April 12, 2015

ERP system is a preserve for the established enterprises

An ERP system enables businesses to harness different departmental information systems and databases with programs that harmoniously work together and utilize a single database. ERP application is available for key business functions such as order processing, production control and finance. By using a common technology platform and database throughout the company, businesses can integrate departmental activities and achieve a range of cost, operational and productivity benefits. Implementing an ERP system requires careful planning to achieve the target benefits and minimize the risk of project failure.

However, the requirements for the ERP are not favorable for most SME’s for the following reasons:

• Expensive. The common and available ERP systems are expensive for most of the SME’s
• The Design of the ERP systems are complex. Most SME’s process are simple and may not need complex application
ERP system delivers more than what users need, normally this results from the lack of user participation and effective communication between the developers and users hence hard to align with their current business processes.
ERP requires more than one skilled personnel for the management and implementation of the ERP system, this is an additional overhead for the SME’s
ERP systems envisages to provide solutions to a complex process which is only available for the large and established companies.
• Functions are dependent – Processes are required to be initiated to see through the workflow, many SME’s have limited processes to warrant the need for the ERP
• It’s a common assumption that the organization focuses on technological change aspects rather than considering social ones for the deployment and implementation of ERP

However, Although the core SAP solution is especially built for a large enterprise, the majority of SAP’s customer base is composed of more than 77% of small businesses. That is why SAP started to develop their solution suitable for those small and midsized businesses, which are SAP Business one and SAP ByDesign.

• Al-Mashari, M., Ghani, S.K. and Rashid, W., 2006, A Study of the Critical Success Factors of ERP Implementation in Developing, Countries. International Journal of Internet and Enterprise Management
• Huang, Z. and Palvia, P., 2001, ERP Implementation Issues in Advanced and Developing Countries, Business Process Management Journal,

By: Waqo Shuke Galma
ID Number: 1461443

- One comment Not publicly viewable

  1. To add that , appropriate training is very essential during and after the ERP implementation. The staff should be comfortable in using the application or else, it will backfire, with redundant work and functional inefficiencies.
    Also, lack of support from senior Management will lead to unnecessary frustrations in work place. It will cause delay in operations and ineffective decisions. So, it is essential to ensure that the senior Management supports the transformation.

    17 Apr 2015, 06:49

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