The ERP tailor-made suit for SMEs
4 June

The ERP tailor-made suit for medium-sized companies

Why SMEs in particular are dependent on 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 for SMEs, it is still the practice to work with different systems in the separate departments of a company. Against their own advantage, SMEs still do not use a central ERP system. They still manage their data in Excel and other software. So it happens that the different software of the individual departments of a company only work via interfaces can come into contact with each other. The variance and complexity of these interfaces often lead to erroneous results. This is because only the most necessary data is communicated and must be brought together again and again. From this multitude of individual solutions, it is clear that when the data is aggregated by different programmes, different results come to light.

Flying blind for SMEs without correct figures

However, management is dependent on correct reporting because it makes decisions based on the results. The subsequent verification of the credibility of the report is necessary and requires additional resources. The correctness of the figures still cannot be guaranteed and they remain opaque. This lack of clarity leads to an increased and doubled collection of data in the various programmes. If a company builds on such a solution, it becomes very immobile in the event of changes. This puts it at a competitive disadvantage and can have a negative impact on the company's performance.

A practical example - where ERP is missing in SMEs:

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

  • Outgoing deliveries
  • Production demand quantity
  •  Current stock
  • Current orders
  • Delivery time In addition, further information may be of interest to him, such as: Orders with a liquidity stop
  • 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 has these details in mind, but his employees do not. Instructions that are passed on verbally or through third parties are often lost or ignored. This happens even in smaller companies. For lack of information, for example, the need for an order is estimated because the ordering party is not responsible for informing the buyer. The consequences are not only too much stock and thus unnecessary costs, but also the basis for further mistakes. These weaken the performance of the business. Modern systems such as SAP Business One offer also gives the buyer the opportunity to network with his 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 healthy basis for work and decision-making. If this is customisable - like SAP Business One - it is possible to react flexibly to changes in operations. Standard reports require less effort from the software producer, but 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 the essential processes such as production, warehousing, purchasing, sales and accounting must be handled with an ERP system. The software should not consist of individual ERP modules, only to be in contact again via interfaces.

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

The standard BWA from DATEVhas interesting information for the management, but it is not sufficient. Much more interesting information is helpful, such as -Which product generates which turnover? -What revenue has the company generated per product or order? -What is the customer's payment term? -Is the supplier's delivery performance good? -What is the frequency of stock turnover of an item and how much turnover is tied up with it? -How high is the stock of orders that have not been invoiced but have been fulfilled? -How high is my order stock and what expenses can be expected with it? Without integrated accounting, these values can only be created manually with great 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 erroneous. Especially when aggregating data without a suitable ERP programme, one often loses insight into the basis. But if a value differs, it is important to make its accuracy verifiable. If this possibility is missing, 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 becomes to check it for completeness - ergo, this is associated with higher time and cost consumption. For these reasons, data is often only checked via random samples. In this way, however, completeness can only be assumed, but not guaranteed. A report that does not contain guaranteed 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

Because manually created reports have three major disadvantages:

  • The enormous amount of time required for the creation/editing of individual reports
  • No up-to-dateness of the data due to extended creation times
  • Rare use of individual report guidance and abandonment of interesting information material

These reports can be created automatically by the appropriate ERP system and can also be configured manually. This has the pleasant consequence that the right information is always available without spending a lot of time. And time is a precious commodity in medium-sized businesses.

 6. standard processes run without interface communication

If a data set is transferred during interface communication, it exists in two systems from this point on. However, if a change is made to one file, it must also be made to the file in the other system. If one system does not approve 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, these checks cause high costs and no error-free transfer can be guaranteed. With a suitable ERP system such as Business One, these work steps and thus also the errors are saved right from the start.

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