ERP systems have become key in transforming business and innovating processes across organizations. These solutions increase employees’ productivity, help them work faster, give them more visibility of the entire company, and allow them to improve their efficiency. ERP systems affect every business domain: manufacturing, resource, purchasing, sales, marketing, inventory control, customer relations, distribution, and more.

While several companies have integrated ERP systems into their business, there is still a misconception that only big firms and enterprises can afford an ERP system. Small businesses often don’t work with an ERP system, thinking it’ll be out of their budget or they need to know where to begin. This article will paint a brief picture of what challenges an ERP system for small businesses will help you solve, why it is good for the business, and how you can choose one for your organization.

Starter Guide to ERP

Challenges ERP Helps Solve

Growing companies generally implement ERP solutions to assuage any issues or pain points they are experiencing. While these challenges can differ from business to business, they can be bundled into one of these four areas.

Assorted Systems

Companies often use a mixture of software applications for handling different business processes. There is one application for raising tickets or issues, a different one for maintaining conversation, files are saved and shared through a separate application, and then there are the evergreen spreadsheets. While these applications make work easier, they raise the challenge of collating all the data collected. Since none of the applications is connected, it becomes tricky to reconcile data and the only option left is to spend hours reconciling this data manually. This leads to human-induced errors in data entry, a backlog of data collected, delays in taking important decisions, and the need to hire an extra workforce for increased workloads.

Also Read: From Excel to ERP—Why You Should Make the Switch

Inefficient Processes

Employees don’t want to perform the same mundane tasks every day. It not only affects their satisfaction levels but also has a direct impact on their efficiency. They have to spend significant time executing these simple tasks and need more time to do what is essential. The manual effort required can also frustrate them while working. Inefficient processes impact the company financially as well.

Lack of Visibility

Making business decisions becomes easier if there is more data to analyze—lack of data visibility forces managers to take decisions based on their gut and intuition. There are more efficient ways of basing decisions, and these can cause performance issues. If the marketing team needs more data about how their marketing strategies are performing, they run the risk of missing opportunities to find customers and close deals. If the accounting team needs more data about their financials, it is easier for them to generate accurate revenue reports, profitability margins, and more.

Also Read: How ERP Can Be Used to Improve Company Performance

Absence of a Growth Support System

Business growth requires a robust support system of applications and software that can adapt to changing business dynamics. In a tangled mess of systems, transferring data between systems and finding inconsistencies in operations becomes almost impossible, significantly when the business is increasing and changing operations frequently.

Benefits of ERP Systems for Small Businesses

Centralized Data

One of the most significant advantages of using an ERP system for small businesses is that it combines data from different departments and brings them into a single centralized place. Without centralization, data is spread across platforms and is unstructured. Analyzing it and extracting any actionable insights becomes nearly impossible. It also leads to duplicate data stored, which makes the result inconsistent and doesn’t provide accurate reports. An ERP system standardizes the data, prevents duplication, and helps businesses make more informed decisions.


Complying with regulations becomes difficult if your records are not up-to-date and accurate. ERP systems make it easier to find any record or data, reducing the complications in adhering to compliance requirements. Any information that an auditor might need is available at a single location, making you much more auditable. With customizable reports, businesses can track their compliance as well. The best ERP systems update themselves regularly to integrate any changes in regulations and help remain compliant without any hassle.

Increases Productivity

ERP systems automate several mundane and repetitive tasks, which allow employees to work on other tasks and utilize their time more efficiently. It makes processes more straightforward so that the employees can spend less time searching for information and complete their tasks more quickly. ERP systems are great for taking some work off the plate of every employee. They are now free to take on more tasks that leverage their skills and expertise, and with increased visibility into the business, they can get their work done without pinballing around for data.

Enhanced Visibility

Enhancing the visibility of different business aspects is one of the most significant benefits of having an ERP system. It puts power into the hands of every employee and enables them to make better and more informed decisions much faster. Since different teams work together in a business, other teams need visibility into what everyone’s doing. For instance, the inventory team can look into the data collected by the purchasing team to decide whether to restock any inventory to avoid insufficient or excess stock.


The scalability option of ERP systems allows businesses to stay flexible and leave the door open for any changes in the future. As the business grows and evolves, it can add new features as required. Getting a new ERP solution every time your business changes isn’t an economical approach, and if you’re rapidly evolving, it becomes even more difficult. ERP systems run on remote servers, so adding extra power and resources on demand is relatively easy.

Reduces Cost

Eliminating manual tasks like data entry, automating repetitive tasks, executing tasks faster, enhancing visibility, and other features help ERP systems in small businesses in lowering overall costs. It can even wipe out some of the operational and administrative expenses completely. With the ability to monitor everything happening in the organization, business managers can quickly find areas for cost-cutting and identify sources that are incurring the highest expenses. ERP systems also help prevent rush orders, over-ordering, or over-production of items and manage resources that can help reduce your costs.

Also Read: What is SAP ERP?

How to Choose an ERP System for Your Business?

Now that you know how beneficial an ERP system can be for your business, it’s time to integrate one. However, many ERP solutions are available in the market, so choosing the one that suits your business and meets your objectives is highly crucial. Here are some factors you should consider while selecting an ERP system for your business.


Remote work has increased in the past couple of years. Employees are no longer constrained to work from their cubicles or homes; they work on the go from any device. Choose an ERP solution that can be accessed online so employees can open their workflows and access essential data whenever possible. The ability to tap into ERP dashboards at any time to extract information boosts the overall productivity of the employees and makes the business more efficient.

Testimonials and Recommendations

Before completing any purchase, customers look for references and ratings from other customers to gauge whether the product will benefit them. While selecting an ERP software, read testimonials from different organizations and review how the software helped them achieve their business objectives. Talk to companies that partnered with the ERP vendor and see how the system is integrated into their business and how it reacts in real life.

Ease of Use

The ERP system must be easy to use and integrate with the business. Focus on the user experience to ensure your employees can easily access any data point or information. There should be a manageable learning curve for employees as it can demotivate them from learning the platform. Go with a solution that functions smoothly and simply while fulfilling these needs efficiently.

Proven Track Record

Testimonials are a great way of understanding how user-friendly and beneficial an ERP system can be. But only some industries are the same; hence, the features of an ERP system that are invaluable for one company might be useless for another. Bet on vendors with a proven track record of working with organizations in your industry. This will ensure that the ERP vendor has experience in the industry and is familiar with your needs, requirements, and challenges.

Also Read: SAP Business Technology Platform – An introduction for Enterprise Architects

System Cost

System cost is one of an ERP system’s most significant deciding factors. It is essential to understand here that a business evolves and grows constantly. So instead of focusing on the current scenario and choosing a solution that costs less upfront, business owners should think about the future and be prepared for any changes. Many cloud-based ERP solutions have flexible pricing where you can keep costs down and only pay for services you need. And when the need arises, you can quickly scale the solution.

Also Read: Why Your Business Needs an ERP and How SAP Business One can Help

Getting Started

Are you interested in implementing an ERP solution in your small business? Contact Praxis Info Solutions, one of the leading end-to-end ERP solution providers. It’s suitable for small businesses thanks to its scalability, flexibility, and modularity. Personalization is one of our key differentiators, and we strive to provide custom solutions based on our customer’s unique business requirements.

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