Editor’s Question: Is an ERP an essential tool for an SME and why?

Editor’s Question: Is an ERP an essential tool for an SME and why?

Four experts explain why they think an ERP is an essential tool for an SME. Robert Sinfield, Global Head of Product, Sage, outlines his thoughts below.

In today’s fast-paced and competitive business climate, small- and mid-sized businesses (SMBs) face numerous challenges in managing their operations efficiently. That’s where Enterprise Resource Planning (ERP) systems come to the rescue.

ERP systems are productivity superheroes for SMEs due to the numerous benefits they offer in streamlining operations, improving efficiency and enabling data-driven decision-making – all of which help provide SMEs with a competitive advantage in today’s business environment.

For example, manual processes using Excel and Outlook can be tedious and prone to errors. ERPs address this challenge by transforming them into secure digital workflows. One of the primary advantages of ERP systems is automation, which simplifies day-to-day tasks and boosts productivity while reducing costs. By automating low value-add tasks and data entry processes, employees can focus on more strategic activities, leading to improved overall efficiency. This automation also reduces the risk of human errors, ensuring data accuracy, which is critical for making informed decisions.

Data is the new gold. ERPs provide a unified and real-time source of data within a multi-entity, multi-language and multi-currency framework. This centralised database ensures that all team members have access to up-to-date information, promoting better collaboration and co-ordination among teams. In this data-driven era, such a shift from data gathering to data analysis is a strategic move that propels SMEs ahead of the competition.

Furthermore, real-time visibility into inventory levels, re-order points and manufacturing components enables SMEs to optimise inventory management, leading to reduced carrying costs and better supply chain management. This not only helps them to be more efficient – it allows them to be more robust in an ever-changing world.

Data discovery, powered by role-based, task-centric dashboards empowers employees at different levels to access relevant data and reports, facilitating faster and more informed decision-making. This data-backed, decision-making approach enables SMEs to respond quickly to market changes and adapt their strategies accordingly.

Lastly, ERP systems play a crucial role in enhancing customer and supplier relationships. By utilising data analytics, SMEs can shift from transactional interactions to strategic partnerships with customers and suppliers. This customer-centric approach helps retain existing clients, attract new ones and gain a competitive edge in the market.

The comprehensive capabilities of ERPs empower SMEs to stay competitive, respond quickly to market changes, optimise inventory management, reduce costs and build stronger customer and supplier relationships. By adopting Sage Distribution and Manufacturing Operations or similar ERPs (like Sage X3 or Sage 300), SMEs can lay a strong foundation for sustainable growth and success in today’s dynamic business landscape.

Marlon Doogan, Senior Manager, EMEA Industry Advisors, Oracle NetSuite:

In their infancy, many growing companies rely on a patchwork of entry-level software solutions to help run their business. However, eventually they reach a point where spreadsheets and disconnected systems no longer cut it. That’s where Enterprise Resource Planning (ERP) comes in. ERP systems collect and organise key business information and help organisations run lean, efficient operations as they expand. No matter the sector, expanding businesses want a system that is scalable by design, is built for quick expansion, expands globally and future-proofs them to succeed.

Every small business dreams of becoming a fast-growing company, and they can be. But that’s a struggle when the information needed to execute processes and make key decisions is spread across systems and departments. An ERP system can compile front and back-end company information in a central database for cross-departmental visibility, spanning financials and accounting, through to HR, commerce and inventory management. ERP helps eliminate problems with conflicting sources of data and empowers teams to analyse various scenarios, discover process improvements and generate major efficiency gains. That translates to cost savings and better productivity as people spend less time digging for data.

Rising costs, an uncertain economy and inefficient processes all impact a new business’ ability to scale up. And yet, perhaps one of the biggest value propositions of ERP systems is they can save organisations money through automating repetitive tasks. This minimises errors as well as spotting inefficiencies leading to better deployment of all resources. Plus, by adopting an ERP system during the early stages of the business’ evolution, SMEs can benefit from best practice and avoid growing pains later down the line.

An ERP is also an asset when it comes to planning and co-ordination. Employees can see current available inventory and customer orders in detail, then compare supplier purchase orders and forecasted future demand. ERP software improves communication and collaboration as well because workers can check on the status of other departments to guide their own decisions. Not only this, but financial reporting standards and governmental and industry-specific data security regulations change frequently, and an ERP can help your company stay safe and compliant.

Many of the world’s best-known and most successful firms have leaned on ERP for the last quarter of a century. Now, this software can be configured to meet the needs for businesses of all sizes. The right ERP system will be scalable and flexible enough to meet a business’s needs today and for the foreseeable future and will help unify people, core business processes and technology. Businesses that don’t want to remain stagnant, inefficient and disorganised should look to ERP systems as an essential tool in their operations.

