ERP: A powerful business ally in uncertain times

What is an ERP, and what it could do for you

An enterprise resource planning (ERP) system is software that allows companies to manage all their different business functions on a single platform, including finance and accounting, production and warehousing, sales, and others.

Businesses can face significant challenges when each department operates with its own independent software. For instance, inconsistent or duplicated data across systems can lead to miscommunication between departments. This might result in the sales team promising delivery dates based on outdated inventory information, creating inefficiencies and customer dissatisfaction.

In today’s volatile business environment, implementing an ERP is a strategic move to safeguard profitability and enhance resilience. As a business owner, you may not have control over tariffs, trade regulations, or shifting political landscapes. But you can control your internal processes and efficiency.

The most significant ways an ERP can help you deal with trade uncertainty is by reducing costs and increasing operational efficiencies. As new tariffs drive up expenses for cross-border operations, efficiently managing your supply chain, inventory and overall operations can help offset margin erosion and keep your business competitive.

How an ERP system can save you time and money

Consider this scenario. As a sales employee, you create a sales order and email it to a colleague. That colleague then manually enters the information into the accounting system to generate an invoice. From there, further inefficiencies may emerge:

• The warehouse team lacks real-time visibility and may only receive the order once the invoice is manually forwarded, delaying fulfillment.
• If the product is out of stock, someone must manually check inventory and initiate a purchase order, risking further delays and stockouts.
• Shipping may not be notified immediately, requiring additional follow-ups to ensure the order is packed and dispatched on time.
• When the order finally ships, tracking details may need to be manually entered and emailed to the customer, increasing the risk of errors.
• The finance team must reconcile invoices and payments manually instead of using an automated system to track outstanding balances.

With an ERP, this entire process becomes seamless. Orders are entered once, inventory is automatically updated, fulfillment is triggered, shipping is notified, and invoices are generated—all in real time.

The time savings add up quickly. If an ERP saves just 10 minutes per sales order and your business processes 100 orders per week, that’s 1,000 minutes saved. At a labour cost of $50 per hour, this translates to over $40,000 in yearly savings.

Another way an ERP can help you save costs is by streamlining procurement. By providing greater visibility into future demand, an ERP allows you to plan your purchasing more strategically. Instead of relying on intuition, you can make data-driven decisions about when and where to source raw materials. If you know that in three months, you’ll need 1,000 widgets or 20 tons of grain, you have time to shop around for the best supplier—whether in China, India, France, or Brazil—ensuring you get the best price and terms.

Beyond sourcing, an ERP also optimizes logistics and inventory management. With real-time insight into sales pipelines and production needs, you can:

• consolidate shipments to reduce freight costs
• ship full containers instead of half-empty ones
• avoid costly last-minute purchases.

Additionally, better visibility across the supply chain helps ensure you have the right materials when needed, reducing production delays and improving overall efficiency.

When conditions shift rapidly—whether due to supply chain disruptions, price fluctuations, trade wars or evolving customer demand—an ERP equips you with the data needed to make faster, more informed decisions. This agility can be a key advantage in uncertain environments.

How quickly can you implement an ERP?

An ERP system is not a quick fix. Think of them as a medium- to long-term solution you could start working toward now.

ERPs are not simple like word-processing or spreadsheet software. They are complex systems and their implementation involves a certain degree of risk. Your employees will also require training.

Realistically, a diligent selection process will take at least six months and will be followed by an implementation phase that typically lasts from six months to a year. In total, you’re looking at a delay of a year and a half, or even two years, from the time you decide to get an ERP until your system is fully operational.

Moreover, during this period, you won’t be seeing the immediate benefits of your new system.

However, this doesn’t mean that implementing an ERP isn’t the right move. Quite the opposite. It simply means that you need to adopt a longer-term perspective. The trade climate enjoyed by Canadian businesses has changed quickly and radically. For the moment, nothing seems to indicate that the previous, more stable business climate is coming back soon. As a result, business owners must prepare for tomorrow by making strategic investments today.

Right now, small and medium-sized enterprises that have already implemented an ERP are in a far stronger position to weather these headwinds. By investing in an ERP system now, your business will be better equipped to tackle the next challenge, whether it’s another round of tariffs, a pandemic, or some other unforeseen disruption.

What kinds of businesses should be looking to implement an ERP?

Typically, ERP systems become essential when a company’s revenue approaches or exceeds $10 million.

That said, a company with $3 million in revenue might still find it worthwhile to invest in an ERP if it has an aggressive growth strategy in place. Even if an ERP is not the right decision for a company today, streamlining operations by leveraging technologies for digitization, integration and automation is still highly recommended.

A practical way to assess whether you need an ERP is by evaluating the complexity of your operations and identifying areas of inefficiency. Key indicators include:

• manual workarounds
• data re-entry
• paper-based processes.

If managing multiple systems, sharing information across departments, or handling growing data volumes is becoming overwhelming, it might be time to consider an ERP system.

Additionally, if tariffs are squeezing your margins, this could be a clear sign that implementing an ERP is necessary to streamline operations and maintain profitability.

Don’t wait for the next crisis to force your hand—now is the time to evaluate whether an ERP could strengthen your business.

Next step

Looking for more advice? Discover how BDC can finance your project and help you find the right technology solution for your business.