Updated: May 20, 2020
What is an ERP system and does your business need one?
ERP stands for enterprise resource planning, and they are all the rage these days. If you are currently working in a large business organization, you are most definitely aware of what an ERP is; you might be using it right at this very moment and understanding the fundamentals of an ERP system is a crucial aspect of an IT support role. What is the idea behind an ERP system? Is it a one size fit all solution, or maybe every business could use perfectly tailored ERP solutions for their business requirement. As IT professionals, we would love nothing more than to sell you a product. However, your business may not necessarily need an ERP system. But how does one identify the need for an ERP system in the first place? You're clearly a decision-maker in your company, or maybe you would like to learn more about ERP systems, which might have led you to this article in the first place, to understand better what an ERP solution may potentially provide for your business organization. A large organization stands to gain with the implementation of an ERP solution, but does this mean a small organization would not need such a solution? That depends entirely on the nature of a business, seriously. Say you are a small company which supplies paper to companies and your margins are too little to justify hiring extra workers to assist you, or maybe it is difficult to find good help. Every day you receive calls, you arrange delivery, and you have to check the stocks to see if you have continually enough. Your small team stands to benefit with an ERP solution that is capable of automating many of those tasks in between, from collecting orders from clients via a web-based form to sending automated emails to your suppliers when a particular stock is running low, which frees up resources to focus on acquiring more clients, improving sales and profits.
An ERP system is not a tool to make your operations as efficient as possible; it is a tool for scaling. If you have just started a new business for well over a year, you are still building leads, and your team is doing well dealing with clients. Now you are thinking; maybe it is time to have an ERP system in place. Unfortunately, most businesses think the same way. They think it is better to build an ERP foundation now rather than later, right? Wrong, ERP solutions are expensive and for a good reason, and you always have to hire a third-party vendor to integrate these solutions into your environment. What you are essentially saying is: Let's make life easier for the ERP integrators and let them earn some easy money. Does that make sense? Regardless of when you implement an ERP system, they still have to be integrated, and you would still be paying the same amount and spend the same time on the project management. Which brings us back to our earlier point, an ERP system is a took for scaling and not for productivity. Yes, it does make your organization more productive and efficient; this is a side effect, not the purpose.
It does boil down to dollars and cents at the end of the day. An ERP system is a tool meant to maximize your profit potential through scaling. Its also meant for businesses which are struggling to meet their demands, streamlining crucial operations along the way and optimizing the speed of delivery. How could you possibly know which process within your operational procedures to speed up when there is not enough business coming in to push your operations to the test? Does a Formula one race team finish tuning a car before it goes out on the track? Or maybe you buy a yoga mat just in case you are inspired to do Yoga in the future? The last example was probably a bad one. No two businesses operate in the same way, mainly because the culture is always different. Just remember, having an ERP system you don't need is no different than hiring an extra staff who has no work to do. ERP systems are unique tools; having one benefits you but only under the right circumstances. Let us finish off by saying this, the moment you believe your business is beginning to feel the stress and falling back on delivery; this would be the perfect moment to start considering an ERP solution for your organization.
Thank you again for reading 'IT Support 101: Does my business need an ERP system?' by IT Block. IT Block is an IT support services provider based in Singapore and we enjoy sharing our IT expertise with the world. #IT #support #ERP #CRMS #system #business #services #Singapore