ERP implementation in Indian SME’s

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Why is ERP implementationit necessary to have ERP for small business India

India has a wide market for SMEs and hence there is always a need to stay ahead in the competition. Compressed product development cycles, cut throat domestic and global competition, economic downturns, rapidly changing customer demands and volatile financial markets have all increased the pressure on SMEs to come up with effective and competitive capabilities to survive and succeed. ERP implementation is often considered as one of the solutions for their survival.So what it means to have ERP for small business India

ERP implementationWhat ERP bring in to the table?

Before answering the question why? We have to know what? i.e. what is ERP? ERP system is an IT solution that helps organizations to achieve enterprise wide integration which results in faster access to accurate information required for decision making. ERP has its roots in manufacturing as the name is an extension of Manufacturing Resource Planning. Today, an ERP system is considered as the price of entry for running a business and for being connected to other businesses.


Why does any company need ERP?ERP for small business India

ERP combines all the business functions together into one single integrated system with a single central database .This system serves the information needs of all the departments across geographies, while allowing them to communicate with each other. A typical ERP system consists of modules for manufacturing, Production Planning, Quality Management, Financial Management, Human Resource, Manufacturing and Logistics and Sales and Distribution. Once an enterprise wide implementation is in place, operating managers are relieved of routine decisions and they thus have the time to plan and execute long-term decisions that are vital for the growth of an organization. It leads to significant cost savings as the health of the organization is continuously being monitored. Though the cost of an ERP system is very high, it becomes insignificant in the face of the benefits a proper ERP implementation provides in the long run.

Implementation of ERP in SMEs ERP for small business India

While many new SMEs start each year, nearly 50% cease to exist in the first 3 years of business itself. Though it is assumed that all SMEs desire growth, only 40% survive beyond 10 years. Majority of the firms do not think of long-term business strategy but focus only on survival. They think of change only when the business begins to fail as a result of not keeping track of the changing market scenario. The firms who survive and grow are the ones who have the ability to take risks and respond to the changing circumstances. ERP can bring a lot of changes in any business, hence successful implementation of ERP is necessary or all would be lost effort and nothing more. The implementation involves business process change and software configuration to align the software and the business processes .There are two approaches towards implementation of ERP. First approach is to re-engineer the business process to fit the functionality of the ERP system. The second approach is where the ERP system is customized to fit the business processes of the organization.

Pros and Cons of various ERP implementation approaches

There are pros and cons among both the approaches:-
i.)  For implementation of ERP according to first approach will have a huge cost on the company and will bring some major changes in the industry but this approach will take advantage of future upgrades, and allow organizations to benefit from best business processes.

ii.) Implementation of ERP according to second approach is easy on the company as they don’t have to make huge changes in the industry but this will slow down the implementation and can introduce new bugs into the system and make upgrades difficult and costly. Over customization of ERP solution can lead to system failure hence ERP vendors’ advice organizations to take the first approach and focus on process changes.

So now you know why is it necessary to have ERP for small business India

Read more about Benefits of ERP

Optimize your business with the Best ERP for manufacturing SMEs l Spectrum ERP. 


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