For a majority of MSMEs, WhatsApp and Excel are not only means of communicating information; they have become the operating systems for the MSMEs.
The sales inquiries can come on WhatsApp, the inventory can be tracked using Excel, accounting information could reside in another application, and approvals might come through WhatsApp messages or phone calls. All of this is manageable as long as the MSME is small, but growing orders, personnel, and locations can complicate these disparate systems. Recent industry reports on the digitization of MSMEs in India also underscore the transition from unstructured systems like WhatsApp and Excel to structured ERP systems.
This is where modular ERP for MSMEs comes into focus.
What Is Modular ERP?
Enterprise resource planning (ERP) involves integration of various business processes using a digital platform.
Modular ERP is another level of ERP that not only integrates but also helps firms start with the business processes they require and then gradually add other processes as their complexity grows.
In case of an MSME, for instance, one may consider starting with:
- Accounting and finance
● Sales and CRM
● Inventory Management
● Purchase management
● HR and Payroll
● Production management
● Customer support
The specific mix may vary based on firm characteristics.
Why Spreadsheets and WhatsApp Can Be Difficult to Handle
1. Information is Dispersed
Where the sales data, customer data, inventory and payment information is dispersed into multiple documents and messages, employees might not all have access to the same information.
This leads to duplicate data entry and also makes it difficult for management to know what is going on within the company.
2. Critical Data May Go Unnoticed
While WhatsApp is good for fast communication, business critical data can sometimes be hard to find since it gets lost in amongst hundreds of other messages.
Information like purchases, customer orders and delivery notifications could get overlooked or require searching through past messages.
3. Reporting Requires More Manual Efforts
When data is stored across several different systems, the employees need to gather and consolidate that data before creating reports.
This may result in delay and make the managers rely on manual data.
Modular ERP for MSMEs
A Business Unit That Is Well Connected
The modular ERP can help connect all units in an organisation such that information is able to flow from one business function to another without having to be re-entered manually.
For instance, when there is a sale order that is made, information can be entered into the inventory, purchasing and billing systems based on the modules chosen by the firm. It helps in maintaining consistency in operations.
Build-Up Approach
One of the biggest benefits of this approach is that it enables a business to implement ERP gradually without having to digitize everything at once. When a firm finds it difficult to manage its inventory, it may choose to begin with inventory and purchasing and later extend it to finance, CRM or human resource modules. This gradual approach also aligns with the wider move toward digital procurement for Indian MSMEs.
Improving Visibility to Aid Decision Making
Interconnected business information may provide owners and management with better visibility regarding such indicators as sales, inventory, accounts receivable, purchases and many others.
There is no need to ask different people about their progress since management will have all the necessary information at hand.
Things MSMEs Need to Take into Account before Implementing ERP
Switching from spreadsheet to ERP cannot be viewed merely as a software purchase.
Businesses need to determine what processes create the most troubles.
Then, they need to check whether the ERP:
- Fits their workflow
● Provides necessary modules
● Is capable of integration with the current system
● Provides proper access control
● Is usable in mobile/could versions if needed
● Is scalable for further growth
● Provides implementation assistance
Most importantly, businesses need to refrain from implementing any unnecessary modules just because they are present.
ERP Systems Can Scale Together with the Growth of the Business
The purpose of ERP implementation should not be to remove every single spreadsheet and every conversation through WhatsApp. There can still be room for these kinds of technologies to be used effectively.
The more important thing to consider would be to make sure that the most vital pieces of business information and processes don’t become dependent on the various spreadsheets or employees.
ERP can help MSMEs scale together with their growth. The current trend in ERP implementation in India revolves around this concept.
The move from spreadsheets, WhatsApp, and other tools to a modular ERP solution will be, in the end, the move from fragmentation to connected business management.
MSMEs do not have to change everything overnight. They will be able to create a more structured digital environment to grow in by pinpointing what they lack and making use of the proper modules. This broader shift is also reflected in initiatives supporting the digital adoption of small businesses.
ERP systems may not have a big future in the form of one big system for smaller businesses. The future may be in the creation of a combination of connected modules for growing businesses. AI and digital tools
FAQs
Modular ERP is an ERP approach that allows MSMEs to start with the business modules they need and gradually add more modules as their operations grow.
As orders, employees, inventory and locations increase, information stored across spreadsheets and messages can become difficult to manage, track and consolidate.
MSMEs should consider workflow compatibility, required modules, system integration, access control, scalability, usability and implementation assistance before choosing an ERP system.
