Pandemic, quarantine, economic crisis and SMEs at risk. How to avoid bankruptcy? What to do? What not to do?
The coronavirus pandemic is wreaking havoc on the economy, and small and medium-sized enterprises are no exception. Those that have not already closed their doors are at serious risk of doing so.
During these uncertain times, SMEs must learn how to navigate a risky and constantly changing environment. Whether due to government regulations or the virus itself, companies are worried about the health of their employees and, ultimately, their business operations. Therefore, the managers of companies that still carry out manual processes or rely on several different applications to keep track of them must start to develop a strategic plan to integrate their processes into centralised systems that can make obtaining information quick and easy.
This plan will not only streamline business operations, but also improve understanding of the various data that make up the organisation. This has a positive impact not only on the execution of day-to-day tasks, but on your bottom line as well. This is especially true if you take into account the cross-cutting management of knowledge, particularly in these times.
Global COVID-19 containment measures have had an obvious effect on economic activity. While some have managed to adapt, many SMEs around the world have had to close their doors because they were not equipped to take on the challenges of an economy based on virtual interactions, e-commerce and remote work.
Additionally, the vulnerabilities typical of SMEs are heightened in an environment where access to the market is restricted. As a result, many are looking to optimise their commercial management, since this goal is critical to the company’s survival under current conditions.
The current situation has put even more pressure on this primary goal, and business owners need to engage more closely with their customers and better understand their constantly evolving wants and needs.
One approach that has worked well for many organisations is setting up an emergency committee to speed up decision-making during the pandemic. Such a committee helps to identify and capture opportunities, and to direct actions both in terms of market access and in adapting new processes, products and services.
From a technology perspective, most SMEs are still lagging behind. Their operations and administration rely heavily on manual processes with minimal automation. Most of the time, their systems are not synchronised. The systems that manage operations and the accounting system are fragmented. On top of that, cost, logistics and invoicing systems and so on are often maintained in Excel sheets.
Without well-organised financial information, including sales, costs and other key data, it is difficult to make timely and accurate decisions. At the same time, any discussion about adopting new technology raises many concerns over implementation, as well as over profitability and return on investment-especially as we move into the post-COVID-19 slowdown that we are already seeing.
How ERP Can Support SMEs During Emergencies
In the current climate, the main priority for SMEs is rebuilding and getting business back on track. While it is true that many workplaces already practise remote work, some sectors are much more familiar with this model than others. Within companies, there are also departments, such as sales, for which working outside the office is nothing new. Other organisations have had to adopt this model as their main strategy for growth, but were not prepared for sudden changes. Putting forward more flexible or remote work options has been challenging. This is why, for companies planning to move towards automated processes, it is important to create a situation where remote work is not only possible, but also necessary and profitable.
In other words, the role of technology is critical. Cloud-hosted ERP platforms are meeting expectations by providing immediate, simple and secure access to essential information. They also enable different functions – whether commercial, production or finance – to interact without anyone needing to leave home. Cloud, SaaS and pay-per-use operating models have now shown more clearly than ever their strengths compared with other, much less flexible and scalable solutions, especially as they help organisations reduce the spread of COVID-19.
Paradoxically, COVID-19 will drive change within the SME ecosystem, speeding up the adoption of cloud solutions and hybrid work models. In this environment of disruptive change, the Odoo ERP has made it easier to provide remote access for all key company functions. This not only helps businesses achieve the stability they need to ensure continuity, but also supports profitability across all their operations.
Cloud-based ERPs
On top of the many services they offer, cloud-based ERPs provide exceptional transparency when it comes to the upfront costs of implementing local IT infrastructure. This clarity also makes it easier to plan and manage expenses-two crucial factors, especially at a time when companies need to focus their efforts on getting their businesses back on a growth path.
With a cloud-based ERP hosted on external servers, companies need not worry about maintenance costs or other technical and security issues. The main expense is a manageable monthly subscription fee. Depending on your chosen plan, this may also cover all services related to the software: maintenance, updates, security, training, technical support, and more. In this way, the company’s time and resources can be channelled towards innovation and growth instead.
Once the worst of this health crisis is over, we will still have to deal with its economic impact. Organisations that have embraced technology will be able to operate more efficiently and be far more resilient in the face of future and unexpected change.
For SMEs looking for a solution that can support their operations through challenging times, the first step is to understand their requirements clearly and select the ERP that best fits those needs. They will also have to operate in an economic downturn, where they must stay competitive while keeping costs under control. This means they need a business model that lets them access and use new technologies, including ERP systems, without a large upfront investment.Odoo ERP is therefore positioned as one of the leading options within this new business model. Odoo is an easy-to-use integrated enterprise resource management solution. Apart from its wide functional coverage, what makes the software stand out is the application of its technology in its developments and the commitment to provide additional services. This is further complemented by Odoo’s high level of flexibility and ability to integrate with third-party platforms. Its scalability, security, and functionality promote business continuity during the pandemic and long afterwards.
