ERP requires huge investments and many small business organizations do not possess the needed resources which can be attributed to implementation of ERP. Earlier small companies bought software of many vendors and integrated the modules of different vendors, but such solution had many problems. There are many modules such as CRM, HRM, Inventory, SCM, Purchase, Distribution etc in an ERP and all the modules are integrated to provide specific solution. Small and mid sized companies does not require software for automating all its system, instead software is considered as an alternative way of doing the manual process.
Analyzing the needs of small business enterprise -
Generally a small sized company may have only one production or retail unit. The number of users accessing the software may not be more than two to three and the company may be located at only one place. Many small industries do not require integration to high tech applications and therefore, the requirements of an organization should be analyzed before starting the implementation process.
Purpose of ERP in Small business enterprise -
The ERP should be aimed to improve the business condition of small companies, and to improve focus on market condition using the software.
Many leading software companies have entered the small and midsized market to provide specific solution to the companies.
The main criteria for ERP implementation in small organization are -
Low cost of implementation: Small industries need specific solution and it may not require multiple features of ERP such as multi location or connection to mobile service etc. Most of the small industries are working in specific fields and these companies search for software which can increase the production cycles or help in increasing the customers for a product. Small industries require easy to use low cost automation of certain work processes.
With increased competition in ERPs, vendors are providing many options to meet the requirements of the different types of clients but still there are many small companies that do not get the required level of automation in their budget.
Open technologies: Small companies prefer to use open technologies and may need software which can be integrated to previous systems used by the organization. It can happen that small industry spends on ERP in various stages and different software supplications are selected for each stage of implementation.
Industry specific solution: Small businesses may not require complete automation of all processes but the companies may need industry specific solution which can speed up certain critical procedures and enable the organization to control the activities easily.
Easy implementation: SMEs will never spend on long implementation procedures and therefore the software should be designed in a way to support easy and fast implementation. The cost of implementation and maintenance should not be high because small businesses do not have additional resources and funds to spend on systems.
Software to fulfill the structuring need of the organization: Small organizations require basic functionalities of software such as speeding up procedures, easy maintenance of applications and accuracy in transactions. The limited requirement of the organization can be met by the software which has been designed considering the needs of specific industries.