Enterprise Resource Planning (ERP) software integrates the internal systems of a business. For eCommerce brands with a multichannel sales structure, this means updating all your sales data across multiple platforms, whilst your sales channels simultaneously feed back data to your inventory management system. Before you start applauding your screen, we’ll address the small-to-medium-sized elephant in the room. Many ERP systems are built to accommodate the big, the huge, and the gigantic. Advanced ERP technologies will integrate everything from accounting to customer service to human resources – which is amazing when relevant, and costly and time-consuming whether important or not.
This post outlines the key considerations an SME (small–medium sized enterprise) should consider before choosing an ERP system.
‘Limited budget’ is one of those phrases that, no matter how many times you say it, certain sales representatives do not seem to hear. It’s just a fact that SMEs do not typically have the same financial resources of larger organisations. ERP systems are a costly investment – implementation alone can cost between $150,000 and $750,000. Those numbers may be eye-watering, but the cost of an ERP system for small businesses could be much greater – the cost of future scalability.
Despite the current financial climate, scaling is still a future priority for many SMEs. With aspirations of rapid and controlled growth, there is a risk that the flexibility constraints of many ERP systems do not support the changing needs of an expanding business. An end-to-end eCommerce software system that is flexible and adaptable to accommodate growth is a much safer and affordable option for SMEs looking to scale.
ERP systems are designed to support a vast range of business processes and functions. To accommodate for these modules, the systems are incredibly complex. This complexity does not necessarily impact large scale businesses as they’re relatively consistent in their business needs. However, for SMEs this complexity can result in a rigidity that is not conducive for the changing needs of a scaling business.
Complexity also means advanced training needs that are not sustainable for smaller businesses. If an ERP system requires extensive training, it can take resources and focus away from revenue driving efforts, since transitioning from one system to another will usually mean running twin systems in parallel for a time. More agile and less convoluted solutions can support SMEs to a greater degree.
As SMEs often have business requirements that differ from large organisations and industry standards, ERP systems that don’t account for tailoring their software to align with specific system needs can hinder efficiency rather than promote it. Limited customisation options, particularly for businesses with unique industry requirements – and almost all business will argue they’re unique and work in a unique way – can’t support the evolving needs of an SME.
Customisation can come in many forms. There are a few instances, however, where customisation is a key factor in implementing a successful integration system:
ERP systems are designed to hold large amounts of data. If they’re difficult to customise, there can be constraints as to what data can be captured. For enterprises with specific data capture requirements, this can be a huge flaw in a rigid ERP system. An example of this might be a charity, that needs to account for Gift Aid. If this kind of data capture is not facilitated, the efficiency of the ERP platform is compromised.
Modifying reports and dashboards can be hugely beneficial to SMEs seeking relevant and actionable insights relating to scaling opportunities. If an ERP system is unable to create custom reports that align with their business goals, a standardised generic reporting structure is unlikely to yield the desired insights required to scale, resulting in companies having to do a lot of further data crunching to get at and report on the right information.
For SMEs, finding the right systems and software to suit their business needs can be a lengthy and agonising process. Once found, it’s integral for your business to work with these systems providers to tailor the solution to your exact requirements. ERP systems that are not designed to be customised may have limitations in terms of third-party system integrations. This is a huge consideration for SMEs as they often lack the time and financial resources to move to an equivalent system that is supported by their ERP.
Get in touch if you are an SME looking to implement an end-to-end software that can facilitate scaling, find out more about Volo’s offering.