Enterprise resource planning (ERP) software can make your work life much simpler.
But they’re often too costly or too complex for smaller businesses. Then there’s the inflexibility of dealing with a single vendor and the risks of an expensive ERP implementation failure to think about.
If you’re concerned a single-vendor ERP solution isn’t the right option for your business, it might be time to consider these ERP alternatives instead.
In this guide to ERP alternatives:
Why are ERP alternatives trending?
In a survey conducted by Gartner Marketing Technology, 57% of respondents claimed they prefer a best-of-breed approach when selecting technologies to meet business requirements.
So, why this trend towards ERP alternatives?
Firstly, the success of an ERP system is measured by the ROI it brings about to a business.
While the benefits of implementing an ERP system are numerous – increased productivity, streamlined data flow, improved decision-making – the total cost and usefulness of a single-vendor ERP system can prove unsatisfactory for SMEs.
Many ERP systems began as single-focus software and later expanded to become giant ERP suites. As such, they often do one thing well – the original task they were built for – but cannot be relied on for the other functions they offer. This is not ideal for product-based businesses that require efficient inventory management and production tracking features.
Add to that the devastating consequences of an ERP implementation failure, and it starts to become clear that single-vendor ERP solutions may not be for everyone.
The disadvantages of a single-vendor ERP for SMEs can be summed up as:
- The complexity of implementation
- Unplanned costs for new requirements
- High adoption costs
- It takes a long time to fully implement
- They’re often specialised in a single area of business
- The financial repercussions of ERP failure
SMEs often find many of the features included in an ERP system unnecessary for operating their business. In other words, they’re paying extra for functions they don’t want or need.
With so many risks around implementing ERP software, you might wonder about alternatives.
Is there an affordable ERP alternative?
There sure is. An affordable ERP alternative is what’s known as a best-of-breed (BoB) solution.
So, what is best-of-breed?
A best-of-breed software stack is an amalgamation of different best-in-class offerings – usually delivered via a cloud-based SaaS model – that each performs a single function exceedingly well.
By integrating a few of these smaller-scale products, you can create an affordable alternative to ERP.
What does a best-of-breed ERP alternative look like?
The main benefit of a best-of-breed software stack is in the name: You’re getting the very best product each industry has to offer.
Rather than a CRM system that’s evolved to include inventory and accounting functions, you get the best CRM system, the best inventory management system, and the best accounting system.
Your new best-of-breed ERP alternative would look like this:
- A CRM platform that handles all the customer and sales side of things, feeding sales, shipping, and other customer-relevant info into the inventory management platform.
- An inventory management platform that controls and tracks production, from supply chain through warehousing and manufacturing down to picking and shipping, supported by data from the CRM.
- An accounting platform that receives data from your CRM and inventory management software and helps with invoicing as well as calculating business income and budgets.
While all three software may have been procured from different vendors, they all integrate and speak to one another seamlessly.
- See a real-life example of this software stack: How Sage compares to Xero, Unleashed and Prospect CRM
Key features SMEs should look for when procuring a best-of-breed ERP alternative
If you’ve concluded that a single-vendor ERP software is just too big, too complex, or too expensive for your business, then you’ll probably benefit from implementing a best-of-breed alternative.
So, to help you start building your tech stack, let’s look at some of the features you may require. Here’s a summary of what’s covered below.
The key features to for in an ERP alternative best-of-breed stack:
- Real-time inventory management
- Purchasing and supply chain management
- Sales order processing
- Production tracking
- Analysis and reporting
- Customer relationship management
Let’s break these down.
1. Real-time inventory management
If you’re running a product-based business, you probably already know that inventory management software is vital.
You need access to the stock levels, locations, and production status of your goods at all times. This will help you set accurate reorder quantities for each SKU and prevent stockouts or overstocking.
Best-of-breed inventory management software allows product-based SMEs to:
- Know where your goods are at any given time.
- Reduce spoilage from forgotten products.
- Keep your stock levels up to date, to the second.
- Track stock across multiple warehouses and move goods from one to another without hassle.
- Compare inventory to other factors, such as sales figures, shrinkage, returns and more, to determine best-sellers and laggards.
2. Purchasing and supply chain management
Creating purchase orders and managing suppliers are two key processes that can benefit from automation.
Purchasing management software digitises how you perform these functions. This allows you to store everything accurately, in the same place, so you can get rid of that old filing cabinet or those endless spreadsheets.
Best-of-breed purchasing management software enables you to:
- Generate new purchase orders based on set minimum reorder levels.
- Automatically generate purchase orders when stock runs low.
- Track purchasing costs, supplier information, and customs charges.
- Manage returns more easily.
3. Sales order processing
Correct tracking of sales orders can mean the difference between a happy customer and one that vows never to return.
