Top 4 Benefits of ERP Systems for SMEs
Why do Small & Medium Enterprises (SMEs) need ERP systems
18 December, 2020 by
Top 4 Benefits of ERP Systems for SMEs
Eric Kek

Top 4 Benefits of ERP Systems for SMEs

Why do Small & Medium Enterprises (SMEs) need ERP systems?

Enterprise Resource Planning system (also known as ERP system) is a business management system that is used to integrate and automate business processes such as planning, purchasing inventory, sales, marketing, finance, marketing, human resource management, finance, and more.

Time and time again, ERP systems have always been thought to be implemented only by large and well-established enterprises due to their high cost and complexity.

Most owners of small and medium enterprises (SMEs) frequently feel as though they are “too small” for an ERP system.

However, we are here to tell you that NO BUSINESSES ARE TOO SMALL FOR ERP SYSTEMS!

No matter if you are running a small business, a medium enterprise, or a large company, ERP systems play an important role in ensuring the efficiencyproductivity, and competitiveness of your business.

With the rapidly evolving market trends and increasing competition nowadays, the need for SMEs to implement ERP systems is higher now than ever.

Thanks to the advancement of technology, ERP systems that have top-notch quality, are affordable, and are user-friendly are now made available for all enterprises!

One of the examples of an ERP system that utilizes open-source cloud technology is, Odoo.

We have been going on and on about what is an ERP system, and why all businesses need an ERP system. But, if you are wondering... 

"What exactly are the benefits that SMEs can get from implementing an ERP system?" 

Well since you asked, please do allow us to show you the;

Top 4 Benefits of ERP Systems for SMEs:

  • Full integration of business data and processes

  • Improves productivity and efficiency through automation

  • Maintain, control, and reduce costs

  • Full visibility and traceability

A line graph of business performance from the past to the future.

Full Integration on Business Data and Processes

We strongly believe that the integration of business data and processes for any enterprise is important, regardless of its type and size.

With the implementation of ERP systems, SMEs will be able to integrate all of their data and information into one single source of truth.

This helps to ensure the accuracy of data and information communicated, which in turn enhances the collaboration between departments.

Plus, ERP systems are also very useful for the integration of core business processes such as sales order entry, procurement, invoicing, accounting, inventory, financials, human resource management, and so on.

As an example, when an SME made a sales transaction, the ERP system will immediately record the sales transaction made into the financial/accounting system.

The inventory system will be updated as well according to the number of products needed as stated by the sales transaction.  

A person is working with a laptop with high efficiency and productivity.

Improves Productivity and Efficiency Through Automation

Operating a business involves a lot of repetitive and time-consuming manual tasks such as inventory replenishment, creating purchase orders, data entry, accounting reconciliation, and more.

Without a business management system that can effectively automate these tedious tasks, it can be quite a challenge for SMEs to improve their business productivity and efficiency.

Human errors will also often occur as these manual tasks solely depend on human workforces.

Through the implementation of ERP systems, SMEs can have their manual tasks automated.

For example, SMEs that have adopted ERP systems will get the option to auto-replenish their inventories according to the minimum threshold level, maximum quantity to reach, and Multiplier of Quantity set.

With ERP systems, SMEs will not have to reorder supplies and replenish their inventories manually every single time.

Through automation, the productivity and efficiency of SMEs can be vastly improved when human errors are reduced.

A calculator is used to calculate business cost.

Maintain, Control, and Reduce Costs

Oftentimes, SMEs will implement simpler business management systems or accounting software due to the reason of having a limited amount of capital.

However, they are usually not fully integrated across all business departments, causing SMEs to actually spend even more on implementing individual systems and software for each business department.

Without a fully integrated and automated business management system, more costs will be needed in acquiring more human resources, as SMEs continue to grow over time.

By integrating all business functions into one ERP system, SMEs will be able to better maintaincontrol, and even reduce their operational costs.

When costs are controlled effectively, SMEs will then have a higher chance of gaining more profit and boosting their business performance.

A pair of glasses implying full visibility on business.

Full Visibility and Traceability

Visibility and traceability are the two crucial traits that SMEs will absolutely need to have for better decision-making, strategy planning, and overall business management.

With the implementation of ERP systems, SMEs can have access to real-time data and information easily, which provides them full visibility and traceability across all business functions.

Thanks to ERP systems, SMEs are now able to carry out tasks such as serial numbers tracking, generating reports, work center progress evaluating, and more, all under one single platform

Having a wide range of ERP systems in the market, we understand that you might feel overwhelmed during the process of choosing the most compatible ERP system for your business.

Fret not! Our team of expert consultants will always be here for you!

If ever you are in need of our services, feel free to contact us at any time!