Top 5 ERP Software For Small Businesses In Australia

How does ERP software for small businesses play a role?

In Australia, one big reason for SMEs' struggles is inefficient business management (Australian Banking Association, 2023). That’s why an enterprise resource management system (ERP) is a powerful solution that can help us save much time and costs on daily processes. Handling finances, managing inventory, enhancing customer experience, etc., all can be resolved with an ERP that fits your company.

Let's jump right in to discover what you need to know before ERP implementation and the 5 best solutions in the Australian market!

Why is ERP software important to small businesses?

Implementing ERP software for small businesses is crucial as it covers the entire spectrum of activities in the organisation. Businesses cited shorter processing times, better teamwork, and a centralised data system as the top 3 advantages of running ERP.

The software provides a unified system that different departments can use to work together. Before diving into what specific aspects an ERP can help you with, we need to make some points clear:

1. Data is never the least. Regardless of your business size, data is rich, especially in data-intensive industries like manufacturing. Even as a smaller business, ERP software can still deliver valuable insights from your given data.
2. Data must be organised. Regardless of the data volume, organising data is important for you to efficiently operate your business. For instance, in manufacturing, it's a must to understand your financial status, raw materials, workforce, and production capacity. The goal is to operate at maximum efficiency.

Without a centralised system to gather data, report on processes, and a holistic view, how can you precisely know where your business stands? For any organisation, ERP will (generally) provide the following support:

• Allows your employees to understand their roles more clearly
• Provides efficient allocation of resources across departments, internally and externally
• Provides a single source for production data, sales data, inventory management, human resource management, etc
• Reduces costs associated with human error by using one system for all procedures across an organisation
• Shows accurate data and reporting to track progress, productivity, and performance.

Read more: How ERP Accounting Software Elevates Finance Management

Important notes before implementing ERP software

Implementing ERP software is time-sensitive, and for small businesses, every second is valuable. The ideal solution should cover most aspects of your company. This can be accounting, payroll, HR, time and attendance, fixed assets, CRM, inventory, and more.

Let's discuss in-depth what you need to consider when seeking an ERP system:

Important notes before choosing an ERP solution

1. Why does your current business need an ERP?

You can identify changes by understanding the reasons behind them in your business.

Take the example of our client - Fencing Components (FC), when their old software solutions did not communicate well. FC therefore looked for a complete solution to streamline their business processes. Their objective was to simplify every facet of the company to increase productivity and provide outstanding customer service.

Along with your current business needs, you may point out some reasons such as:

• You are having trouble controlling growth. For instance, increasing order volumes creates ongoing stock control challenges
• The software you use now is outdated and inefficient for your current procedure. For example, your departments are drowning in processing papers
• Your teams are having many symptoms of process disorientation. For instance, safety concerns on the factory floor require better processes
• The all-purpose spreadsheet grows too complicated or needs to be fixed
• Clients and partners are expressing their dissatisfaction and you find it difficult to fulfil their expectations
• An ERP can be taken into consideration at any of these points, and the search for the best one starts here.

2. Where & What in the business to make changes?

After specifying the previous reasons, it’s easier to identify the related areas that need changes. Getting back to the case of Fencing Components, several areas that require adjustments are inventory control, shipping, accounting, and sales order management from multiple channels. Overall, you can consider factors like administrative tasks, spreadsheet data, or equipment.

Also, you need to clarify your existing software and processes, plus, their contributions to your business. Are you in a food production company that has developed a custom batch and lot tracking process? Or a plastic manufacturer managing work orders and job costings via a separate accounting system? Make sure you know your technology stack and evaluate how or where employees will adopt the new ERP system.

3. Who will take action on the software?

The resources you provide to subordinates can help them complete tasks much better. According to Gallup’s study, employee engagement and ongoing communication are co-related. Managers and employees who have access to more information from their company's databases make better decisions. Moreover, when having more access to how the business is operating, and the purpose of their work, employees get more trust.

Thankfully, ERP provides beyond this kind of access and encourages more effective communication and procedures. However, it’s important to get the details about how the software collaborates with your teams by: 

• Talking to everyone about their responsibilities and the software they use
• Asking them about any problems they want to fix or think may be done better
• Ensuring that all important stakeholders are involved to avoid overlooking significant details.

4. When to start the implementation?

Implementing ERP software for small businesses requires thorough planning and discussion. Think about what can influence your implementation timeframe and be best prepared for them. Here are some typical impacts:

• Getting the right internal resources involved and coordinated
• The time to gather information from your team on what issues you want to solve with a new ERP system
• Availability of your key staff and resources during the implementation
• Documenting your existing processes and identifying anything that needs changing
• Tidying up and data-cleansing of current business information and deciding what to bring over.

Read more: Breaking Down Cloud-Based ERP Systems and Its Impact on Business

Key success factors of ERP software for small businesses

A successful ERP software for small businesses is one with constant change and enhancements. No "perfect" system is needed because there should always be room for improvement. 

