How ERP Systems Reduce Costs And Improve Profits For SMEs

Luke Fitzpatrick

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Frankfurt am Main, Frankfurt am Main, DeutschlandPhoto by Yibei Geng on Unsplash

The ERP market is rapidly expanding, with the total market size expected to exceed $4.95 billion by 2024.

If you’re running an SME, you need access to the tools that can help to improve data insights, collaboration, and financial reporting in your business.

Keep reading to learn how ERP systems reduce costs and improve profits for SMEs, along with the other benefits you can gain when implementing ERP in your SME.

What are ERP systems?

ERP is an abbreviation of the phrase enterprise resource planning. Modern ERP software helps businesses automate tasks by bringing all jobs together in one system. ERP software works to provide automation of processes in your industry. These processes could be:

These are just a few processes you can roll into a fluid ERP system. Implementing an ERP system in your business will have improved insights, more automation, and internal controls. Data is collated in a central database that collects data from different inputs across your business, including finance, HR, marketing, and commerce departments.

The benefits of implementing ERP software

Before investing in ERP software for your business, you must know the benefits and what ERP software can do for your business. Here, we will cover some of the most significant benefits your business will gain from ERP software.

1. Reduces costs

ERP software can be an expensive investment. However, over time the returns on your investment will become apparent. ERP systems save you money over time and can help improve your business's profitability and reduce costs.

The software is designed to reduce time-consuming manual data input tasks. Instead of manually entering data into the system for different departments, you must only input the data one time. Then, the system will distribute this information across all necessary departments. Some of the additional tasks that you can manage more effectively with ERP systems include:

  • Report drafting.
  • Invoice allocation.
  • Employee payroll.

Streamlining time-consuming tasks in your business can reallocate your time to more important tasks and focus on your business’ growth.

2. Improved reporting and planning

With an ERP system, you receive better insights into data and improved reporting and planning. A centralized ERP system has only a single reporting system for all departments and aspects of the business. With all information housed in one place, your ERP system can generate valuable reports using all available data at any given time.

One of the significant benefits of using an ERP system in your business is financial reporting. With an ERP system, your financial reports will no longer need to be revised by your IT team. Instead, standard financial information, like cash flow and income statements, can be generated using custom reports built into your ERP system.

When you invest in an ERP system, you also have the opportunity to invest in built-in business intelligence services. When you invest in business intelligence services with your ERP software, you gain access to better insights into your overall business operations. This will indicate any problem areas in your business that need further attention in your corporate planning procedures.

When you have optimized reporting and planning in your SME, you can make more informed business decisions and effectively identify your business's strengths and weaknesses.

3. Improving customer service

CRM is an essential part of maintaining your client relationships. When you invest in ERP systems for your business, your customer relationship data is stored on your unified system rather than spreadsheets, which can be time-consuming to create and cause confusion.

Acquiring and retaining new customers should be of utmost importance in any business model. You can merge your customer relationship management with an ERP system with automated marketing. Most ERP systems will support eCommerce processes, tools, and data if your SME is an eCommerce business.

4. Data security and quality

ERP systems can help you share customer service, finance, marketing, and eCommerce departments and make this information readily available on one unified system. However, one of the significant challenges businesses face when sharing data is keeping the data secure. You will need to be able to implement controls regarding who can see and edit this data.

Your ERP system will assist in keeping your data secure and implementing controls over who can see and edit your data. Your data will be secured if you opt for an on-premise or cloud-based ERP system. Your data will have a centralized backup system and an added layer of security for your sensitive data.

5. Enhancing workflows and collaboration

An ERP system can enhance collaboration and workflows for your SME business. Collaboration is essential for improving productivity, so you must facilitate collaboration with systems that support real-time cooperation.

With an ERP system, you gain better communication and real-time updates to ensure that different departments in your company are kept in the know with current information. All of the data in your system will be funneled into a centralized location, so employees will have access to data from different departments in one place.

When your employees have access to a wide range of company data on-demand, their productivity will not be inhibited by any delays related to accessing data. Employee decision-making will be based on all available data, and your company will operate more fluently.

Summing up

If you’re looking for systems to make everyday processes in your SME more straightforward, you should consider investing in ERP software. ERP software centralizes all data in your business from different departments for the reduction of costs and improved profits, facilitating easier financial reporting.

You will also be able to improve workflows and collaboration, along with customer relationship management, as all information will be readily available on-demand, allowing your employees better data insights and improved productivity.

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Academic Speaker | Freelance Journalist | I have contributed to a variety of publications such as Forbes, Tech In Asia, and The Next Web. I cover a variety of topics ranging from fintech, big data, AI, blockchain, to lifestyle and breaking news stories.

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