“ERP for SMEs?” is today’s question. “Is it a matter of necessity, fashion, or luxury?” is yet another one. Generally ERP, or Enterprise Resource Planning, solutions are frequently portrayed as a high-cost choice only available to industry behemoths. In today’s business world, nothing could be further from the truth. Good ERP systems are becoming more affordable, while inexpensive ERP systems are becoming more capable than ever. ERP not only helps SMEs reach more customers globally, it makes going to market (GTM) a priority.

One of the key reasons for this intriguing situation is that the internet has significantly reduced the cost of developing a solid ERP system. What SMEs (small and medium-sized enterprises) or SMBs (small and medium-sized businesses) must realize is that they must utilize this resource. They should prioritize this issue to expand at a faster rate and stay ahead of the competition.

What are the benefits of ERP for SMEs?

ERP enables small and medium-sized enterprises to manage the business and automate numerous back-office operations related to human resources, services, and technology through a system of interconnected applications. Because of the high expenses of installation and maintenance, an ERP solution is mostly utilized by large corporations. However, small and medium-sized firms are increasingly using technology in the modern-day to streamline data from multiple departments, make data available, make smarter choices, and increase productivity.  Hereunder are a few of the most important advantages of an ERP system for SMEs:

1. Make the information flow more seamless

An ERP or business planning software enables SMEs to combine the stream of data between the organization’s various business processes while also integrating business transactions with the company’s finance system in real-time. It aids in the recording of necessary business transactions in the general ledger and other financial systems. This enables management to see the financial implications whenever they are required. It aids in the completion of key processes such as product pricing, sales order entry, inventory and warehouse, shipping/delivery, production, invoicing, procurement, financials, and a variety of others.

2. It boosts productivity

All departments’ key data and information are available on a single platform at the appropriate time and in the right location. As a result, there is no need to contact personnel from several departments or comb through excel files to obtain disintegrating data. Customers, vendors, routines and manufacturing work processes, products/materials, bill of material (BOM), and other vital data are all kept in the ERP system. This helps to keep work processes consistent, saves time, and boosts productivity.

3. Retain control while lowering operating costs

An increase in the number of business transactions combined with a heavy reliance on spreadsheets may result in a loss of data management and a state of operation that is on the verge of collapsing. Data entry on spreadsheets can result in errors, the disclosure of confidential information, and unnecessary turmoil.

SMEs frequently use less expensive tools like spreadsheets or simple accounting software like QuickBooks or Peachtree, which are ideal for small businesses with low transaction volumes. However, as corporate processes get more complicated and transactions become more frequent, an ERP system or basic operating system becomes necessary.

The absence of suitable integrated business software may have a detrimental impact on SMEs as human resources/employees and revenue expands. Lost sales, inventory shortages, poor management, missed invoicing, missing shipments, and hence a lack of control may all affect the profitability or cash flow. By integrating data into a specialized software programme, SME owners can save dollars on individual software and management systems that were previously paid for in each department.

4. Increased adaptability

One of the most important benefits of ERP software for SMEs is its agility and flexibility in reacting to market needs or buyer situations. Dedicated ERP software allows for essential data management adjustments to be made to preserve corporate flexibility. For example, instead of removing files and keying data into a spreadsheet, stock modifications, changes in sales figures, and order cancellations, this can all be easily maintained in an ERP program.

5. Boosts sales and makes long-term plans

The budget is issued in the event of spreadsheet control, but it is not examined if they received confirmation of receipt. This may result in carelessness and, as a result, a loss of sales. To avoid this, dedicated ERP software includes an automated authentication system. It also sends out daily suggestions reports so that essential actions can be made. If the system provider/vendor remains a partner for a long time, it is a long-term investment. The ERP system increases customer service and profitability by ensuring consistency in company policies and processes across the enterprise.

6. Better decision-making abilities

Making critical business decisions necessitates the timely availability of required information and reliable data. When such data and information are readily available and frequently updated in an ERP system or ERP application, management at small and medium-sized enterprises can make timely choices that are critical to the company’s growth and survival. Managers can analyze sales statistics and income from different months using available data, anticipate future sales and financial needs, and make smart decisions that meet corporate needs.

Overall, a good ERP system provides the following benefits to SMEs, according to a report issued by Aberdeen Group, the premier source of fact-based research:

  • A 22% decrease in operational costs; 
  • A 20% cut in administrative costs; 
  • A 17% drop in inventory (M&D only)
  • A 19 percent increase in complete and on-time delivery 
  • A 17 percent increase in schedule adherence (M&D only)

Small and medium-sized firms face the additional challenge of competing with larger, more cost-effective businesses. In this case, a well-managed ERP deployment can result in long-term cost savings and increased productivity, which will not only help SMEs survive and thrive but also stimulate future growth and expansion.

The advantages of implementing an ERP system for SMEs are numerous. Efficiency gains have the potential to reduce expenses across your firm, resulting in increased profitability. As if the financial benefits weren’t enough, the increased employee satisfaction is yet another compelling reason to deploy ERP.

Although the expenses of installing ERP software are significantly greater than the price of managing data on spreadsheets, the benefits of such a software system make it a crucial tool for SMEs. It aids in better data management, maintaining confidentiality, making flexible modifications, increasing labor productivity, increasing sales, and making smart judgments at the correct moment. 

ERP comes in a variety of flavors that cater to diverse company procedures and can help firms achieve rapid success. Lineris Solutions’ dedicated, bespoke ERP software also aids in preventing technology obsolescence in a company and long-term business planning, especially for SMEs. We at Lineris Solutions understand the value of ERP through our services which helps SMEs expand their global reach as well as makes GTM a priority. Contact Lineris Solutions today to learn more!