Sales order processing software manages the sales process from the moment a customer purchases your product through to its delivery. It helps integrate multiple sales channels into a single digital workflow.
This means you can better control each step, monitor for errors, and improve your customer satisfaction rates.
Best-of-breed sales order processing software can help you:
- Receive and manage customer orders across sales channels.
- Generate new sales orders.
- Create lists for picking, packing, and stocktaking.
- Create and track shipping information.
- Send and receive invoices.
4. Production tracking
For manufacturers, the ticket to an efficiently managed operation is to optimise your production processes.
While some single-vendor ERP software may provide minimal production management features, it’s unlikely they’ll have the best performance on the market.
Best-of-breed production tracking software can help you create, track, and automate:
- Bills of materials
- Assembly and kitting
- Receiving, counting, picking, and stocktaking (with barcode scanning)
- Serial numbers for parts and products
5. Analysis & reporting
The ability to measure and forecast data is essential when coming up with new growth strategies.
Reporting software provides real-time analytics from each department in your organisation, allowing you to collect real evidence about how individual products and your business are performing. It also helps you track improvements so you can measure the success of any changes implemented.
Best-of-breed reporting software helps you:
- Identify trends such as seasonal popularity, spoilage, and increased sales.
- Forecast future expenses and resources based on historical data.
- Track various key performance indicators (KPIs) and measure your business’s performance over time.
- Make data-driven decisions around purchasing, employment, resources, and fulfilment.
6. Customer relationship management
Managing all your customer and sales data can get pretty overwhelming if you’re still stuck on a spreadsheet (or pen and paper) system.
CRM software takes care of everything to do with the customer. It’s where sales teams and marketing teams can record, manage, and review any critical information related to past, current, and potential customers.
Best-of-breed customer relationship management software tracks:
- Where a prospect is in the sales funnel
- Which marketing materials someone has engaged with
- Whether a lead is hot or cold
- Customer details, including contact preferences
- A customer’s position in the onboarding process (if required)
- A customer’s purchase history
- Past incidents with a particular customer
Some CRM systems take it even further, helping businesses listen to chatter on social media. They can even function in a human resources (HR) capacity – recording employee goals, completed tasks, and HR KPIs.
Accounting can be a real drag for ill-equipped product-based businesses. There are just too many transactions to efficiently record and reconcile using a spreadsheet or pen-and-paper system.
Cloud-based accounting platforms are designed to take as much of the menial work out of bookkeeping as possible so that your team can focus less on putting decimals in the right place, and more on value-adding activities.
Best-of-breed accounting software can automate the tedious steps involved in:
- Payroll management
- Tax management
- Expense reporting
Just about anything to do with numbers will relate to accounting in some way. Automating those processes around accounting is one of the most effective ways to increase overall productivity.
An eCommerce store functions as your digital shopfront. It allows customers to browse products, view stock levels, compare prices, and make a purchase.
A good eCommerce platform will integrate into your website and connect with your other software providers, so your inventory levels, financial books and customer database are all linked with the actual point-of-sale (POS) end of things.
Best-of-breed eCommerce apps offer businesses:
- The ability to display and sell their products online, to a wider audience.
- A new sales and marketing channel to promote their goods.
- In some cases, a way to bypass the need to hire developers and designers as many eCommerce platforms include predesigned themes for website layouts.
- An opportunity to remain competitive in an ever-growing digital landscape.
As with all best-of-breed apps, the ideal eCommerce platform is one that can easily integrate with other best-of-breed systems.
See more software solutions for SME manufacturers and wholesalers:
- 15 Types of Manufacturing Software (& Who Benefits from Each)
- 17 Wholesale Software Features for SMEs to Look For
Example of an ERP alternative best-of-breed software stack
Taking what we’ve covered above, we’ve created an example of a possible ERP alternative stack.
Here’s how one might look.
For real-time inventory management:
Unleashed easily helps you with the first four functions mentioned in the list above. In this case, a single best-of-breed option is available for managing your inventory, purchasing, sales orders, and production.
Xero is accounting software specially built for SMEs, accountants, and bookkeepers. It’s ideal for making sure all of your data is stored accurately and safely in one cloud-accessible place. If Xero isn’t a good fit for your business, you can also consider Quickbooks.
For customer management:
Thanks to seamless integrations, both platforms can be easily connected with Unleashed so that your customer, sales, and inventory data are aligned.
For eCommerce and POS:
If you’re looking for a fast, easy way to set up an online shop – try Shopify. Shopify integrates well with dozens of other apps and makes it simple to create an eCommerce website without hiring a developer or designer to build it for you. If you’re interested in selling on an open-sourced eCommerce platform, there’s also Magento.
And to manage all of your point-of-sale tasks, Vend is a highly capable cloud-based POS and retail management software that integrates well with other best-of-breed apps.