20 Feb Why ERP can mean big insights for small businesses
Whatever business you’re in, there’s nothing quite like a three-letter techy acronym to strike fear into your and make you start counting the days till the weekend… or retirement.
That’s especially the case when it’s three letters that people don’t really understand the meaning of – and are often too afraid to ask. And perhaps the big daddy of all such scary business acronyms (or SBAs, if you’re a fan of irony) is ERP, which stands for enterprise resource planning.
But once you look beyond the off-putting initials, ERP is a humdinger of an idea. Wikipedia defines it as: “The integrated management of core business processes, often in real-time and mediated by software and technology.” Put more simply, it means using tech to get a clear view of what’s happening in your business at any given moment.
And you don’t have to be a German car-maker to realise how doing this can help you weed out inefficiencies, boost productivity, and generally help you make better decisions all the time. But surely anything that starts with the word ‘enterprise’ means ‘not applicable for smaller businesses’, right?
Er, not any more.
Thanks to the growth of cloud software solutions that are increasingly affordable and easy to use, the magical world of ERP is opening up to businesses of all shapes and sizes, allowing them to benefit from the same levels of insight and all-round savviness as their bigger competitors.
So, we asked Cognition24’s Andy to talk us through his top four reasons why all small companies should be thinking about an ERP system of their own.
1. Scale up – rapidly
Imagine your sales people do so well that you’re struggling to keep up with the demand they’re creating. “Nice problem to have, isn’t it?” says Andy, Cognition24’s Managing Director. “But small businesses relying on manual processes to fulfil orders are likely to struggle with larger volumes when they get a sudden growth surge.
“ERP systems are good at reducing the impact of things like this. By automating certain time-consuming tasks, like entering data onto spreadsheets, it means your people can focus on higher-value activities, while making sure none of your multiple balls in the air get dropped.”
2. Make better, faster decisions
ERP systems gather and deliver real-time data that can be applied to a range of business activities, such as marketing, accounting or general management. “But the most important thing,” says Andy, “is that they allow you to make the really big decisions quickly and with all the facts at your fingertips.
“For example, your system might help you to spot an issue that’s holding back performance or productivity. As soon as you do, you can react rapidly to solve it, in the full knowledge that you’re making a call based on accurate, up-to-date information – and then move on to the next challenge.”
3. Keep on the right side of the law
Constant changes in government legislation can be a big pain in the proverbial for small business owners, many of whom don’t have large teams of accountants or lawyers to help them keep up.
“Hands up who feels nervous when they hear someone say GDPR or GAAP?” asks Andy. “The good news is, an ERP system gives you a better handle on regulatory compliance, especially with the really tricky stuff like data security and financial accounting. The software keeps everything in line while ensuring your data is accurate – and if you do hit a problem, you’ll be able to trace it back to the source.”
4. Streamline your systems
A well-installed ERP system will allow different information systems in your business to be streamlined into one. This means that anyone with permission can access and share relevant information in a few simple clicks, removing the need to export or re-submit data that could lead to mistakes.
“Thanks to this, you can drive greater transparency across the business, move people away from mundane data-crunching tasks, improve data accuracy and generally give your business productivity a shot in the arm,” says Andy. “And who wouldn’t want to do that?”
So, maybe it’s time to ditch your fear of the acronym, and start thinking about ways your business would benefit from some of the above.