Once upon a time, ERP systems were reserved for companies with hundreds and often thousands of employees, multiple locations, and even global points of operation. Who ever thought of evaluating ERP For start-ups?
Those days are gone, ERP has been re-imagined and redesigned to fit the build for companies of just about any size. These powerful and affordable software solutions can streamline your daily operations and make your start-ups success much easier to achieve.
While you may still think your start-up, small or medium business isn’t ready for ERP, you may be missing out on some essential tools that will set you up for positive outcomes and scale as you grow. You may be small now, but that won’t be the case for long. You may already have more business than you can handle.
In any case, you need to be able to manage the company operations and responsibilities to your stakeholders, staff, and customers. Evaluating ERP for start-ups is the first step into satisfying those responsibilities and making good on your obligations.
ERP will make your start-up run more efficiently, drive consistent outcomes, and deliver the data you need to inform business decisions.
This data comes from all the departments of your organization, including finance, sales, operations, inventory, and more. It delivers your staff a single source of truth they can rely on to improve their performance and deliver on the expectations your start-up must satisfy to succeed.
Here are just a few ways to begin evaluating ERP for start-ups.
When to Begin Evaluating ERP For Start-Ups
While each unique situation will dictate the process of evaluating ERP for start-ups, these indicators will reinforce the idea that it’s time to start looking. The more these examples crop up in your day to day, the stronger a candidate you are for implementation.
Waste Is Plentiful – Whether it’s time or capital, waste is one of the biggest contributing factors to a start-up’s success. Whether you are building widgets or delivering a service, processes that produce waste leave room for improvement. This is one of the areas of business management that ERP shines most.
Consolidating software and housing all your data in one central location is perhaps one of the most valuable moves your start-up can make. It cuts out the time spent searching for reports and invoices or delays when production materials can’t be found in the warehouse or worse, were never ordered when safety stock ran low.
Demand Is Outpacing Delivery – Not entirely a bad problem to have, right? Think again. If you get a reputation for missing deadlines and leaving customers with a sour taste in their mouth after doing business with you, know your competitors are waiting to step in and deliver.
Customer Relationship Management, production planning, scheduling, and Sales Management tools provided by ERP solutions ensure you have the tools you need to manage volume with a lean staff, budgets, and space.
Erroneous and Duplicate Data Is Abundant – Multiple points of data entry between disparate systems slow down your operations. It also leaves room for errors and errors can end up costing your critical customer accounts.
ERP ensures you only need to enter data once. That data can easily be verified within that same system. Add to that the risk of human error at the point of entry is kept to a minimum and your business does not suffer.
This means data used downstream is more likely to be accurate and ensure your orders, supply chain, and analytics give a true picture of your start-up’s performance.
You’re Missing the Forest For The Trees – the metaphor may seem obscure, but it’s about as apt as can be when we’re talking about access to the bigger picture of your business’ performance.
ERP will give your start-up the visibility it needs to see how you’re delivering on KPIs, grant access to analytics that illustrate where investments need to be made or scaled back, and superior reporting tools that show everyone you’re on the right track.
What to look for when Evaluating ERP For Start-Ups
By now, it should be clear that ERP can be a real boon to businesses at any size. However, for the start-up environment, there are specific qualities that make some ERP solutions better suited than others. Here are the most basic qualities you can evaluate in your search.
Cost vs. Price – while the two words may seem interchangeable, when it comes to ERP they most certainly are not. The true cost of not implementing an ERP system can easily be higher than shouldering the price of purchase.
Price is also not about what you can afford right here, right now. Keep in mind that sticker shock is just as real for enterprise-wise software. However, we have to remember that these are powerful systems that take a lot of time and engineering to develop. Not to mention save resources immensely but cutting down errors and non-revenue generating tasks. Fortunately, grants, tax write-offs, and financing are available to make the lessen the impact of the purchasing process on your overall business operations.
That said, the price of your system should be in line not only for the tools you need now but also those necessary to facilitate easy expansion as you grow. Which leads to the next characteristic to consider when Evaluating ERP for start-ups, scalability.
Scalability – Often, businesses evaluate ERP software vendors and decide what they have to offer is too rich and expansive for what they need here and now. That may be true. Instead, they may opt for a static product that is meant for small-scale operations that don’t expand capability or functionality as a business grows.
You also need to consider the future development of the product. Patches, updates, and versions that build on the ERP’s current state are essential to keep up with Industry as a whole.
It’s important to understand where your ERP vendor’s vision for their product will lead. Does that vision for the future include the functionality your business will need to remain competitive? Are they developing tools to enhance UI, automate manual processes, and facilitate superior eCommerce or self-service portal interactions?
Scalability is also a consideration for those evaluating open-source ERP solutions. Open source ERP vendors might only develop a product up to a certain point, package it, and sell it. Further development may cost significantly, fall on your shoulders directly, or be left up to the user community at large.
Accessibility – think about who is going to use this system. Will they find it intuitive? How much training will they need before they can use the ERP system to its full potential? What about ongoing maintenance and customization to your unique business components?
Accessibility also means permission. Can you easily segment who gets to see what in the system or is it a free for all with the data available?
When evaluating ERP for start-ups, make sure to get plenty of demos that include your company workflow. If possible, get an NDA in place so you can see that workflow in real-time with your own data. This will give you the best picture of what is possible and how transactions, projects, and reporting progress within any given ERP solution.
Who to consider as a partner when Evaluating ERP for Start-Ups
If you’re currently Evaluating ERP for a start-up, this information is probably quite intimidating. Fortunately, you don’t have to go through the process alone. Vendors, consultants, value-added resellers, industry peers, investors and stakeholders all have a vested interest in your success.
Consider what it means to partner with an experienced implementer and reap the benefits of streamlined project methodology, knowing where to avoid pitfalls, achieve quantifiable milestones, and lead to Go-Live success.
Encompass Solutions here to help, let’s talk about where you’re going next.
About Encompass Solutions
Encompass Solutions is a business and software consulting firm that specializes in ERP systems, EDI, and Managed Services support for Manufacturers. Serving small and medium-sized businesses since 2001, Encompass modernizes operations and automates processes for hundreds of customers across the globe. Whether undertaking full-scale implementation, integration, and renovation of existing systems, Encompass provides a specialized approach to every client’s needs. By identifying customer requirements and addressing them with the right solutions, we ensure our clients are equipped to match the pace of Industry.