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.

Discussing ERP's intervention in small and Medium Enterprises

Source:erpwire.com

ERP for small business calls for voluminous investments. The amount was fairly affordable to small business entities. There is no doubt or two say about its benefits.

But the question that kept ringing in the market was can everyone afford it. The answer was a stubborn no initially but not anymore. ERP outsourcing, Open Source ERP's and ERP applications designed for S.M.E.'s (Small and medium Enterprises) have successfully overcome the above said limitations.

Some relevant issues concerning ERP for S.M.E.'s are the following:

Evolution of ERP in S.M.E.'S

Enterprise Resource planning was a term restricted purely to elite class. This scene was witnessed in the IT market for some long time ever since ERP was introduced. The large organizations went ahead with ERP process unmindful of negative consequences, not to forget mentioning the fact that they took every proactive measure to curb the same. Needles to say firms were interested in serving such large players. So the fate of Small and Medium enterprises remained unanswered. ERP for S.M.E's remained a mere dream.

ERP Vendors and Corporate giants

It so happened that the number of larger companies without ERP turned out to be nil. Thanks to the awareness created by vendors and IT researchers. No doubt companies were initially hesitant lot and apprehensive on just hearing the word ERP. However the industry proved them otherwise. Then came a stage where a company could not exist but without ERP. Even if their performance was satisfactory they were not able to gain any competitive advantages.

This explanation of how goliaths adapted to ERP has lot of significance in studying their intervention with S.M.E. These bigger companies were not providing the required business to ERP vendors. Even though there are many big companies the number of vendors was always greater in multiples. This means only the best could strike deals and there was no possibility for mediocre or average vendors (in terms of performance).The best players also found that they had none to serve after a point of time because almost every company in the market successfully established ERP (whether on the first or further attempts).

Stabilization of ERP in S.M.E.S

SO they had to naturally look for greener and fresher pastures. S.M.E.'S was the only answer. The next question was how to provide best services at an affordable cost and still make profit. In this case the vendors had to be worried only about the number of sales they could make and not the quantum of profits because the number of vendors was few and far between when compared with the number of S.M.E.'S choosing to go for ERP. As the saying goes "necessity is the mother of Invention" vendors had to devise cost effective applications to meet the demands of the Small and Medium enterprises. This was the origin of ERP for S.M.E.'S. This benefited them in terms of business .On the other hand the firms enjoyed greater benefits by making use of this application. Hence ERP and S.M.E. was weighed on the same scale.

Conclusion

S.M.E.'s are becoming the popular choice of ERP vendors. There is an increasing awareness of ERP in S.M.E. market. It has practically helped to unravel the myth that ERP is exclusively meant to business empires. ERP and S.M.E have become important part of enterprise studies.

Openbravo India - Qualian technologies

Qualian technologies - Openbravo partner.

Introduction About Qualian Technologies Pvt. Ltd.

•Headquartered in Chennai, India
• Involved in Outsourced Development Activities for US customers
• Involved in Enterprise solutions implementation for Small and Medium Enterprises in India
• Early Partner and Active Practitioner of Openbravo in India
• Developing Industry specific ERP solution based on Openbravo for the Textile Industries in India • Developing additional modules like HRM & Payroll for Openbravo to fulfill the current and future customer requirements



http://www.slideshare.net/Openbravo/09-qualian

The Technology Awards recognized outstanding projects lead by companies or organizations build on top of Openbravo technology.
http://worldconference.openbravo.com/2009/agenda.php#awards

Nominated - Openbravo Best implementation of year 2008 :

Qualian Technologies. Implementation of Openbravo ERP in Vaishnovi Infrastructure Private Limited, India. Implemented for the customer with one production facility and 23 branch locations spread across India, with more than 100 users in a company has more than 1000 employees. Customer deals with international suppliers & local suppliers. Handled special financial instruments like LCs (Letter of Credit). Developed a custom CRM application to handle the sales visits of Sales person and capture the details about in and around of a customer.

Openbravo Customer Stories: How the Community is Benefiting


Openbravo World conference

Senthil in Openbravo world conference.

http://worldconference.openbravo.com/2009/agenda.php#obsshtcib

Qualian Technologies (case Vaishnovi Infrastructure): Senthil Palanisamy
This session provides a case study that manifests how Openbravo ERP was customized and modules added, to ensure the right fit for a the customer´s needs. The partner helped Vaishnovi Infrastructure, based in India, to overcome the challenge of gaining control over a complexity of operations, from managing critical resources, to providing a timely service to the customer.

http://s3browse.com/getObject/obwc.files/Qualian.pdf

Openbravo India - Qualian

Qualian Technologies (case Vaishnovi Infrastructure): Senthil Palanisamy
This session provides a case study that manifests how Openbravo ERP was customized and modules added, to ensure the right fit for a the customer´s needs. The partner h elped Vaishnovi Infrastructure, based in India, to overcome the challenge of gaining control over a complexity of operations, from managing critical resources, to providing a timely service to the customer.
Link: http://worldconference.openbravo.com/2009/agenda.php#obsshtcib

