Small and medium-sized businesses (SMBs) are always looking for opportunities and resources to grow. Ultimately, achieving a larger business standard is the main goal for SMBs. However, those who want to attain this goal cannot stay in the past and dwell on traditional methods and machinery. Instead, SMBs need to keep track of tools that are aligned with business trends. Among those key tools is the Enterprise Resource Planning (ERP) system.
Larger businesses hugely popularized the ERP system throughout the years because this system was considered an obligatory installation due to its sophisticated modes of business operation. But that’s not the case anymore - as ERP awareness and implementation are spreading outside of larger businesses, the growth for SMBs is becoming apparent. Owing to the fact that SMBs are now able to access quality resources just like those in larger businesses.
In this article, we will discuss what ERP is, its types as well as its evolution over time and how it can be of immense help for SMBs to flourish through the efforts for its unique business resources.
What is SMBs ERP?
Enterprise Resource Planning (ERP) is an omnipresent system for businesses to streamline their daily operations in a manner that is more effective and productive for both business employers and employees alike. In modern days, this system has superseded traditional resource allocation and implementation among various business types, especially those of SMBs.
Upon implementing an ERP system, SMBs are offered vast business functions to cope with the business's day-to-day tasks. There’s no need to install a separate or stand-alone business software because the ERP has got everything covered - SMBs will have an application for sales, Human Resources (HR), supply chain management, inventory, accounting, Customer Relationship Management (CRM) as well as other vital business works. Acting as a central repository in a business, an ERP helps to manage these applications along with their processes by binding them in an integrated system.
The Evolution of ERP throughout the years.
ERPs have made significant progress since it was first built back in the 1960s. Initially, they were not as technologically advanced as they are now. They were basic and on-premise. Nowadays, they are advanced and cloud-based to cope with digital adversity.
1960s: The birth of Material Requirements Planning (MRP)
In its early beginning, an ERP did not get its name as it is now. It was first associated with the system MRP. Back then, manufacturers needed a tool to cope with their massive inventory as managing, tracking and controlling them with manual labor was overwhelming. Thus, MRP was developed. The system offered basic functions of manufacturing, purchasing and delivery. Although they were limited function-wise, it was good enough to help the manufacturer teams.
1970s – 1980s: MRP System Advancement or MRP II
As time went by, the MRP system gained popularity among manufacturers. The system itself was becoming more advanced than it was in the 1960s. There were more functions built in the system which allowed manufacturers to handle their scheduling and production operations more efficiently. It was at this era that Material Requirements Planning (MRP) got its new title called, Manufacturing Resource Planning System or MRP II.
1990s – 2010s: The birth of ERP
Finally, MRP II has become an ERP. It was no longer meant for manufacturers alone but was usable for other business departments and functions like accounting, sales, and CRM. It was then, the system was able to integrate these respective departments and functions into one conducive environment.
2020s- until now: Artificial intelligence (AI) and IoT integration.
Today’s modern ERPs are more advanced. It is equipped with machine learning and IoT integration to become more adaptive to current business trends. Based on the data stored in its database, it can help to calculate forecast numbers along with informative decision-making to make sure your business is at an all-time high. In addition, these technologies allow routine tasks such as scheduling, customer communication and data entry to be automated easily. That means employees can focus on more dynamic tasks as opposed to repetitive ones.
References: https://www.geniuserp.com/resources/blog/a-brief-history-of-erps/ & https://www.netsuite.com/portal/resource/articles/erp/erp-history.shtml
Types of ERPs for SMBs
Currently, there are 3 types of ERP systems: On-premise, cloud-based, and hybrid. Each of them has their advantages as well as disadvantages. It all depends on which one fits your business needs the best.
Great stories have a personality. Consider telling a great story that provides personality. Writing a story with personality for potential clients will assist with making a relationship connection. This shows up in small quirks like word choices or phrases. Write from your point of view, not from someone else's experience.
just one person. If you try to write with a wide, general audience in mind, your story will sound fake and lack emotion. No one will be interested. Write for one person. If it’s genuine for the one, it’s genuine for the rest.
- Advantages: Business owners will have full control over the system. This is because an on-premise ERP will be integrated with the business's previous legacy system and architecture. Thus, the longevity of ownership is wholly held by the business itself, and not by the vendors.
- Disadvantages: Business owners are wholly responsible for future maintenance and upgrades because they have total ownership of the system. That means they are responsible for putting out necessary effort and expenses to fix any problem related to the system.
