How SME can also benefit from ERP

ERP applications can help organizations in several ways. It can reduce an organization’s operating cost, integrate all parts of an organization, increase the efficiency of operations because of the integration, enable free flow connection of information across the organization and enable consolidation of different software within the organization.

It is a misconception in SME’s, that ERP systems are best suited for large-scale industries due to the prohibitive cost of ownership, complexity of implementation and subsequent maintenance. But over the last decade, with technology becoming simpler and easily available, ERP packages now have shortened implementation phases, requiring minimal in-house skill sets, making it a more tangible option for SME’s. ERP systems provide the opportunity for SMEs to address the competitive demand for the rapidly changing market and to be successful in terms of improved customer relations, management, improved cycle time, improved quality, increased sales volumes, improved margins, reduced product development time and improving supply chain efficiency. As companies grow and improve performance, they are most likely to have invested in an ERP system that will grow with them.

Below we list the main reasons why SME’s need ERP systems. 

Speed: Profitability is the key for organizations of all sizes, but for SME’s a lack of profitability can prove to be fatal in a much shorter time span. Therefore, it is necessary to rapidly identify which products, departments and customers are profitable and which are not.

Reliability:  To make the right decisions, you need data you can trust. Most modern ERP’s have been tested extensively before deployment to ensure that they will work exactly as described with as few hiccups as possible.

Innovation: Companies need to move fast, innovate, stay ahead of the competition, propose new products and services, to attract new clients and keep faithful ones. The implementation of a state-of-the-art ERP solution allows a fast deployment of innovating technologies.

Cost cutting: The cost of an existing legacy system is often considered low, as the system cost may have already been paid for.  But if you consider the cost of dedicated personnel to support the system, the missed opportunities regarding innovation, the cost of wrong business decisions due to misinformation; then the costs suddenly start to rise.

Reduced risk: The knowledge of how to operate legacy systems often known to just a few people in an organization. The potential discontinuation that could occur if something happens with these people is enormous. The advantage of an ERP system is that any person that has experience with the implemented ERP solution can work on it and the use of standard system also guarantees smooth upgrades to new releases.

Conclusion

While the upfront cost of implementing an ERP system may seem unnecessary for an SME, the benefits outweigh the costs in the long run and can help to ensure that the company is as profitable as possible from the very first day.