5 signs your business might just need an ERP

If you’re running your business on Excel sheets, at some point you’ll run into a slightly uncomfortable question:

Do I need an ERP, or do I just need to tell everyone for 100th time to just to update the damn sheet?

The annoying answer is that it depends.

Excel is great. It’s cheap, everyone knows how to use it and you can get surprisingly far with a few formulas and someone in the office who knows what a pivot table is.

But there is a point where your business starts spending more time managing the sheets than using the information inside them.

Here are five situations that suggest you may have reached that point.

1. The Spreadsheet Multiverse

Let’s say you have three SKUs, each with a few variants, and you track their inventory across two or three Excel sheets.

One employee updates their file. Another makes a copy before changing something. Someone sends “Inventory_Final_v2” over email, which would be reassuring if “Inventory_Final” and “Inventory_Final_Updated” didn’t also exist.

Now, before you can make a decision, you first need to figure out which version reflects your actual inventory.

If “which sheet is the latest one?” has become a regular part of running your business, it might be time to think about an ERP.

2. The Phantom Inventory Incident

Your inventory sheet shows that an item is available, but somebody forgot to record that it had already been used or dispatched.

Your sales team confirms an order. A little later, you find out that the inventory is no longer there and you can’t deliver to the client on time.

At this point, “please remember to update the sheet” is not much of a process. You need validation built into the workflow, so the next action is based on what is actually happening rather than whichever file someone opened that morning.

If a missed update can turn into a missed delivery, it might be time to think about an ERP.

3. The Copy-Paste Relay

Someone receives an invoice and enters the data into Excel. Somebody else takes that data and enters it into another system. Then, when the two don’t match, a third person spends their afternoon figuring out why.

If this happens a few times a month, it is annoying but manageable.

If it needs to happen hundreds of times every week, your team is effectively running a relay race, carrying the same information from one system to another and hoping nothing gets dropped along the way.

Sure, ChatGPT, Claude and smaller automation tools can help with parts of this. But getting an AI to copy information from one file to another is different from having one system where the information moves reliably in the first place.

If moving data between tools has become somebody’s actual job, it might be time to think about an ERP.

4. The Weekly Time Machine

Say you manufacture five batches of a product in a day.

Right now, can you tell me how many items are still work-in-progress and how many are finished? Or will someone compile that information at the end of the week, by which point it is an interesting history lesson rather than something you can act on?

There is a fairly large difference between knowing what your business is doing and knowing what your business did last week.

If you only understand your operations after they have happened, it might be time to think about an ERP.

5. The Contextless AI Conundrum

Your inventory is in one spreadsheet, purchasing is in another, invoices are stored somewhere else and production updates are sitting in messages or, more dangerously, in someone’s head.

You can upload these files to an AI tool and ask it questions. But tomorrow, when the files have changed, you’ll need to collect and upload everything again.

For AI to give you useful operational insights, it needs data that is current, connected and follows the same rules every day. An ERP can provide that base; AI makes it easier to query and use.

If your AI experiments keep beginning with “first, let me find all the files”, it might be time to think about an ERP.

The Nothing-Is-Broken Exception

If a few spreadsheets still give you reliable information, your team knows exactly where to update it and you can see what is happening without chasing five people, keep the spreadsheets.

You do not get extra points for buying enterprise software before you need it.

An ERP should remove complexity that already exists. If implementing one would create more complexity than it solves, you’re probably not there yet.

If you recognised your business in one or more of the situations above, though, it is worth evaluating your options.

Which ERP should you get, and how do you go about it?

I’ll talk about that in the next article.