6 proven benefits of using ERP systems for small businesses

benefits of using ERP systems

SMBs in the manufacturing sector keep facing several challenges to stay competitive and relevant. They have to drive and demonstrate value to their business out of limited time, resources, skills, and budget. Things turn out the more cumbersome when the business has less involvement of technologies in the execution of its processes and operations.

Many SMBs has not realized what technology like ERP can provide them to address critical challenges they face in the day-to-day operations. And those businesses, which have already understood, generally worry about the enormous costs of taking on and running these technologies ERP systems, which do nothing but negatively impact their profitability and sustainability in the market.

This is a poor decision making and, no wonder that many SMBs are at risk because of it. They are still running their operations through traditional ways where processes are executed manually, or with a little involvement of technology and every transaction are recorded on papers. It’s sort of bookkeeping, isn’t it?

No doubt some of these businesses may be making money without fully relying on technology and avoiding ERP systems because of their observation that only large-scale organizations can afford ERPs.

But things are totally different. In fact, ERPs for SMBs or SMBs are becoming more and more popular to facilitate greater productivity and more streamlined data is in the access of all departments within a business at all times.

Choosing the correct ERP system could also prove beneficial for SMB’s for the long run.

Still not convinced how an ERP system can help an SME? Let me mention some benefits that an ERP system introduce to a small medium business.

1.  Increase in productivity

One of the biggest benefits that can instantly be seen just after implementing an ERP is the increase in productivity. Almost all businesses, particularly those which are in the manufacturing sector, keep battling with increasing productivity of their manufacturing units to get more out of every operation.  They have multiple processes; one relying on the data of other for decision making. It’s their bottom line.

Here ERP helps in making business-data available across departments at once, and if its’ required then in real-time. When data available immediately, employees save the time and rapidly complete operation. Their dependency on employees of other manufacturing units for the information they need to process their operations is just removed.

2. Data Flow Streamlined

A fast-growing business, without an ERP, may run into a problem when it works with the data compartmentalized in different departments. But there may be the requirement of a set of data which is generated by a department to execute operations of other departments. For example, financial data is required by the inventory department of business.

When your business starts using ERP for processing and executing its operations, it will instantly see every fragment of data is streamlined and sequenced according to step by step requirements of operations and is reachable among employees flawlessly.

3. Better Collaboration

An ERP system implementation can make a big difference to small businesses which are struggling with collaboration issues.  Poor communication and lack of collaboration are caused when employees have no or insufficient data. When all authorized employees have the data reach across departments, collaborate is naturally better facilitated as everyone is able to see what they need to executive their tasks on time, with great accuracy.

4. Decreased Operating Costs

Almost all businesses, including those in the manufacturing sector, are bothered how to reduce overall operating costs so that profit margins can be increased. Again, an ERP can help them save money. With an ERP generated streamlined data, business-owners can save the money they invest on individual software and management systems for individual operations. A single ERP system can have software applications for all the departments in a company; from production/manufacturing to human resource, to sales & marketing, to purchasing, to accounting and finance and so on. In result, operational costs are automatically decreased.

5. Business Insights and enhancement

ERP can also make business insights available and help managers to understand lags in the process of manufacturing. Insight data helps in making changes in processes, which are affecting the productivity of a specific operation.

6. Better Decision-Making

There are little scopes that SMBs can bear losses or failures caused by bad decisions. When it comes to decision making, it’s vital for small-medium businesses to rely on data. With ERPs for SMBs, there’s never any doubt for any decision being made without a base. An ERP can generate a variety of reports and charts, which will help business-owners to understand trends and make decisions accordingly.

Author Bio:- Sofia is a digital marketing expert in Rapidsoft Technologies which is a leading IT consulting company providing full  range it services including, IoT application development, ERP software development , and big data app development solutions.