The ERP tailor-made suit for SMEs

Why SMEs in particular need the help of an ERP solution designed for them.

When, where and why does ERP become necessary in SMEs?

Although there is a wide range of software available for SMEs, it is still common practice to work with different systems in the separate departments of a company. For their own benefit, SMEs still do not use a centralised ERP system. They still manage their data in Excel and other software. As a result, the different software used by the individual departments of a company can only be accessed via interfaces can come into contact with each other. The variance and complexity of these interfaces often lead to incorrect results. This is because only the most necessary data is transferred and must be merged again and again. This multitude of individual solutions means that when data is aggregated by different programmes, different results come to light.

Flying blind for SMEs without correct figures

However, the management is dependent on correct reporting, as it makes decisions based on the results. Subsequent verification of the credibility of the report is necessary and requires additional resources. The accuracy of the figures can still not be guaranteed and they remain opaque. This lack of clarity leads to increased and duplicated data collection in the various programmes. If a company builds itself on such a solution, it becomes very inflexible in the event of changes. This leads to a competitive disadvantage and can have a negative impact on the company's performance.

A practical example - where ERP is lacking in SMEs:

The buyer of a medium-sized company needs to determine the order quantity for an item. To do this, he needs the following information:

Outgoing deliveries
Requirement quantity of the production
Current stock
Current orders
In addition, further information may be of interest to him, e.g: Orders with liquidity block
Overdue orders that have not yet been paid
Recent stock dynamics
Average of the quantities of previous orders
Quantity overview for purchasing
Extra orders on behalf

The buyer often remembers these details, but his employees do not. Instructions that are passed on verbally or via third parties are often lost or ignored. This happens even in smaller companies. Due to a lack of information, for example, the need for an order is estimated because the person placing the order is not responsible for informing the buyer. The consequences are not only excessive stock levels and therefore superfluous costs, but also the basis for further errors. These weaken the performance of the company. Modern systems such as SAP Business One also enable the buyer toto network with its suppliers. Enquiries can be made and orders placed directly from the system.

The tailor-made suit: customised reporting through an ERP system

The management and employees of a company need a reliably complete reporting system as a sound basis for working and decision-making. If this is customisable - like SAP Business One - it is possible to react flexibly to changes in operations. Although standard reports require less effort from the software manufacturer, they usually do not contain the information that is needed. The following points clearly show the advantages of the right ERP system for SMEs.

1. there is only one data centre

For good and equally efficient data collection, the data from key processes such as production, warehousing, purchasing, sales and accounting must be processed with an ERP system. The software should not consist of individual ERP modules that are then in contact with each other via interfaces.

2. accounting is integrated into the individual steps in all business areas

The standard BWA from DATEVAlthough it provides interesting information for the management, it is not sufficient. Much more interesting information is helpful, such as -Which product achieves which turnover? -What revenue has the company realised per product or order? -What payment terms does the customer have? -Is the supplier's delivery performance good? -What is the frequency of stock turnover for an item and how much turnover is tied up in it? -How high is the stock of orders that have not been invoiced but have been fulfilled? -How high is my order backlog and what expenditure can be expected from it? Without integrated accounting, these values can only be created manually with a great deal of effort.

3. every report compiled is transparent and comprehensible

If a report contains a value that cannot be traced back to its origin, it may be incorrect. Especially when aggregating data without a suitable ERP programme, you often lose insight into the basis. However, if a value deviates, it is important to make its accuracy verifiable. If this is not possible, errors can quickly arise.

4. the completeness of the data is guaranteed

The larger the amount of data that is moved via interfaces, the more difficult it is to check it for completeness - which means that it takes more time and costs more money. For these reasons, data is often only checked using random samples. However, completeness can only be assumed, but not guaranteed. A report that is not guaranteed to contain correct data is a fiasco for the responsible decision-maker. With an ERP system such as Business One, without these interfaces, completeness can be determined much more efficiently and, above all, reliably.

5. the reporting system is automated

This is because manually created reports have three major disadvantages:

The enormous amount of time required to create/edit customised reports
Data not up to date due to extended creation times
Rare use of individualised reporting and omission of interesting information material

These reports can be created automatically by the appropriate ERP system and can also be configured manually. The pleasant consequence of this is that the right information is always available without taking up a lot of time. And time is a precious commodity in Middle class.

6. standard processes run without interface communication

If a data record is transferred during interface communication, it exists in two systems from this point onwards. However, if a change is made to one file, it must also be made to the file in the other system. However, if one system does not authorise the change, the other system must not guarantee it either. In addition, continuous checks must be made to ensure that no data is transferred incorrectly or even lost. In addition to the enormous manual effort involved, these checks result in high costs and no error-free transfer can be guaranteed. With a suitable ERP system such as Business One, these work steps and therefore errors are avoided from the outset.

SAP B1 blog