There comes a point when a growing business simply out grows its systems, and there are indications that if it continues with the status quo, further growth – and profits – will be stagnated.
“When a company shows the first symptoms of wavering in inefficiencies, it’s time to down the old tools, and reach for a ‘Leatherman’,” says Leo Dreyer, Project Delivery Manager, at Bluekey Software Solutions, specialising in SAP Business One, the Enterprise Resource Planning (ERP) solution for small and medium size businesses.
He lists the inability to meet customer demand for products; an overstocked warehouse; poor decision making as a result of poor access to reliable, current information; mountains of data hidden in spreadsheets, as just some of the signs.
“When you’re employing more people to handle growing volumes of work and you’re investing substantial sums of money in small solutions to fulfil the different requirements of the business but you’re still not operating optimally, it’s time to revaluate. If the systems and people you’ve got cannot support the business’s objectives and future growth, it’s unlikely that adding more people and more systems (that aren’t integrated) to the mix will either.
“The only way to gain control and be rid of inefficiency is to integrate all aspects of the business with an integrated business management tool. There is a perception that ERP is reserved for big companies. But, it’s not. ERP addresses the key business requirements from finance and inventory, to Customer Relationship Management (CRM); human resources; sales; and procurement, all in a single, integrated solution.
“These requirements are the same for growing small and medium size enterprises. So, why should they not be addressed with an integrated ERP solution?” questions Dreyer.
He says that greater availability of solutions, in particular SAP Business One, which are better-geared for mid-tier enterprises, coupled with low mid-range IT costs, means that ERP is accessible and sensible for smaller sized companies.
“ERP adoption amongst small and medium sized companies is increasing rapidly as more and more of them realise that integration is the only approach that can support growth sustainably into the future, and ensure they maintain their edge. If the tool fits, use it,” says Dreyer, adding that the implementation of ERP often leads to a complete re-engineering of the business, resulting in a faster, leaner and more profitable organisation.
“The right solution, implemented properly, will pay itself off very quickly through headcount reductions, lower stock holding, higher productivity and tighter stock management,” he adds.
When evaluating ERP or business management solutions, Dreyer says companies should ask a few important questions:
- Does the solution include the key modules required by your business?
- Is the solution real-time?
- Can the system support better decision making through improved access to reliable and accurate information?
- Will the solution provide a single source of the truth?
- Can the software-owners provide a dedicated roadmap for future releases? (SAP is always four years ahead).
- Is it just an accounting system or does it provide the tools to manage your business?
- What is the total cost of ownership?
- Will it provide rapid ROI?
SAP Business One is a great fit for most small and medium sized businesses. It is easily configured for varying business needs, without having to do bespoke development as is often the case with other robust products. All the modules are available to the company in one solution. It is up to the business which modules they want to utilise.
He concludes saying that it is important for companies to understand that ERP is not a “box-drop” solution.
“Companies cannot expect an off-the-shelf solution. Implementing ERP can be complicated due to the very nature of ERP which is to integrate many, varying aspects of the business. However, well-planned implementations that have buy-in from top management and a competent implementation partner are typically completed within an average of three to six months and return on investment is usually achieved within (six to 12 months.
“So, to get real value from your investment in ERP, you not only have to ensure that you choose a solution that’s a great fit for your business, but your implementation partner should also be a good fit.”