Great stories are for everyone even when only written for
Cloud-based ERP- The system is located remotely, in your ERP provider’s servers (third-party servers). You can access it online with the Software as a Service (SaaS) method. That means you pay a subscription to the provider to use the system online.
- Advantages: It offers the most flexibility for growth and maintenance. Since it is stored in a virtual database,
customization can be made easily with a few codes finalized in the back end of the
system. Moreover, the ERP vendors share their responsibility in taking care of the
system, so theirexpertise allows proper system functionality.
- Disadvantages: Business owners won’t have full control over the system. Instead, they will have their share of ownership based on the contract agreement with the ERP vendor. Hence, manipulation of data and functions cannot be done freely by business owners.
Hybrid ERP- This system combines both on-premise and cloud-based ERP into one. It offers your business more flexibility for function deployment to conform with industry rules and regulations.
- Advantages: It is fitting for businesses with unique requirements because it allows existing business systems to assimilate with new cloud-based
technologies. For instance, a law firm may still need its built-in system on its location to operate based on its rules and standards. Having a certain degree of cloud-based ERP
allows it to enjoy new technologies and aids for scalability.
- Disadvantages: Just like in cloud-based ERP, business owners have limited control of the system as they share ownership with the ERP vendors. In addition, limited customization is probable since the physical and legacy system is integrated into the new ERP.
How SMBs benefit from ERP
As noted in the introductory paragraph, the deployment of ERP has allowed SMBs to enjoy the same resource caliber shared by larger enterprises. Below are the advantages of ERP’s resources in details:
1. Better customer service
In a business, customer experience is pivotal. With an ERP solution, SMBs can turn every customer’s lead journey into a success. With a CRM function embedded in the ERP, SMBs can retrieve, extract and share customers’ details with other departments with ease. For example, an ERP could offer total visibility of customers’ information as they enter it in the ‘Contact Us’ form from your website page. This information will be transferred to the back-end of the system where you have control for manipulation. Moreover, an ERP has the technology to automate routine customer interaction. So, there’s no need to worry about sending a follow-up email to a customer because an ERP is there to do that.
2. Standardized data
All data of an ERP system is placed in a single database. Such a case allows for a standardized format in data across multiple departments and functions. Those without an ERP system will have it hard to organize an abundance of data manually, making it difficult to track down data in needed time. Also, redundancy and duplicate data are more probable. An ERP would not allow that to happen; its sophisticated technology can detect such anomalies and deviate them along with offering real-time data on the spot. For instance, Sales Staff A focuses on acquiring customer data from social media, while Sales Staff B gathers information from email interactions. An ERP system monitors the data entered by both sales staff, identifying and eliminating any redundancies to maintain data integrity and ensure efficiency.
3. Better business forecast and decision-making
Today’s ERP systems are built with the technology of machine learning or artificial intelligence (AI). Such technology can calculate better numbers for business forecasts while at the same time offering accurate insights and options for better decision-making as opposed to employees manually doing the math and reports. This is done by the system-coded algorithms- it analyzes chronicled data in the database, market trends and customer interaction. Subsequently, forming reports and calculations to help SMBs foresee customer behavior, sales goals and other marketing tactics.
4. Scalability
Specifically speaking for cloud-based ERP, the system provides seamless adaptability to cope with a business's changing and growing needs along with goals. This system can be modified without having to redo the whole system from the start. With the ERP providers making little resource allocation and programming, the system is adjusted to ensure a business's performance matches its scalability without any manual mediation. In addition, cloud-based ERP is agile and presents no adversity for business expansion.
5. Customizable
An ERP system’s major win in resource planning is how it enhances workflow efficiently while simultaneously evolving based on business trends. This is due to its sophisticated modes of operation based on its modular approaches which allow personalization to its existing functions or departments to tackle business shifting requests. In the case of cloud-based or hybrid ERPs, business owners can ask for it to be personalized even after implementation is finished. Any unique requests such as new functions, redesign its interface and more, all are attainable. For example, in the Odoo ERP module called ‘CRM’, users can ask to build a new programme for interactive animations every time a customer has purchased a product on the product sales webpage.
6. Mobility
Modern ERPs are equipped with Internet of Things (IoT) technology. Which further increases the accessibility of the system in various mobile devices such as your phones or tablets. In essence, it offers the convenience of accessing the system anywhere and anytime. Additionally, IoT sensors and analyzes real-time data stored in the system’s database, allowing it to store, insert and remove data from your mobile devices in an instance; reducing unnecessary downtime travesty.
