January 14, 2025
How ERP Systems Empower SMBs: Benefits, Challenges, and Implementation Tips
Every small and medium-sized business (SMB) runs under a system that helps it to maintain organization and optimization of workflows. Nevertheless, some SMBs are using ineffective systems for business operations resulting in business needs and goals being unmet. These ineffective systems are those not conforming to current business trends and dynamics. Instead, they are old-fashioned and rigid. To combat this, SMBs need to install an Enterprise Resource Planning (ERP) system.
Since SMBs are just starting with their journey, they find it limited to access valuable business resource planning. However, an ERP system can mitigate this issue because it offers various functions and departments that are systematic for SMB operations. An important detail to consider is that an ERP has been the catalyst for countless SMBs to level up to larger business scales; assisting organizational activities with no difficulty.
In this article, SMBs can explore the definition of ERP as well as its challenges and opportunities presented in their daily business processes. This highlighted knowledge will be useful for SMB owners’ endeavors with ERP systems and implementations.
SMBs and startups are encouraged to utilize ERP in their day-to-day operations because it provides them with multiple departments and features meant to streamline business processes better than manual labor. Think of ERP as a car, and like cars, their component consists of multiple compartments that are connected and yet they still perform respective tasks to ensure proper functionality. ERP is synonymous- its servers are the car engine; its database is the car electronic control unit, and the other machine compartments are the features and departments of ERP. In a business context, an ERP system, along with its servers and database, systematically manages built-in features and various departments to ensure efficient business processes.
ERP Features for SMBs
- Challenge: Inconsistency of Data and Work Practice
- Without the deployment of ERP in SMBs, they are more susceptible to the inconsistency of data and work practice. Manual data acquisition does not offer rules and regulations as each employee has their own working style.
- Solution/Opportunity: Standardized Data and Work Practice
- An ERP is programmed to manage data and workflow in a standardized manner. It has pre-configured rules on how data is meant to be collected, stored, shared, and removed across all of its features and applications. As such, work practices on how to manipulate data remain consistent across every department.
- Offers personalization and scalability
- Includes machine learning and big data technologies
- Improves overall business productivity
- Customizability and scalability depend on business budgets and hardware resources
- Insufficiently skilled workers
- Long period of implementation
Explanation
- Modern ERPs are aligned with technological trends, which maintain a modular behavior. So, customization as well as scalability for certain or all features in your standard ERP can be made anytime as your business advances.
- Modern ERPs have AI and big data technologies built into them. As such, ERPs can make accurate forecast numbers and business predictions for now and in the future.
- Thanks to the various applications and features that come with ERP deployment, business activities are governed by systematic rules and algorithms that ensure every workflow runs smoothly.
- Although ERPs are customizable and scalable, it all depends on how much a business can pay to obtain such services. This results in SMB owners coming across with a limited degree of customization and control of their system.
- When internal employees are used to their old system over some time, transitioning to a new system may be hard to assimilate. Ideally, employees need to take courses and training on the new system before they can make it into full effect. But, that might not be the plan everyone is on board. As such, a business is left with non-skillful internal workers. Some business owners would resort to hiring external consultants instead, but that will only increase the business expenses.
- Deploying a new system takes a long time to finish as it runs on multiple steps and processes before it can be deemed a success. This is especially the case for SMBs that have their own system prior to ERP implementation. During the deployment period, monetary losses may incur and the business is not able to function effectively.
How to Cope with SMBs ERP Cons?
1. Customization and Scalability Limitations
The degree of customization and scalability of an ERP system indeed depends on the organization’s resources. That being said, SMBs may opt for a cloud-based ERP as it is the most cost-effective one among other ERP systems. This is because cloud-based ERP removes hardware infrastructure as well as lowers a business’s IT expenses. SMBs only need to focus on subscription expenditures and pay as they use to access their system.
2. Inadequate Skilful Workers
Having a good leader in an organization can boost employee morale and productivity. Hence why, SMB owners need to take the initiative to encourage their workers to explore new things. Let your employees know how they can benefit from ERP in terms of work-life balance, transparency and communication. With the support of your ERP provider, allow employees to take their time to learn and assimilate with the new business system.
3. Long Deployment Period
SMBs need to make sure they understand their business needs and goals before beginning their ERP endeavours. This helps to assess the risks and losses that may happen during system implementation. Upon finding a system they are interested in, make sure to account for its deployment period while simultaneously being equipped with a contingency budget and plan so the business remains active and functional.
Frequently Asked Questions
1. What are the steps involved in ERP implementation?
Generally, an ERP implementation consists of 7 steps which are: business needs analysis, ERP provider selection, system design and implementation, data migration (for legacy systems), system testing, system launch and support for internal users.
2. What industries benefit from SMBs ERP?
Historically, ERP was first invented for manufacturers to cope with their inventory and logistic tracks. It was only at the end of the 1990s that ERP was developed to tailor the needs of all industries like retail, healthcare, education, wholesale and more.
3. Can current SMB data be transferred to ERP?
Absolutely. Nowadays, ERP developers are well aware of businesses with unique needs, including those asking for data migration. Modern ERPs have little issue with data transferred, so you don’t need to fret.
Conclusion
As a conclusion, Enterprise Resource Planning (ERP) is a powerful system that no SMBs should ignore. Instead, they need to take it into account for implementation. It is noted throughout history how much ERP has helped SMBs of all industries to grow and flourish while at the same time successfully competing against larger businesses. From its roots in manufacturing and logistic management to tailoring the needs of all unique industries, ERP is advancing quickly and becoming more potent. Modern ERPs as we know them today possess technologies of machine learning and big data as well as accessibility to your mobile devices. They are, indeed, the direction of future business trends.
SMBs and startups can thrive with ERP. Even when there are disadvantages present, its advantages outweigh them. It’s time to make a difference, so contacting an ERP provider is the next step SMBs need to take. By consulting for free with Ariyes Online, you are given personalized solutions to fit your business goals. We are a team of experts in ERP systems, and we promise to provide you with ERP solutions that fit with the business trends of 2025 and beyond. Start this exciting journey with us and progress into the future with felicity.
In Ariyes Online, we implement Odoo ERP and streamline your business processes with customized solutions, seamless integrations, and ongoing support to ensure your success.
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