First of all
What are ERP systems
The acronym traditionally stood for "Enterprise Resource Planning", but in a nutshell what it gives you is a single integrated system for handling business administration.
While every business is unique, there are lots of similar tasks that need to be performed. Everyone has to hire and fire people, they need to store documents, have instant messaging, do accounting and tax returns and on and on. This is true whether you are a formula one team or running an e-commerce business.
We can use spreadsheets though
So many business stumble along with spreadsheets, which are great for prototyping, assembling data and doing other important tasks. But they are almost too good. Spreadsheets are so powerful that you can end up building extremely complex apps inside them, and while they can do it, you really shouldn't.
Spreadsheets are great for 2 dimensional data. You plot sales each week - dollars vs time. You can slice the data and do some analytics with pivot tables, maybe splitting sales by region and so on. The formulas can do a lot of the heavy lifting, and you can even script up some macros to do the harder bits.
BUT, what they don't give you is things like protecting data integrity. My kids worked at a charity managing the memberships on a shared Google sheet. Someone else stupidly logged in one day and sorted by ONE of the columns instead of all, and suddenly all the membership expiry dates did not align with the members, so nobody could see who needed to pay or not. This was the main purpose of this sheet, so with one erroneous click of the mouse it became completely worthless.
It took them hours and hours going through bank statements and emails to reconstruct the data as it should be. There is no protection on a spreadsheet.
I had a client that had complex drop-shipping and just-in-time delivery managed all on a single spreadsheet. It was so critical to the business they backed up a separate copy each day in case anyone messed it up. It was also very difficult to use and not only wasted time but also became a bottle-neck on how many orders they could handle at any one time.
I already have Monday.com and Xero
The next evolution in business is to start looking at SaaS tools. These are online platforms that solve one specific problem. So businesses will realise they don't have an easy way to do instant messaging, and they will sign up for Slack.
Then as they grow they will find it difficult to keep track of tasks and project management, and turn to a solution like Asana or Monday.com.
These tools are great, but as you start adding more and more SaaS tools to your business, you will see your licensing costs climb significantly. You will also start running into problems integrating these different tools. Sure they provide APIs, but then you need developers to build integrations between the systems.
Some have built-in plugins, but these might not really do exactly what you want. Also the SaaS platform itself you will likely be making compromises. When I was last at a company using Monday.com it blew my mind that they did not have the ability to add sub-tasks to a task - one of the main things I like to do on task management platforms.
By the time you have Employment hero for HR, Xero for accounting, Asana for tasks, Slack for instant messaging, you are paying through the nose for all this technology and compromising on your business processes everywhere, trying to force these tools to fit where they really don't fit well.
ERP to the rescue!
You'll get to a point where this pain really starts to kick in and the benefits of an ERP system really start to appeal to you.
Having one platform that does basically everything, AND can be customised to meet your specific needs, can be a game changer for a business.
You pay ONE set of licenses for the ERP software, and all the data is in one place - centralised, with good integrations between the different modules.
Everything from customer support tickets, ecommerce sales, warehouse operations, accounting, HR, manufacturing processes, project management, legal compliance, document management, company training, mailing lists, reporting, everything all in one system.
So if you need more complex business processes, like every time a customer complaint comes in, a list of tasks is automatically assigned to one of the managers, with a workflow that delegates work out tasks to people in other teams.
Or you can build reports where if certain metrics hit key points, an alert is sent out to management. You can have custom workflows for your warehouse operations, rather than having to bend the way you do things to the current software platform you are on.
I once saw a client have to mark an order as ready to ship before they even packed it, because that was the only way they could print the address in the system they were using. Once the address was printed, they unmarked the order as ready to ship and set it back to packing. This was because, for whatever reason, they had a business process where they wanted to the address printed off before the software provider had decided was the best time to print the address off.
These types of hacks and workarounds become unnecessary once you start to have control over the software systems you are using to manage your business.
Which ERP?
My personal opinion is that Odoo is currently the market leader in ERP solutions. The licenses are very affordable, and there is a lot of functionality still available on the Open Source Community Edition.
It's also been built from the ground up to be easily customisable, so with a good Odoo Implementation Partner, you can tweak it to meet your needs.
I would stress the need for a GOOD partner, because customising any ERP does add cost, and so you need someone who can make good judgements about when it is worth bending the system to meet the needs of the business process, and when it is better to bend the business to align with the software.
A good example of this was a client that insisted on highly complex functionality to allow them to retroactively amend GST (i.e. VAT) submissions. It needed various levels of user permissions and sign-off, and complex date logic to correctly allocate the amendments to the correct month without breaking other very complex accounting calculations.
Ultimately though, it was a faulty business process that was introducing the mistakes in the tax submission in the first place, and actually the way Odoo worked out of the box (OOTB) was better, because the difficulty in retroactively amending entries should have acted as a deterrent to having the wrong data in the first place.
I would have been much cheaper to change the way they did month end to make that process more reliable, then for any stragglers that did fall through the net just do a manual adjustment to the return and not implement any software changes for it.
There are many trade-offs to make, and they all require an understanding of not only the business but the ERP system itself.
Is now the right time to commit to an ERP?
Truthfully, they are an investment. But if you're already spending tens of thousands of dollars a year on SaaS licenses, then you have to weigh that up with the alternatives.
I would say your best bet is to book a demo so you can start to get an idea of what an ERP would look like and the potential is has for your business. Then you can start to plan out if and when would be a good time to make the jump into a new ecosystem.