A great ERP system must be able to grow with you and your entire business operations. It is expected to be customisable to any specific needs. As a whole, the success of an ERP system relies on the following 5 key factors:

Key success factors of ERP software

• User-friendly interface: The user experience should be simple, intuitive, and enjoyable
• Scalability: The ERP software should be able to grow with the company and not get outdated after a few years of use
• Flexibility: The solution should adapt to many types of business and allow customisation. It is expected to fit in different processes and needs within the company  or department that it is being used
• Reliability: The software should have reliable performance and be secure enough to protect sensitive data. However, it shouldn't be too hard for you to update quickly new features or bug fixes to prevent potential security risks
• Robust integration: Solid integration options offering other cutting-edge tools make it much easier to automate your business.

The 5 best ERP software for small businesses in Australia

Keep in mind that the ideal ERP software varies based on your unique business requirements, size, industry, and budget. To find the most suitable one for your business, it's a must to evaluate your own needs and compare the options.

1. Odoo

Founded in 2005, Odoo has become a global player in the ERP market. With 8,000,000+ users worldwide, it boasts a thriving user community and a growing market share in Australia.

Odoo ERP features (source: Odoo)

Its distinguishing feature lies in the combination of open-source flexibility and modular functionality. With a library of 10,000+ apps, businesses can tailor their ERP solution and pay only for what they need. This cost-effective and customisable approach, along with a user-friendly interface and robust localisation, positions Odoo as a top choice for Australian SMEs.

The best parts are:

• Open-source platform: Odoo sets itself apart by providing a free core version with essential features. This makes it a cost-effective option for small businesses, resulting in lower initial investments compared to others
• Local features: Odoo addresses Australian-specific requirements with dedicated modules for accounting, taxation, and reporting. It ensures seamless compliance with ATO regulations, streamlining workflows for local businesses
• Robust partner network: Odoo has an extensive network of certified partners in Australia. This ensures businesses have access to local expertise for implementation, support, and customisation, which overall enhance their ERP experience.

2. Microsoft Dynamics 365 Business Central

Following Navision, a product boasting 100,000+ global customers, Microsoft has entered the ERP market with a highly competitive offering. Microsoft now provides an end-to-end integrated business suite that encompasses Outlook, Teams, LinkedIn, PowerBI, Dynamics, and more. With its dynamic environment, Business Central has the potential to be among the top 3 ERPs in Australia.

Microsoft Dynamics 365 Business Central (source: Microsoft)

The best parts are:

• Microsoft Office integration: The solution smoothly integrates with established Microsoft tools such as Office 365. This enhances user familiarity and experience for many Australian businesses
• Strong financial management: Strong financial management capabilities address complex accounting needs. This makes it an ideal choice for mid-sized to large businesses with complex financial structures.

3. Acumatica (MYOB Advanced)

MYOB Advanced, built on the Acumatica framework, is a localised version of Acumatica designed for the Australian and New Zealand markets.

Acumatica ERP system (source: Acumatica)

Originating from a 2008 vision to challenge traditional ERP systems, Acumatica has gained prominence globally with over 6,000 customers, including major names like Coca-Cola and JetBlue. Although it may not currently dominate the Australian market, Acumatica is gradually becoming more impressive in the field.

The best parts are:

• Tailored for mid-sized businesses: Acumatica is highly customised to meet the unique requirements of mid-sized businesses. It fosters growth and operational efficiency without any complexity
• Seamless integration with MYOB: Effortless integration with existing MYOB accounting software ensures a smooth transition with familiar financial management tools.

4. NetSuite ERP System

NetSuite, currently under Oracle's ownership, defied the traditional ERP models by introducing its cloud-based enterprise resource planning systems. Today, more than 37,000 customers worldwide, including many in Australia, benefit from NetSuite's all-in-one business management suite.

NetSuite enterprise resource planning systems (source: NetSuite)

The best parts are:

• All-in-one functionalities: Offers a range of integrated modules like CRM, finance, inventory, e-commerce, and more
• Global and regulatory compliance: NetSuite facilitates international operations and aligns with Australian tax and accounting regulations. This helps businesses in multiple regions to ease their accounting processes.

5. Oracle Fusion Cloud ERP

Oracle Fusion Cloud ERP stands as a prominent ERP solution globally. With over 10,000 customers spanning diverse industries, it has established a strong presence. In the competitive Australian market, This Cloud ERP distinguishes itself as a robust contender, owing to its extensive suite of cloud-based applications on finance, supply chain, human resources, and more.

Oracle Fusion Cloud ERP (source: Oracle)

The best parts are:

• High scalability and customisation: Oracle Fusion Cloud ERP is ideal for large enterprises with complicated business processes. It offers exceptional scalability and customisation capabilities
• Global operations and multi-currency support: This is suitable for international businesses because of the seamless support for global transactions and multi-currency functionalities.

Summing up

Setting up ERP software for small businesses needs thorough planning. However, first thing first: make sure you create a detailed business case and take note of important requirements.

When evaluating familiar ERP options like Odoo, Microsoft, Acumatica, or NetSuite, focus on specific benefits and support to ensure the chosen one aligns with your unique needs.

References:

• Technology Evaluation Centers (2022). ERP Software Facts and Lessons Learned: How to Avoid ERP Failure
• Gallup. What Is Employee Engagement and How Do You Improve It?