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What a small business should look for in ERP

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What are the most important features a small business should look for in ERP? Simply, the features that answer the requirements defined and prioritized by the people in that business when they start selecting their ERP. Every ERP includes many features that the developers considered to be valuable. None are required for every business and those requirements are where the value is defined.

Most important requirements for a small business

The most important requirements depend on the particular business. A business with inventory might list inventory management as an important requirement while another business that provides a service is unconcerned with inventory management.

Ease of use is a requirement that most small businesses will agree on. Small businesses have few users and many of them wear different functional “hats” during the day. Given that recent ERP research showed that 54.1% of small businesses sought an ERP solution to increase efficiency and gain greater functionality, an easy (and most importantly, usable) system is a must-have. Give those ERP users a break and insist on a system that is user-friendly and easy enough that the users will actually use it. At the same time, ensure the selected ERP has the power and sophistication you need to enable your users to enter purchase orders and stock your shelves with the products you and your customers want so your profitability is enhanced.

Small businesses that plan to grow must look beyond today’s immediate needs and select an ERP that will satisfy tomorrow’s needs too. The ERP must be able to scale over time. It should be ready to use now and ready to provide for the needs of the larger version of that business over time.

Every business has requirements for compliance with environmental and tax laws and regulations. Many businesses have customer requirements and trade association rules to comply with as well. Be certain that the ERP you choose for your small business helps meet your compliance requirements.

ERP features to consider

CRM or customer relations management is a feature many ERP systems provide. Successful businesses aerll have customers to satisfy and this is a feature many will find valuable.

Many businesses make sales by providing a quotation and converting some of those quotes to actual orders. Quoting in ERP allows you to simulate orders by combining time and materials needed for an order and adding some margin to the total cost. When the quote is won, ERP will simply move all the quoted components to an open sales order status for fulfillment and measurement of actual costs and margins.

A business with inventory, whether items for sale or items to be manufactured for sale, will want to consider inventory and production management features in their ERP.

Service order management provides tools to manage another kind of business many small businesses offer. These businesses do not sell things but they do sell ideas to their customers.

The list of potential ERP features is very long. ERP providers all offer many features as they intend their products to help the widest possible number of customers.

Conclusion

Start with your list of requirements you and your team defined as important. Be certain the ERP you select meets all the ones you said were “must have” and as many as possible of other “nice to have” desires that are not necessarily required.

Look for an ERP that is easy enough to use that your users will accept immediately and no extensive training is needed. Verify the ERP can scale and will continue to meet your future requirements as well. Make certain the ERP will help meet whatever compliance needs that you have.

Once your ‘must-have’ requirements are met, every other feature you can use is an added bonus. Accept those bonus features and learn to use them well.

Written by Tom Miller from ERP Focus.

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