Five signs your startup is ready for an Enterprise Resource Planning solution

Founders of rapidly growing startups often reach a point where the company consumes their every thought. Sleepless nights are spent fretting over growing complexities and the constant worry of things potentially forgotten besieges all the waking hours. For startups in this position, the time may have come to consider upgrading the accounting system – to ease at least one aspect of the running of a successful company – to one which provides more control, more information and better insights into business performance. In short, it may be time to implement an Enterprise Resource Planning (ERP) solution.

But how do you know that you are ready to invest in better business management software? Here are five signs that you are ready for ERP:

There are weaknesses in the systems supporting your business

Take a hard look at what you’re using to run your business. An accounting package? Spreadsheets? A variety of different software tools for different tasks, none of which integrate with any of the others? You may have discovered that the accounting system is just fine for accounting, but is very limited for many of the other tasks which are necessary to running your startup. Establish what it is you need to know, and identify what these tools are not providing; for example, are sales forecasts easily available? Profit and loss reports, stock management, and customer segmentation – the metrics most important to you will depend on your specific business, but if they can’t be produced quickly and with ease, your systems may be lacking.

There are functions in the business which aren’t being handled very well

It’s not just the systems that have shortcomings; as a startup, you will appreciate that some things are done in the company as well as they can be, while others may not be. Knowing where the functional weaknesses are; such as in HR or project management, provides an opportunity to address those issues pro-actively, and improve business processes with the implementation of an ERP solution.

Organisational performance is hampered by inadequate processes

This is a critical question which has to be answered with brutal honesty. For example, if the shortcomings are personnel-related, the result of changing market conditions, or owing to products and services which aren’t stacking up to the competition, they can’t be solved by just technology systems. While capable of improving efficiency, delivering more information more easily, and improving management, a modern ERP system isn’t a panacea to solve all ills.

Control and management of extended resources is difficult or impossible

Poor access to critical information is a clear indicator that your business systems aren’t up to scratch. As your startup grows, so too does the number of tasks, resources, metrics and projects. If it is becoming difficult or impossible to keep track of sales opportunities, project statuses, staff time, product inventory, billing and invoicing, or any one of a number of business functions, you may need an ERP system.

Your IT systems are a mess

The upshot of having a wide variety of software tools to manage different aspects of the business is typically a creaky, difficult-to-manage IT environment. Computers crashing, constant and unsynchronised upgrades and patches, attempts to integrate or share information from one system to another – these are signs of an IT system incapable of meeting business requirements unobtrusively without interruption.

Making the decision to implement an ERP solution is not one which should be taken lightly. However, when your startup reaches a certain point of complexity, sure signs will emerge that things can be done better with an integrated, modular system. With an ERP solution in place, you can look forward to better information more often, a clearer view of the company’s performance, and enjoy the comfort that comes with knowing more.

Image: Karl Baron via Flickr.