By Khaos Marketing, 20th August 2021

The technological progress shown in ERP solutions has begun to form the question as to why small businesses need ERP software. Integrating all core business processes and having access to real-time data has turned ERP software into a strategic tool for growing multi-channel businesses. Developments within cloud ERP software have formed a financially viable solution for smaller businesses. A cloud-based solution brings automation to tedious tasks, and the ability better analyse the success of a business. This advantage is beginning to set SME’s apart from one another. Alongside this, the inherent application of ERP software supports future growth within a business due to the scalability that ERP solutions offer.

1. Future-proofing for growth

Once establishing themselves on various marketplaces, small businesses tend to have the ambition of becoming self-sustainable on their own platform/website. This provides benefits such as greater control, higher chance of referrals and no listing fees. However, making this switch can often cause issues such as loss of sales, order data and, customer information. Having an ERP system implemented early on means information from all different areas are stored in one place. This means no matter the direction a business takes, data from prior platforms will never be lost.

Growth naturally brings an increase to the size of a business’ workforce which will often be in the back of a small business owners mind. The onboarding process can be a strenuous and time-consuming task for new employees. A well-implemented ERP solution can help streamline this process as well as reduce the workload for new employees. Having information readily available in a centralised system makes the learning process considerably more convenient. In addition to this, the inherent intuitiveness of ERP software reduces the complexity of tasks that new employees face. This in turn not only speeds up the onboarding process but makes it a more manageable experience. Onboarding is one of the first opportunities a business has to form a positive employee experience. Making the onboarding process a seamless and pleasant experience can begin to instil loyalty and confidence in new employees which can become a long-lasting effect.

2. Quicker and more informed decision-making

ERP software brings access to live data across all major business processes such as marketing, accounting, and supply chain management. This information allows businesses to make decisions based off facts and figures. Small business owners are able to identify any current or potential issues across the business. This can range from potential cashflow issues, current production challenges or future delivery problems.

Readily available information in a convenient format can help small business owners understand which departments are performing better than others. This can help drive the decision-making process towards ensuring underperforming departments have the needed resources in order to further develop. The same can be said for sales channels. Small business owners will be able to strategically decide which sales channels are worth investing time and resources into. This is especially advantageous for smaller businesses with little resources. This therefore places an emphasis on them having to use what resources they have, in the most efficient manner possible.  

It can be noted that ERP solutions not only bring more informed decision making, but also the ability to make decisions faster. In the case of a small business, this advantage can open the door to many opportunities that can inspire business growth. These opportunities are heavily focused around products currently being sold and, sales channels currently being utilised. Due to the in-depth and easily accessible data, trends can be easily identified and taken advantage of. For example, there may be a noticeable spike in sales from a specific channel. Small businesses can take advantage of this opportunity by focusing more of their resources on this particular channel until sales return to a more common trend.

3. Improved efficiency and monitoring

Increased competition and the ease of using online marketplaces such as Etsy and Amazon have meant selling across multiple channels is fairly common for smaller businesses. While selling through multiple channels is an ideal way for a smaller business to gain exposure, monitoring data from these avenues bring its challenges. As well as missing sales orders, or not picking up customer queries, trying to measure the success of each channel as an independent sales channel can be difficult. This is where cloud ERP software can step-in. Evaluating the success of your different channels as well as monitoring your order processing is simple with ERP software. All orders are able to be directed into one area in real-time. This removes the task and confusion of having to check and monitor multiple selling channels.

While smaller businesses tend to deal with less data, the benefit of process automation can still transform even the simplest operation. As well as ensuring complete accuracy with your data, the chances of mistakes made by human error are almost completely removed. This gives small business owners a chance to place more resources into growth and development rather than manual data entry.

4. Better interaction with customers (CRM)

It’s common for ERP solutions to have a built-in customer relationship management (CRM) tool that works alongside your order processing. This allows for easy access to real-time data regarding customer information and order history, as well as other benefits such as:

  • Improved customer retention
  • Quicker communication
  • Improved segmentation
  • Increased knowledge of customers

From a small businesses point of view, having a positive relationship with customers is of great importance, and using a CRM solution inherently aids this process. Positive reviews and word of mouth marketing are two key factors that give smaller businesses the platform to grow their customer base. Positive customer satisfaction will be the biggest driver of this. The use of an in-built CRM system can help ensure customer queries and orders are dealt with in a timely manner therefore increasing the likelihood of customer satisfaction.

A smaller business will be more focused on obtaining new customers. Having good CRM practices in place will make the process of customer retention smoother down the line. This is important as the likelihood of selling to current customers is much greater than new ones (as shown below).

Probability of selling to returning customers

Do small businesses need ERP software?

Many of the fears small businesses face when considering an ERP system are ones that simply no longer exist. It is evident that ERP solutions can help propel smaller businesses in their early stages. The streamlining and automation of various processes ensures time is available to focus on business growth. In addition, the future growth of a business can scale in line with ERP systems by simply increasing the number of users/features. A more tailored experience can be offered to current customers due to built-in CRM functionality. These overriding factors help to show why small businesses need ERP software.