Openbravo India

Qualian Technologies (case Vaishnovi Infrastructure) - Senthil Palanisamy - Presentation Transcript

http://www.slideshare.net/Openbravo/09-qualian

1. Openbravo World Conference Openbravo Customer Stories: Vaishnovi Infrastructure Barcelona, April 18, 2009 Speaker: Senthil Palanisamy, Qualian Technologies
2. Agenda Introduction • About Vaishnovi Infrastructure Engineers (Customer) • About Qualian Technologies (Implementer & Openbravo Partner) Challenges Solution Result Further Developments Page 2
3. Introduction About Vaishnovi Infrastructure Engineers • Headquartered in Chennai, India • Engaged in Refurbishing used construction Equipments – Like Excavators, Cranes, Bulldozers, etc. • Stock, Sell, Service construction Equipments • Involved in International and Domestic Trade • Having 23 branches all over India and one Refurnishing unit • Employs more than 1000 • Turnover is above 1 billion Indian Rupees. • No.1 in this industry • Previously they were using a locally developed System for Accounting and Inventory Page 3
4. Introduction About Qualian Technologies Pvt. Ltd. • Headquartered in Chennai, India • Involved in Outsourced Development Activities for US customers • Involved in Enterprise solutions implementation for Small and Medium Enterprises in India • Early Partner and Active Practitioner of Openbravo in India • Developing Industry specific ERP solution based on Openbravo for the Textile Industries in India • Developing additional modules like HRM & Payroll for Openbravo to fulfill the current and future customer requirements Page 4
5. Agenda Introduction Challenges • Shortcomings of Existing System • Need for Additional features to effectively utilize the resources of the company. Solution Result Further Developments Page 5
6. Challenges Shortcomings of Existing System • Independent Systems for Inventory and Accounting • Client Server Application – Managing about 100 desktop installation was a nightmare • Existing system did not provide Outstanding based on invoices. It gave outstanding based on business partner alone. • No provision for COGS Page 6
7. Challenges Need for Additional Features • Centralized stock management which will help Vaishnovi to effectively utilize the spares which are residing in different branches. • Every customer needs to be assigned to a Sales Person, who will be responsible for the collection of pending payments. • Cost of Goods Sold calculation for Spares and Machines. • Organization wise Profit & Loss statement • BOM • Sales Commissions • Advanced Tax Setup based on Organizations and region • Support for hierarchical Organizational Structure • CRM Needs Page 7
8. Agenda Introduction Challenges Solution – Openbravo ERP • Why Openbravo ERP? • Customizations & Additional Developments Result Further Developments Page 8
9. Solution – Openbravo ERP Why Openbravo? • Web based architecture of Openbravo eliminates the deployment of desktop based client applications and its management • Integrated modules of Openbravo which doesn’t require duplicate data entry. • Sophisticated Finance and Accounting module in which we can get Organization wise P&L Statements • BOM • Sales Commissions available in Openbravo • Tax Setup Features • Tree Structure for Organization Definitions Page 9
10. Solution – Openbravo ERP Customization & Additional Developments • Sales Commissions have been customized to have additional commissions for Regional Sales Managers and Heads based on the sales of that Region • Product Substitute implementation • COGS has been enhanced to calculate Product wise (for Spares) and Product Instance wise (for Machines) costs. • Additional level of Access Control has been implemented to Cater Vaishnovi’s needs • New feature has been developed to make the payments based on the invoices and to retain the invoice wise outstanding. • Basic Customer Relationship Management module has been developed to track the sales activities of the Organization • Specific feature has been developed to handle the LCs (Letter of Credits) Page 10
11. Agenda Introduction Challenges Solution – Openbravo ERP Result Further Developments Page 11
12. Result • Users are happy to use the application from anywhere. • COGS helps the management to price the products appropriately • Invoice wise outstanding & Sales Person’s accountability association has improved Vaishnovi’s Cash collection by 20%. • Basic CRM developed for Vaishnovi helps them to reach the appropriate customer and their spares sales have been increased by 10% in last three months. Page 12
13. Agenda Introduction Challenges Solution – Openbravo ERP Result Further Developments Page 13
14. Ongoing Developments • HRM - To be implemented in Vaishnovi • Payroll – To be implemented in Vaishnovi • Texbravo – Industry Specific ERP Solution – An Industry Specific ERP Solution for Textile Vertical – Being developed and implemented in association with two Major Textile Industries in Southern Part of India – Features Custom Workflow Implementation to cater the needs of Textile Processing industries. Page 14
15. Thank You Page 15