Five Business Benefits of ERP for Small to Mid-size Enterprises

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Aberdeen Group, the leading provider of fact-based research, has released a report on the important role Enterprise Resource Planning (ERP) plays in the growth plan of Small to Mid-size Enterprises (SMEs). The report, “ERP in SME: Fueling Growth and Profits”, states that implementation of ERP software is an essential element to the SME space in providing both a foundation for transaction-based business and as a source of cost savings and operational improvement. Out of the 578 SMEs surveyed, 80% anticipate growth in revenue. To manage these growth goals, the report maintains it will be increasingly important to contain costs to ensure that growth of revenues does not come at the expense of profits.

The report showed that Best-in-Class ERP implementations yield quantifiable business benefits:

  • 22% reduction in operating costs
  • 20% reduction in administrative costs
  • 17% inventory reductions (M&D only)
  • 19% improvements in complete and on-time delivery
  • 17% improvements in schedule compliance (M&D only)

These benefits show that SMEs implementing ERP systems were clearly able to turn their growth strategies into profit. Report author, Cindy Jutras, summarized the report findings: “As the world economy continues to recover from its long recession, Small and Mid-size Enterprises (SMEs) are poised for future revenue growth and profits. A well-managed ERP implementation can be a continuing source of cost savings and operational improvements which help companies survive and thrive as we emerge from these troubled economic times. While even our Laggard implementations derived businesses benefit from ERP, the wide gap between cost reductions and schedule improvements of our top and bottom performers indicate there is risk in neglecting to measure the business benefits. And for those SMEs that have yet to implement ERP, the performance gap will widen as ERP solution providers continue to innovate solutions and those with ERP continue to reap the benefits. Those that aspire to Best-in-Class status would be well advised to turn ERP into a strategic weapon by taking full advantage of the technology, features, and functions which continue to expand at an ever-increasing rate. “

The full report, “ERP in SME: Fueling Growth and Profits”, is available on Aberdeen’s website.

If you’re interested in learning more about how an ERP system can fuel growth and profits in your business, contact us here at Sikich. We are a Microsoft Gold Certified Partner located in Chicago, IL and serving the Midwest. We specializing in the implementation of Microsoft Dynamics GP, Microsoft Dynamics NAV, Microsoft Dynamics SL and Microsoft Dynamics CRM.

We work with over 4000 throughout the Midwest in a variety of industries with a focus on manufacturing/MRP and distribution ERP, professional services, education, not-for-profit and multi-site international organizations.
By Sikich, St. Louis Microsoft Dynamics GP partner

4 thoughts on “Five Business Benefits of ERP for Small to Mid-size Enterprises”

  1. Nice.. ERP software has the benefit of being scalable. While growing businesses often have to make radical changes to keep up with the demands of growth, this software can easily tolerate changes without interruption.

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