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ERP System ROI – How Small Businesses Can Achieve ROI from the Purchase of an ERP Software Solution

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While there are some similarities between the ways in which larger corporations and small businesses achieve a return on investment from the purchase of an ERP solution, the benefits to be realized from an ERP system implementation for small businesses tend to be more intangible in nature and, at least initially, less measurable. That being said, small businesses who have grown to the point where their existing small business software’s functionality no longer meets their business needs can gain several benefits from a fully-integrated ERP system that will lay the groundwork for future business growth and more efficient, streamlined business operations. Some of the benefits a small business can realize from an ERP solution include:

  • Time savings due to the elimination of duplicate data entry. A small business ERP solution can allow the organization to operate on a single software platform. Unlike many small businesses who use one software solution for accounting and financial management, Microsoft Excel to maintain inventory levels, and a separate software package to manage customer orders and purchasing, the small business who utilizes an ERP system can manage all business transactions in a single software package that maintains accurate data for all of the company’s departments. Rather than entering an order in one software package, updating the inventory data for the ordered item in Excel, and then making the necessary accounting entries in a third software package, an ERP system can automate such processes and eliminate the need to maintain products, customers, vendors, customer orders, inventory data, and financial accounts in separate software solutions. In addition to reducing employee time spent on maintaining such data across a multitude of software applications, an ERP system can help small businesses improve data accuracy and integrity, as the likelihood of entering incorrect data is significantly reduced due to the simple fact that data does not need to be entered multiple times.
  • Faster order entry and processing. By having the company’s customer service, warehousing, and accounting departments integrated in a single ERP system, small businesses can gain significant improvements in customer service. In TGI’s Enterprise 21 ERP software, the system tracks customer order history and buying habits to show customer service personnel the items a given customer orders most frequently during the order entry process. Such a feature can allow the customer service representative to enter orders quickly and easily. In addition, the customer service representative has immediate visibility to real-time order status to communicate to the customer when their order is being picked, packed, and shipped. Furthermore, should the small business choose to integrate the ERP system’s back-end e-Commerce functionality into the company’s website, customers can place Internet orders while still having access to their customer-specific product pricing, promotions, and volume discount opportunities, allowing for more automated order processing and giving the small business the opportunity to process a larger volume of orders on a daily basis.
  • Flexibility and scalability. When a small business makes an investment in an ERP software solution, it is making a decision for the future benefit of the company that will ultimately result in significant cost savings in the years following software implementation. An ERP system that offers a flexible, configurable architecture can deliver the software functionality the small business needs today and the scalability to take advantage of additional functionality as the business continues to grow without having to invest in a new software package, higher implementation costs, and additional services fees for employee training.

Purchasing an ERP system is an investment in every sense of the word for organizations of any size; however, small businesses can take advantage of the benefits to be realized from a fully-integrated software platform today and additional functionality in the years following implementation as the business continues to grow.

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