September 22, 2014
When you are looking to choose an ERP solution for small business, you need to carry out a needs analysis, determine whether ERP will benefit your business or not and then hire a consultant or team of consultants to guide you through the vendor selection process. You also need to consider how business differs from each other in requirements and the questions like cloud vs on premises and open source vs proprietary.
Specifics of Small Businesses ERP
While making selection of an ERP software small businesses need to emphasize flexibility over the control according to the experts. Small companies usually needs an ERP software which typically offers basic level integrated modules and built in best practices to keep their operations going smoothly. Ideal ERP solution for small businesses needs to be modular, affordable and adaptable and it must offer the flexibility to be implemented quickly with minimal training.
On Premises Vs Cloud?
Small businesses usually choose cloud based ERP solutions with minimum in house technical support and low capital investment with a strong desire on core competencies. When you talk with a broad perspective then you find out that on premises ERP is more customizable and provides complete control over uptime and security and is more suitable for the companies with stringent reliability and security needs but when you talk about the total cost of ownership then expense of managing and owing own server and backups is high which makes small businesses budget run out of on premises ERP.
Open Source or Proprietary?
If you have any concern regarding software adaptability then open source is better option as compared to proprietary. Open source is appealing because of its less cost as well as no software licenses are required, fully customizable and it mitigates the risk of software vendor going out of the business. On the other hand open source software products are not as mature and well maintained like the proprietary ERP solutions and they will provide very little or no support at all.
If your company is looking for an ERP solution with the personalized support that is flexible enough to meet your future needs and demands for next few years then you need to take your time make the choice carefully. You need to look for the ERP systems which are marketed towards businesses in your industry. Solution which you consider must be affordable as small businesses tend to have few resources and they need to plan all the things accordingly. Some questions which you ca ask from a potential vendor are:
- What specific features an ERP offer relevant to your industry?
- How the data migration will be carried out?
- What will be included in the support contract and how can they reach the supporting staff?
- How many successful implementations have been done already?
Small businesses usually have an advantage of carrying out informal communication between employees and management which reduce the decision making time and facilitates efficient cross functional team communication to enable the rapid responses to internal and external changes. However small businesses face problem like evolving the necessary organizational changes during and after ERP implementation. These challenges need to be overcome in order to carry forward a successful ERP implementation with specific knowledge and resource constraints. Few points to avoid the problems and use the new system efficiently are:
- Carry our smart decisions to import historical data
- Make plan for the implementation during the least busy business season
- Put investment adequately in post implementation support and consulting
- Keep all the employees and related personal on board for change.
You must keep in mind that ERP solution is not just a software purchase but it is rather a long term investment which has impact on all the business processes throughout the organization so you need to invest wisely to reap the benefits in the long run.