user | December 28th, 2020

Why SMBs Purchase an ERP System

By: Isaac Sacolick

When is the right time for a growing company to step up to the next level of technology and purchase an ERP system? If you’re lucky it is the sheer speed of growth that forces the move or it could be a regulatory disaster that become the compelling event.

For many the realisation that their Xero, Quickbooks or Excel spreadsheets are no longer cutting it is a slower affair.

Either way, when everyday processes are simply taking up too much time and not enough is getting done, then it is time for the back office to step up to new technology.

This is when ERP comes into the equation.

What is ERP?

ERP systems enable companies to standardize business processes and gain greater visibility into corporate financial, HR and supply chain functions. They are a system of record and a single home for all data that can then be accessed and shared in real time across all departments.

What benefits do SMBs get from ERP?

According to Cindy Jutras of Mint Jutras

“ERP is more than a necessary infrastructure that forms the transactional system of record upon which a business is based. ERP is the potential source of cost savings and operational improvements.”

She asks: “Is efficiency and productivity leaking out of your organization by not providing adequate tools to run, monitor and manage the business?”

96% of growing businesses who excel in their respective industries rely on an ERP system (The Aberdeen Group)

What is ERP Software for Small Medium Business (SMB)?

ERP for small and medium sized business is not the same as the large, on premise ERP systems found at enterprise level. Today, cloud has enabled a new breed of light software as a service (SaaS) offerings that are quick to deploy and a great deal easier to use.

It means SMBs can compete with much bigger companies.

The ability of an SMB manufacturer for example, to track materials, orders, billing and shipping – all in a single system means they can go after the customers of a much bigger company on an equal footing.

Why do I need it?

ERP software has been around for some time. However, it has undergone so many changes that the older versions are now called legacy systems. These platforms served companies well, particularly enterprises. However, times have changed and it is time to look at the modern functions available when you purchase an ERP system.

No one wants to be dependent on spreadsheets and siloed information. Here are some good reasons to adopt a modern, cloud-based ERP.

The Advantages of ERP for SMBs

  • Live flow of data from one department to another
  • Fewer instances of human error
  • Increased efficiency
  • Internal transparency.
  • Accurate, real-time analytics
  • Prepare your business for long-term growth

Around 53% of businesses consider ERP, along with CRM, to be priority investments.

The Benefits of ERP for the Finance function

The financial module is deemed as one of the most valuable aspects of the modern ERP system. It provides finance-related functionalities such as general ledger, currency management, payroll management, fixed assets, cash management, and more. It’s also responsible for producing financial reports for various departments.

Those are the just the essential services that ERP provides for finance and accounting teams. In recent years, the financial module has become  integrated with all of the internal and external processes of a company. For example, it records each transaction and integrates that data with other modules to track and calculate the impact of particular spending. This can really increase the visibility on offer to senior decision makers.

Another reason why ERP’s role in finance is evolving is access to more powerful analytics. Either built-in or purchased as an add-on, modern analytics solutions empower quick decision making and plan execution. It allows accounting, finance, and planning departments to respond rapidly and effectively to changing situations and to adapt to operational changes. (Something we have needed to do often during the Covid years.)

Finance professionals have a lot to gain when you purchase an ERP system, particularly in this area of analytics. The big software providers are constantly investing in the provision of enhanced analytics capabilities that users can really benefit from – utilising all the buzz technologies in their toolbox, such as AI and machine learning.

Define Your Goals

Each company needs new technology for a different reason. For some it is the desire to compete with bigger players on an international stage, others simply want to close their books faster. If you can identify your pain points and define your goals you will be in a good position to start the selection process for an ERP that fits you.

Identify Your Requirements

Which functions do you “absolutely and totally” need?

This is important! Failure to sign up for the correct functions will leave you with a system which won’t do what you want it to. Take this checklist to any meetings and don’t get distracted by the offer of bells and whistles. Fun gizmos won’t help you when you are trying to carry out bread and butter processes like invoicing your customers.

ERP Requirements Gathering Template

Which of these modules and features do you think you will need? Use the following as a guide before you begin the process to purchase an ERP system.

Accounting & Financials

Accounting and compliance – may include; financial reporting, general ledger, accounts receivable (AR), accounts payable (AP), billing, revenue recognition and budgeting.

HR Management

Human resources information – May include; onboarding, benefits, payroll, productivity, taxes, time tracking and leave requests.

Manufacturing and Distribution

Run your manufacturing operations from end to end. May include production control, distribution scheduling, quality analysis and warehouse management.

