As a small business owner, you are probably working with multiple software tools to manage different business aspects. Typically, this includes the latest solutions in sales, marketing, finance, accounting, and HR. Now, imagine an enterprise solution that integrates these business functions.

This is what an ERP system can do for any small business. One of the widespread rumours is that ERP systems are only designed for large enterprises with complex business processes. This is not true. ERP solutions are equally valuable for small businesses.

Here’s a discussion of why every small business must upgrade to an ERP system.

Small Businesses Should Upgrade to ERP Systems

How ERP Works for Small Businesses

Short for Enterprise Resource Planning, an ERP provides a unified framework that integrates every aspect of small business operations. Depending on their business size and industry, small businesses have a variety of requirements, including the following:

  • Financial management – or tracking of business expenditures and income.
  • Customer relationship management (CRM) – or the need to improve customer relationships.
  • Inventory management – or monitoring inventory levels to prevent overstocking or under-stocking.
  • Marketing – to promote their products (or services) to a wider customer base.
  • Customer support – or providing customer service to address their concerns and questions.

Next, let’s discuss some of the small business ERP benefits.

ERP Benefits for Small Businesses

Here are some reasons why small businesses must implement an ERP system:

1. Business Visibility

Most of the smaller businesses run their operations with manual processes or tools like spreadsheets and accounting tools. Additionally, small business owners manage multiple roles and smaller teams. They don’t have any bandwidth to look at their overall operations and improve business efficiency.

An ERP system gives small businesses greater visibility over their various processes. This can help them identify areas of improvement – and improve operational efficiency.

2. ERP Scalability for Small Business

Small businesses need an enterprise solution that can scale according to their business growth or requirements. For instance, an ERP tool can accommodate more users – as more employees join your workforce.

Besides scalability, ERP systems are flexible for changing work requirements. For instance, cloud-powered ERP systems can connect remote workers to your enterprise, thus boosting collaboration and productivity.

3. Data-driven Insights

Whether a small business or a large corporation, every company depends on data-driven insights to improve its decision-making process. By using ERP integration for small businesses, this solution provides the latest data to various business departments within the enterprise.

This serves as a “single source of truth.” Using data analytics tool, small businesses can leverage ERP data to make critical decisions around procurement, order fulfilment, and production.

4. Workflow Automation

Human (or manual) errors can be devastating to the growth of small business enterprises. Through automation, they can overcome this challenge and accelerate their business growth. An ERP solution can automate various workflows, thus eliminating human error.

ERP systems can automate a variety of business activities, including the following:

  • Accounting
  • Payroll processing
  • Inventory control
  • Order processing

5. Cost Efficiency

With ERP systems, small companies don’t need to invest separately in software tools such as inventory management, accounting, and customer relationships. This helps them save software-related costs related to licensing, software upgrades, and administration.

Similarly, through ERP automation, small businesses save time and expenses by performing manual activities. By eliminating human errors, ERP systems save valuable money spent on rectifying issues.

When Should Small Businesses Adopt an ERP System?

There is no correct time for small businesses to adopt an ERP system. However, here are some indicators of when small businesses must invest in ERP solutions:

1. Data Conflicts

Are your business departments working with “siloed’ or inconsistent data? This is the right time for you to investino ERP. Effectively, an ERP system centralised all data, thus presenting a “single source of truth” for all business functions.

2. Manual Processes

Another sign that your small business requires an ERP system is when business teams are spending too much time on manual processes (for example, manual data entry). An ERP system can automate these processes, thus saving valuable time and resources.

3. Limited Business Growth

Is your company experiencing sluggish business growth? This could be because your existing systems cannot scale and handle higher demand. ERP solutions are designed to scale according to your business requirements, thus ensuring continuous growth.

4. Poor Customer Relationships

Small companies rely on customer relationships to grow their business to the next level. If you are struggling to consistently meet your customer requirements, an ERP system can help integrate customer data and automate customer-centric processes. With an ERP, small businesses can deliver improved customer service and respond to their changing needs more efficiently.

5. Lack of Real-time Reporting

Often, small business owners struggle to make the right decision because they are presented with outdated data. If your business is working with “siloed” or outdated data, it’s a good time to invest in an ERP solution. Through data consolidation, ERP systems can generate real-time reports with accurate insights for accurate decisions. With ERP reporting, business owners can also identify areas of improvement and business opportunities.


For small businesses, switching to an ERP system may seem like a big investment. However, in the long run, the high ERP ROI for small businesses makes it worth the time and effort.

As an award-winning ERP service provider, Praxis Info Solutions has enabled small businesses to switch to an efficient ERP system like SAP Business One. With our extensive skills in ERP customisation for SMEs, we can help you implement ERP according to your business requirements. How do you get started on ERP? Here’s our complete guide to ERP for small businesses.

Are you looking for the right ERP implementation partner to upgrade your small business? We can help. Contact us today.

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