Small business ERP: six questions you need to ask yourself
Do I really need an ERP system? This should be the first question you ask yourself. It is also a question for potential vendors and you should expect a frank reply. Small business ERP software can provide you with a set of powerful tools that combine accounting, finance, sales, inventory, production, engineering, human resources, and payroll and many other system tools into a single overall package. You are in business already and we can assume you already are doing all the functions of a business yourself or someone is doing them for you. Someone might be an employee or an outside contractor, but someone has to be doing those jobs.
Combining functions provides you an integrated tool where data from one part can be easily shared with another part. No matter what your job is, the user interfaces are similar. You have one support system for all the parts of the system. There are a lot of advantages and many small businesses can benefit from process integration. Combine this with the lower upfront costs in Software as a Service (SaaS) models, and your interest in small business ERP is clearly justified.
Does the ERP fit my type of business?
ERP systems are often designed for a business type such as retailer or manufacturer or contractor. This is true regardless of the size of business. There are *many ERP vendors which cater to a variety of industries, and these could provide your business with flexibility in the long term.
However, small businesses tend to have an increased number of non-uniform processes associated with their industry. This is where a tailored small business ERP system for your sector may be more efficient.
How much will this cost?
This is important for any size business but especially for small businesses where one mistake may jeopardize the long term future of your company. ERP systems can run to many millions of dollars or can be as low as a few thousand dollars.
Cost includes the amount for the initial software. There will be other costs too; remember to add any necessary other software and any ongoing support fees from your vendor. Don’t forget hardware costs. If you choose a SaaS solution, how lengthy will the ERP contract be?
"You don’t have a 100-strong IT team at your beck and call, you must consider this when you are taking on the responsibility of an ERP system."
What maintenance will be required and how much is included in your support?
Small business ERP systems require maintenance. There will be computer and server issues to fix. There will be database problems to solve. People will need to be trained. You don’t have a 100-strong IT team at your beck and call, you must consider this when you are taking on the responsibility of an ERP system. Small businesses have limited resources so be sure you can keep your tool sharp.
Should I buy it or rent it?
In the past the only choice was to buy an ERP. Many vendors today will rent the system. This can be a wonderful choice for a small business. There is very little up-front cost. No dedicated servers are required. Most of these ERP systems are designed to need simple maintenance by users. ERP for rent is known as SaaS or software as a service.
Do I really only need an accounting system?
A common reason small business owners are considering ERP is because they realize they need more powerful accounting and most accounting software today is packaged within ERP. You still have a choice; there are stand-alone accounting systems and often you can buy only the accounting module from an ERP.