An ERP's Impact on Your Tech Business

Posted on June 5, 2019 | Updated on October 28, 2022

It’s almost impossible to run any type of business today without the use of technology. People expect tech businesses to be at the forefront of innovation. They need smooth systems in place that help them operate at an optimum level. Enterprise resource planning (ERP) brings together the best of technology and business sense. It creates a smooth source of data and systems for your entire organization.

In a survey of company leaders from a variety of industries, researchers found about 40 percent cited functionality as the most important thing they needed in an ERP system. Even in companies that weren’t strictly tech-focused, about 23 percent involved IT professionals in their decision-making process when implementing an ERP system.

If you don’t already have an ERP system in place or feel you need to upgrade your current format, there are numerous ways an ERP impacts your tech business.

1. Store Data in a Usable Format

If you’ve been in business for any length of time, you have a lot of data which is likely stored and just waiting for analysis. Implementing an ERP system allows you to look at customer history and ordering patterns. This helps you figure out how best to meet their future needs. Over time, the ability to run reports and access data easily improves the customer experience (CX). Not to mention it makes you stand out from the other tech companies in your field.

For example, a web hosting company might analyze data and realize their clients upgrade from a shared server model to a dedicated server at the five-year mark of being in business. Armed with this information, the sales team can then reach out to customers before this time. They’ll see if the shared system is still meeting their needs or if they’re thinking about upgrading soon. If they are upgrading, a system can be created that helps them learn the differences between a managed dedicated server and a shared server. Walking them through the process helps their business grow and keeps them as valuable clients.

2. Speed Up Processes

The right ERP system allows you to speed up processes within your company. For example, when inventory is automated, those who order stock know immediately when they are running low on a popular item. They can then replenish it before it runs out. This reduces the number of back-orders and customer wait time. All in all, improving customer experience. For a tech company, goods might often be digital rather than physical.  So the system is used more for staffing needs and to ensure customer response time is at lightning speed.

Be sure you thoroughly test systems to avoid ERP failures. Many companies run into issues when they first implement a new system. About 21 percent of companies experience some type of failure when rolling out their new ERP solution. In the early 2000s, Nike experienced an ERP failure. They automated their inventory process and the system ordered too many low-demand items. Test every aspect of your ERP before rolling it out. Work with a professional who knows what potential problems to look for before they arise.

3. Boost Productivity

One of the biggest benefits of ERPs for any small business is the ability to move resources around. This allows the high-priority projects get covered first. The company can now grow faster because workers focus on results. No longer do employees have to get up and walk across the building to get feedback on where another worker is on a project. Everything is streamlined in real-time. In recent months, productivity in the United States rose to 34 percent. Most likely a result of more companies taking advantage of technology such as ERP.

Technology companies benefit in particular from cloud-based systems. It’s because of the project-oriented nature of most of the work. A designer might be working on one aspect of a project while an engineer works on another part. By seeing what changes are occurring, in real-time, the project flows more smoothly. Ideas bounce off one another in a free exchange of information.

4. Hire the Best of the Best

Cloud-based ERPs also help companies manage remote workers. This means you’re no longer limited to only those based locally, Plus, you can draw on workers from coast to coast. Many people see the ability to work remotely as a perk of employment. Offering the option may attract top contenders in niche technology.

Put yourself in the shoes of a hotshot graduate from MIT. You have your choice of three or four big firms and then the choice of working for a small tech startup. True, the big firms offer slightly better benefits. However, the startup lets you work from home and gives you more paid time off (PTO). Your tech startup can’t compete with a multi-national conglomerate. But your business can certainly offer some other advantages a larger company doesn’t offer. This increases the potential to gain some of the best employees out there.

5. Reduce Business Costs

A solid ERP system reduces business costs by streamlining data into a single system. The delays of information being stuck in one department and needed by another disappears. All information is easy to obtain with a few clicks or taps. The ability to access information easily also helps with collaboration between departments. This is especially true for sales and marketing or sales and logistics. In addition, you won’t pay for software for each department. It will reduce overall costs and free up money for innovation and growth.

6. Increase Company-Wide Trust

When information is held tight by a particular department, other departments may wonder what they’re hiding. Opening up your systems and providing open data to all the leaders in the company reduces misunderstandings and increases trust. Yes, it’s more productive, as time isn’t wasted answering questions you can look up yourself in an ERP system, but it also increases the trust leaders have amongst each other.

If there is a question about why inventory control ordered extra items, notes can easily be accessed and leadership can see that, every September, the items ordered see an uptick in sales. Leadership then knows the reason why the extra items were ordered and doesn’t need to question the decision-making of that department head.

Restore Order

The best ERP software for a tech company is the one that meets the needs of that company. Spend time studying the systems available and figuring out what would make information flow more smoothly throughout your operation. Talk to department heads about what information they need from the company and other departments to do their jobs more efficiently.

Keep in mind that you can add features to your ERP system later on, so it may take time to see complete results. ERP systems help create a system where everything in the company operates smoothly and your business is a whole instead of a group of disconnected parts.

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  1. Albert David on June 24, 2019 at 2:59 am

    Great article on ERP. There are businesses who question ERP, but I still think it’s the way a business should go about.

    • Eleanor on June 24, 2019 at 8:29 am

      Completely agree. Thanks for reading!

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