Is Your Small Business Ready for ERP?

8/2/2010 at 9:48 am by The Sage ERP Team

Watching a small business develop can be a lot like watching a child grow. It’s difficult to notice on a day-by-day basis, but one morning you wake up and realize your baby is ready to head off to college. In the same way, a business that started out in your basement could one day be expanding into larger and larger corporate offices – and some day soon, might be ready for ERP.

So how can you tell when your small business is ready to take the next step and implement an ERP system?

Here are a few helpful tips:

If your organization is using dozens of different kinds of software, it might be time to utilize ERP to consolidate all of that data into a single, neater package. Is your accounting department using Sage Peachtree while your management staff is using Microsoft Office and your sales force is using ACT? Trying to exchange data across all those different platforms can be difficult, if not impossible. At best, carefully planned formatting may be lost when viewed using another type of software; at worst, files created on one platform may be incompatible or unreadable on another. ERP software can eliminate this problem by making sure that all of your departments use a single type of software. This means that files created in one department will always be legible, simple and understandable when sent to other sectors of your business.
Another sign that your business is ready for ERP is when you begin to notice that data entry is becoming increasingly inefficient. As small companies expand, data can often be entered twice or even three times by different departments, each one unaware of the goings-on in the others. Again, this can be complicated by the presence of many different software systems, which may even necessitate that the same data be entered twice in order to be viewable across the different platforms. A fully-integrated ERP system will solve these problems by streamlining all of your data entry into one simple, company-wide process. Your employees will then be free to do something more valuable with those brilliant minds you saw when you hired them.
A common sign that it’s time for ERP is when a small business is having inventory troubles. Do you frequently end up with shortages of one item, while simultaneously being saddled with enormous leftovers from bloated orders of another? An inventory that used to be easy to manage when it had only a few customers can quickly become very difficult to keep track of when you start selling to big clients and expanding your customer base. An ERP system can make sure that your inventory is managed more effectively, so that you never run out of your most popular products.
It may be time to implement ERP if you find that you have difficulty pulling up statistics on a customer-by-customer basis. As your number of clients continues to grow, statistics about what customers buy, how much of it they buy, what times they buy it and how they pay for it will become increasingly important to the continuing success of your business. ERP can make keeping track of this important data much simpler than it would otherwise be. When you can easily call up this kind of information, you can optimize your business for maximum profit.
Your company will benefit from ERP if you plan to incorporate an ecommerce platform into your business. In many cases, older, more specialized software that many small businesses use doesn’t support the complex procedures needed to manage online inventory. ERP can make getting into ecommerce – one of the quickest, most efficient ways to move more products in a very short time – much simpler than it would be with traditional software platforms.

There’s no surefire way to know when your small business is ready for ERP. There’s no magical light that will click on or sign that will pop up that will let you know its time to take the next big step in managing your small business. But following these useful tips can help you get the most out of your small business and invest in an ERP when the returns will be the greatest.