An Introduction To Enterprise Resource Planning (ERP) For Startups

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Running an eCommerce business requires strategic planning. You can achieve that by using valid and updated information to make essential decisions. For that reason, you may want to choose the right tool to collect, analyze, store, and share data. ERP software can help tremendously in this regard.

Business owners and managers have used spreadsheets for several years to manage data. However, as technology evolves, spreadsheets have become less effective and are now being replaced with enterprise resource planning (ERP) systems. You can also consider eCommerce ERP integration and boost the growth of your online business.  

This article introduces you to ERP software for your startup company. You’ll learn its benefits and how to choose one in the market. But before going further, you might want first to get a brief definition of ERP software. Read on.  

ERP Software Defined 

ERP software is a computer application you can use to manage all your business processes. These include procurement, accounting, sales, risk management, marketing, human resources, asset management, project management, and others. In simple terms, ERP is a program that automates business processes to help manage daily activities in an integrated system.  

Why You Need To Include An ERP System On Your Business Website 

Sometimes, deciding whether or not your startup or small business needs to install an ERP system can be daunting and overwhelming. This is true especially if you’ve never used any major software in the past. However, it can bring several benefits to your company.  

Some benefits of purchasing this software for your business include:  

  • Minimized Costs

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Like any other business owner, your primary goal is usually to maximize your business profits. One of the best strategies to achieve that is by keeping costs at the lowest level possible.  

You can do several things to minimize your business costs. One of them is installing this software.  

Installing an ERP system can cost your business a heavy initial capital outlay.  However, it’s worth the investment in the long run.  

Manual data planning solutions like spreadsheets will require you to employ several workers to perform the work. This increases your labor costs. You can avoid that by installing an automated ERP tool. It’ll eliminate the need to work with numerous workers. A few of them will be enough to feed data to your computers.  

It’s also good to note that having different tools for specific business processes can cost you a lot of money. For instance, you must utilize the money to train your team to use every single tool. 

On the other hand, you’ll need one system only with integrated ERP. This reduces training requirements for end-users, thus minimizing costs.  

  • Enhanced Data Security

Another major benefit of installing this software in a business system is to secure your business data. This is especially important now when cybersecurity attacks are rising rapidly.  

When hackers and other online criminals invade your business networks, you can lose essential data. The good news is that this software can enhance the security of your online data. It comes with features that help control who can access and edit your company information. ERP system also provides a centralized backup location of your business’s essential data.  

  • Improved Efficiency And Productivity

Installing ERP software means automating all your key business functions. It helps avoid manual and tedious steps. For that reason, your workers will complete tasks on time and focus on other productive activities. With improved efficiency and productivity, your company will likely expand. 

  • Assured Government Rules And Regulation Compliance

You must remain compliant with government regulations for your business to operate for the foreseeable future. If you fail to do so, you might incur huge costs in fines and penalties.  

The government has laid down regulations to follow when sharing data in various sectors. However, sometimes you might be unaware of the minute details of the set regulations. That’s one of the many reasons you might want to install ERP software into your business systems.  

Most ERP systems are designed to help your business comply with industry and government regulations when managing and sharing data. This helps you avoid paying unnecessary fines or risking being forced to close down your store.  

  • Improved Customer Service

Better customer service is essential to the success of your company. It involves taking care of your clients by providing quality services.  

It might be challenging to manage your customers’ data well with several applications in your business system. That’s why it’s advisable to have an ERP software.  

ERP software provides a centralized location where you can store and retrieve customers’ information. This enables teams in various departments to collaborate when finding solutions to customer needs. It’s one of the best strategies to improve customers’ experience and satisfaction.  

How To Find A Suitable ERP Software 

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As you’ve seen in the previous section, there are many benefits of having an ERP tool in your business system. However, you must find a suitable or personalized solution.  

You can install suitable software by:  

  • Finding A Scalable Solution 

Scalability is one of the many things to consider when buying an ERP tool. This is especially important if you have plans of growing your small business into a giant in the future.  

Scalability is the ability of the selected ERP software to continue accommodating your growing business. It ensures you’ll not need any other new solution to manage your business. The chosen software should be able to support your startup today and even when it expands.  

  • Comparing Price Versus Quality Of The Solution

Price and quality are two essential things to bear when buying ERP software. However, some business owners only consider the price and forget the quality. 

Finding a cheap solution can help save a few coins. However, it might fail to provide long-term benefits. Why? Some cheap automated tools are of low quality and not durable.  

At the same time, you need to note that high prices don’t always reflect the best quality. Therefore, before you opt for any ERP solution, ensure its price reflects its quality.  

  • Finding This Software From A Reputable Vendor

It’s no doubt that the functionality of the selected ERP tool will majorly depend on the service provider. A company known for the best solutions in the past will likely provide good software.  

One of the best ways to determine the reputation of any ERP software vendor is by reading online reviews. A firm with more positive reviews than negative ones might be reputable. Strive to source your ERP software from such a company.  

Takeaway on ERP Software

Purchasing ERP software is the best way to grow your business faster. It allows you to store and manage data more efficiently. Make sure you find a suitable solution from a reliable service provider.  

