7 signs your growing company needs an ERP system
7 signs your growing company is missing an ERP system: data chaos, silos, rising IT costs, delays, complex regulations, scaling challenges.
· 7 min read
If you are starting to lose the overview of your company’s digital solutions, it may be because you are missing an ERP system.
That is really all there is to it. An ERP system is a bit like a control tower at an airport that monitors and directs air traffic. If only a single plane comes along now and then, the control tower is not that important.
But if there are suddenly lots of planes that need to go to different places at different times, the control tower becomes absolutely crucial for making sure that no accidents happen and that the air traffic flows without problems.
It can just be hard to know exactly when you need an ERP system in your company. That is why we have collected the 7 most important signs that you should probably consider having that control tower built.
The 7 signs are:
- Your company has grown bigger
- Your systems do not talk to each other
- Your IT solutions are getting more and more expensive
- You experience delays in data changes
- Your company has to comply with complicated laws and regulations
- Your customers expect better service
- Your digital solutions cannot scale with your company
Let us dive into each of the points and give you a better overview.
But first we need to get it completely clear what that ERP thing actually is
What is an ERP system?
First you get the formal explanation of what an ERP system is:
An ERP system (Enterprise Resource Planning) is an integrated software solution designed to help companies manage and automate a wide range of business processes across different departments and functions.
Or put in 3 other ways: a control tower at an airport, the brain in a body or the conductor of a symphony orchestra.
Typically an ERP system will help with the management of:
- Purchasing and supply chain
- HR and personnel
- Sales and orders
- Production
- Accounting
- Inventory
It all sounds very nice, doesn’t it? But when is it time to hire a conductor for your company’s symphony orchestra?
Here are 7 suggestions:
This is why your company should acquire an ERP system
If you are in doubt about whether your company is missing an ERP system, see whether you recognise one or more of these situations:
Your company has grown bigger
Situation: Things are going pretty well. Your company has gained new departments, lots of new products on the shelves and maybe a new location (possibly abroad?).
That means higher revenue, but also greater complexity. And it is a hassle to keep track of it all manually.
How can an ERP system help?
Here an ERP system can help streamline the processes in your company, so you avoid errors and misunderstandings. In other words, less hassle.
Your systems do not talk to each other
Situation: Imagine that your company’s warehouse department uses a different IT system than your sales department. And that the two systems do not talk to each other. That can mean that your salespeople sell more than you have in stock, so customers have to wait a long time for their goods.
Or that you order goods that are no longer in demand, so they just sit taking up space in the warehouse or have to be sold at a discount.
It may also be that your accounting department uses different systems for invoicing, payroll and budgets, which also cannot talk to each other, so errors arise.
How can an ERP system help?
An ERP system contains features that support the important processes in your company. So that, for example, goods are not sold that are not in stock and that you can no longer get hold of. You avoid having to manually keep an eye on whether everything adds up, because the ERP system takes care of it all for you.
Your IT solutions are getting more and more expensive
Situation: If you have several different IT solutions, it can cost you a lot of money in, for example:
– Licenses: As your company grows, you need more and more IT solutions – and they all cost money.
– Maintenance: All your IT systems have to be maintained. And if you need support, it can be expensive if you have many different vendors.
– Training: Your employees have to familiarize themselves with many different systems. That takes a long time and costs money. That is why you may only invest in training for one employee, which makes your company vulnerable to any sick leave or resignation.
How can an ERP system help?
By having a single entry point to your digital solutions, you save money across the board. At the same time, it makes more sense to upskill several employees in the system, so your company is less vulnerable that way.
You experience delays in data changes
Situation: If you do not have an up-to-date overview of your stock, your cash flow or when your upcoming deliveries arrive. It can be difficult to make the right decisions for your company.
And without an ERP system, delays can arise between when an update in one system becomes available in the other system. And that delay can create errors and misunderstandings.
How can an ERP system help?
If you have an ERP system, you avoid having your data lag. You have a real-time overview of your company at all times. And if you combine that with an ERP system’s ability to analyse data across the board, it really becomes a winning combo.
Your company has to comply with complicated laws and regulations
Situation: GDPR and ESG. Those are just some of the complicated sets of rules a modern company has to comply with and live up to. And new ones keep coming. If the rules are not complied with, it can result in large fines and scratches in the paintwork of your company’s brand.
How can an ERP system help?
With an ERP system you can automate your processes and make sure that you track your data in the correct way depending on the case. So you do not get unpleasant emails from the authorities.
Your customers expect better service
Situation: With all the new digital possibilities, customers expect fast deliveries, correct and specific information about your products and an empathetic and helpful customer service. And if you cannot give them that, you can be sure your competitor can.
How can an ERP system help?
When you streamline your internal processes with an ERP system, it is ultimately your customers who get the biggest benefit. Because you will have the necessary overview of your shop at all times, so you can give them what they want!
Your digital solutions cannot scale with your company
Situation: Your beloved (and old) digital solutions have helped your company get to where it is today. They have done well. But it is no longer what your company needs if it is to continue being scalable.
It is time to swap the tricycle for a racing bike.
How can an ERP system help?
An ERP system can give your company plenty of flexibility and integrate solutions that can ensure your company can continue its growth journey for many years to come. Among other things because it can create a better overview of all the data in your company.
Summary
To put it briefly, if your company has come out of the first phase of its growth journey and is establishing itself as an important and solid player in the market, then an ERP system will be a good solution for you. Of course it is not a decision you make on a Friday afternoon. It is a decision that requires a lot of consideration and extensive planning.
At the same time, all companies are of course different, so there may be industry-specific considerations that we cannot cover in this article. But if you start running into some of the 7 signs, it is at least a good idea to consider whether an ERP system might be the next big step for your company.