Zakaria Haltout, Managing Director, SAP UAE:

Small- and medium-sized enterprises (SMEs) are the growth engine of MENA’s economy and face a number of the same business challenges as larger, more established organisations. While an ERP solution may not be an immediate priority, it’s critical to deploy enterprise software to achieve key business goals. These include the provision of intelligent capabilities to unlock growth opportunities, the ability to swiftly adapt to changing customer expectations, disrupted supply chains and uncertainty, and a focus on streamlining core functions to deliver efficiency and agility across the business.

At a fundamental level, ERP solutions enable SMEs to condense workflows, streamline processes and automate, eliminating the need for manual input. With fewer manual processes, smaller companies can take on more innovative, profitable projects. Ease of workflow increases, with faster turnaround time and high production capability. ERP solutions also deliver transparency about how problems within an SME affect the rest of the process, allowing managers to analyse, gain better insights, and make effective decisions. It provides real-time financial data that offers a competitive advantage, increases efficiency and helps ensure cost savings.

SAP has found that SMEs are embracing cloud computing solutions due to their

reliability as well as speed and usability that accelerates ROI. With cloud solutions, mid-size companies can be up and running quickly at a more predictable, affordable price.

SMEs that are evaluating a cloud-based ERP system should consider solutions that are designed to work together to bring visibility and clarity across the company and avoid silos, have built-in scalability to grow quickly alongside the business and incorporate industry expertise and best-practice support to optimise performance.

SAP delivers a range of ERP solutions, tailored to the needs of SMEs including SAP S/4HANA Cloud, public edition. This solution is the core of GROW with SAP, a flagship offering for mid-market customers. Mid-sized organisations can also consider SAP Business ByDesign, a suite-in-a-box that offers 39 end-to-end business processes for mid-size businesses including security and compliance topics to ensure that they remain up-to-date with changing business needs. Finally, smaller enterprises in the region are deploying SAP Business One either in the cloud or on premises to manage functions from accounting and financials, purchasing, inventory, sales and customer relationships to reporting and analytics.

Growth-focused companies trust SAP – up to 80% of our global customers are SMEs. Newer enterprises need cloud solutions that combine built-in industry and business best practices with the scalability to handle more volume, languages, currencies and new business units. With an ERP strategy, SMEs benefit from greater innovation and related growth; it’s an opportunity that smaller and mid-sized organisations can’t afford to miss.

SAP also delivers Business AI that’s relevant, reliable and responsible. The SAP Business AI portfolio is embedded into the SAP product portfolio, with more than 26,000 customers already using SAP Business AI across multiple scenarios and partner solutions.

Lorenzo Ancona, Vice President for ERP Solutions, Atlantic Technologies:

SME companies are adopting modern ERP systems in an array of fields, using features that manage business processes in real-time and integrate them with the aim of increasing efficiency and competitiveness. Not just for the day-to-day running of the business, but to connect with suppliers and customers. One of the chief benefits of ERP solutions is that they make it possible for all business processes to be managed in an integrated way, all as part of a single application, improving productivity and efficiency. Information can pass between functions much more easily than if using a range of applications from different companies.

An ERP platform also allows SME companies to automate processes, generate reports and give management oversight over the state of the business instantly to aid those crucial management decisions. And today, you can do this from anywhere, taking advantage of all the benefits of a modern cloud-based ERP solution.

So, for businesses small and large, it is important to have systems that can move with the pace and agility of your customers and wider supply chain. This is why ERP is so essential today.

We recently surveyed 150 senior UK CIOs and ITDMs and 91% said it was important for them to become a data-driven organisation over the next 12 months. In this context, an ERP solution such as Oracle JD Edwards, is a crucial component because it provides end-to-end visibility enabling data-driven informed decisions.

ERPs importance has grown for several reasons. Firstly, business has become far more digitally dependent, whether that is to give transparency to customers and suppliers or ensure your team can work from anywhere. Secondly, the development and costs of ERP solutions have made them much more accessible for SMEs.

In addition, the age-old challenge of complexity is also disappearing. Many ERP solutions come with vertical-specific configurations, meaning whether you run a services, manufacturing or other specialist/regulated business, you’ll be able to find an ERP system that can get you up and running quickly that is based on best-practices for your industry. Even specialised areas like food or pharmaceutical manufacturing that rely on traceability and batch controls, are supported off the shelf.

Essentially the technical, skills and cost barriers are fading away, making the benefits of modern cloud-based ERP solutions available to all. So is ERP essential? Yes, but more importantly it’s accessible.

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