How to Select the Best ERP for Your Small Business
Updated: 3 days ago
The failure rate of small businesses worldwide is alarming. For example, in the US, only about half, 45.4% to 51% of small businesses, survive their first five years. Several factors are responsible for this failure rate. However, this article doesn't focus on the causes of small business failure.
Instead, it explains how to choose one tool that can aid your small business – ERP systems. Enterprise resource planning (ERP) systems are a suite of software that can help you run your company. They automate tasks and reduce human error in business operations.
Several large companies have been exploiting ERP systems for years. But unfortunately, some small businesses have been unable to catch on. So, if you're considering an ERP for your small business, read on to learn how to choose the best.
How to Pick the Best ERP System for Your Small Business
ERP systems can significantly increase your small business's chances of success. However, this also depends on you choosing the suitable one. But suppose you haven't worked much with ERPs.
Then selecting one for your supply chain systems and other elements of your small business may be challenging. We've explained what to look out for in small business ERPs below.
Outline Your Small Business Goals and Follow Them
What do you want to achieve with your small business? How can an ERP system help you hit this target? This should be the guiding principle in choosing ERPs for your small business.
Several ERP software has varied uses and can achieve different goals. So, you must only choose ERP systems that align with your objectives. Your goals could be:
● Cost reduction
● Fuller automation of tasks and manual responsibilities
● Managing your supply chain control system
Whatever the goal is, there's a supply chain system for you.
Running a small business means you may not have the funds to install large computer systems and networks. Therefore, you and your employees must access your ERP system via mobile devices. Whether you're using Cloud storage or other ERP elements, having them on mobile gadgets is crucial.
Mobile functionalities can allow you to stay on top of your supply chain systems. For example, employees can input the company's purchase and use of materials daily. Consequently, you can build a demand-based supply system.
Human Resource Management Focus
Capital is often tight for small businesses, so humans are their greatest asset. Therefore, any ERP system they choose must have a solid human resource focus. It'll thus be best not to fall for the old pattern of having ERPs just for payroll journals and other financial functions.
An excellent ERP should track your employees in various ways, including:
● Responsibility scheduling
● Performance tracking
● Attendance tracking
Furthermore, while ERPs handle most menial work, they free up your employees to do actual work. This leaves their creativity and energy flowing.
Cost-Reducing ERP Systems
What business procedures currently suck up most of your capital and account for your recurrent expenditure? Get an ERP that caters to that task, thus reducing your operating costs. For example, are you struggling with your supply chain systems?
Then, what you need most are supply chain management ERP systems. Supply chain ERP systems simplify the interactions between your supply chain players. These include manufacturers, suppliers, distributors, retailers, and customers.
Customer Relationship Management (CRM)
Small businesses often have limited market penetration. Therefore, more than established companies, they must cherish and manage customer relationships. So, your small business needs ERP tools (and/or complementary CRM-dedicated products) that focus on the consumer's needs.
Depending on your industry, you may need customers:
● Personal information
● Favorite orders
Thus, it would be best to have an ERP that tracks lead until conversion. After that, you must select an ERP software that identifies pain points and problems before they occur. All this information from ERPs can also ensure you serve clients based on their preferences.
Choosing a Small Business ERP Software Vendor
Now you know the right features to look out for in a small business ERP system. However, you still have to select an ERP system vendor. There are many ERP software providers in the market.
Many of them offer unique and vital functionalities. Therefore, choosing from the long list may be challenging. It would help if you looked for a vendor whose software matches your business needs.
In addition, vendors who can work alongside your existing business management structure and software would be a great fit. Finally, you can check:
● Whether ERP system has a history of success in your industry
● Whether the ERP software can provide a return on investment
● How long the ERP system's solutions will last
Let's Help You Choose the Best ERP System for Your Small Business
Making the final decision on an ERP system for your small business is a big move. So, it'll be best to allow industry experts to guide you.