While Business Operating Systems (BOS) – or Enterprise Resource Planning (ERP) systems as they used to be called – were once viewed as a business solution for large corporations, but research shows that SMEs are thinking differently about ERP.
A properly implemented ERP or BOS strategy allows SMEs to run as the smaller company they are, while effectively levelling the playing field and allowing them to compete alongside bigger companies.
In a survey conducted recently with over 300 respondents in SMEs, it was found that 77% of them have already implemented a BOS solution. Indeed, for those SMEs that have not yet implemented ERP, the top reason they stated that would make them do so is that it supports explosive growth (39%), and the sudden availability of low-cost options (39%).
9 Reasons why SMEs implement ERP as a BOS strategy
- Manage growth – The main driver for BOS being implemented in SMEs is the need to manage growth expectations. With the economy slowly recovering, SMEs are aware that unsupported growth on the back of patchwork systems could result in business-failure.
- Reduce costs – More than that, BOS is a source of cost savings, and operational improvements. Once the BOS solution is implemented, it allows SMEs to keep track of their growth, spot bottlenecks, view profit and loss, manage inventory, all the while running a smoother, more efficient operation and managing their staff better.
- Be easier to do business with – If SMEs want to grow, they need to go face to face with their competition, and establish themselves as industry leaders among their target markets. One way to do this is to improve their standing among customers. SMEs are also feeling the pressure to become easier to do business with, and to improve their overall customer experience. BOS helps SMEs run their businesses more tightly and so provide their customers with accurate information, and meaningful customer service.
- Multi-location – As SMEs grow, they often add additional operating locations. BOS allows these organisations to communicate effectively with each other, and gives decision-makers visibility into the daily operations of these geographically diverse locations.
- Gain managerial insight – The saying goes, ‘you cannot manage what you can’t measure’ – and in the case of SMEs this is especially true. Without visibility into the business it is impossible to correct course or identify the places where the business is underperforming. With BOS, adverse events (bottlenecks in production, staff productivity, stock shortages, etc) are discovered quicker, allowing management to respond before the negative impact.
- Integrated rather than multiple points – Since BOS is meant to be an organisational system of record, SMEs prefer an integrated system (all-in-one) rather than a patchwork add-on solution. However, it is important for BOS to be able to integrate with other systems – eg import bank statements for accounting.
- Ease and speed of implementation – Growing businesses can’t afford lengthy downtime during BOS implementation. You need the systems in place quickly, but heed caution to to cut corners. Since BOS is the foundation on which the organisation will be built, that ground needs to be stable, even while being implemented quickly.
- Access to BOS from mobile devices – Cloud hosting makes this possible for any internet-enabled device.
- Automated alerts – BOS notifies decision-makers about events that will affect the business as soon as they happen. If a manager is acting on outdated information, the plans are wildly inappropriate for the current situation. Spot and stop issues before they become issues.
These considerations extend beyond the mere total cost of ownership and should be carefully considered when selecting an ERP.
9 Steps for your SME to implement an EPR or BOS with overwhelming success
Implementing any new system requires a fair amount of change management, planning, and an acceptance of the fact that it will disrupt the business, even if only for a short while as the team adjusts to the new system.
Being prepared for this process will guarantee success. Here’s how.
- Be aware of the cost and time constraints – Even though cost-effective BOS solutions are available, implementing one should be seen as a separate project with its own costs and timeframe.
- Benchmark current operations to get a baseline of performance to measure progress against – Understand and define your current and future state processes before deploying new software. As much as possible, try to use the configuration settings and templates provided by the software provider to tailor the business logic to match your preferred business processes.
- Set business, process, and technology standards – BOS helps to enforce standards that ensure everyone in the business is using best practices, and that the organisation is running as efficiently as possible.
- Get senior management buy-in – Lack of senior management support would lead to abandonment of the project, or unenthusiastic integration of the system into the business. Discuss the BOS strategy and benefits of implementation clearly.
- Use a BOS agent or consultant for the BOS implementation – Most SMEs believe this is a pricier option than doing it themselves, however this is not the case in the long run. Not only will the business agent manage the system implementation, but they will also review business operational flow, and could spot areas of vulnerability that have gone unnoticed, and are eroding business growth.
- Test End-User Acceptance – End-user resistance is often encountered due to a common fear most people have of new technology. The best way to deal with this is to clearly communicate the change through the entire organisation, and keep staff involved in the design and UAT process.
- Assign a job role or group dedicated to data management – Data is only as useful as it is accurate. Incomplete or outdated data leads to process failure, poor performance, and low productivity.
- Measure the benefits from the BOS implementation – SMEs are almost twice as likely to properly measure the ongoing performance affected by BOS. You need to make sure this process was worthwhile. Based on your benchmark figures before installation, and once the teething problems have settled, the benefits should be clear pretty quickly.
- Teach, and keep on doing so after implementation – Once implemented, invest time in training your existing team, and include BOS training as part of your induction programme for new staff members. If updates are included with your BOS solution, make sure your team is trained on the new functionality.