Enterprise resource planning (ERP) is a large-scale computer technology system companies use to help enhance or improve their business operations. ERP for small businesses focuses on making these organizations more competitive against their larger counterparts in the business environment. While small businesses will often have fewer resources to improve their operations, spending capital on an ERP system can be more beneficial if the computerized advancements will offer more return on investment compared to the initial investment.
ERP for small businesses hinges on the type, functionality, and number of modules a company can or should implement in its operations. Small businesses may be able to only implement a few ERP modules in their operations, limiting the amount of capital spent on this item. For example, small business owners may choose to only use the accounting, payroll, production, shipping, or time management module of an ERP. While the company may upgrade later on after the business grows, fewer modules early on can help save money for the small business.
Business owners should also review the longevity of the ERP system they decide to use. Because these systems are often designed for large companies, attempting to use an ERP commonly found in larger competitors may be unreasonable. Using a large-scale ERP for small businesses may result in operations hindered by the fact that business owners and managers cannot accurately gather information needed from their specific operations. Additionally, transforming manual processes into automated processes can take more time if the ERP must constantly be adjusted or altered for use in the small business.
The number of locations of a small business is another consideration for ERP implementation. Small businesses with small satellite locations or several mobile units may find this system less important. An ERP for small businesses should match current operations in a sense that the business will not need to reinvent the wheel solely for implementing technology into the company. The more time spent implementing ERP will often result in less time spent on the money-generating activities of the business.
ERP for small businesses can also struggle if there is little data to collect from the company’s operations. Small business has a broad definition, meaning a company with five employees is seen in the same way as a company with 50 employees. These smaller businesses may find that their operations will not benefit from a wide-scale ERP system because the information in the business does not travel very far for decision-making purposes. In fact, employees may spend more time inputting the data into the ERP than managers will when reviewing it.
