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Why do small businesses need ERP systems more than others?
Why do small businesses need ERP systems more than others?

discover | Thursday - 08 / 02 / 2024 - 6:10 pm

We recently thought about inviting several filmmakers/ movie producers to our company (this is due to the many exciting events taking place in our sales department – here it could be a great movie scenario -).

When a generous (and angry!) client visited us and accused us of being an evil (capitalist) company, citing our direct interest – as he put it – in huge companies, such as real estate management facilities companies, big factories, and educational institutions… in case of such client, it is known that, anger is an expression of a hidden fear, we asked him: Is your small business facing a problem?
Our client’s tongue has been tied with a kind of astonishment, and he hesitated to reveal what was inside him.

To be honest, yes…we would like our company to be part of KSA vision 2030, but all digital transformation solutions are expensive. The real problem is that we don’t even have enough cash to invest in an ERP system!
Here we realized the misunderstanding that had occurred; our client believes that all ERP systems come in the form of office packages, so he’s concerned about the cost and complexity of network infrastructure.
It seems that the client is right. Our interest in large companies has come at the expense of the interest in small companies, and perhaps it is time to turn a new page.

erp system

How small businesses benefit from (cloud) ERP systems
Small business life cycle.

We asked our client how he started his company, and he told us – and his eyes were shining with enthusiasm – about the day the entrepreneurial idea emerged in his mind, and how he gathered his employees from the best recent graduates.
Then his enthusiasm began to fade when he talked about wasting capital on start-up expenses (without knowing how or why!)… And when he inquired about enterprise resource planning (ERP) systems, someone told him (improperly) that adopting them might take several months or more… And so, Before he lost hope completely, he decided to search in the issue by himself and during the searching process he was guided to our company’s website, where he took the address of the company’s headquarter and honored us with a visit.
At this point in the conversation, the client seemed frustrated, and he was looking out the window at the parking lot. He was looking towards his car (Mercedes). At this moment our marketing director said a sentence that immediately changed the client’s mood:
Have you heard about the marketing deal between an ERP system provider and the Mercedes Formula One F1 Team?

In fact, We had no idea that the client is interested in the Formula One world!

We became aware of what he’s getting at: greater awareness of ERP systems is built among employees (of all positions), small business owners, and startup founders. Along with the growing number of small businesses of digital-first technology, enterprise resource planning (ERP) systems are becoming increasingly valuable as an engine of growth. By ingesting and analyzing all the data, ERP systems establish shared and effective decision-making processes.

Key benefits here include (but are not limited to):

  • Better information exchange between team members.
  • Making data available to anyone interested (increase in transparency).
  • Improving workflow through automation, which contributes to increasing productivity.
  • Develop business intelligence to drive strategy.
  • Access smart features like analytics and AI insights.
  • Improved data backups, security and disaster recovery.
  • Simplify and even reduce IT costs, as your employees can work with the latest ERP applications from day one, all running in a secure environment (eliminating the need for “expensive” digital security solutions).

Going back to our conversation with the great client, we were able to convince him of the ability to start his ERP journey as a small business, able to overcome many of the integration issues and technical issues that larger companies face.
As you know, the larger the company, the more difficult it is to squeeze the huge volume of data into the ERP system, but talking about “difficulties”, “compression” and “huge data volume” brought us back to talking about his small company’s lack of necessary resources. That’s why, my dear, the cloud ERP system appeared. It turned out that the “so-called-advisors” had not told our client about the existence of ERP ‘clouds’, where a company can deploy massive amounts of computing power thanks to the cloud (built around data centers with high-powered processors and massive storage, linked by fast, high-bandwidth networks). You don’t have to manage any of this yourself, we take care of everything.

When we felt that we were about to convince our client of the importance of ERP systems for his small business, we found him whispering a “secret” to us:

Honestly, I made up the company’s founding story. I already have a company, but it’s still in its early stage, and all the accomplishments which were mentioned are just dreams…. Do

you still think I need your system?

Does 65% sound good?

We thanked the client for his frankness and honesty, and then our sales manager opened his desk drawer. Here everyone thought the sales manager was about to pull out a gun (like in gangster movies!), but instead he pulled out a printed report with a statistic that said: 65% of small businesses benefit from ERP consulting services. The manager gave that report to the client and at the same time the manager began confirming (there is no small company on the ERP system):

1- no matter the size of the company, there will be a lot of data, and an ERP system will help you organize and understand it.

2- getting off to a good start requires you to have full control over the resources—that is, the company’s cash, raw materials, employees, and production capacity— to operate at full capacity and achieve maximum productivity.

3- without a comprehensive system that collects data, reports on your operations and systems, and sees the big picture, how can you accurately know where you are?!

4- your business resources are what you use to keep your business running, and you must be aware of where you stand at all times.

5- one of the greatest advantages of an ERP system is its ability to provide a complete view of the entire process, giving you insight into how the company is performing.  With our system, what used to take hours of collecting accurate data and generating reports can be automated, giving you a comprehensive overview and allowing you to monitor important performance metrics through real-time dashboards. You can use this information to optimize production schedules, increase capacity and increase productivity.

6- not only will you have a clear vision for your organization, but you will also be able to easily share information and collaborate between departments, allowing you to increase operational efficiency.

Seriously, in real life when running a small business, employees wear multiple hats.  Everyone steps in where and when needed (which, as you know, often happens). With so much going on, who on your staff has the time to manually process multiple spreadsheets and separate large amounts of data?

The sales manager’s speech was amazing, and the client even got up from his chair to shake the manager’s hand warmly. We were promised a second visit, but it would be in the company of “decision makers”!

Just a moment!  Wasn’t this person the owner of the company in the first place?!

The conclusion:

Just by seeing the words “enterprise resource planning”, some small businesses think that ERP systems are not for them.  While adopting ERP systems creates value and helps the company grow in the market;  Regardless of its size.

When the SME (small and medium enterprises) choose Logix ERP, this then gives them a competitive advantage over small business competitors, first and foremost. Secondly, it helps the SME accelerate growth and join the race of larger companies.

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