A Starter Guide to ERP for Small Business
Top Reasons that Small Businesses Choose to Implement ERP Software
You likely started your small business with one key motivation in mind: to be your own boss. If you’re reading this, chances are you made that happen – so first, congratulations.
Running your own business comes with as many perks as there are challenges. The volume of tasks is immense – from operations, payroll, accounting, and employee engagement – to sales, marketing, strategy and more.
With the excitement of growth comes another set of challenges. The ones we see the most, in our business, are technology issues. Under the umbrella of “technology issues” there are usually a myriad of concerns that can be summed up as two main problems:
- Your business software no longer fully supports your business (if it ever really did in the first place)
- You have a mix of software that are disconnected, and don’t “talk” to each other
This is what typically sets small businesses on the path that eventually leads to enterprise resource planning (ERP) software. Below are more specific motivations beyond ERP for small business.
Top reasons that small businesses choose to implement ERP software include*:
- Reducing frustration and improving efficiencies
- Improving business performance for KPIs
- Supporting growth
- Gaining advantage over competition through technology
- Saving costs
*Mint Jutras 2016 Enterprise Solution Study
What is ERP for small business?
Enterprise resource planning is business management software that enables organizations to have one system to manage business processes. This concept sounds simple, but often isn’t, and can be game-changing – especially for small business.
An ERP software solution is a suite of modules that all operate in one database that serves as a master source of enterprise information. ERP is accounting and operations oriented, with modules such as inventory management, project management, human resources, supply chain management and more. Other key business functionalities included are sales, marketing, manufacturing, inventory, e-commerce. Read more in: What is Enterprise Resource Planning?
Your small business’ priorities are likely not the same as a larger business, and as such, your ERP software should reflect that. Some typical small business problems that ERP software can help solve include:
- Manual processes
- Little to no visibility into business data
- Disparate systems
- Lack of reporting and analytics
An ERP solution provides business insight, a suite of tools that provide reporting and real-time analytics, the ability to automate manual processes and is simple and easy to use. But not all ERP software is like the other – choosing the best solution for your business is a crucial step in the ERP implementation process.
Comparing ERP for Small Business
While ERP software can benefit businesses of all sizes, it’s not one-size-fits-all. Some platforms are built to better perform for larger enterprises, while others are best suited for smaller companies or startups. A smaller business likely requires a platform that is optimized to aid growth, while providing fewer employees who perform multiple duties more business intelligence and organization. What are the best ERP options for small business? Below are some of the top vendors.
- Acumatica: Their Small Business Edition is a cloud-based ERP designed specifically for small businesses that have basic accounting needs and require fewer than 10 users. It operates as a bridge from accounting programs to a full ERP solution with the potential to grow.
- Oracle NetSuite: A full-service solution, NetSuite provides complete visibility into business data at a price point smaller businesses can afford. NetSuite will scale with you as a long-term solution as your business grows. NetSuite is largely considered the world’s number one cloud ERP – chosen by more than 18,000 organizations.
- Sage: This vendor offers multiple products that cater to the needs of small businesses – taking control of finances and automating processes that reduce time spent on administrative tasks.
How much is ERP for small business?
Many ERP systems are optimized to best perform for specific company sizes. This is also true regarding price, since smaller companies cannot afford the same software that larger businesses do. However, that doesn’t mean small companies and startups are losing out on functionality – they simply don’t need the same number of applications that a large organization requires. ERP software pricing can depend on a few different factors including:
- Number of users
- Software footprint – the modules implemented
As discussed, smaller businesses don’t require the same level of functionality compared to a large business. There is no getting around the fact that ERP is an investment of time and money – ERP software for small businesses are less expensive but can still be a significant chunk of the budget. To soften the blow, below are some facts and figures regarding ROI on ERP for small business.
- Small businesses that implement ERP software are able to reduce operating costs by up to 20%. Other cost saving areas include admin costs and inventory costs.
- Small businesses that implement ERP software achieve 100% ROI within 27 months, on average
- Cloud ERP lowers upfront cost (compared to traditional on-premise ERP) – as subscriptions are paid monthly. Cloud software also allows you to account for the cost as an operating expense (versus a capital expense for on-premise hardware).
NetSuite Small Business Pricing
As an Oracle partner, our company is most familiar with NetSuite for small business. An option for startups and small businesses is the NetSuite SuiteSuccess Starter Edition. Companies that select this package receive the full system designed for the specific needs of a smaller enterprise. An option with SuiteSuccess Starter Edition is the NetSuite Professional Services Activation, a no-cost activation in which NetSuite consultants will convert your business data, configure your system, take you through a process walkthrough, conduct training and assist with go-live support. A value of about $70,000, the complementary activation gets your business online with NetSuite quickly and affordably.
Terillium also offers discounts on NetSuite implementation consulting for small businesses and start-ups. Request more info if you’d like to learn more.
ERP Software Selection Process
Once you’ve determined how ERP can help your small business, now you need to choose which software is the best solution. There are some key things to keep in mind when evaluating ERP for your business. Below are the top 10 – you can read the full info on ERP selection criteria here.
- The functional fit for your organization – does the software functionality meet the needs of your business?
- Industry experience – is the software used in your industry, does it have helpful industry-specific features?
- ERP vendor viability – how long has the product been around? How many organizations are in the customer base? What is their financial viability?
- ERP implementation project considerations – when is the right time to take on this project? Who will be the internal and external (often ERP consultants) leaders of the project?
- Technology – does the software include key features like end-user reporting, good user experience, data security, ability to integrate with other software?
- Risk – make a plan and consider key areas to avoid risk.
- Scalability – consider how the software suite fits with your business strategy today, and down the road.
- References – talk with other companies who have implemented the ERP. Both the software vendor and implementation partner should be able to provide references.
- Post go live – what is the on-going support and training plan?
ERP Software Consulting
However, before making a final decision in the software selection process, consider what you need from an implementation partner. To make the project a success, you’ll need the right team on your side. An ERP implementation isn’t just an IT project – it’s a business project because it will have an effect across your company as a whole.
Begin by consulting employees from all departments that will use the new system. Ask questions such as:
- What do you need the software to do in order to make your job easier or more effective?
- How many users in this department will use the software?
- What job positions will use the software?
Once you have a better idea of what to expect regarding who will be involved in the project, select your in-house team. These should be your A-team employees that you trust to deliver a successful project. Once you have your team lined up, consider your needs for a consulting partner. Check out this resource to learn more about ERP Software Consulting. Below are important aspects to consider.
- When to engage with an ERP consulting firm? It’s never too early, and the right partner can help you navigate the selection process.
- What should I expect from an ERP consulting team?
- What are average rates for ERP consultants?
- How does a technology consulting partner help ensure a successful ERP project?
Still Not Sure Where to Start?
After doing the research, you may still be unsure what ERP software is best for your company. This is where a business technology assessment comes in. At Terillium, we offer an assessment in which our team will come in and evaluate your existing technology and business goals. This will help you build a roadmap that can be used to assist in the ERP selection process.
During an assessment we review:
- Your business goals and how your current processes help or hold them back
- Your current technology
- Any manual processes that could potentially be automated
- Reporting and analytics
- Recommendations from our team and a roadmap to move forward