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A Small Business-owner’s Guide To ERP Software

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Guide To ERP Software

Most business owners use all sorts of software and systems to help with their day-to-day activities. Most of these programs facilitate specific operations, such as invoicing, accounting, communications, and billing. However, you may also find a handful of software that can handle a variety of activities. Enterprise resource planning software, also known as ERP software, is a perfect example of this. 

An Overview Of ERP Software 

As stated earlier, ERP software is a type of program that facilitates day-to-day business activities. Unlike most business software that usually focuses on a specific activity, an ERP has numerous functions that touch many or all business operations. You can think of it as a program that fits numerous software into one system, thereby allowing business owners to cut down on costs. 

Unfortunately, while ERP software is indeed a powerful business tool for corporate giants and small businesses alike, it can be quite difficult to navigate, much less utilize for business purposes. 

For that reason, most users, specifically small business owners, consider ERP consulting services before taking on the challenge of ERP implementation for their organization. In the meantime, however, users can learn more about the software, and that’s what this article is all about. To start with, you must understand that ERP software consists of several components, also called modules. 

Introduction To ERP Software Modules 

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Normally, when you purchase software from a provider, you can enjoy all the features that come with the package. For example, the key features of a digital asset management platform include: 

  • Batch download 
  • Search 
  • Version history and control 
  • Organization 
  • Filter and sorting 
  • Access control 

However, that isn’t the case for ERP software. Unlike most systems and platforms, you can select which modules or components you want to include in the software. This is one of the main reasons that ERP software has become extremely prevalent among small business owners. By selecting only the features necessary for your business operations, you can cut down on the cost of your purchase. 

On that note, here’s a list of the different modules that comprise most ERP systems: 

  • Finance and accounting 
  • Manufacturing 
  • Procurement 
  • Inventory management 
  • Warehouse management 
  • Workforce management 
  • Marketing 
  • Automation 

While it might be tempting to select just about any module for your ERP software, you must take into consideration your business model, size, industry, and your employees’ technical expertise. If you can construct an ERP software that contains all the modules or components your small business needs, you should be able to maximize the potential of the software and enjoy its benefits to the fullest. 

Potential Benefits Of ERP Software 

Apart from the previous point concerning the customizability of ERP software, there are a lot of other benefits you can gain by implementing this type of software. Here’s a closer look at these benefits: 

  • Reduce Overall IT Costs 

A business’s IT sector includes all the software utilized for business purposes. This may include platforms like invoicing software, billing programs, and staffing software. As you may imagine, maintaining this much software can be financially draining, especially for a small business. That’s why being able to fit all these into one system in the form of ERP software can be extremely helpful, as it reduces the overall costs to maintain your business’s IT department. 

  • Prevent Too Little Or Too Much Inventory 

If you’re operating a retail business, you’ve probably experienced having too little or too much inventory a couple of times. Too little inventory means longer customer fulfillment times, while the opposite may increase your overhead costs. Either way, it doesn’t lead to any positive effects for your business. However, with the inventory management module present in your ERP, it should be possible to prevent having way too little or too many items in your inventory. 

  • Improve Customer Service 

Customer relationship management, also known as CRM, is one of the essential components of a business. Not only does it improve your customer acquisition, but it may also positively affect your retention rate. In short, it improves your customer service quality. And, as you may have guessed, CRM is yet another module that you can find in typical ERM software. 

  • Enhance Data Security 

Much like most business platforms, ERP software generally offers enhanced data security that would allow you to protect valuable business data. Considering the ever-increasing number of cyber threats, this benefit could certainly go a long way in helping you manage your business. 

  • Automate Repetitive Tasks 

Oftentimes, when a small business suddenly becomes popular among the masses, things tend to get hectic very quickly. At times like this, routine or repetitive tasks can get in the way of a productive operation. Hence, many business owners look for a way to automate these tasks, and ERP software is undoubtedly one of the best ways to approach this issue. 

  • Encourage Collaboration 

As you may already know, ERP software may consist of numerous functions that would otherwise be separate from one another. For example, the accounting software is usually separate from the marketing platform, but ERM systems make it so the two are together. As a result, your employees can establish a connection with other sectors of your business, which in turn encourages collaboration and better communication. 

As you can see, enterprise resource planning software is in no way inconsequential to an organization, much less to a small business. It brings a lot of benefits to the table, which explains why it’s incredibly popular with small business owners. But you must remember that ERP software isn’t free, by any means.  

Cost Of ERP Software 

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ERP software varies in price according to the number of modules included in the package. But for your reference, the average price for an ERP system suitable to small businesses is around USD$5,000. 

Take note that this figure is much higher for medium and big enterprises. Moreover, the price may come in the form of a subscription plan or licensing. For subscriptions, you usually need to enter a contract with the vendor to decide on the contract length. 

Conclusion

Despite the benefits you can gain from having ERP software, you must also remember that it has a few disadvantages of its own. For example, you need to train your employees before you can get any use out of the software. Not to mention that it can be quite costly to purchase your license or subscription for the software. Simply put, investing in ERP software may not be for every business, but if you decide to do it anyway, this guide should be of great help.

 

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