Is ERP Out of Reach for the SME?

If you think ERP software is too expensive for a SME, think again.

Heinrich de Leeuw, Managing Director, Seidor South Africa points out that ERP technology enables SME owners and directors to have a real time dashboard of important data in the business. “In our current context, can you afford not to have a digitally intelligent business?” he says.

A comprehensive ERP, like SAP Business One, links all components of the business centrally and gives SME owners a 360-degree view of the company, unifying flow of information and business transactions in real-time. The business benefits far outweigh the upfront costs because robust ERP delivers measurable value and can have a major positive impact on a business.

“The costs of an ERP system depend on many elements, including the rental and/or licence fees, business analysis, data analysis, customisation, infrastructure, testing, training and change management,” says de Leeuw. “Keep in mind that ERP reduces costs by streamlining processes and limiting repetition and manual work. By enabling just-in-time inventory management, raw material orders can be aligned with production schedules, freeing up capital for other needs, and optimising warehouse operations.

Among the many benefits ERP offers, it increases a company’s capacity for strong growth, making it easier to pursue new revenue opportunities.”

De Leeuw makes the point that by unifying the data gathered by various programmes and departments and consolidating it all in one place, ERP makes business administration less of a challenge. “The speed of access to information is accelerated, and the changes or decisions required are highlighted. This empowers managers to take action to address issues and move the business forward.”

Here are some of the key benefits of a modern ERP system like SAP Business One:

1.    Improved productivity: An ERP system simplifies and streamlines all business operations, reducing complexity and improving productivity

2.    Increased customer satisfaction: ERP helps improve customer service by streamlining backend business processes, matching supply with demand, improving the user experience, and enabling easy access to the information people need to better serve customers.

3.    Compliance and risk management: ERP systems facilitate control over reporting processes and ensure compliance with regulatory requirements and as a result these key operational requirements are made much simpler.

4.    Increased ROI: Return on investment is achieved through integrated information sharing, increased efficiency, real-time data access and governance, improved inventory management and reduced costs.

5.    Realtime information: Realtime information and reporting, available across any part of the business, provides access to company performance at any given time and delivers up-to-the-minute, accurate information.

6.    Advanced analytics: Effective historical data analysis and future trend predictions allow for more informative decision-making, leading to better business performance.

7.    Improved reporting: With instant visibility analysis capabilities, companies can manage and monitor financial performance in real-time.

8.    Improved inventory management: ERP helps businesses make better decisions by providing accurate inventory data. Stock availability and location information is available in real-time, whether in transit, in the warehouse, in the online store or in the shop

9.    Standardisation: Standardised business processes ensure increased control and reliability of information.

10. Flexibility, scalability, longevity: With cloud-based ERP, everything is hosted on third-party servers in the cloud, giving a business the flexibility to grow the system as needed. Operating costs are lower as no manual or regular maintenance is needed, and all applications are automatically updated and maintained, eliminating the need to go through numerous implementations in the future.

“ERP doesn’t automatically equal expense,” says De Leeuw. “The size of the company and the number of users ultimately defines the cost of the project, but if you select a proven system and have a detailed roadmap, it’s likely to be the only one your business will ever need.”