16 February 2017
Growing Pains: Have You Outgrown Your Accounting Package?
It might sound strange, but one of the most common causes of business failure is success. Or at least, not having systems that cope with the growth that success brings. This is where an enterprise resource planning system (ERP) can come in.
After working so hard to build a business, taking the next step can be more daunting than it was to get started. Now you have more to lose.
In the early days, managing information is easy. A combination of spreadsheets, simple bookkeeping applications and a personal knowledge of customers is a winning formula. Until there are more customers than it is possible to easily keep track of, additional suppliers to deal with, and more employees on the books.
What typically happens is the hiring of more admin staff to keep track of everything. This fixes it for a while, but with more growth comes more complexity. It gets harder to see the business as-a-whole. In most industries, intense competition means there is not enough margin to withstand such inefficiencies.
What is an ERP?
An ERP is an information management system that integrates all the important parts of your business. Finance, HR, planning, purchasing and sales, all in one place. Once your business hits a certain size – for TechPath it was six employees – an ERP is both a survival tool and a growth opportunity.
An ERP used to mean investing in IT infrastructure before even thinking about the cost of software licences. Cloud-based platforms have made that a lot easier – no servers, no big up-front costs, and lower financial commitment. Businesses pay on a per-month, per-user basis.
What does this mean in practical terms?
Imagine that you’re speaking with a customer. You can have information about everything from their previous orders, payments, available stock, special pricing, even emails or social media exchanges. You can access that instantly on your mobile or tablet, as easily as from your desk and you can confirm delivery, schedule projects, even invoice them on the spot.
Even without the infrastructure costs, an ERP is an investment. When looking at the overall costs, it is worth comparing to the cost of admin staff, and the cost of inefficiency. Having your business systems integrated reduces human error, and when you’re building – or keeping – a hard-earned reputation, mistakes are costly.
With a little expert help to get your systems integrated and automated, there is a path to growth without the administration headache. When the time comes to increase staff numbers, it won’t be administrators to manage the complexity – it will be customer service, sales, or product development. Your investment in people will reap sustainable growth.