ERP: It's not just for blue-chips anymore

On average, small businesses in the UK waste over 120 hours a year on backoffice and administrative tasks - time which could be much better spent focusing on core business activities (Source). Around 6% of total staff time is spent performing back-office tasks manually, because businesses do not have the technology in place to streamline them.

A case study

Contoso Ltd - a web design company

For this article, let's take the example of a (fictional) web design company, Contoso Ltd. Contoso operates by taking an initial contact from a prospect, going through a series of email and telephone-based consultations, agreeing upon a quotation, and then issuing invoices when the work is complete.

The current system

Currently, Contoso operates these systems to achieve this:

• A CRM system to track the relationship between Contoso and its clients
• An invoicing system to enable Contoso to bill its clients for time spent
• A HR management system to track Contoso's staff time on projects
• An accounting system to keep track of Contoso's income and expenditure, and to prepare reports
• A website management system such as WordPress

In order for Contoso to complete a full interaction with a client, the following steps need to happen:

1. Client's initial contact - take down their details and enter them into the CRM.
2. Discuss the project with the client and keep progress updated in the CRM.
3. Send a quotation to the client - because most affordable billing systems don't support sales orders/quotations, this step is usually achieved by manually creating an Excel document or similar
4. Exchange relevant contracts and keep track of them. Contoso currently achieves this by keeping PDFs in folders on their file server.
5. Perform the work.
6. Bill the client - enter their details again into the invoicing package, and issue the invoice.
7. Take payment - and enter it up yet again into the accounting system.

Challenges and pain points

With Contoso's current system come a number of challenges and pain points, both during day-to-day running and from a regulatory perspective.

• Data is entered multiple times due to the spread of systems used - this is inefficient use of staff time repeating tasks and increases the risk of clerical errors during input
• Data exists in multiple places - this means updates to data (for example, a client's change of address) need to be replicated across multiple copies of that data, introducing the chance of drift in the event one of these copies is missed
• Poor adherence to GDPR principles - specifically the data subject's rights of access and rectification become extremely difficult and costly to respond to, as staff are required to search multiple databases for multiple instances of the same data, and cannot 100% guarantee to find all of it

Our proposed solution

In order to alleviate these concerns and rise to the challenges presented, we would propose Contoso implement a modern, modular ERP system to centralize and consolidate its data collection and administrative operations into the one place.

What is ERP?

At the mention of the word "ERP", one can easily be forgiven for immediately thinking of systems such as SAP or JDE: unwieldy, expensive behemoths aimed squarely at businesses in the "large to enormous" size bracket. As a result, many small to medium businesses miss out on many benefits a properly implemented ERP can bring. 

The acronym "ERP" stands for Enterprise Resource Planning, and is a term used to describe systems which aim to bring all of a business's management and administrative tasks into the same place and to minimize duplicate data entry.

The core philosophy of ERP is that one piece of data exists once in one place.  This means that if a salesperson takes down John Doe's details, then that information should never need to be taken again - it should be available throughout the company to whichever department needs it. 

A modern, modular solution

Modern ERP solutions such as Odoo work by breaking down their functionality into modules - for example CRM, Invoicing, Inventory, HR, Website CMS and many others. Each module is designed to manage a specific business area, while keeping duplication of data to an absolute minimum.

As mentioned above, a core tenet of ERP design is that one piece of data exists once in one place. Currently, most businesses operate multiple different packages each providing a specific function, such as separate CRM, billing, and accounting systems; and as a result they need to re-enter the same data into each of these separate systems. This introduces opportunities for errors, and also creates a lot of staff overhead keeping track of everything.

A modern ERP system would roll all this into the one place - making sure that staff only need to enter new data once.

How has this helped?

Let us look again at the step-by-step description of Contoso's interactions with their client, this time with their backoffice tasks being run through an Odoo-based ERP.

1. Client's initial contact - Sales team records client's details in CRM module.
2. Discuss the project with the client - sales and development teams can interact with the same data and keep each other in the loop.
3. Send a quotation to the client - when a price is agreed, simply create a quotation and send it to the client we created in step 1.
4. Exchange relevant contracts - these can be attached to the quotation we created in step 3. When the client returns the signed copies, simply attach them to the sale order
5. Perform the work.
6. Bill the client - raise an invoice in one click against the sale order we created in step 4.
7. Take payment - this will be automatically recorded against the invoice.

As a result of this solution, Contoso's staff now only need to collect data once - and many previously time-consuming tasks have been streamlined into requiring less than three clicks of a mouse, leaving everybody free to focus on core activities.