Member Article

Small Business Finance Directors: Are You Too Small for ERP?

ERP is now more accessible and affordable for SMEs than ever before thanks to new software delivery methods and pricing models.

Enterprise Resource Planning (ERP) sounds as though it should be of no interest to the SMB. However, ERP software automates processes for businesses of any size. Which company would not benefit from:

• Streamlined business processes? SMEs using ERP systems reported a 95% complete and on time rate.
• A scalable manufacturing software solution which promotes business growth and adapts to changing market variables? Small and medium businesses using ERP software can make operational and strategic decisions 31% faster than their competitors.
• Objective reporting tools which give a clear insight into your business processes and efficiency? SME ERP can cut operational costs by 22% and admin costs by 20%.

(Figures from Aberdeen Group report - ERP in SME).

These are common demands of every manufacturing business. And each has a demonstrable effect on your company’s bottom line.

But it costs too much…

Traditional ERP software is installed on computers onsite, often at considerable upfront cost, increasing the time to generate a return on the investment. However, new options are now offered by many vendors designed to keep costs affordable for SMEs without compromising ERP functionality:

• On Demand/Software as a Service (SaaS) ERP software accessed over the internet
• ERP software hosted and managed by the vendor
• An ERP system hosted and managed offsite by a third party.

The beauty of these systems is that businesses often only pay monthly, removing expensive upfront costs for hardware, software or licenses. For onsite systems too you can expect a good vendor to help provide a finance package that gives you the benefits of monthly, rather than upfront, payments. In both scenarios this helps to ensure a more rapid return on investment, as business improvements from the system are quickly seen on the bottom line.

“Using the web to access a single ERP system at a central location, companies can reduce their IT investment on two fronts—hardware and personnel.” -Gary Forger

Can you afford not to invest in an ERP system?

Research from the Aberdeen Group (ERP in SME 2011: Setting the Stage for Growth) suggests that 77% of SMEs have already implemented an ERP system. More specifically, 72% of manufacturers are already using ERP (Aberdeen Group - ERP in Manufacturing 2011). You could already be missing out.

“The Best-in-Class [companies that are most efficient in their use of ERP technology] are 127% more likely than all others to receive triggers and alerts based on events that have an impact on the organization. This allows decision makers to be more agile and react on the fly. They can take advantage of opportunities as soon as they are presented as well as react immediately to adverse events.“ -Aberdeen Group - ERP in Manufacturing 2011

Does your business currently benefit from the use of an ERP system or are you one of those who are missing out? Do the new software models provide a suitable, cost-effective solution for your business needs? Copy and paste this link into your browser http://bit.ly/ERPeGuide.

This article was first published on the Sanderson manufacturing blog

This was posted in Bdaily's Members' News section by Paul Bywater .