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Grow Your Business Technology

5 Signs Your Startup Needs an Enterprise Resource Planning Solution

erp, enterprise resource planning
Enterprise resource planning solutions help streamline business operations into a unified system. Is your startup ready for one? / Credit: ERP image via Shutterstock

When many entrepreneurs first start out, they're able to handle all their orders, finances and data on their own. A few spreadsheets, meticulous email monitoring and a great website are all they need to stay on top of their business operations. However, as startups grow, so do the number of things the owner needs to keep track of on a daily basis. If your small business has stopped feeling "small," it might be time to consider an enterprise resource planning (ERP) solution.

ERP solutions allow a business owner to store information from all parts of the company in a single database. With ERP, product planning, manufacturing, inventory, sales, marketing and accounting are all housed in the same system, which streamlines the business and makes handling it a whole lot easier.

While an ERP solution isn't right for every small business, Rhonda Chicone, an information systems and technology professor at Kaplan University, believes it's something every entrepreneur should consider when his or her startup reaches a certain size. In an email interview with BusinessNewsDaily, Chicone listed five situations that could indicate the need for a unified business management system. If any of these situations applies to your company, you're ready to start looking into ERP solutions.

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You have multiple systems that duplicate data. Your startup has an internal ordering system to track product orders. The sales department uses a cloud-based customer relationship management (CRM) system, and the accountant uses on-premise software. The data for each system reside in different locations, and in some cases, they get duplicated. Without a central store of information, you can't verify the integrity of the data.

Because critical business data are located in different places, you might not know if there were a security breach. Your company has several systems doing various critical business functions, and data are in different locations. Is the data secured? Who has access to it? Do you even know where certain data are, let alone how to access this information yourself? If you can't answer these questions, an ERP solution might be necessary.

It is hard to access the information you need because your back-office systems do not talk to one another. Your ordering system tracks orders by customer name. The customer is duplicated in the CRM system but doesn’t match the exact name in the ordering system, and the order number is not in the CRM system. Your sales person has to use both systems to enter customer information, wasting his or her time and creating more work when that information needs to be accessed. What does the sales person do when the information pulled from each system doesn't match?

(Read our guide for more information on the best CRM tools for startups)

It takes a week to determine the revenue for the month. Your company is making sales, but it takes a week to get the final revenue numbers for the month. With all the technological advances available, a week is too long.

A customer wants to give you money, but you're not equipped to accept it. A customer has been evaluating your product for more than a month, and now wants to buy it as soon as possible. The customer wants to purchase your product with a credit card. You have to tell the customer no, as your company is not set up to process credit cards. You're not only losing this sale; you're also losing all future business from that customer.

For more information about enterprise resource planning, visit BusinessNewsDaily's ERP guide.

Nicole Fallon

Nicole received her Bachelor's degree in Media, Culture and Communication from New York University. She began freelancing for Business News Daily in 2010 and joined the team as a staff writer three years later. Nicole served as the site's managing editor until January 2018, and briefly ran Business.com's copy and production team. Follow her on Twitter.