Your Guide For Buying Small Business ERP

Your Guide For Buying Small Business ERP

With ERP solutions thriving over a few decades, it has become an integral part of modern businesses and provides them with benefits irrespective of the industry, market, or size.However we have to acknowledge that ERP for big business has been much longer than ERP for small businesses. Thanks to continuous advancements in providing complex functions and affordable pricing, ERP systems are now accessible to small and medium-sized businesses.

ERP (Enterprise Resource Planning) is a business management software that integrates all the core functionalities (finance, accounting, HR, sales, supply chain, production, project management, inventory, etc.) into a single system that helps you run your business smoothly. The ERP solution provides you the business insight to automate and streamline your business process, allowing you to take better and informed decisions that enhance your business productivity and profitability. Small businesses turn to ERP for a myriad of reasons such as,

• To eliminate manual processes so it can reduce frustrations and improve efficiency.
• To overcome bottlenecks current processes that are holding back your business.
• To improve the business performance.
• To effectively scale the business alongside meeting customer expectations.
• To handle your business expansion with the increase in employees and customers
• To provide a competitive edge.
• To reduce and save costs.
• To gain visibility of the business data.
• To bridge the gaps in providing real-time reports and analytics that allow better decision-making.
• To increase the opportunities for interdepartmental collaboration.

Though ERP solutions are quite alluring, choosing the right vendor and software can be complicated for small businesses especially as you have to choose the functionalities and modules to reduce costs without blowing the budget and ensure it grows along with your business.

ERP selection process for small businesses

First, before investing in ERP, ensure why your small business needs ERP solutions. Once you have determined the reasons, consider the following factors to select the right ERP for your business:

• Is it the right fit for your organization in terms of functionality? Ensure that ERP meets the requirements and functionalities need of your organization.
• Does it have the right industry-specific focus? What experience does your implementation partner or vendor have in your industry?
• Price and cost play quite a crucial role in the selection process. Ensure the pricing is clear and adaptable to your business.
• ERP vendor viability in terms of their product, customer base, and experience.
• Ensure it’s the right time to take on the project by taking into account the project implementation details.
• ERP suite needs to be integrated with many other software used by your organization. Ensure those integrations are built-in.
• Ensure it has the right technology, so the software covers key features such as – security, scalability, flexibility, good user experience, usability, etc.
• Make a clear plan to avoid risks.
• Ensure along with your business, the ERP solution is also scalable and the solution can be customized along the way.
• Refer with other companies who have implemented the ERP solution before investing in them.
• Ensure you have a solid support and training plan after going live.

Type of ERP software for small businesses:

ERP software for businesses can be categorized into groups based on range, size, installation, and maintenance. Some ERP solutions are marketed only for small businesses which are mostly web-based due to their lower upfront costs when compared to on-premise software. And you would want to pick a solution whose functionalities are tailored to the needs of the organization rather than spending on a full-scale ERP with functionalities that you wouldn’t use. The ERP solutions can be categorized as follows:

• Range: Range specifies the different facets of your business that the ERP solution covers. It can be full ERP or industry-specific ERP. Full ERP covers a wide range of industries and their functionalities whereas industry-specific ERP solution is specific to the industries it covers. Small businesses need to mostly opt for industry-specific to cater to their specific needs.
• Installation and Maintenance: Based on where you want to install your software and maintain it. The ERP solution can be categorized as cloud ERP, on-premise ERP, hybrid ERP. Cloud ERPs are web-based solutions (SaaS) and its quite the popular choice for small businesses due to their low upfront costs and they are quite easy to set up with customizations based on your business needs along with the growth of your business. On-premise ERP software is implemented onsite and is maintained in the physical space of your organization. This solution is quite expensive but you can take ownership of the entire system, once implemented. Hybrid ERP software is a combination of both on-premise and cloud-based solutions providing your business a great amount of flexibility.
• Size of the target business: Based on the size of your business, they can be categorized as Tier -I, Upper tier -II, Lower tier -II, and Tier-III. Tier-I is associated with multi-million companies, Upper Tier-II is for small to medium businesses, Lower Tier -II is for small to medium businesses with lower revenue numbers, and Tier -III are catered to very specific industry need.

