Implementation of ERP software for small businesses is key because it covers the entire range of activities within the organization. Companies have cited faster processing times, better teamwork, and a centralized data system as the top three advantages of implementing ERP.
The software provides a unified system that different departments can use for collaboration. Before diving into the specific aspects in which ERP can help, we need to clarify a few points:
- Data is never the least important. Regardless of the size of your business, data is rich, especially in data-intensive industries like manufacturing. Even as a smaller company, ERP software can still provide valuable insights from your data.
- Data must be organized. Regardless of the volume of data, organizing data is essential for efficiently managing your business. For example, in manufacturing, it is crucial to understand your financial status, raw materials, workforce, and production capacity. The goal is to operate with maximum efficiency.
Without a centralized system for data collection, process reporting, and a holistic view, how can you accurately know where your business stands? For any organization, ERP will (generally) provide the following support:
- Enables your employees to better understand their roles
- Facilitates efficient resource allocation across departments, both internally and externally
- Provides a single source of data for production, sales, inventory management, human resources, etc.
- Reduces costs associated with human errors by using one system for all procedures within the organization
- Displays accurate data and reports to track progress, productivity, and performance.
Important notes before implementing ERP software
Implementing ERP software is time-sensitive, and for small businesses, every second counts. The ideal solution should cover most aspects of your business. This could include accounting, payroll, human resources, time tracking, fixed assets, CRM, inventory, etc.
1. Why does your current business need an ERP?
You can identify changes by understanding the reasons behind them in your business.
Take the example of our client – Fencing Components (FC), when their old software solutions did not communicate well. FC therefore sought an integrated solution to streamline their business processes. Their goal was to simplify every aspect of the company to increase productivity and provide excellent customer service.
With your current business needs, you can highlight some reasons such as:
- You are having trouble managing growth. For example, increasing order volumes create constant challenges with inventory control
- The software you are currently using is outdated and inefficient for your current processes. For example, your departments are drowning in paper processing
- Your teams are experiencing many symptoms of process disorientation. For example, safety issues in the factory require better processes
- Multifunctional spreadsheets are becoming too complicated or need fixing
- Clients and partners express dissatisfaction, and you are struggling to meet their expectations
- ERP can be considered at any of these points, and the search for the best begins here.
2. Where and what in the business to make changes?
After identifying the above reasons, it becomes easier to pinpoint areas that need changes. Going back to the Fencing Components case, several areas that require adjustments are inventory control, shipping, accounting, and managing sales orders from multiple channels. In general, you can consider factors like administrative tasks, spreadsheet data, or equipment.
You should also clarify your existing software and processes, plus their contribution to your business. Are you in a food manufacturing company that has developed a custom process for batch and lot tracking? Or a plastics manufacturer managing work orders and labor costs through a separate accounting system? Be sure to assess your technological stack and evaluate how or where employees will adopt the new ERP system.
3. Who will take action on the software?
The resources you provide to subordinates can help them execute tasks much better. According to Gallup’s study, employee engagement and ongoing communication are interlinked. Managers and employees who have access to more information from the company’s databases make better decisions. Moreover, when they have better insight into how the company operates and the purpose of their work, employees gain more trust.
Fortunately, ERP offers more than this type of access and promotes more effective communication and procedures. However, it is essential to get details about how the software collaborates with your teams in the following way:
- Talk to everyone about their responsibilities and the software they use
- Ask them about any issues they want to solve or think could be improved
- Ensure the involvement of all key stakeholders to avoid neglecting significant details.
4. When to start the implementation?
Implementing ERP software for small businesses requires thorough planning and discussion. Consider what can impact your implementation timeline and be best prepared for them. Here are some typical effects:
- Engaging and coordinating the right internal resources
- Time to gather information from your team on the problems you want to solve with the new ERP system
- Availability of your key personnel and resources during implementation
- Documenting your existing processes and identifying everything that needs to change
- Cleaning up your current business information and deciding what to transfer.
Key success factors of ERP software for small businesses
A successful ERP software for small businesses is one with continuous changes and improvements. A “perfect” system is not required because there should always be room for improvement.
A great ERP system must be able to grow with you and your overall business operations. It is expected to be adaptable to all specific needs. Overall, the success of an ERP system depends on the following 5 key factors:
- User-friendly interface: the user experience should be simple, intuitive, and pleasant
- Scalability: the ERP software should be able to grow with the company and should not become outdated after a few years of use
- Flexibility: the solution should be adaptable to many types of businesses and allow customization. It is expected to fit into various processes and needs within the company or department in which it is used
- Reliability: the software should have reliable performance and be secure enough to protect sensitive data. However, it should not be too difficult to quickly update new features or bug fixes to prevent potential security risks
- Robust integration: solid integration capabilities offered by other top tools greatly ease the automation of your business.
The 5 best ERP software for small businesses in Australia
Conclusion
Setting up ERP software for small businesses requires thorough planning. However, the first thing to do is definitely to create a detailed business case and note important requirements.
When evaluating well-known ERP options such as Odoo, Microsoft, Acumatica, or NetSuite, focus on the specific benefits and support to ensure the chosen option aligns with your unique needs.
