Monday, July 20, 2009

How can ERP function more effectively in S.M.E.?

Source:erpwire.com

The troubles faced by S.M.E.'s with regards to ERP is quiet understandable. However they can be rectified. Even if they are not taken out totally there is always a
scope for making things better and making ERP's more user friendly for Small and Medium Enterprises. The vendor's primary concern should be solving ERP problems in S.M.E.'s. This is emphasized because ERP problems in Small and medium enterprises are many.

Some of the suggestions that can be implemented in S.M.E's are as follows

Structuring need based software programs
The main problem faced by S.M.E.'S when it comes to ERP is that their requirement is limited while the product offered exceeds their specifications in all ways (including the costs).The gap between these two needs to be analyzed by the companies and S.M.E.'s. It is not possible for the vendor to bring down their standards for the sake of the company neither is it feasible for the later to upgrade for the sake of the former (just for the sake of compliance and matching the company's model and that too without any direct monetary benefit ).

A balance should be stricken between the two. The company and the vendor should sit together and analyze the pros and cons of every possibility to match their requirements. Both of them should make compromises as and where possible. These adjustments even though may seem to be smaller will have greater impact when it comes to the structuring of software programs.
Rectifying inherent defects in software programs
Software is not given due importance in many of the small and medium enterprises. Software is looked upon as just another operational tool. This will not have major impact at the immediate outset when it comes to other operations (though the loss will be known at a later point of time). However the case will not be the same with ERP.

The vendors experience great difficulty when it comes to installing ERP in such companies. They find themselves petrified to handle the resultant consequences because the companies might blame the vendor for the failure without realizing that it is due to their own inability/carelessness in maintaining software programs. That is why he must exercise care in solving ERP problems in S.M.E.'s.

The vendor needs to carefully review the software competencies in the company.This study will help him to asses what the company requires more in terms of software .To start with the vendors must initially speak to the in-house IT personnel. They should convey their observations very clearly. This will help them in disseminating the information all over the company and speaking to the decision making body. The senior management may have greater chances of accepting the vendors suggestion when it is supported by IN house IT personnel but with a good faith and in the interests of the company. The vendor should take all possible steps to remove the software deficiencies in the company before thinking of running the ERP application.
Giving Due Attention to ERP
The vendors have an advantage when it comes to working with bigger players. They realize the seriousness of ERP projects not only in terms of the money invested but also in the context of the restructuring and the supposedly redefined functions. This feature is absent in Small and Medium Enterprises.

They refuse to show importance as business process reengineering and change management looks like absurd to them. They underestimate the jargon and think it is too much keeping the size of their firm in mind. The ERP vendor needs to make them realize the importance in order to be successful in the project (for both of them).
Conclusion
Unless the ERP vendor and the company sits together to resolve the conflicts it is not going to be beneficial to either of them. The onus of initiating lies with the vendor when it comes to ERP problems in small and medium enterprises. Since he has the required expertise he needs to take the lead in convincing the company and be sure of Solving ERP problems in S.M.E.'s.