IT-based solutions are helping small businesses stay competitive on the market, even against larger corporations. Cloud solutions such as SalesForce, for example, are allowing small businesses to remain agile and lean while maintaining a huge competitive advantage against their rivals.

Another way small businesses can improve operational efficiency is by using Enterprise Resource Planning or ERP. Unfortunately, ERP is still seen as a solution for large corporations when in fact it can be very useful for small businesses. The big question is: when is the best time to implement an ERP solution?

Understanding ERP

Before we can talk about the best time (and way) to implement ERP in a small business, it is important to understand what ERP really offers. As the name suggests, an ERP system allows businesses to better manage their resources, from the use of raw materials in manufacturing lines to internal finances and human resources.

ERP is different to Supply Chain Management or SCM. ERP is primarily used by manufacturing companies and large corporations, but it is applicable in other situations as well. The main difference between SCM and ERP is the approach the two systems take. SCM takes a more external approach and focuses on managing supply chains while ERP focuses on internal matters and is more comprehensive.

When implemented, ERP can be used to aid decision making on a managerial level. Since the system integrates every part of the business’s operations, business owners will also have a clearer view of things from a different perspective.

Getting Started with ERP

The best time to start using ERP is, well, as early as possible. ERP can be useful for businesses of any size, including small and home businesses who are trying to capitalize on market growth. There is a solution for every scale of business; scalability is ERP solutions’ strongest suit.

Of course, there are systems for larger businesses that may not be suitable for small businesses. SAP, for instance, is primarily used by larger, more complex organizations. Even the company’s Business One, which is designed specifically for SMEs, may not meet the needs of smaller businesses perfectly.

On the other hand, there is no upper limit. An ERP system will grow alongside your business, supporting operations and helping with factors such as efficiency every step of the way. Starting early is the way to go.

Things to Consider

There is one other important task to tackle when you’re considering an ERP system implementation, and that is finding a system that meets your specific needs perfectly. This involves understanding the requirements, setting a budget for the system, and going through the available options to find a suitable solution.

Aside from SAP, you can look at solutions from Oracle, Sage ERP, Microsoft Dynamics, and even Blue Link. Make sure you opt for a solution that is scalable so that you know you can continue to use the system as the business grows. This alone will make a good ERP system a valuable investment to make, especially in a market as competitive as today.