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6 Reasons Why Small Business Should Consider Using an ERP System

6 Reasons Why Small Business Should Consider Using an ERP System
The Siliconreview
11 May, 2022

An enterprise resource planning (ERP) system is, in essence, a digital management tool for businesses. It helps companies oversee the different parts of an enterprise (such as sales, human resources, and logistics, to name a few) by integrating them on an all-in-one platform through a centralized database.

In the beginning, ERP systems were developed to aid large-scale businesses to manage their burgeoning operations. This led to the general expectation that ERP programs are only for big companies, which many individuals still believe today. However, ERP technology has evolved significantly over the past years, and today, even small and medium-sized businesses (SMBs) have access to ERP solutions that are specifically designed to cater to the needs of a smaller enterprise. Case in point, a quick online search for “ERP Philippines” will show a long list of programs that local SMBs can use to improve their productivity and performance.

To highlight further how SMBs stand to gain a lot by investing in ERP, here are some of the perks of using a compatible ERP system in a company.

Centralized Database for Faster Info-Sharing

Storing and disseminating information is a crucial part of running a business. All departments rely on one another for different kinds of info, whether it’s the details of an order or the available number of stocks of a particular product. Holding individual data centers in each department might be effective for a while, but in the long run, it holds employees back from quickly finishing their tasks.

ERP systems address this issue by implementing a centralized database, where all the information of each department is stored in a single place. Hence, instead of calling a worker from another department for the info that they need, employees can simply access the centralized database, find the necessary details, and use that information to complete their assignments.

Improved Communication and Coordination

A company is like a human body. Its different parts have to work together for the company to function properly. That is difficult to accomplish, especially when the company’s departments and teams do not communicate and coordinate with each other consistently. This concern also applies to SMBs.

Through the ERP’s integrated platform, coordinating with other departments becomes significantly more efficient because the information is readily available. For example, the manufacturing team can quickly address any product complaints through the details noted down by the customer service team. In this manner, corresponding departments can promptly address any raised concerns and even anticipate the needs of other teams, thus improving the company’s productivity.

Maximized Allocation of Company Resources

One of the biggest perks of using ERP is its capability to streamline several processes. Through the centralized database and automation feature, the ERP program can execute many redundant tasks, such as data input or sending out info to different departments. This feature not only saves employees from extra tedious work, but also allows them to put their efforts into other, more profitable ventures, such as data analysis. As a result, the company can allocate its resources in a manner that helps it actively reach its goals and not just maintain operations on a day-to-day basis.

Data-Driven Decision-Making

In the current market, data is king. Companies need accurate and up-to-date information so that their management can make informed decisions based on this data. Acquiring real-time info about a business and its finances is nearly impossible to pull off without an ERP program.

An ERP system consistently uploads new info into the database, with numbers that can be easily retrieved by those that request them. Moreover, as mentioned earlier, ERP cuts down the need to manually re-enter data, which decreases the likelihood of mistakes and inaccurate info.

Based on these two points, it becomes clear that ERP is critical to decision-making. For SMBs who are trying to make a name in their respective industries, having this tool can significantly help them determine the most effective course of action that can help them achieve their objectives.

Better Customer Service

Improving customer service accomplishes two things for a business: it helps with client retention and it simplifies the client outreach process. Customers today don’t only look at the product, but the entire shopping experience as well, so it’s not enough to simply put out a decent product on the shelves.

With ERP, companies can process orders faster and have the item checked out or shipped as soon as possible. As a result, they can grant a speedy and pleasant shopping experience to their customers and slowly build brand recognition and loyalty, which are especially important to SMBs.

Competitive Advantage in the Market

The current market is highly saturated with countless SMBs. As such, the competition is cutthroat, so it’s important to invest in the right tools that can give the company an edge in the market. Investing in a compatible ERP system earlier on can help small businesses bolster their performance and reach out to more customers by establishing themselves as efficient industry players.

Indeed, all companies, big and small, can greatly benefit from using an ERP system. With so many ERP programs available, however, companies must research their options extensively and seek the counsel of trustworthy ERP experts. As such, SMBs can help address any growing pains and set themselves up for long-term success.