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Cloud ERP: Empowering Small and Medium Enterprises


Sawubona SA!

As per a recent report by SEDA, there are currently 2,251,821 SMEs in South Africa. These SMEs account for about 40% of the GDP. Also, according to a survey by Finscope (2016), 90% of the jobs created between 1998 and 2005 were in Small, Medium and Micro Enterprises. The following graph depicts the GDP contribution by SMEs, over the years:-

SMEs contribution to GDP

[Courtesy:  http://www.seda.org.za/Publications/Publications/]

Based upon this, the ‘2015 SME insights report’ published by SAICA suggests that about 90% of the jobs by 2030 will be created by SMEs.

“However, majority of the SMEs fail in their nascent phases, lasting for an average of 3.5 years. What are the reasons for these failures? A look at ‘Finding Number 8‘ of  the report, lists out the main reasons for SME failure. “

[References: http://www.saica.co.za/portals/0/documents/saica_sme.pdf]

Some of the problems which caught our attention are:-

  1. Poor cash flow management
  2. Labour management issues
  3. High overhead levels
  4. Scaling Issues (Growth)

We agree that not all problems listed in the report can be solved by effective management practices. The macro-economic environment plays a major role here. However, the issues picked by us have a solution. The answer is cloud based ERP (Enterprise resource planning).

ERP Benefits to SMEs

Inventory Management


Almost all new businesses start off by managing their stocks on spreadsheets. It appears convenient in the short term, but becomes cumbersome and inefficient over time. Some problems which may arise as a result of the same are:-

-More frequent stock count

-Training new staff on how to manage your pre-programmed spreadsheet

-Issues related to quantification of inventory.

A cloud based ERP package comes in very handy in such a scenario. From automatically updating the inventory with every purchase and sale to providing a strategic insight on scaling the stock level, the benefits are many.

E-Commerce Website


Most of the cloud based ERP packages tailored for SMEs have an in-built e-commerce module which can be customised as per your business’ needs. Alternatively, these packages can also integrate easily with your existing e-commerce applications based on solutions like Magento, Shopify, and Woocommerce etc. Therefore, the website remains in sync with the inventory and accounts providing a streamlined sales process.

CRM: Online/Offline


-Acquire new prospects => Lead generation

-Provide visibility to the sales funnel

-Convert existing customers into repeat customers

-Sales Analytics

Human Resource Management


Human Resource Management is not merely maintaining records of employees and their payrolls. It is a complete process which mainly comprises of recruitment, orientation, training, change management, performance appraisal, payroll processing and a plethora of related activities. A cloud based ERP like ERPNext, ODOO can automate even simplest of tasks such as:-

  1. Employee expense claim
  2. Leave management
  3. Overtime compensation

while maintaining a complete sync with the accounting software.

Further advantages

-Complete overview of the business at any instance

-Increased team collaboration and Improved communication

-Cost optimisation

-Access to strategic insights

The Takeaway

A cloud based ERP takes away the daily hassle of managing in-business tasks and enables you to focus on on-business assignments. Also, as per an estimate there is a direct correlation-between cloud ERP usage and revenue growth. SMEs using the cloud are 1.7 times more likely to have 10% revenue growth than other similar businesses in general. So, are you ready for building an information savvy enterprise?

For implementing a cloud based ERP solution, connect with us at info@zealousys.com

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