At a glance
A growth-oriented company needs an ERP system that can handle the load, complexity and speed. Scalability, clean data flows and automated processes are crucial. An outdated system, on the other hand, slows down expansion, increases error rates and impairs controllability. The right ERP suitability therefore becomes a strategic growth factor.
Growth is essential for your company. Only by expanding can you increase your production capacities and open up new markets. However, business growth also entails risks. Rising expenses and increased complexity can ultimately mean that you barely make a profit.
If you want to grow sustainably, you need a functioning strategy and efficient processes. The foundation for this is an ERP system that optimally supports your processes. But be careful: some software solutions can also slow down your company’s growth.
How you can benefit from ERP digitization and when an ERP change makes sense in this article.
How does ERP support sustainable growth?
ERP as the basis for the growth strategy
Every good growth strategy is based on knowing your starting position. Only when you know exactly where your company stands can you plan the next steps towards the future.
So before you expand in any way, you need information about your status quo. You can obtain this by carrying out a Thorough recording of operating data and analysis. An ERP solution is the perfect source of information for this – after all, all business data comes together in the system. By evaluating the data, you receive a sound basis for decision-making.
In addition, ERP software offers numerous functions that drive your growth strategies forward. Here are two examples:
1. company growth through diversification
If you want to enter a new market with a new product, you need to expand your portfolio as profitably as possible. Ideally, you can start with an attractive price right from the start. However, you will not be able to achieve this if you first need to build additional production facilities.
The best solution is to continue using existing production structures. This means that instead of using separate processes for each product line, you build a platform. A kind of modular system that maps each product as a modification of a central basic component.
For example, if you already have a ready-made platform for commercial vehicles, you can also produce tanker trucks relatively easily in addition to semi-trailers. If, on the other hand, you first have to build a new factory building, your costs will rise accordingly.
An ERP solution supports this diversification strategy by reducing the organizational effort of flexible production programs. Similar to variant production, the software makes it possible to efficiently manage a wide variety of products.
2. company growth through merger or acquisition
Connecting two or more different organizations is anything but easy. Harmonizing different IT infrastructures and processes requires extensive adjustments, which usually result in high costs and impair ongoing operations.
In this case too, a modern ERP system can provide a remedy by flexibly mapping different constellations on a digital level:
- If you have taken over a small company, simply create it as a client or new location in the ERP system.
- If you want to fully integrate a subsidiary into the parent organization, simply merge the respective clients.
- In the event of a merger, it is best to link the ERP solutions of both organizations until you have established a common infrastructure.
ERP creates efficient processes
The term company growth describes the increase in operational capacity and economic performance. The organization therefore invests in additional resources (machines, systems, personnel, etc.) in order to permanently increase its performance.
However, efficient processes are essential for investments to actually pay off in the end. This is because personnel, machines and systems are embedded in business processes that have a direct influence on the added value of resources. Even the best production plant is unprofitable if it repeatedly has idle times due to chaotic production planning.
However, process optimization is a challenge in itself. On the one hand, it is a highly individual project that takes place differently in every company. On the other hand, manual activities and non-transparent processes make it difficult to identify efficiency losses.
The best solution for this difficult undertaking is an ERP system. This is because the software is designed to make a company’s process landscape more efficient:
- ERP makes processes more transparent
During the ERP implementation, the provider and company jointly analyze all important business processes in order to map them later in the ERP system. This procedure makes many things visible that were previously hidden: actual workflows, workarounds, process weaknesses and much more. This makes it easier to uncover weaknesses and identify optimization potential. - ERP functions relieve employees of routine tasks
Repetitive, low-complexity manual tasks are an efficiency killer. Fortunately, they can be automated relatively easily with an ERP system. While the software handles routine processes independently, your colleagues can get back to more demanding tasks. This allows you to use your resources profitably. - ERP supports cross-departmental communication
Modern ERP solutions are designed to support company-wide collaboration. By managing data from all business areas in one central location, all employees have access to the same level of information . User-friendly dashboards are used to evaluate and visualize key figures.
| Transparency | Analysis and mapping of all processes in the ERP system | Visibility of weaknessesRecognize potential for optimization |
| Automation | Independent handling of routine tasks | Relief for employeesBetter use of resourcesHigher productivity |
| Communication | Central database for all departments | Uniform level of informationBetter cooperation |
In production, thanks to ERP you can, for example
- achieve greater predictability through a better overview of production.
- increase machine utilization through data-supported analyses,.
- predicted machine failures or maintenance by using predictive maintenance to avoid breakdowns.
- Control absence management to keep track of vacation and sick days and prevent staff shortages.
However, when selecting an ERP system, make sure that it is scalable and can grow with you. New locations should be easy to connect via clients and dashboards should be freely configurable. Intercompany functions that make value flows in the organization visible and promote collaboration are also important.
Stefan Grieß, Asseco Solutions
Low efficiency is one of the most common obstacles to growth in medium-sized companies. The only countermeasure is continuous process optimization, ideally with ERP support.
