The Truth about ERP for Small Businesses

Enterprise Resource Planning (ERP) software automates resource management for businesses of all sizes. ERP software, offered by providers that are JD Edwards certified, assists with day-to-day operations by providing automatic, real-time inventory reports, helping small business owners maintain their stock without time-consuming, manual work.

ERP Benefits

Streamline Processes
ERP software can automate processes such as tracking employee hours and calculating their payrolls. It is often integrated with a web-based interface for clients to place their orders, freeing employees to focus on reaching out to new leads and converting them into sales. ERP software is also capable of automatically generating work orders and helps to optimize a company’s workflow.

Scalable
ERP software has the benefit of being scalable. While growing businesses often have to make radical changes to keep up with the demands of growth, this software can easily tolerate changes without interruption. Traditionally, business growth meant hiring more management and accountant personnel to keep up with expanding operations; ERP software has no trouble handling these increases.

Objective Reporting
Further, ERP software provides valuable analytical tools. By keeping everything in a central database, ERP software can provide real-time analysis that would take employees days to compile. Managers are often able to detect weak points and missed opportunities that are keeping a business from reaching its full potential.

ERP Drawbacks

There are a few downsides to consider. ERP software, while designed to be as user-friendly as possible, does have a learning curve. During the transition to using ERP software, managers may be tempted to retain their old, manual techniques before they can fully comprehend the new paradigms and logistical improvements ERP software provides.

The transition to ERP software can have an emotional impact on workers who are used to the old methods of doing business. For long-time employees who are used to manual resource planning, the shift can be upsetting. But even with this emotional disruption, the benefits clearly outweigh these temporary problems.

Despite the growing realization that ERP software is necessary for a business to remain competitive, some myths still persist.

– ERP software is only for medium and large businesses.

Actually, ERP software may be most important for small businesses. Larger companies are more easily able to absorb the cost of hiring new management and accounting personnel than are smaller businesses. Often, small businesses are faced with the realization that the paperwork and planning required is simply too much to handle with existing personnel. Hiring new personnel, however, would seriously undermine profitability.

– I can handle everything ERP software does.

It is true that owners and management are often capable of handling the existing workload. But at what cost? Today, there is no reason for anyone to have to dedicate a substantial fraction of their work hours to perform tasks that can be done automatically. Managers are most effective when they are actively involved with operations instead of being relegated to an office performing tedious jobs.

– ERP will make some employees redundant.

Many small business owners are reluctant to take on software that would take away the work of some employees. ERP software, however, often means than an employee is free to take on new, often exciting responsibilities.
With the new influx of analysis and opportunities for improvement, talented employees are able to take a more active role in helping the company function better.

This helpful advice was provided by Vanessa Mackay.

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