ERP application for small and medium enterprises needs to start with correct understanding

SAP definition
Enterprise resource planning (ERP) is a software system that helps organizations streamline their core business processes, including finance, human resources, manufacturing, supply chain, sales, and procurement, with a unified view of operations and a single source of information.
Streamline core business processes
Core processes include finance, human resources, supply chain, manufacturing, sales.
Unified view of operations
Talking about connectivity, standardizing processes and data
Single source
Speaking of synthesis, unique information

Fast definition
ERP is a system integrated software used by organizations to manage and automate core business their. ERP integrates various business functions such as accounting, finance, human resources, manufacturing, supply chain management, customer relationship management (CRM), and inventory management into a single system.
The system includes all production and business activities and is responsible for linking processes together into a database. synchronous, unique for business
Integrate core business processes
Core processes include finance, human resources, supply chain, manufacturing, sales, CRM
Linking processes together
Talking about connectivity, process, data
Single, unified source of information
Speaking of connectivity, unique information
The above definitions are correct but incomplete.
Enterprise
Consider the business as a unified entity
- Link together
- Unification, inheritance
- As a whole, operating according to function and profession
- Focus primarily within the business
Resource- Resources
Take care of all resources including
- Human resources
- Financial Resources
- Material Resources
- Technology Resources
- Intellectual Resources
- Resources Time
- Relationship Resources
Planning- Planning
Includes planning and monitoring activities
- Clear goals
- Steps to follow
- Resource Allocation
- Timetable
- Actual data
- Analysis and evaluation
So we can see that Planning Resources give Business In addition to the system, there is also participation and possibly a huge change in thinking from the business's operating and management system and a fundamental change in the way the business operates.
There needs to be a strategy as a guideline and goal for Planning activities and businesses need to operate according to a standardized, procedural, optimized, unified, transparent Plan with continuous evaluation and optimization.
Software must also have 3 types of data:
- Plan
- Reality
- Analysis
If you only buy one system is called ERP about and enter the arising facts and create reports, not to mention the fragmentation of information, not optimal standardization, the value is not much, sometimes it is cumbersome, hindering business activities if the system is massive or rigid, or unstable.
From here we can draw a lesson, understanding ERP correctly and fully is very important. Unfortunately, most software companies only emphasize "Software"
Why should small and medium businesses consider ERP systems?
- Small and medium-sized enterprises often face limitations in financial resources, human resources, and access to advanced technology.
- Effectively managing every aspect of your business is essential. ERP systems can help SMEs overcome these challenges by standardizing management practices, optimizing internal processes, reducing waste, and improving decision-making.
- ERP allows businesses to easily manage inventory, control cash flow, improve customer relationships, and optimize supply chains and other resources.
- This not only saves valuable management time and costs, but also creates a competitive advantage, allowing SMEs to operate effectively in a volatile business environment.
Specific benefits that ERP brings
- Plan clearly and strategically: Because the ERP system requires a clear strategy and everything needs to be planned, targeted and monitored and analyzed, it fundamentally changes the way to create professionalism, optimization and long-term development.
Manage more effectively: ERP integrates and automates processes such as finance, human resources, inventory, sales, and customer service into a single platform, reducing errors and saving time. Productivity often increases from 20-25% after ERP implementation.
Improve financial management: ERP helps automate accounting processes, creating detailed reports on revenue, expenditure, cash flow and profits. Businesses can optimize capital and minimize financial risks, with 10-20% operating costs are saved.
Enhance data analysis capabilities: ERP provides real-time reports and analysis, helping SMEs quickly make important decisions. About 88% Businesses record more accurate decision making thanks to ERP.
Enhance customer service: ERP improves customer service through order tracking and automating customer care processes, helping businesses retain customers. Customer retention rates can increase by up to 15-20%.
Scalability: ERP allows SMEs to scale without having to invest too much in new infrastructure, helping businesses develop sustainably and flexibly.
Story from the furniture company
- Problems Before ERP: Furniture Company had difficulty in managing orders and inventory. Manual order processing led to errors, long delivery times and difficulty in inventory control.
- ERP Solution:The company decided to implement an ERP system that focused on inventory management, order tracking, and sales process automation.
- Result: After implementing ERP, Interior reduces 20% inventory cost, increase on-time delivery rate 95% and improve customer satisfaction through faster, more accurate service. Order and inventory management becomes simpler and more efficient.
Food manufacturing business
- Problems Before ERP: Enterprises specializing in handmade food production have difficulty forecasting demand, managing raw materials and optimizing production processes. Data is stored in fragments, making it difficult to track and plan production.
- ERP Solution: The company implemented ERP to integrate the entire process from raw material purchase, production, inventory management to delivery.
- Result: ERP helps businesses optimize demand forecasting, reduce excess inventory and better control raw materials. Revenue growth 15% each year after ERP implementation thanks to improved production processes, reduced waste and ensured timely delivery of goods.
Eco-friendly retail store
- Problems Before ERP: Stores struggle to manage multiple sales channels, from traditional stores to online sales. Manual inventory and order management leads to delayed delivery rates, customer dissatisfaction, and difficulty competing on online platforms.
- ERP Solution: ERP is deployed to integrate information from sales channels, synchronize inventory data, and automatically update order status in real time.
- Result: Stores increase on-time delivery rates 90%, reducing under- or over-stocking, while enhancing the customer shopping experience through tightly integrated and automated processes. This helps T grow sales 25% in the first year after ERP implementation.
Architectural design company
- Problems Before ERP: The company had problems managing contracts and project costs because information was not closely linked. Financial reporting and cost tracking were not synchronized, causing budget loss and difficulty in resource coordination.
- ERP Solution: ERP helps V manage projects, plan finances, track progress and costs, and integrate information about human resources and contracts.
- Result: Company down 15% project cost by optimizing resources and closely monitoring costs. In addition, ERP helps improve financial management, generate quick reports and help businesses proactively adjust budgets when necessary.
Challenges in ERP implementation for SMEs
Initial investment costs: ERP can be quite expensive for SMEs. Initial implementation costs typically run around 50% total ERP budget, along with system training and maintenance costs.
Adaptability: Some SMEs have difficulty getting used to the new system, especially when employees have to change the way they work. The average implementation time for ERP is from 6-12 months.
Employee training: Training employees to use an ERP system requires time and resources, especially in the early stages as employees become familiar with the new technology.
Data conversion process: Migrating data from legacy systems to ERP is a complex process and can cause temporary disruptions in business operations.
Effective ERP support after successful implementation
- Increase productivity: Businesses using ERP can increase productivity from 20-25%.
- Save on operating costs: On average, businesses can save 10-20% expense.
- Real-time data access: 88% Businesses report that ERP improves decision speed and accuracy.
- Customer retention: Customer retention rates can increase 15-20% Thanks to ERP.
- Total Cost of Ownership (TCO): Cloud ERP typically has a lower cost of ownership 50-60% compared to traditional ERP in 5 years.
The Future of SMEs with ERP
ERP implementation helps small and medium-sized enterprises increase competitiveness, optimize processes and improve performance. With the support of ERP, SMEs not only reduce costs and improve efficiency but also grow sustainably in a competitive market, helping leaders and managers have more time to do important long-term work. For SMEs, ERP is not only a management tool but also a strategic solution to help businesses grow strongly and sustainably in the digital age and grow into large corporations or companies.
Outstanding functions of the AI ERP system we provide for SMEs