ERP Software, which stands for Enterprise Resource Planning, is often perceived as a system for large organisations.
The latest report by Aberdeen Group titled ‘ERP and the Small Business’, sets out to prove that an ERP system is a huge advantage not just for the big business but also to the small business.
The leading pressures facing the small business is a need to reduce costs. As a business grows it may find the need to take on more employees, products and business processes. It is vital for the organisation to keep costs from getting out of control and damaging their service offering, which enabled growth in the first place.
A need to keep costs down when combined with the next biggest pressure of trying to manage growth expectations, leaves businesses a difficult challenge. In order to achieve growth a business often needs to have investment.
The report has highlighted these as the main drivers for businesses to implement an ERP system, however 18% of the surveyed smaller businesses are yet to adopt an ERP system. Interestingly enough the bottom 80% of average performers are more likely to be using spreadsheets, accounting applications or a series of multiple disparate applications. These tools provide the business with resources to help performance but when growth is thrown into the mix, they can almost cause more of a hindrance.
An ERP system offers flexibility in terms of adding in functionality as you grow and offering extensions to user licences for the system.
A further finding from the report by Aberdeen Group is the negative attributes small businesses are finding from their existing setup. The top issues are to do with the system not providing enough detail on business processes, a lack of collaboration between business units and the lack of interaction between the different processes.
ERP systems such as Sage 300 ERP offer businesses full interaction between business units, by linking accounts data with sales, marketing and HR. A business can also undertake Business Intelligence reporting to deliver key data to decision makers within the organisation.
*The full report is available for download from Aberdeen Group