ERP systems stand to be a critical investment for improving business efficiency in the world today as a resource that creates order, increases efficiency, improves productivity, and develops effective processes. Businesses without an ERP are quickly lagging behind and those with the system are rapidly improving their business performance and streamlining their operations. 

Hence, in an increasingly competitive world, businesses that stand to demonstrate maximum operational efficiency gain a competitive advantage. Having an ERP system can effectively work to improve the running of any small to midsize company. This post will share the benefits and challenges of implementing an ERP system. 

ERP benefits and challenges

What is an ERP System? 

An Enterprise Resource Planning (ERP) system is one that is designed to improve the operational efficiency, workflow processes, and effective running of a business.

An ERP system is essentially made up of tools, programs, and features that are designed to help improve the way the business operates by creating a centralized database. It’s a system that aims to improve the efficiency of existing structures and processes by removing unnecessary tasks or processes that exist to reduce efficiency, time, or create waste. 

What Does ERP Mean for My Business? 

What makes an ERP system unique is its ability to unify and synchronize multiple business functions.

By providing a remote database, an ERP system creates end-to-end business mobility which enables the optimization of all business functions as a result of a streamlined foundation.

Hence, the process enables enhanced knowledge-sharing as a result of a shared database.  

The Business Benefits of an ERP System for SMEs

As mentioned, ERP systems stand to create a solution to the problems faced by fragmented businesses seeking to improve their operational efficiency.

The most significant benefit of a business implementing an ERP system is the development of synchronized departments.

Before, a business may have had several departments with separate databases. The effects of this discontinuity can have adverse effects on a business by creating a lack of knowledge-sharing, an increase in wasted time, and a lack of efficient workflow processes as a result of unorganized data.

In today’s world, the one requirement of successful businesses is to adopt a lean approach.

Hence, implementing an ERP system works to enable several business functions and departments to work in unison remotely. This results in improved collaboration between departments and improved operational performance as the ERP system enables the timely transfer of data and information to be shared across the business. 

Additionally, the implementation of a shared database results in improved productivity as it enables all departments to access and evaluate the same data and information in real-time. This improves operational efficiency by reducing time. 

Another significant benefit of implementing an ERP system is the improved ability to scale a business as the central database enables the secure control and fluid transition of information that enables the implementation of new processes and informational resources easily integrable.

Additionally, the ERPs automation functions enable the steady control of handling complex processes. 

An ERP system also enables the efficient tracking and monitoring of progress and performance across all departments as it provides complete transparency of all the relevant measurements and metrics. This subsequently improves the accuracy and efficiency of reporting and planning for development. 

benefits and challenges of erp

Challenges of an ERP System

The largest challenge faced by companies investing in an ERP system is their inability to effectively implement the system. Implementing an ERP system requires significant investment, not only financially, but also in manpower.

Setting up an ERP system successfully across a whole company takes time and requires the relevant skills, hence, you may need to source additional staff or outsource in order to implement the system.

Additionally, once the system is up and running, it will require continual maintenance and servicing. Therefore, it’s critical that you invest in the correct training for your IT staff. 

Training is another significant challenge that can be faced in the process of implementing an ERP system.

Integrating several departments and data can be a complex process and a massive change for the whole company. As such, employees may find the change daunting as it will require them to learn a new system.

Hence, it’s essential that you invest in the relevant training for all employees as insufficient training can lead to the inaccurate entry of data or information. Insufficient handling of the system may also lead to errors and technological problems.  

Whilst there is a risk of facing challenges in implementing an ERP, making the necessary investments will see successful implementation. 

ERP system training

Challenges Companies Face Without an ERP System

Efficient and advanced operational performance is what’s needed to get ahead of the game. These days, that means investing in technology that enables a streamlining of business operations.

Systems such as an ERP system do just that by creating a centralized database that enables the smooth integration of all business divisions.

Companies without an ERP system face the problem of inefficient processes that waste time and money, disconnected business divisions that aren’t on the same page, a lack of knowledge sharing, insufficient tracking methods, and the time-consuming manual entry of information and data. 

An ERP system stands to be the solution to creating a business with a competitive advantage. With the benefits an ERP system has to offer, it’s fair to say that every company needs an ERP system if they’re looking to develop their operational efficiency. 

Whilst implementing an ERP system stands to be a considerable investment, on analyzing the benefits and challenges, it can be said that the benefits of an ERP system well surpass the challenges.

Businesses that have an ERP system stand to gain a competitive advantage as they improve their operational efficiency. 

ERP Solutions Provided by Support One

Whether you’re a startup or a midsize company having an ERP system can excel the performance of your business from creating an integrated database to improving traceability and knowledge-sharing.

SAP Business One has proven to be one of the best ERP systems for all types of small-to-medium-sized businesses.

Contact us to learn more on how to integrate your system to SAP Business One.