Five signs your business is ready for ERP

Owners of rapidly growing businesses often reach a point where the company consumes their every thought.

September 5, 2013

By: Taryn Cromie, sales manager, HansaWorld South Africa

Owners of rapidly growing businesses often reach a point where the company consumes their every thought. Sleepless nights are spent fretting over growing complexities and constant worry of things potentially forgotten besieges all the waking hours. For business owners in this position, the time may have come to consider upgrading the accounting system to one which provides more control, more information and better insights into business performance. In short, it may be time to implement an Enterprise Resource Planning (ERP) solution.

But how do you know that you are ready to invest in better business management software? Here are five signs that you are ready for ERP:

1. There are weaknesses in the systems supporting your business
Take a hard look at what you’re using to run your business. An accounting package? Spreadsheets? A variety of different software tools for different tasks, none of which integrates with any of the others? You may have discovered that the accounting system is just fine for accounting, but is very limited for many of the other tasks which are necessary to running the business. Establish what you need to know that these tools are not providing; for example, are sales forecasts easily available? Profit and loss reports, stock management, and customer segmentation – the metrics most important to you will depend on your specific business, but if they can’t be produced fast and with ease, your systems may be lacking.

2. There are functions in the business which aren’t being handled very well
It’s not just the systems that have shortcomings; as a business owner, you will appreciate that some things are done as well as they can be, while others aren’t. Knowing where the weaknesses are provides an opportunity to improve business processes with the implementation of an ERP solution.

3. Organisational performance is hampered by inadequate processes
This is a critical question which has to be answered with brutal honesty. For example, if the shortcomings are personnel-related, the result of changing market conditions, or owing to products and services which aren’t stacking up to the competition, no amount of technology systems will solve them. While capable of improving efficiency, delivering more information more easily, and improving management, a modern ERP system isn’t a panacea to solve all ills.

4. Control and management of extended resources is difficult or impossible
Poor access to critical information is a clear indicator that your business systems aren’t up to scratch. As your business grows, so too does the number of tasks, resources, metrics and projects. If it is becoming difficult or impossible to keep track of sales opportunities, project statuses, staff time, product inventory, billing and invoicing or any one of a number of business functions, you may need an ERP system.

5. Your IT systems are a mess
The upshot of having a wide variety of software tools to manage different aspects of the business is typically a creaky, difficult to manage IT environment. Computers crashing, constant and unsynchronised upgrades and patches, attempts to integrate or share information from one system to another – these are signs of an IT system incapable of meeting business requirements unobtrusively without interruption.

Making the decision to implement an ERP solution is not one which should be taken lightly. However, when your business reaches a certain point of complexity, sure signs will emerge that things can be done better with an integrated, modular system. With an ERP solution in place, you can look forward to better information more often, a clearer view of the company’s performance, and enjoy the comfort that comes with knowing more.