“Rudimentary, unscalable, and unsustainable” is how many cannabis owners and operators perceive their existing business management software. In a recent article by Pricewaterhouse Cooper on the impact of technology in the cannabis industry, the companies that have already prioritized business management software have been able to adapt to change and easily scale with demand quickly.
In the U.S. alone, cannabis is now legal for medicinal purposes in 36 states and entirely legal for recreational use in 15 states. Consequently, new markets have emerged, new competitors have arrived, and new local and state regulations have surfaced. This multi-billion-dollar industry has rapidly grown overnight, and unfortunately, many cannabis businesses have not been quick enough to embrace new technology that can help alleviate some of these pressures.
Like most small to midsized businesses (SMBs), cannabis business owners often start with an entry-level accounting solution, like QuickBooks. They eventually accumulate a handful of other business applications to handle sales, inventory, payroll, and other critical areas of the business. This works for a little while—until you’re met with bigger competition, increased consumer demand, and an ever-evolving regulatory environment. That’s when you discover how difficult it is to quickly access data, close out the month, create accurate reports, evaluate performance, and make informed decisions.
If you are currently juggling multiple systems and islands of data and have started noticing issues across your organization that are impacting data integrity, employee productivity, customer satisfaction, and compliance, your current infrastructure may not be able to support your cannabis business moving forward. But the good news is that the extra weight that these many standalone systems cause is not something you have to live with. In fact, the technology that will help you streamline your processes and efficiently manage the growth of your supply chain operations has been around for years.
What is ERP Software?
Enterprise resource planning (ERP) is business process management software that integrates the core areas of your business into one platform. By bringing together your sales, financials, inventory, and supply chain into one central database, your team has instant access to data and complete performance visibility using a single source of truth.
ERP software is ultimately designed to improve business process efficiency through automation. By automating key areas of your business, you are able to reduce manual processes and save big on time-consuming tasks, like data consolidation and administration.
In the past, ERP technology has been used to manage multiple locations and complex processes of large enterprises. Traditionally, ERP has only been available on premises—which means the software is installed locally and requires a significant investment of hardware and IT staff. Today, things have changed in favor of SMBs around the world.
ERP systems are now flexible enough to fit any size operation and industry. The cloud has made this possible, offering lower upfront costs, accessibility, security, and scalability for the same functionality as on-premise systems. With the flexibility of scaling up or down as your business needs change, you can invest in as little or as much as your operations will allow. Learn more about scaling your business in the cloud here.
How ERP for Cannabis Works
Cannabis ERP software is an all-in-one solution that brings together the core seed-to-sale functionality you use every day with essential back-office features. Back office refers to the operational side of your business, like accounting, order management, production, and distribution.
Cannabis ERP provides an end-to-end platform to efficiently run an entire cannabis operation, from managing sales to calculating financials to tracking inventory. These solutions are composed of several modules from planting to final sale that address specific business requirements. Depending on your needs and budget, you can choose to implement ERP on premises or hosted in the cloud.
Cloud ERP software provides some significant advantages for growing cannabis businesses, and as a result, it’s pushing more and more cannabis owners and operators to consider cannabis ERP. Here are some other reasons driving ERP adoption in the industry today:
- Pressure to keep up with heavy competition
- Rapidly changing rules and regulations
- Errors and mistakes appearing in reports and month-end close
- Bottlenecks and process efficiencies
- Stressed or unproductive employees
- Complex regulatory hurdles
- Out-of-date or incompatible software and business applications
If you’re interested in learning more about how technology has evolved in the cannabis industry, read the Cannabis Technology Handbook below. It includes some specific technology requirements for cannabis organizations and expert recommendations to help you boost productivity and efficiency.
Results You Can Expect to See from Cannabis ERP
Although there are many ERP systems out there to choose from, you should start looking at software tailored for the cannabis industry. These solutions are built to handle plant production, traceability, compliance, and overall management of your day-to-day operations. ERP software specifically built for the cannabis industry will more likely produce results like these:
1. Automated Routine Tasks and Workflows
Eliminate manual processes and bottlenecks by simplifying and streamlining key tasks like month-end close, sales orders, and inventory management.
2. Reduced Operating Costs and Waste
Tied to a central database, ERP software is designed for operational efficiency and productivity. With more automation, fewer mistakes, faster production, and improved collaboration, businesses use their resources better and experience huge cost savings.
3. Increased Data Security and Control
Cloud ERP solutions have the highest level of multi-layered security and compliance you can find. That’s because cloud service providers like AWS and Microsoft Azure have invested in the best infrastructure and cybersecurity experts to safeguard your data. Learn more about how secure the cloud is here.
4. Enhanced Employee Productivity and Customer Satisfaction
Equipped with the modern tools and instant data accessibility they need to do their jobs, employees will be more efficient and happier, which is a win-win for every customer.
5. Smarter Decision Making
With end-to-end operational visibility, you have an accurate picture of what’s happening in your cannabis business. Combined with precise reporting and business intelligence, you can quickly analyze performance and make improvements on the fly.
6. Optimized Supply Chain and Quality Control
With traceability, cultivation, processing, and manufacturing functionality included in your ERP system, you can easily track all plants and products, streamline production processes, forecast crop yield, and continuously measure performance and quality.
7. Reduced Regulatory and Compliance Risk
The legal conditions for cannabis cultivation may be unpredictable, but an ERP system gives you accurate data and a platform to effectively manage your licenses, permits, inventory, financial statements, and documentation in one place.
8. Sustainable and Profitable Growth
With better control of your supply chain, improved financial accuracy, and deeper insight into performance, ERP software gives businesses the data they need to react quickly to changes and make profitable decisions.
Get Expert Advice on Choosing the Right Cannabis Software
When you have been operating your business in a certain way, it can be difficult to see the value in change. But the cannabis industry is all about change, and in order to stay flexible, your technology needs to be able to keep up.
The only way to survive the shifting regulations, rising demand, and uncertain future is with an agile ERP system that supports your processes and fits your goals, requirements, and budget. If you’re worried about making the investment and not seeing a return, it’s time to start your research. As you learn more about the software itself, you should also make time to evaluate your business goals and system requirements. Doing your due diligence will help you choose the right ERP system from the very beginning and set you up for success in the long term. From cost savings and quality control to happier employees and customers, the results you are chasing can only be achieved with technology that fits and grows with your operations.
To help you find a cannabis ERP solution that best meets your needs, read Tigunia’s Cannabis ERP Software Buying Guide. This guide includes all of the information you should know about cannabis ERP software, including essential functionality to consider and tips on how to select the right software and partner.