Many small companies believe that an ERP system is not for them. This conclusion is often based on misconceptions about ERP offerings. But what should you pay attention to as a small business?
It is true that ERP software does not provide the same amount for every organization. Yet many companies have wrong ideas about the usefulness of an ERP. Such organizations conclude too quickly that an ERP system is of no value to them, and try to do without it for a while. Many smaller companies do not find an ERP suitable for their own organization.
Remarkably Often They Have The Same Reasons For This:
- An ERP is too complicated
- My organization is too small for an ERP
- My business doesn’t need ERP
- Implementing an ERP is too expensive
This is often a missed opportunity because times have changed. Even smaller organizations can now implement an ERP relatively easily. Especially the introduction of cloud-based systems has made ERP a lot more accessible for small businesses.
How Do Small Businesses Choose The Right ERP System?
Just like larger companies, smaller companies would also be wise to first critically consider what an ERP should achieve. Many smaller organizations value flexibility more than control. The logical explanation for this is that in smaller companies an employee generally fulfills more roles and tasks than in a larger company.
In a simple webshop, for example, the owner handles customer contacts, makes price adjustments, places orders, and updates the administration. If he does all these kinds of actions (from now on) in an ERP, then it is not convenient to constantly have to switch between a large number of different modules. Prismatic ERP software is the best choice for small to large-scale businesses. Prismatic ERP has amazing features such as inventory management, ledgers, HR Module, and much more. Prismatic Technologies Limited is a leading ERP service provider based in Pakistan and has a strong client network in different countries.
Which ERP Features Are Especially Important For Smaller Companies?
Smaller Companies Find These Features Of ERP Especially Important:
- Ease of implementation
- Self-support: no in-house IT support required
- As little training as possible
- Ease of use
- Modular construction
- Easily customizable
Of course, larger companies also like to see these advantages reflected in their ERP. However, if an organization focuses on low costs and user-friendliness, this can be at the expense of other features. Cheaper systems, for example, have less extensive functionalities, or more limited reporting options.
Cloud Or On-Premises?
When selecting an ERP system, it is important, among other things, to make a choice between an ERP on-premises and an ERP ‘in the cloud’: on the internet. On-premises means that the ERP system is installed on your own hardware. If an ERP runs in the cloud, it is installed on the supplier’s servers. A good internet connection is then always required to be able to use the ERP.
On-premises ERP systems are usually more comprehensive and more adaptable. You also have more control over such ERP systems. An advantage of cloud ERP systems is that less in-house IT support is required, that such systems are easier to implement, and that the initial investment is a lot lower.
However, you will spend more on licensing costs every month than with an on-premises implementation. Although there are also on-premises systems on the market that are specially designed for SMBs, smaller users usually opt for a cloud solution.
Open Source ERP?
You may have heard of ‘open source’: a free alternative to commercial systems. A warning is in order here, because open source is not necessarily free. Open source means that the code on which the ERP system is based is freely available to anyone who wants to program with it. This is in contrast to ‘closed ERP systems’, whose source code is only available to a select number of authorized persons.
The source code of an open-source ERP system is freely available and can be used by anyone to program ERP modules or adjustments. However, this requires a lot of programming, performed by expensive programmers.
Also, the (often excellent) modules and functionalities that were previously developed on the basis of open-source software, are usually not free. They are the product of commercial parties who ‘just’ charge a price for their hard work.
Precisely because smaller companies cannot endlessly tinker with an ERP, a fully open source ERP is not always the right solution. An interim solution for those looking for a cost-effective variant is an ERP system of which a ‘basic version’ already exists, which can be used free of charge.
Sometimes no programming is required at all, and you initially have a more or less free ERP system. Usually, you are limited when it comes to the number of functionalities, and especially when it comes to supporting. So don’t think too lightly about ‘free’ systems.