Many of the global fortune 500 companies have implemented ERP to organize work and improve productivity. System requires huge expense and resources, and multi-million dollar companies are ready to spend money and time on ERP implementation and take the risk, whereas, small companies in growing phase may not have excess resources which can be diverted to ERP implementation - the process which may interrupt the normal business procedure of the organization and prevent employee from performing normally for more than four to five months of implementation.
A simple ERP implementation process includes determining if there are resources available to afford the new system, determining the needs, data analysis, data integration and removal of duplicate entries. The last step is to select the appropriate vendors and get the best bargain.
Features of ERP which attracts small-businesses
1. It improves efficiency and provides an integrated solution. It helps in regulating production procedure and enables growth.
2. Small and mid-sized companies following the traditional method of data keeping may not have all the data at one place and the data need to be transferred from one place to other manually. This increases the chance of errors and expense on data keeping at various places which can be reduced in an integrated automated system.
3. Many ERP vendors are providing specialized services at appropriate cost to small business which has eased the processes and even reduced risks.
4. Many leading ERP providers have entered the small business market which has increased competition and also enabled industries to get functional solution.
5. The latest technologies such as Dot NET and web enabled features have allowed the system to be integrated easily to every kind of application and improve communication and speed up transactions.
Risks of ERP for small business
For both small and large organization the procedure has certain risks and it requires great commitment from the organization.
1. The selection of ERP vendor is a vital procedure and companies should determine the vendor after carefully analyzing the risks and drawback of the process.
2. The cost of integrating the system can be heavy and it can be long term and complex procedure.
3. The structure of project should be chalked out before starting. Planning is vital stage and the benefits of new system should be compared with the original system.
4. The businesses should analyze the future needs to select the vendor.
5. ERP provides highly accurate data and manipulations may not be possible, therefore, the procedures which are highly complex or requires manipulation may not get integrated.
Benefits of ERP for small business
1. It removes the need of porting data and reduces expense on human resource.
2. It automates business procedures and reduces errors.
3. It helps in increasing productivity and clarity across the departments of the organization.
4. The real time data provided by the system can be very beneficial for marketing, management and accounting, and enable the organization to take accurate decisions.
5. It enables business owners to take vital decisions on time and reduce wastage.