Do Small Businesses Need ERP?


Do Small Businesses Need ERP?

ERP for Small Businesses:

I came across many managers and owners of small businesses asking if they need an ERP. Many of them are using accounting software and use various other tools for managing inventory or projects or HR information. However, they have issues to get a comprehensive view of how their business is performing. 

If you have started a business with a vision to scale it up or if you are planning to scale up your business, then having a sound business process and systems are crucial. This is where ERP helps businesses to streamline their complete operations where they can monitor the performance of every function and the company as whole. 

How ERP benefits Small Businesses? 

There are many businesses who have successfully grown and scaled up their business with an ERP system. Hence, I have listed below the benefits of using an ERP for small business. 

Integration: By having an ERP software, there won’t be a necessity to use multiple applications for each business function. All the business functions including Finance & Accounts, Sales, Purchases, Inventory, Projects, Production and HR can use the same application. This will ensure that any type of information is available just a click away. Also, this will help in better coordination and increase in productivity. 

Streamlined Operations: The ERP system comes with industry standard business processes. It can also be customized based on the business process required. This will help in seamless business operations. When your business is scaling up this helps in setting multi-level approval structures. Even when your company adds a new division or activity in future, it can easily be managed using the same ERP system along with consolidated reporting.  

Better customer service: With the inbuilt CRM, all the customer transaction history and enquiries can be tracked easily. By having the information readily available, you can commit to customers for the expected date of delivery of service or product. This improves customer satisfaction leading to improved sales. 

Analytics: As a business owner or manager, you will be able to see the best performing product/service and employee, expense intensive projects, project profitability etc,. With the availability of cross functional information, you can create advanced reporting using ERP software. With the availability of Business Intelligence tools, generating advanced analytics is easier. 

Improved decision-making: The success of small businesses mainly depends on the decision taken by management. Having the right information available in ERP will help in taking informed decisions. As mentioned in the above point, advanced analytics will help business owners to make better decisions.

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