- Harshini Naidu
5 Myths around Enterprise Resource Planning (ERP - CTRM) for SMEs
Nowadays, it's difficult to imagine a company that does not use an ERP system. ERP, which stands for Enterprise Resource Planning, the software is used by businesses to centralize the information from various business activities and monitor the business health in real-time. Sales, human resources, procurement, project management, logistics, accounting, and other functions are integrated and share the very same database. This is used by ERP software, which provides users with real-time data.
ERP governs the entire company by regulating all business activities, maintaining correct accounting, and controlling all business processes. To be profitable and prosper, any firm needs accurate accounting and monitoring of all elements of its operations. It's a question of convenience: understanding your income, expenses, tax payments, sales volumes, production capacity, per unit cost of manufacturing, and sales forecasting make it easier to plan your next actions when information is centralized and in real-time.
However, there are still certain misconceptions concerning ERP systems and their deployment (mainly because of how the ERP industry was largely dominated by a few players only). Despite their favorable market experience, some businesses are apprehensive about accounting systems and their benefits. These anxieties are frequently based on common myths, which we shall investigate and evaluate critically.
Myth 1: We will go for ERP when we cross a turnover of a certain amount
Some businesses are under the myth that ERPs are only for medium and large enterprises that process a large amount of data and have the need to cater to a bigger number of customers. However, it is important to note that no business is too small to use an ERP. Even if you are a one-person business, you must preserve financial and tax records. No business wishes to delay growth and if an ERP System can help you achieve and deliver those results easily, why delay when you can start now?
Myth 2: Why use an ERP when I can have everything in Excel?
When a company's revenue exceeds $0.5 - $1 million per year, they start to hire more people and implement more internal processes. When employees use spreadsheets and email to share critical information across departments, those manual processes don't scale, aren't transparent, and don't allow for accurate financial reporting. An ERP system addresses this issue by bringing many of your back-office functions under one roof.
Myth 3: It is nearly impossible to find a suitable ERP for my business
This is a widespread misconception amongst various industries. 47% of businesses using an ERP system are manufacturing companies making them the ideal candidate for ERP systems. However, in recent times, there is a rise in the number of Cloud based ERP Service providers who are able to customize their features of the ERP and deliver a product that’s suitable to your business and needs and we are proud to have partnered with one of the fastest-growing cloud-based ERP providers Acumatica built on latest tech stack.
Myth 4: ERPs don’t come with CTRM and are not very operations friendly (especially for commodity trading businesses)
Marketing strategy, contracts, market volatility, logistics, operational risk, and regulatory compliance all complicate the trade of commodities. These challenges, on the other hand, create opportunities for the industry to take advantage of using the opsPhlo solution.
opsPhlo is ideal for international trade and manufacturing enterprises, as well as for commodity brokers for managing trades, as it includes contract administration, risk management, and supply chain functions making it more operation friendly and easier for commodity trading businesses. It seamlessly integrates with other business functions in ERP thereby ensuring the essence of centralisation of data from different business functions.
Myth 5: ERPs are very expensive and implementation might take years
The implementation procedure took longer in the early days of ERP. In some situations, the installation took years to complete and required a significant financial investment on the part of the businesses. However, with the evolving technological landscape, implementing an ERP system has become a simple task and you can see that in one of our customer success case studies.
With its proven on-time installation strategy, a web-based ERP solution like opsPhlo may now complete the implementation in a short amount of time. ERP system software has grown significantly more economical and accessible to any type of business with a limited budget in recent times.
When we overlook these myths and start to make decisions for the growth of the business, ERP Solution sounds like a perfect solution to solve all your financial and operational hurdles in the day-to-day business activities. Enterprise resource planning solutions are a critical corporate asset that can boost on-the-job efficiency by simplifying financial management, supply chain tasks, and inventory management.