8 drawbacks facing SMEs without an ERP system

Drawbacks facing SMEs without ERP, the main issues you need to know.

ERP is used to control the operation of the company in real time. Today, thanks to the development of cloud-based tools, versatility has been gained, because this control can be done remotely. And the truth is that it is an irreversible process that, once adopted, cannot be reversed.

However, it is worth noting that not using ERP already has an associated opportunity cost. That is, by not automating and monitoring your processes you won't be one step ahead of your competitors. So what was a novelty in the 1990s is now a must. The emergence of Big Data has only intensified and accelerated this process.

It is common to refer to the advantages of incorporating these software solutions, but there are also some drawbacks. The most problematic for SMEs are the following:

1. Duplication

Lack of centralised control of company flows leads to duplication. That is, more than one company worker will be performing the same function, most of the time due to lack of knowledge.

Duplications, in addition to introducing a confusion factor, are inefficient by definition. Therefore, the work factor must be used for what is strictly necessary. Have you ever wondered how much time is wasted on repetitive operations that can be validated with a simple click of a button? Duplication often occur because this cannot be done, because two workers have to do the same check and they do not coordinate.

Consequently, this is one of the recurrent problems you may encounter. Not having ERP means going a step behind others.

2. Planning

Any company needs to be aware of trends and planning options. It is only by planning correctly that it is possible to optimise costs, whether in terms of raw materials, goods or labour.

3. Reducing the margin of human error

Manual or dispersed management implies a greater possibility of human error. As a rule of thumb, the easier and faster it is to manage data, the better. There is accuracy and, what is more, the options for dispersion are reduced.

This is what you can achieve with a business management solution. In the end, what is measurable is not a matter of opinion.

4. Improving internal communication

Internal communication is one of the vital issues to improve ratios and minimise errors. ERP facilitates this possibility because, by providing centralised information, you only have to log in using a password. As a result, information flows and orders will be smoother.

When internal communication is better, so is decision-making. This will provide you with the improvements you need to stay a step ahead of your competitors.

5. Facilitating comprehensive action

ERP has several modules that can be activated according to the needs or structure of the company. A factory is not the same as a distributor or a retail company. However, what is common is that you can control the main areas of your company easily and comprehensively.

This issue is important in all companies, but it takes on a special value in SMEs. For a reduced cost, you can perform comprehensive actions in less time.

6. Improving security

Security is an essential aspect of any business manager and, with this type of solution, it is increased in two ways.

First of all, it is important to note that centralised servers have stronger security features than when working with several dispersed modules. In the latter case, the chances of valuable information being 'lost' are multiplied.

Moreover, access to the software is only granted to authorised persons. And it is easy to know if there is any unauthorised entry or attack. This exponentially reduces the chances of being a victim of phishing.

7. Use through multiple devices

The ability to access information from multiple devices is another advantage of the managers.

For example, in the case of a logistics worker, a delivery driver could send information to the manager by logging in with his or her password from a mobile phone or tablet. A manager or owner can consult their stock even if they are remotely located. And workers can carry out actions with the machinery by consulting the software. If we add to this the growth of the Internet of Things, which is reaching machinery, we can see that there are multiple possibilities.

Most business management software allows connection and input from multiple devices. However, connectivity with machines will depend on their availability.

8. Possibility of automatic changes

Having automatic changes is one of the advantages of a business manager. The reason? You will not have to duplicate actions and this saves time and, in the long run, money.

Imagine you are making an accounting entry; this information will then be automatically passed on to the other activated ERP modules. The result is that, you will perform more functions in less time. Automation is one of the most important values of this kind of solution.

This has been one of the most important issues that make a difference. The widespread use of ERP is related to this.

Conclusion

Business management software generates value, reduces costs and helps to increase profits. Today you don't have to give up on being more competitive. Looking for a specific solution for your SME? On our website you have several options to include them, so we encourage you to check them out.