Small business ERP software features:

Some of the key features that small businesses need to look out for in their ERP software are listed below:

• Human Resource Management: Enables companies to facilitate their HR functionalities by automating payroll, tracking attendance, managing employee records, etc.
• Financial Management: It simplifies, manages, and tracks resources, income, and expenses with help of financial reports, audits, statements, and data which allows you to forecast the profit and loss of your business.
• Inventory Management: Keeps up-to-date track of product supply and stock levels to avoid running out of stocks or buying unnecessary stock.
• Customer Relationship Management: Manges the interaction and prospects of the client, their information, orders, and invoices which helps you to develop a better relationship with your customers and drive sales.
• Supply Chain Management: Manages and tracks the flow of goods and services from the acquisition of raw materials to the delivery of the end product.
• Business Intelligence: This allows you to analyze the significant and crucial business data to help you make better and more informed decisions.
• Manufacturing: Focuses on forecasting so that budgets and resources can be allocated correctly
• Automation:Eliminate manual business processes by automating and simplifying them to provide better accuracy and efficiency.
• Analysis and Reporting: It helps you to provide comprehensive data through reports and audits that facilitate measuring the key performance like income, expenses, top-performing products, open orders, etc. which helps you to make better and informed decisions.

Cost of ERP for small businesses:

ERP systems are optimized to perform best when there are tailored to the size and needs of the company. The pricing of the ERP solution is varied based on many factors as small businesses cannot afford the same software that’s employed by large businesses. This doesn’t imply that small businesses have to compromise on functionalities because they simply don’t need all the functionalities employed by large businesses. ERP pricing depends on a range of factors such as the number of concurrent users, additional modules, implementation cost for the modules, hosting, integration, maintenance, scalability, and training. ERP cost for small businesses though seem comparatively low, it still going to cost you a significant amount and time. Be mindful when you choose the vendor as they should guide you in picking out the functionalities for your organization, making it cost-effective. Also, be informed and apprehensive of hidden fees under licensing, consultation, implementation, configuration, software updates, support, hardware, and hosting that can easily blow up your budget.

Though there are free ERP solutions and many of them are more of demo services rather than permanent solutions. There are also open-source ERP solutions such as Odoo, Dolibarr, etc.

Some of the good ERP software for small businesses:

• Netsuite: It is one of the best solutions for businesses with a global presence. It’s a full-service solution that provides great visibility and scalability for small businesses and it’s chosen by more than 26,000 organizations.
• Sap Business One: It is another popular ERP solution that can be deployed either on the cloud or on-premises. The pricing is customized based on the number of users and functionalities that you opt for.
• Microsoft Dynamics 365 Business Central: It’s a great choice for small to medium-size businesses to manage their business and financial processes. The plan starts at $70 per user per month.
• Sage Intacct: Sage is an online ERP solution priced per user per month and it can be customized based on your needs. They assist you with varied features such as financial management and inventory management.
• Oracle Fusion Cloud ERP: This is an end-to-end business management solution that works best for business that’s heavily focused on supply chain management.
• Acumatica: It’s a cloud-based solution specifically tailored for small-sized businesses providing a full ERP solution.
• Genius ERP: It’s a great option for manufacturing companies.
• IQMSEnterpriseIQ ERP: It is another great option for manufacturing companies and it provides great levels of scalability.
• SYSPRO ERP: SYSPRO ERP solution is a full and matured ERP solution, been in the market since 1978. It provides great and flexible solutions and works best for manufacturing businesses.
• Dolibarr ERP: It is one of the best open-source platforms that focus on the combination of ERP with CRM. The pricing starts at $9 per month.
• HoneyBook: This ERP solution works best for end-to-end projects.
• Odoo: This is another good option for an open-source ERP solution as it integrates with more than 23000 third-party apps allowing you to streamline your business process seamlessly.

Hope this blog provides you with a better understanding of how to select ERP solutions that benefit your small businesses and some of the available options in the market.Having done 200+ ERP implementations we recommend Oracle NetSuite or SAP Business One for the best results.