The traditional thinking is that applying ERP to a small business’s challenges is a bit like using a flamethrower to kill a mosquito or unleashing a tsunami to put out a candle—an expensive, risky solution that may harm the business more than it helps.
As small and medium businesses (SMBs) accelerate their growth, they quickly encounter many of the same challenges with which larger enterprises are grappling. Poor visibility into operations, slow or inefficient business processes, and an inability to move fast to respond to a changing business landscape are just some of their issues.
The answer that most larger businesses embrace to these challenges is an enterprise application suite that allows them to manage every aspect of their business in an integrated way. Just like larger businesses, SMBs need technology that scales as they grow, helps them to streamline their processes, and enables them to maintain process discipline—all without constraining their agility.
Yet enterprise resource planning (ERP) software has a reputation for being too expensive, complex and feature-dense for the average SMB. The traditional thinking is that applying ERP to a small business’s challenges is a bit like using a flamethrower to kill a mosquito or unleashing a tsunami to put out a candle—an expensive, risky solution that may harm the business more than it helps.
However, ERP has evolved over the years, and many of the preconceptions SMBs have about ERP have become misconceptions. Indeed, one global IDC study shows that 92% of SMBs (those it defined as leaders that are outperforming their peers) use or plan to use ERP software. Let’s bust some of the myths about why ERP isn’t a good fit for SMBs.
Let’s explore the myths behind ERP
Myth #1: Not only is it too expensive, but the costs are too unpredictable
As the ‘e’ in the acronym implies, the first ERP software suites were complex, monolithic solutions designed for larger enterprises. They’d need substantial budgets for hardware, software licences, consulting and integration to implement an ERP suite. The complexity of the deployment meant that the costs weren’t always predictable. So many SMBs still think ERP is still just too expensive for them.
Reality: Today, SMBs can choose from a range of ERP solutions that are designed to be affordable for smaller organisations. They can opt for a software-as-a-service or hosted solution that enables them to pay a predictable monthly fee for their software. Total cost of ownership is kept low since ERP solutions for SMBs are designed to be low maintenance. Plus, today’s modular architectures mean ERP can scale and grow to meet an SMB’s evolving needs.
Myth #2: ERP takes years to implement
Many SMBs still think of ERP as a project that will take years to reach fruition, causing disruption to their business for 18 months or two years as they implement the software. ERP is associated with complex business reengineering exercises as well as extensive customisation and integration efforts. But is this still the case?
Reality: ERP best practices for companies of all sizes have come a long way over the past 10 years. And SMBs, especially, can benefit from ready-to-run cloud ERP built on the latest industry best practices. Proven tools and methodologies bring predictability to the scope and timeframe for an ERP deployment. It’s today possible to deploy an ERP solution in months or for simpler cases, even within weeks.
Myth #3: The path to ROI is long and uncertain
In a challenging environment, most SMBs are looking for quick wins when it comes to cutting costs, increasing productivity and driving revenue growth. Many perceive an ERP solution as an option that will take years to deliver return on investment (ROI), soaking up human and financial resources until they can finally go live with their platform.
Reality: The modular nature and flexibility of a modern ERP system means that it doesn’t need to be rolled out in a single, big-bang implementation. Companies can introduce ERP modules in a phased approach, using the features and functionality that address their most pressing pain points. They can expand the deployment over time, effectively using ROI from the earlier phases to pay for the later ones.
Myth #4: ERP is too complex for SMBs
ERP software packs in a lot of functionality, so many SMBs are concerned that it could add more complexity to their processes. Many also wonder whether the software will be too difficult for their end-users to use, especially if they’re implementing ERP after using Excel or simpler finance packages for many years.
Reality: Ease of use of ERP software has improved in leaps and bounds, with a slick user experience that will be familiar to anyone who has used a mobile app or cloud productivity tool before. While there are many features and modules available, the deployment can be tailored to the business’s needs. ERP makes life simpler because it eliminates redundant processes, breaks down data and business siloes, and reduces the need to work across multiple tools, systems and manual processes.
ERP is not just for big business
ERP can help businesses of all sizes to streamline processes, remove duplication of effort and enable the frictionless flow of accurate information across their operations. It’s an essential tool for any business aiming to achieve greater efficiency to increase operating margins, while leveraging improved insight to grow revenues. Today’s solutions enable SMBs to unlock the power of ERP, so they can compete with larger companies on a more even footing.