Materials Management

Optimize supply chain processes – make sure you have enough materials for planned production. May include automated procurement, inventory management and logistics management.

Inventory and Order Management

Making sure there is sufficient inventory to meet demand. Reduce the risk of stockouts, keep stock up to date. May include; inventory tracking and warehousing, pricing management, ecommerce, order entry and customer returns.

Supply Chain Management (SCM)

Automates and organizes everything from placing an order to the getting finished product to the customer. May include; demand forecasting, purchase order, work order and transfer order automation, shipping management; and warranty management.

Customer Relationship Management (CRM)

Track and manage contacts and communication with customers including order history. Allows you to; record marketing campaigns, manage leads and generate sales quotes.

Business Intelligence and Reporting

Dashboards and analytics for reporting. Make data driven decisions with reports you can slice and dice in real time with no waiting.

Advantages of cloud ERP

Cloud solutions are game changers because they have opened up the benefits of ERP to businesses of all sizes. Here’s a quick look at why you might want to purchase an ERP system…


Respond to changing needs in the market by scaling up or down as needed.


Paid for as a subscription not a capital expenditure cloud ERP can offer great value for money.

Always Updated

Updating the software is not your responsibility. Quarterly updates mean you are always running on the most up to date version. No missing out!

Ease of use

Users benefit from much improved intuitive user-friendly dashboards

Backup and recovery

Your data is hosted off premises and kept safe according to world class data security standards.

Offsite access

Anytime anywhere access to all your data in real time wherever there is an internet connection.

Quick Implementation

Light, out of the box ERP designed for small and medium sized business can be implemented quickly, even during a pandemic, using remote working practices. Fixed scope for faster delivery.

Cloud ERP helps SMBs plan for the future

A scalable solution which grows with you is the best way to prepare your company for the future. With updates coming through quarterly you will never miss out on the constant improvements to functionality which include everything from easier short cuts to new breakthroughs.

One of the biggest developments in recent years has been the Intelligent Enterprise which is another way of talking about how we are integrating future technologies like AI into our everyday working lives.

What is Intelligent ERP?

Artificial Intelligence (AI) is a technology whose time has come. Previously, users have had to install separate add-ons to their ERP systems to enjoy the benefits of automation and intelligence. Now it is increasingly common for ERP solutions to have these functionalities built-in – you will not even know you are using it.

Intelligent ERP solutions create workflows, reduce errors, lessen information loading time and automate hours’ worth of routine processes -freeing time to carry out more valuable work.

10 Intelligent ERP elements to take into account when you plan to purchase an ERP system

According to IDC research there are 10 elements we look for in a digitally enabled intelligent ERP. Here they are as enumerated by David Sweetman, Senior Director, Global Product Marketing at SAP.

Modern: Take advantage of on-demand access to agile, configurable, quick-to-implement, and scalable technology to help your employees work anywhere and anytime.

Connected: Unify end-to-end processes with accurate data to gain transparency and make your business more resilient. By coupling ERP data with other enterprise applications, you can create strategies that are more effective and make a significant impact across the company.

Agile: Gain visibility into what’s happening throughout your organization by providing in-depth insight into different lines of business. Leveraging simple, interactive, and intuitive technology enables mobile workflows that add flexibility to your employees’ lives.

Compliant: Follow corporate and statutory policies to the letter with solutions that are updated regularly, helping you stay in front of evolving requirements in every area of business, including manufacturing, production, and the supply chain.

Capable: Unlock value everywhere by focusing on industry-specific requirements with proven best practices, enabling new business models as your marketplace evolves.

Cognitive: Turn analytics into insights and bring value in real time by analyzing substantial amounts of data using machine learning, deep learning, and robotic process automation. The result: clearer overviews and added value.

Collaborative: Empower your workforce with a single source of real-time information to make strategic and operational decisions faster – fostering a collaborative culture of seamless insight sharing and intelligent, forward-thinking analysis.

Innovative: Optimize the impact of core business processes by combining the benefits of the cloud with your corporate data sets, leading to new insights and quicker breakthroughs.

Scalable: Move through the ebb and flow of uncertainty by scaling capabilities with technology priced through a subscription-based pricing model.

Real-time: Run like the rest of the world – fast, forward-moving, and progressing – by making decisions based on your current performance and through a lens of predictive analytics.

If this comprehensive look at why SMBs purchase an ERP system has encouraged you to get started then please get in touch. Let’s start a conversation about how ERP can streamline your business. With an idea of your specific requirements we can begin this exciting journey together.

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