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The ERP Need
Living in the Internet Age means a couple of things: living faster and doing business much differently. Small and medium-sized businesses, in particular, may be feeling the greatest impact. With advances in technology breaking down geographic barriers, even companies with just a few million dollars in annual revenue find themselves operating on a global scale, with customers, suppliers, and other business partners located the world over.
Most small business owners welcome these changes because they have given them access to markets that previously were open only to the largest corporations. On the other hand, small business owners are realizing that competing with mega-enterprises for access to markets also forces them to deal with many of the same problems that confront big organizations.
Take for example, something that is common among most businesses of any size—shipping out. To sell your goods globally, the cost of shipping and receiving goods across borders must be accounted for when building your business strategies. In addition, complying with environmental regulations, tax laws, and other policies in multiple countries increases the complexity of running a business. Global competition, as a function of the Internet Age, is also forcing companies—both large and small—to do more to meet the needs of individual customers.
For manufacturers, this means building and managing more products, as well as maintaining better records of customer preferences when it comes to products, methods of delivery, and issues related to service. Small businesses that count mega-enterprises as customers must also incorporate specific forms of information technology (such as electronic data interchange, or EDI) to connect to a particular supplier network, or transmit documents in exact formats.
With so much to consider, small business owners increasingly have to confront one essential question: Do we need an enterprise resource planning (ERP) system? On the surface, that’s a difficult question for small business owners because ERP systems historically have been associated with large organizations that fill large number of orders for numerous customers. There also is a widespread perception that installing and maintaining an ERP system is a time-consuming, expensive undertaking—and much too complex for any small business.
Fortunately, technological developments have transformed the nature of ERP. Advanced ERP systems are often professionally installed, easy to use, and simple to maintain, putting them well within the reach—from both a technical and financial standpoint—of small manufacturing operations. These systems give small businesses the tools they need to compete in the global marketplace without busting their budgets.
With small business owners realizing that word-processing systems and spreadsheets are insufficient for managing a modern enterprise, ERP systems are becoming increasing attractive for operational control. The first step in that journey is, ironically, turning back to the Internet for information. The Internet is a trove of information, and is populated by thought-leadership and education on the subject of evaluating and selecting the right ERP system for a manufacturing or job shop business.
The Internet Age is a double-edged sword. That is to say, while on one side the demands of speed born of having Internet access is ever-increasing to seemingly impossible rates of performance, the other edge provides the means for meeting those demands. With ERP software, a manufacturer can often get the best of both for the purposes of competing globally with the big boys.