John[1] owns a small firm having an employee base of 50 in the state of New Jersey. He uses QuickBooks, an accounting software to deal with the various business functions of finance, accounting, sales and marketing, and the challenges that come with a growing business.
John however, needs further help in streamlining his expanding operations and efficiencies, while keeping a tight check on the costs. On consulting with a technology service provider, the recommendation was to adopt Enterprise Resource Planning (ERP) solutions as a natural progression to meet the growing business needs.
So, what exactly is ERP and how does it benefit small and medium businesses?
ERP solutions refer to a type of management software that helps you run your entire business by integrating the core processes such as finance, accounting, HR, sales, supply chain, and others, of a company in one place. Some of the benefits ERP systems offer to small businessesinclude easy management of business operations by aiding the business owners to pre-plan processes and create healthy budget planning that leads to saving costs and money for the small business outfits. An effective ERP system enables faster delivery of company offerings to the end users, thus enhancing customer experience and widening customer outreach.
With the integration of all the business processes under one common umbrella leading to seamless project collaborations and interactions across different functions, it enables easier employee collaborations. It also helps forecast demand and supply for better inventory and supply management.
Choosing the right ERP solution for your small business setup
Today, ERP solutions can be deployed either on premise (on the business’s local servers and computers) or hosted on the cloud. With the current scenario of innovative technologies disrupting the business landscape, onsite/on premise/in-house ERP systems are proving to be less flexible to meet the ever-changing technology and business practices.
Therefore, a massive shift to Cloud ERP as a more viable and cost-effective option for small business owners. Cloud ERP is a cloud-based system, accessible over the internet, that uses cloud computing platforms and services to offers customers an easier way to store their data and complete tasks. It is offered as a SaaS model, meaning that cloud ERP is provided as a service, not as an infrastructure on the customers’ premises.
In fact, recent study reflects that the global cloud ERP market size is expected to grow from $45.3 billion in 2020 to $101.1 billion by 2025, at a 17.4% CAGR.
Benefits of Cloud ERP
Cloud offers a number of benefits that include, faster implementation of the ERP system in the cloud; better support in the form of software updates, maintenance, etc. Cloud also offers enhanced security of your data; a fact that is not compromised by your business’ need to scale up or down depending on market factors. Cloud also offers real-time analytics that enables better business efficiencies and forecasting. And last, but not least, there is transparency in the cost structure that allows the client to choose how much and when. The company can pay per use or subscription model based on their business needs, thus helping the business owners to have better control over their expenditure.
Best practices/steps to consider before shifting to Cloud ERP
To find an answer to that, it is critical to evaluate certain critical aspects of your business. You need to chart your long-term business goals to get a better picture of your workload and finances.
Another thing is to match your business requirements with the functionalities being offered by different vendors. Since cloud solutions are accessible to the users no matter where they are, it is easier to share the functionality included in the solutions. Thus, this improves visibility, impacts collaboration, and enables efficiency and agility for the organization.
In our example, John needs to hire an ERP specialist such as Saberpoint, which specializes in assisting companies to make the transition from QuickBooks to an ERP solution that can scale with his business and build an intelligent enterprise with the integration of end-to-end cross-functional, innovative business processes.
[1] Fictitious example