Frequently Asked Questions
1. What is ERP?
To simplify, Enterprise Resource Planning (ERP) is defined as digital resource planning for all kinds of businesses, ideally for SMBs, to use to maintain their well-being. ERP has been noted over the years to manage a business more efficiently compared to manual planning.
2. What are the ERP features for SMBs?
Most modern ERP systems come with functions or features that run specific tasks meant for different departments. There are sales, inventory, accounting, CRM, website, events, HR, and so much more.
3. What are the challenges of an ERP implementation?
The most common challenges that come with ERP implementation are the period of deployment and customization. Before beginning an ERP journey, make sure to take into account your business needs and requirements as well as the ERP implementation time you are interested in. This is so you can cope with the losses that may incur during this period. As for customization challenges, always look for ERP providers that offer systems in trend with technology advances; make sure to do your research too. Those who are aligned with ERP trends have minimal issues with system customization.
Conclusion
In conclusion, an Enterprise Resource Planning (ERP) system helps businesses of all kinds streamline their processes in a way that is much more convenient and manageable as opposed to traditional resources and planning. The system comes with various functions or departments, each doing its tasks while integrating into a cohesive, centralized database. SMBs and startups are suitable candidates for ERP as the system can help them grow faster; to catch up with larger businesses. That is why, SMBs and startups need to make sure implementing an ERP is their first step to building a successful business. This step doesn’t have to be daunting when they find the right ERP provider.
At Ariyes Online, we take SMBs’ needs seriously and we are committed to helping businesses reach their highest potential with an ERP system that is in-trend, cost-effective and with a reasonable implementation period. We are transparent and supportive throughout the implementation period- from the beginning, during and after implementation. Contact Ariyes Online for a free consultation and let’s work together to make your business dreams come true.
Great stories have a personality. Consider telling a great story that provides personality. Writing a story with personality for potential clients will assist with making a relationship connection. This shows up in small quirks like word choices or phrases. Write from your point of view, not from someone else's experience.
just one person. If you try to write with a wide, general audience in mind, your story will sound fake and lack emotion. No one will be interested. Write for one person. If it’s genuine for the one, it’s genuine for the rest.
- Advantages: Business owners will have full control over the system. This is because an on-premise ERP will be integrated with the business's previous legacy system and architecture. Thus, the longevity of ownership is wholly held by the business itself, and not by the vendors.
- Disadvantages: Business owners are wholly responsible for future maintenance and upgrades because they have total ownership of the system. That means they are responsible for putting out necessary effort and expenses to fix any problem related to the system.
Great stories are for everyone even when only written for Cloud-based ERP- The system is located remotely, in your ERP provider’s servers (third-party servers). You can access it online with the Software as a Service (SaaS) method. That means you pay a subscription to the provider to use the system online.
- Advantages: It offers the most flexibility for growth and maintenance. Since it is stored in a virtual database, customization can be made easily with a few codes finalized in the back end of the system. Moreover, the ERP vendors share their responsibility in taking care of the system, so theirexpertise allows proper system functionality.
- Disadvantages: Business owners won’t have full control over the system. Instead, they will have their share of ownership based on the contract agreement with the ERP vendor. Hence, manipulation of data and functions cannot be done freely by business owners.
Hybrid ERP- This system combines both on-premise and cloud-based ERP into one. It offers your business more flexibility for function deployment to conform with industry rules and regulations.
- Advantages: It is fitting for businesses with unique requirements because it allows existing business systems to assimilate with new cloud-based technologies. For instance, a law firm may still need its built-in system on its location to operate based on its rules and standards. Having a certain degree of cloud-based ERP
allows it to enjoy new technologies and aids for scalability. - Disadvantages: Just like in cloud-based ERP, business owners have limited control of the system as they share ownership with the ERP vendors. In addition, limited customization is probable since the physical and legacy system is integrated into the new ERP.
How SMBs benefit from ERP
As noted in the introductory paragraph, the deployment of ERP has allowed SMBs to enjoy the same resource caliber shared by larger enterprises. Below are the advantages of ERP’s resources in details:
1. Better customer service
In a business, customer experience is pivotal. With an ERP solution, SMBs can turn every customer’s lead journey into a success. With a CRM function embedded in the ERP, SMBs can retrieve, extract and share customers’ details with other departments with ease. For example, an ERP could offer total visibility of customers’ information as they enter it in the ‘Contact Us’ form from your website page. This information will be transferred to the back-end of the system where you have control for manipulation. Moreover, an ERP has the technology to automate routine customer interaction. So, there’s no need to worry about sending a follow-up email to a customer because an ERP is there to do that.
