Scaling up to a scale-up and sustaining growth is a high-stakes step for a start-up. In order not to fail in the maneuver, a young shoot must find the means to produce according to a strong multiplier factor and to structure itself. The computer tool lies at the heart of the equation, and ERP is undeniably part of the software on which to rely to structure a young company in strong growth.
At the initial start-up stage, a new innovative
company must still validate its market and its economic model through an
experimentation phase. In particular, a start-up does not yet have a
well-established organization, its market is not yet well identified and it may
still have to develop a factor of its activity, including its business model,
its technology, its product. , its target clientele or even its mode of
distribution.
Any start-up aspires to move to the scale-up stage,
which implies that it validates its model, which must be industrializable and
profitable. More specifically, a scale-up meets three well-defined criteria: it
has at least 10 employees, shows annual growth of at least 20% per year and has
exceeded one million ARR (Annual Recurring Revenue), the indicator of future
predictable income. The time has then come to establish its stability and
growth. However, the change in stature goes hand in hand with a change in scale
and the need to structure. That's the whole challenge.
Do not fail in the change of scale
A scale-up must establish its organizational model and
adapt to new needs, in particular because it welcomes new skills and develops
its businesses, including support functions that are now internalized. But also
because its production is going to scale up.
The challenge of a scale-up: structure the
organization from which its processes directly derive, and secure the growth of
the activity. The processes play a major role: they must be defined so that
they are efficient, fast and limit the hazards as much as possible. In
addition, they must contribute to a clear organizational structure, in which
each team knows its scope and its missions. Finally, the company must rely on
the right indicators and forecasts to anticipate the next steps — in
particular, the future resources to be integrated, the fundraising to be
organized, the scaling up of the IT systems to be tested, etc.
Start-ups and scale-ups, different IT tool needs
At the start-up stage, the company has rarely equipped
itself with formal IT systems. It is rather a phase where improvisation and
agility are required. As the number of customers increases, a start-up will
often choose ad hoc tools, such as a CRM, accounting software or an online
project management tool. But these scattered tools, selected for short-term
needs, quickly reach their limits with growth and the need to structure
themselves.
Once it has become scale-up, the company will have to
equip itself as a priority with functional bricks linked to its core business
for operational efficiency purposes, but also more related bricks, such as a
CRM, to meet the all business needs including support functions.
The most relevant way to avoid hindering growth is to
have a limited number of tools and to favor solutions that combine several of
them. This is the guarantee of avoiding too many silos of information, a
multiplication of interfaces and entries with the associated risk of error and
difficulties of interconnection between tools. It is also the way to unify many
processes between perimeters and to add a crucial layer of automation to save
time.
ERP in support of serene growth
The ERP meets several challenges at the scale-up stage:
- ERP is a structuring and centralizing tool. It alone brings together several software including planning, inventory and production management, CRM, Business Intelligence, commercial management and accounting. In addition, it brings together all the activity management rules, which guarantees their uniform application in all the areas covered, and follows the processes to the millimeter. This is why ERP is a structuring tool that promotes the organization of operational processes and the overall vision.
- ERP is also an automation tool that meshes digital flow activity. It can therefore take care of duplications, real-time updates, predefined calculations to save time and increase precision compared to manual processing. In addition, the ERP makes an automatic chaining of the steps in a given workflow. Thus, from an estimate, itself product by automating the collection of product characteristics and the calculation of prices, the solution will generate a purchase order, an invoice, a delivery note. All in a few clicks for the user.
- ERP is an evolving tool, a crucial dimension in an activity that must be sustainable. The modularity of the ERP allows the company to implement key functions as its needs evolve. In particular, when the company goes international, or multi-site, or deploys new production models, the ERP already has the appropriate functionalities, all the more so if it is a specialized vertical solution for the activity of the company. It is therefore possible to “open” new à la carte modules, without having to change the solution.
- ERP is a decision-making tool, with many analysis, reporting and Business Intelligence functions. It centralizes operational data, feeds it into context and cross-checks it in precise analyses. The software also makes it possible to define indicators, ratios, alert thresholds, as many decision-making tools to gain visibility and make informed decisions, quickly if necessary.
- Finally, ERP is a tool for profitability. This point is strategic for a scale-up, because it is no longer content to think in terms of products, but of profitability. However, ERP generates many savings on the one hand, and creates value on the other. Indeed, it optimizes operational performance, management and bypasses many costs induced by the hazards, errors and approximations to which a company without ERP is exposed.
The advantage of cloud ERP
Today, ERP is widely available as a service mode in
the Cloud – SaaS. The ERP Cloud version is well suited for young companies fond
of Cloud. It eliminates the technical complexities of a solution maintained
on-premise and represents a monthly opex charge that is easier to carry. In
addition, the ERP SaaS makes it easy to compose the required functional package
and to make it evolve according to the needs of the company. For a scale-up, it
is a particularly well-suited solution for acquiring a structuring system,
without heaviness, and immediately operational.
Last argument in favor of ERP to establish a scale-up,
and not the least: ERP helps to prove to investors the stability of the company
and its ability to manage its rapid growth.