ERP integration can help SMEs expand business reach

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Bikky Khosla | 14 Dec, 2010
While Indian SMEs usually overlook the benefits of ERP citing ERP software being beyond their budgets as the reason, it is beyond doubt that ERP implementation can improve a company's performance manifold. My feeling is that despite the fact that penetration of IT in SMEs is much below its potential, they are now slowly waking up to the importance of adoption of IT tools in their operations and are realising the necessity of setting up intra- and inter-office networks.

Considering the current market realities, SMEs today need to understand that with ERP software they can not only systematically arrange and assimilate all systems of entering data and processes, but also understand and adapt to retailers' business requirements and thus respond faster and frequently to product orders from retailers.

Adapting to changes in the multilateral trading system, and for the management to know what is happening in the organization is of utmost importance and ERP implementation can help businesses achieve cost control and low working capital as also integrate latest technologies to remain competitive for survival.

I strongly feel that by proper ERP integration, businesses can expect far-reaching results like reduced working capital requirements and improved customer service. They can also reduce purchase costs considerably and bring in more clarity and accountability throughout the organization.

Having said that, several SMEs and even big businesses were unable to reap the benefits of ERP implementation. When I tried to comprehend the reasons for the failure of these companies, I found that lack of visible top management support or commitment and poor ERP package selection were the key reasons for their failure.

But all said and done, it goes without saying that implementation of ERP in businesses will not only act as a complete business software solution, but will also help companies to expand their reach of business quickly.