You've got your head around what an enterprise resource planning (ERP) system is. You understand the benefits it could offer your small business. But how do you know when you're actually ready to take the plunge?
Here are some key signs...
1 Lack of efficiency or drop in productivity
One of the most immediate and dramatic benefits wrought by the introduction of an ERP system is an increase in efficiency and therefore productivity. This is thanks to both a reduction in manual tasks such as data entry and information consolidation, and the creation of a single centralised source of business information. So, if you have noticed that efficiency is not where it should be, or that productivity has dropped below where you need it to be, it could be time to consider the introduction of ERP software.
2 You have ambitious growth plans
Whether you want to grow organically or attract funding or investment, an ERP system is very often the engine for ambitious business growth. On the organic side, it forms a clear foundation for businesses to expand and get more complex, because it creates a single centralised information source that can expand without becoming unmanageable. On the funding and investment side, ERP software makes it easier for multiple business departments to undertake accurate forecasting, which is crucial for attracting and securing investment.
3 You want to introduce more flexible working
Flexible and remote working practices are increasingly becoming expected as workplace benefits and are an excellent way of standing out from the competition when it comes to attracting the best candidates for vacancies. Additionally, they can help improve business productivity. However, to power flexible working, you need to ensure that your staff can access the same core systems and information sources wherever they are – precisely what an ERP system enables.
4 Your business has inconsistent processes and procedures
Inconsistency is the enemy of both productivity and accurate business intelligence. If different departments are running things in different ways, collecting, recording and harnessing information differently, then you run all kinds of risks as business. At best, you may experience a drop-in productivity; at worst, you will be dealing with contradictory information and spending time trying to get to the bottom of conflicting data. An ERP system solves these problems by, again, creating a single consolidated process and database.
5 All your competitors are using an ERP system
It might sound obvious, but if your key competitors are using ERP software and you are not, you are seriously risking them running away without you. ERP systems enable better collaboration and innovation and, as outlined above, they are the foundation for solid business growth. If your competitors of a similar size and scope have all or nearly all deployed ERP software, then you could easily be left behind.
6 Your customer experience is dropping
Your customers are, after all, at the centre of everything you do. Growing businesses without ERP systems in place typically find it increasingly difficult to offer a seamless and top-quality customer experience, because they simply cannot access the information they need when a customer needs it. Sales and after sales support, for example, are liable to be disconnected. So too are sales and logistics or production. If you find yourself regularly running out of popular products and disappointing customers who place orders, or finding it difficult to rapidly resolve customer queries, it could be time for an ERP deployment.
7 You don’t trust the numbers
Simple but true. If you don’t believe any set of numbers within the business – whether financial data or information from your product stockroom, factory floor, HR department and so on – then you will have to spend valuable time checking, cross-referencing and validating those numbers. What’s more, you may struggle to get to the bottom of the inconsistency. This is a waste of time and potentially a huge spanner in the works when it comes to business growth. An ERP system will introduce automation and thereby reduce data errors,