Business growth with ERP: examples from practice
BayWa r.e. Solar Energy Systems GmbH:
ERP digitization as a growth driver
BayWa r.e. Solar Energy Systems GmbH has grown considerably and expanded its business model to include wholesale, project business and its own production. This increasing complexity presented the company with new challenges that could no longer be mastered with the previous ERP solution.
By switching to the APplus ERP system, the photovoltaic specialist created the basis for highly automated order processing and future-proof digital processes.
The most important results:
- Complete mapping of all business processes in the ERP system
- Doubling of the daily order throughput
- Development of a new project business
- Basis for AI-supported optimizations in warehouse management
Sumitomo (SHI) Cryogenics of Europe GmbH:
Future-proofing through automation
As an internationally active company with growing complexity, Sumitomo (SHI) Cryogenics of Europe GmbH was faced with the challenge of modernizing its processes. The previous ERP solution was no longer able to meet the requirements for digitalization, service and automation.
By switching to the APplus ERP system and using APplus Premium, the cryogenics specialist laid the foundation for consistent, smart processes and greater efficiency.
The most important results:
- Solid basis for automated EDI and digital service processes
- Increased IT security and browser-independent use
- Faster processes thanks to fewer manual steps
- Always up to date with the latest ERP thanks to the update service
When is an ERP change worthwhile for growing companies?
You now know that an ERP system is worth its weight in gold for sustainable growth. But every product – whether physical or digital – has its own lifespan. This also applies to ERP systems. There comes a point when the software solution is outdated and no longer meets the requirements of the business. In this case, the system may even hinder your growth.
An ERP change is an opportunity to modernize processes and lay the foundations for the coming years of growth. But how exactly can you tell that your ERP solution is getting on in years? Here are four clear signs that you should consider a system change:
1. the technology of the ERP system is outdated
The classic client/server architecture is dying out in the ERP sector. Today, browser-based ERP solutions are modern and largely hardware-independent. These often also offer mobile applicationsthat support both colleagues in the field and the production department.
Of course, this doesn’t mean that every company needs a cloud ERP system with a mobile app. But if your ERP solution is still running on a server in the basement, this may indicate outdated technologies. In this case, an ERP change can lead to a significant increase in efficiency.
Other problems with outdated ERP software include
- Security risks due to a lack of update capability
- Dwindling integration capability due to lack of compatibility
- Excessive time expenditure due to slow data processing
- High costs for system care and maintenance
2. the ERP system does not support your growth strategy
Your ERP solution may have optimally supported all processes when it was first introduced. But as your company grows, the demands on the system change. If you open up new markets and customer requirements increase, the software may not be able to cover the new processes adequately.
Over time, there is a gap between the functional scope and the actual procedure in day-to-day business. This in turn has consequences for the efficiency of your company.
Let’s assume that You are expanding abroad. In this case, your ERP system must fulfill requirements that are not given for purely national use, for example:
- Multilingualism in invoicing
- Coordination of legally independent locations
- Mapping of legal requirements abroad
If the EPR solution no longer fulfills its original purpose, this is not necessarily due to the effects of aging. It simply happens that the strategy of an organization changes so much that the software can no longer keep up. In principle, an ERP change should never be made for technical reasons alone, but should always be linked to the corporate strategy.
3. the ERP system offers poor user-friendliness
If your employees are struggling with long training periods and many operating errors, this indicates an outdated ERP system with poor usability. In this case, you should also consider changing your ERP system, as otherwise user acceptance and, as a result, productivity will fall. This is anything but conducive to your company’s growth.
A lot has happened in the field of ERP usability in the last ten years. Instead of confusing interfaces and complex functions, ERP users today work with intuitive user interfaces. These are characterized by the following factors:
- Automated workflows
- Customizable dashboards
- AI-supported assistance systems
- Reduced complexity
- responsive design for mobile devices
4. your colleagues are dissatisfied in the long term
To determine whether your current ERP system meets the needs of your growing company, it is always worth talking to your team. Therefore, regularly ask your colleagues whether they still feel sufficiently supported by the current software. By talking to them, you will quickly find out what problems are occurring in day-to-day business and what the general mood is like.
Automation and artificial intelligence in particular combine to provide considerable relief within the workforce. However, if your ERP system is not capable of integrating modern processes, this leads to frustration and stagnation.
Conclusion: ERP as the key to sustainable growth
In order for your company to grow sustainably, you need a sound expansion strategy and efficient processes. Due to the increasing complexity, this project can only be implemented effectively with software support. Otherwise, you run the risk of your value chain coming to a standstill and bottlenecks looming.
ERP systems are ideally suited for managing company growth. After all, one of their main tasks is to optimize complex processes and coordinate distributed organizations. However, the prerequisite is that the system can keep pace with your plans, both technically and functionally. Checking in good time whether your ERP solution is still up-to-date and efficient will ensure your long-term competitiveness.
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