Do you have ambitions for the rapid growth of your business? If you are running a small or medium-sized business and have ambitions for rapid growth – a scalable ERP solution is a vitally important aspect you need to focus on.
What is scalability?
Scalability is the capability of a system to handle an increasing amount of work and its ability to accommodate growth. It’s a very important quality in ERP software. Scalable ERP systems are adaptable to the changing needs and demands of your business.
Scalability can be divided into two aspects: hardware and software. Scalability of hardware means changing workloads by changing hardware resources, such as changing the number of processors, memory, and hard drive capacity. Scalability of software is to satisfy the change in the workload changing the planning method.
When you are looking for a scalable ERP solution you should consider four dimensions that can help you to determine whether or not the system will be scalable to meet future growth needs of your company.
Utilisation: It is the ability of your ERP system to handle increased usage and the amount of data. Such things as the amount of data stored in the system, a number of users on the system, transactions being run, and servers being used to run the system affect the system’s ability to operate properly. Thus, an efficient database structure that will allow for additional servers to be added as the company’s needs grow is a must-have for any scalable ERP solution.
Platform: Without considering a platform you cannot evaluate an ERP solution’s scalability. It is the solution that helps to deliver its functionality in multiple computing environments. To increase scalability, nowadays companies look for browser-based software since the device’s operating system essentially becomes a non-factor.
User count: Adding users or customers is one of the most fundamental ways to scale up operations. As your business grows, the number of people who will need to access the company’s systems increases. Most ERP systems and implementation will allow you to add people but you should be aware of how additional cost and relative ease of doing so can vary between them.
Functionality: The ability should exist to enhance the system by adding new functionality with minimal effort and low ongoing overheads. When business conditions change, your software will need to adapt to different things, functionality must meet the needs of the company, including needs that will arise in in the future.
Strategic planning for business growth
Creating a strategic plan is a key part of planning for your business growth. A strategic plan helps to prepare a realistic vision for the future of your business and maximise your potential for its successful growth. In choosing a scalable ERP solution, it is vital to set the bar correctly. By considering the growth capabilities with a scalable ERP solution your business will experience the following advantages:
- Adequate ERP capabilities with growing business needs
- Full business agility and responsiveness, with no unforeseen remedial expenses from corrections and updates
Having determined the volumes of scalability, it is important to choose a system that will correspond to the expected changes in the long term. When choosing, you should consider the availability of such opportunities:
- effective account management
- easy management of critical data
- real-time information
- support for various platforms
A high-quality ERP system copes with a big increase in customer’s accounts and the creation of new ones. The system should not have restrictions on the amount of data input, and the information should be displayed in the real-time. For effective decision-making, you must have easy access to the real time information in the system. Reports should reflect the real data and for this, you need a constant update. Scalable ERP systems should work on any device providing mobility and flexibility for your business. It is a very important point because it allows you to expand your business faster.
Why scalable ERP is so important?
With the rapid growth of your business, you shall be ready to face a number of challenges. As your business grows, your ERP system should be able to grow with you. It means there will be more customers, and you will also need to process more data and manage more resources. If you do not have the way to overcome these challenges, you may lose effectiveness or impair the quality of your service or products, and this can lead to poor customer relationships and a diminished business reputation.
An optimised, scalable ERP system will reduce the complexity associated with growth, and introduce an efficiently designed workflow system, which will greatly simplify the process of scaling your business. Today’s customers are more demanding, they choose more customised products and they want them quickly. So it is vitally important to be able to scale up your operations efficiently when demands are higher and scale down when they are quieter.
The assessment of scalable ERP solution will affect the potential of your business. The choice of software that can contribute to or hinder expansion depends on the speed of business development. Consideration of the existing proposals should be taken seriously, treating them as strategic solutions for the business.
Scalability and small business
Small businesses have the greatest need for scalable ERP solutions because they are the best candidates for high growth. Small business owners evaluating ERP should consider the significance of scalable solutions and the inherent agility that drives a broad mix of long-term advantages. If we turn to the nature of the fixed cost base, income has the potential for exponential increase and therefore, scalable businesses provide greater profit potential and attractive growth.
For small or medium-sized businesses, savings from economies of scale matter because they help to make your business more cost-effective in comparison to money invested. Growth should provide for a reduction in incremental costs, as products are cheaper to produce or purchase from suppliers in greater quantities, thus delivering better profit figures. Operating costs, including employee remuneration, maintenance, and equipment costs, should grow more slowly than income in a scalable business. The determining whether your business initiative is scalable or not from the beginning will help you to decide if it will satisfy what you really want to achieve.
Of course, small organisations want to foster the potential for as large a business ‘reach’ as possible, and business leaders must work towards achieving this goal. These businesses need to be especially mindful of scalability since they have the greatest opportunity for growth and need to maximise profits against resources. Scalable ERP systems allow these growing businesses to integrate existing systems across departments and by so doing achieve greater efficiency and improved workflow.
We can conclude that true scalability is a key factor for any ERP solution to support smooth and economic growth as user communities and customer requirements expand. Therefore, we can see that unhindered and profitable growth typically occurs when the ability to increase technical capacity at an acceptable incremental cost is present without the need for system upgrade or replacement. This crucial characteristic in ERP software offers a dependable platform for worthwhile growth and increased profits. Operations are streamlined, employees are rewarded with more time to manage and in turn deliver overall heightened productivity.