2. Standardized data
All data of an ERP system is placed in a single database. Such a case allows for a standardized format in data across multiple departments and functions. Those without an ERP system will have it hard to organize an abundance of data manually, making it difficult to track down data in needed time. Also, redundancy and duplicate data are more probable. An ERP would not allow that to happen; its sophisticated technology can detect such anomalies and deviate them along with offering real-time data on the spot. For instance, Sales Staff A focuses on acquiring customer data from social media, while Sales Staff B gathers information from email interactions. An ERP system monitors the data entered by both sales staff, identifying and eliminating any redundancies to maintain data integrity and ensure efficiency.
3. Better business forecast and decision-making
Today’s ERP systems are built with the technology of machine learning or artificial intelligence (AI). Such technology can calculate better numbers for business forecasts while at the same time offering accurate insights and options for better decision-making as opposed to employees manually doing the math and reports. This is done by the system-coded algorithms- it analyzes chronicled data in the database, market trends and customer interaction. Subsequently, forming reports and calculations to help SMBs foresee customer behavior, sales goals and other marketing tactics.
4. Scalability
Specifically speaking for cloud-based ERP, the system provides seamless adaptability to cope with a business's changing and growing needs along with goals. This system can be modified without having to redo the whole system from the start. With the ERP providers making little resource allocation and programming, the system is adjusted to ensure a business's performance matches its scalability without any manual mediation. In addition, cloud-based ERP is agile and presents no adversity for business expansion.
5. Customizable
An ERP system’s major win in resource planning is how it enhances workflow efficiently while simultaneously evolving based on business trends. This is due to its sophisticated modes of operation based on its modular approaches which allow personalization to its existing functions or departments to tackle business shifting requests. In the case of cloud-based or hybrid ERPs, business owners can ask for it to be personalized even after implementation is finished. Any unique requests such as new functions, redesign its interface and more, all are attainable. For example, in the Odoo ERP module called ‘CRM’, users can ask to build a new programme for interactive animations every time a customer has purchased a product on the product sales webpage.
6. Mobility
Modern ERPs are equipped with Internet of Things (IoT) technology. Which further increases the accessibility of the system in various mobile devices such as your phones or tablets. In essence, it offers the convenience of accessing the system anywhere and anytime. Additionally, IoT sensors and analyzes real-time data stored in the system’s database, allowing it to store, insert and remove data from your mobile devices in an instance; reducing unnecessary downtime travesty.
Frequently Asked Questions
1. What is ERP?
To simplify, Enterprise Resource Planning (ERP) is defined as digital resource planning for all kinds of businesses, ideally for SMBs, to use to maintain their well-being. ERP has been noted over the years to manage a business more efficiently compared to manual planning.
2. What are the ERP features for SMBs?
Most modern ERP systems come with functions or features that run specific tasks meant for different departments. There are sales, inventory, accounting, CRM, website, events, HR, and so much more.
3. What are the challenges of an ERP implementation?
The most common challenges that come with ERP implementation are the period of deployment and customization. Before beginning an ERP journey, make sure to take into account your business needs and requirements as well as the ERP implementation time you are interested in. This is so you can cope with the losses that may incur during this period. As for customization challenges, always look for ERP providers that offer systems in trend with technology advances; make sure to do your research too. Those who are aligned with ERP trends have minimal issues with system customization.
Conclusion
In conclusion, an Enterprise Resource Planning (ERP) system helps businesses of all kinds streamline their processes in a way that is much more convenient and manageable as opposed to traditional resources and planning. The system comes with various functions or departments, each doing its tasks while integrating into a cohesive, centralized database. SMBs and startups are suitable candidates for ERP as the system can help them grow faster; to catch up with larger businesses. That is why, SMBs and startups need to make sure implementing an ERP is their first step to building a successful business. This step doesn’t have to be daunting when they find the right ERP provider.
At Ariyes Online, we take SMBs’ needs seriously and we are committed to helping businesses reach their highest potential with an ERP system that is in-trend, cost-effective and with a reasonable implementation period. We are transparent and supportive throughout the implementation period- from the beginning, during and after implementation. Contact Ariyes Online for a free consultation and let’s work together to make your business dreams come true.
In Ariyes Online, we implement Odoo ERP and
streamline your business processes with customized
solutions, seamless integrations, and ongoing support
to ensure your success.
Contact us for a personalized meeting