Discover the difference between SaaS and Cloud ERP
Factors to consider if a Cloud ERP is right for your organisation
The adoption of cloud ERP has been on the rise as more and more organisations realise that it is the most cost-effective, flexible, and fastest way to deploy business applications without the need for substantial capital investments and additional IT resources. However, moving to a cloud model is an important decision, and there are several factors to consider when deciding if it is right for your organisation.
1. ASSESS THE TOTAL COST OF OWNERSHIP (TCO)
Organisations often make decisions based on incomplete or inaccurate information when evaluating local ERP costs. It is essential to consider your entire TCO, including costs of implementation, hardware maintenance, software licences, training, and any hidden additional costs. Often, organisations do not consider the cost increase that could come with additional users, storage, transactions, and other things that can make cloud solutions very expensive. Each organisation must evaluate and quantify the TCO for each option and make an informed decision about their move to Cloud ERP.
2. EVALUATE CLOUD OPTIONS
You should evaluate and choose from all of your available options, including SaaS, provider-provided hosting options for on-premises solutions, and third-party-hosted hybrid cloud options, based on your unique needs and business processes. In public clouds, you share the same hardware, storage, and network devices with other organisations or tenants of the cloud. Public clouds offer high scalability, high reliability, and no maintenance at lower costs. Private clouds are used exclusively by a company or organisation. They provide more flexibility, improved security, and high-level scalability. Hybrid clouds combine local infrastructure, or private clouds, with public clouds and offer the best of both worlds. They provide greater control over your infrastructure, better flexibility, and ease of deployment.
3. DEVELOP A TRANSITION PLAN
Do you want to move all your applications or start with non-core business components? A hybrid approach to the cloud is often ideal for organisations using highly configurable systems that have been customised to meet their specific needs. When considering your applications for the cloud, ask the following questions:
- Which applications will deliver the most value by moving to the cloud?
- How will the move affect the functionality and customisation of the application?
- What impact will the move have on your business process
- If an app costs little to manage internally, is there a benefit to moving?
- How difficult would it be to move this app to a new platform?
Understand which business processes will be automated and assess whether the move will deliver the desired outcomes. It is crucial to consider the long-term impact your choice will have on your business.
4. PLAN THE MIGRATION OF YOUR DATA
Data migration is one of the most difficult parts of moving to the cloud. Having a detailed plan and strategy can significantly simplify data migration. Identify the types of data that may be required to be stored or processed in the cloud. Examine data carefully for any inaccuracies, standardise data formats, and eliminate redundancies by cleaning your data.
Do your research and find out if the data migration procedure has worked well for other organisations like yours. Set clear guidelines on who has the right to create, approve, edit, or delete data from the source system, and document it in writing as part of your project plan. Often, dependencies between objects are not discovered until very late in the migration process, so make sure you have a workaround plan in place.
5. DEVELOP A CHANGE MANAGEMENT PLAN
Cloud ERP implementations can succeed or fail depending on how well organisational change is managed. The new Cloud ERP system is central to achieving your business goals, so you need to ensure that users are both competent and motivated to use it.
Effective change management supports users through the transition period after the new system goes live. Share essential information clearly and engage employees throughout the cloud migration. Some existing processes and job roles may change when you implement the new ERP system in the cloud. You should plan for employees to receive the necessary training so that they can handle these changes and get the most value out of the new system. The benefits of Cloud ERP can only be realised when your employees accept the process changes that come with implementing the new system.
Some key points we can take away from these crucial months:
• Increased mobility and better visibility of the business: enabling direct access to commercial platforms, financial management functions or specific real-time data from anywhere with Internet access improves not only day-to-day operations but also overall profitability. Ensuring uninterrupted connectivity does not mean being online all the time, but having smooth collaboration and the flexibility needed to respond with the agility and accuracy that the new environment demands.
• Greater operational efficiency: working remotely, especially if it is being done for the first time, can be critical and, at the same time, challenging. Fortunately, cloud technology has really proven its worth and enabled 24×7 connectivity, allowing management teams to spend more time on the most strategic aspects of their business. More detailed reports, analytical monitoring of profitability, and closer relationships with customers, despite the distance, are all positive outcomes of what the cloud makes possible.
• Virtual financial management: having control over operations and the day-to-day data of the business provides the information needed to make accurate, real-time decisions.
• Priority on digital transformation: the pandemic has accelerated digital transformation in the SME landscape. For the first time, the need to implement more digital processes has been clearly seen in real situations. This makes medium-term projections for technology adoption, process automation and, in general, digitalisation more optimistic than ever.
In conclusion, SME managers and directors must take responsibility for strategic decisions such as acquiring technologies that will help execute their business processes. They also need to understand the concepts of digital transformation, smart companies, and ERP systems and leverage these strategies to better face the challenges during this period.
Are you a small business looking for an ERP? Check out our top 10 ERPs in 2023 for small companies.
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