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Sunday, July 21, 2019

Top 5 ERP News and articles: Week 2019-28: ERP for SMBs

Checkout my book 'Selected Articles on ERP' on Amazon.com 

The Short URL for this post is http://bit.ly/ERP_SMBs

Introduction

The theme for this week is ERP for SMBs (Small and Medium Businesses) also referred to as SMEs (Enterprises). Due to their small size, these Organizations face their own challenges when it comes to procuring and implementing ERP. The first article talks about three challenges - customization, users and investment in infrastructure - that SMBs face. Second article, from this blog, talks about typical risks faced by SMBs. This list is based on the personal knowledge that author had about ERP implementation in an SMB. The list includes lack of process knowledge, consultant attrition and lack of knowledge about local taxation (important especially in India).

The third article is a list of four ERPs tailored for SMBs. The fourth article from Microsoft blog is about the ways in which ERP can help SMBs. A good ERP can provide insights, is scalable and can grow with the Organization. The last article in this post discusses the reasons why SMBs go for ERP. The innovative reasons include ERP acts as a Change Management Catalyst, ERP allows for a clean break for the subsidiary companies in case of a spinoff and that it acts as a source for competitive advantage.

Considering that SMBs are a very attractive target market for ERP vendors, this article is timely. Read and see for yourself.

Top Five Articles 

1. The top challenges for ERP implementation in SMBs:  Elizabeth Quirk for Solutionreview.com
https://solutionsreview.com/enterprise-resource-planning/the-top-challenges-for-erp-implementation/

The article mentions three ERP related challenges for SMBs. These are:
  1. Customization: Other than a generic statements about the non-desirability of this, the article is not clear of how it is a challenge for SMBs. I guess that considering the lower budget that SMBs may have, the cost to develop and maintain a customization may be a challenge.
  2. Users: It is more challenging for an SMB to handle user resistance to ERP. Author says that users must be sensitized to effective ERP adoption processes. The author also mentions 'selecting wrong ERP system' under this heading. Not sure how it is related to SMB or to this section on 'Users'.
  3. Investment in internal hardware: An ERP system expects significant additional investment in terms of infrastructure. This may be a challenge for SMBs. The arrival of ERP on Cloud mitigates this challenge. 
Unlike the past, ERP adoption is no longer challenging to SMBs. Many application vendors are creating solutions targeting this specific business segments.

2. ERP Journey - Ten risks faced by SMEs: ERP Consultancy Blog
http://erp-consultancy.blogspot.com/2011/09/erp-journey-risks-faced-by-sme.html

This article is from my blog. In this I identify 10 risks related to ERP that are specific to SMBs. These are related to:
  1. Process knowledge
  2. Knowledge of your pain points
  3. Product
  4. Product version
  5. Consultant's competence
  6. Internal Competence
  7. Knowledge of Local Taxation Rules
  8. Period Closing
  9. Continuous support / maintenance
  10. Lack of knowledge about support availability
In my opinion, larger companies may have the resources required to tide over these risks, which SMBs may not have.

3. Four top ERP systems for small businesses: Rick Carlton for ERPFocus.com
https://www.erpfocus.com/top-erp-systems-for-small-business.html

This article discusses the strengths and weaknesses of four ERP applications suitable for SMBs. These are:
  1. CGS: Blue Cherry: This product is suitable for mid-sized apparel manufacturers. 
  2. xTuple: Open source ERP for tailored for small businesses. Available on both On-premise and Cloud
  3. Netsuite: Product from Oracle. Delivered as SAAS (Cloud) offering. 
  4. BizAutomation CloudERP: For small businesses. Available as SAAS offering.
4. What the heck is ERP for SMB? Jennifer Dorsey for Microsoft Cloudblogs
https://cloudblogs.microsoft.com/dynamics365/bdm/2015/09/09/what-the-heck-is-erp-for-smb-it-s-what-helps-you-achieve-more/

This article is from Microsoft Blog and discusses the features of the ERP application from the Microsoft Dynamics stable. This is a comprehensive, yet easy to use Business Management Solution that helps companies that are outgrowing their accounting software. By integrating your Calendar, Email, Data and Documents, the solution is comprehensive.

Some of the benefits are:
  1. Streamline the business process by taking care of mundane tasks and delivering numbers and reports on the fly.
  2. Improve productivity through the mobility solutions
  3. Transform data into insights
  4. Scalability
  5. Save time, money and worry.
The points mentioned are generic. The general message is that an SMB can continue to grow with the ERP application.


5. Why SMBs purchase ERP System?  David C Smith for Softengine.com
https://www.softengine.com/blog/why-small-to-medium-sized-smb-companies-purchase-an-erp-system

The ERP adoption in SMB space has been low due to the following factors:
  1. Worry about change management
  2. Systems cost
  3. Implementation time
  4. Customization costs
  5. Perception that ERP is for large companies
  6. Cost of on-site support
More and more SMBs are adopting ERP. The reasons are:
  1. ERP provides a competitive advantage
  2. To manage business growth and scalability
  3. Costs of maintaining legacy systems: Some legacy system have been 'sun setted'. Many older systems have security issues. Legacy systems may lack flexibility, companies may not find support resources etc are some other reasons
  4. Process visibility. ERP provides single source of data entry improving inter-departmental visibility as well as data integrity. This also improves decision making.
  5. Change management: An ERP implementation can be the primary event that catalyzes Change Management processes in the Organization. ERP implementation allows Business Process Reengineering which initiates change management.
  6. Spinoffs: ERP systems can enable a 'Clean Break' for small subsidiary companies that are spun off from the parent companies. 
Nice and comprehensive article.

Additional Readings

1.Why manufacturing SMBs turn to Cloud ERP: Techtarget.com
https://searcherp.techtarget.com/feature/Cloud-ERP-platform-becoming-likely-choice-for-manufacturing-SMBs

2. Meeting evolving business needs with Modular ERP: Copley Consulting Group Blog
https://copleycg.com/erp-for-smb-part-2-meeting-evolving-business-needs-with-modular-erp/

3. SAP: Cloud ERP at the core of its SMB Market Strategy: Frank Niemann for sitsi.com
https://www.sitsi.com/sap-cloud-erp-core-its-smb-market-strategy


The Year at a Glance

The articles that we have so far covered in this series in Year 2019 are:

26. Week 2019-28: ERP for SMBs
27. Week 2019-29: Assorted articles on ERP

Disclaimer:

The articles in this blog post are those that I found interesting and relevant to the topic of ERP and technology in general. I have no commercial association with any of the entities mentioned in this article. I may be following a few of these entities on LinkedIn and even some of these entities may be on my LinkedIn or Social Media network. These articles are selected purely based on their relevance to the objective of this blog, to promote ERP. Finally, the summary is mine. While I stay close to the points in the articles, I also elaborate a few of them based on my understanding.

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