SMEs most aggressive adopters of ERP

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Sudheer Nair | 08 May, 2013
Over the last decade or so, information technology has taken some giant steps and this exponential growth has changed the way we live and interact with the world. No wonder information technology has enabled many small and medium businesses to carve a niche for themselves. Indeed, IT has triggered the growth of many SMEs and SMBs. And now, Indian SMEs are coming forward and adopting ERP solution like never before to improve their output. When it comes to implementing the latest technology for their business needs, a lot of Indian SMEs are on par with their western counterparts.

Slowly but surely, Indian SMEs are willing to invest in Information Technology to improve their output and efficiency. Over the last couple of years, Indian SMEs have been adopting Enterprise Resource Planning (ERP), clubbing it with Customer Relationship Management (CRM) and sometimes even with Supply Chain Management (SCM). These small and medium enterprises have realised that to maximise the potential of available information technology, ERP solution must be implemented in tandem.

The way ERP system was used by organizations is now changing rapidly. Initially, an ERP solution was mostly preferred by manufacturing industry and that too for the Finance and Accounting, Sales and Distribution and Materials Management/Purchase process. Lately, they have included Plant Maintenance, HR, Transportation and Service modules for easy operational process.

Today every industry is looking for an ERP solution to run their business smoothly. Like the manufacturing industry, process industry also has benefited handsomely from implementation of eresource ERP system. Fleet Management, Construction, Chemical, Automotive and Trading Industries all are finding eresource ERP system as an effective business solution to overcome the market challenges.

Apart from the above industries other industrial sectors like cement sector, power sector, and food sector are going for eresource ERP solution. Many construction and project companies have also implemented eresource ERP solution for an effective business process.

The SME segment in India has been one of the most aggressive adopters of eresource ERP software. In fact almost 60 per cent companies in our client list are from the SME segment. This increase in the penetration level in the SME segment is attributed to the introduction of low cost eresource ERP solution.

The implementation of eresource ERP helped the SMEs to get aid in smooth inventory management, timely scheduling of production cycles and shipment of goods, managing human resources and online data communication.

The emerging trend in the ERP market shows a steady increase in the implementation of ERP system in every industrial sector. As a result, these industrial sectors have witnessed tangible quantitative benefits in the post-ERP implementation period.

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. Despite the fact that usage of IT in SMEs is much below its potential, they are now slowly waking up to the importance of adoption of ERP 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.

Through 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.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.

The companies who implemented the ERP system must realize that most of the time all the benefits are difficult to prove on statistical grounds as soft benefits like comfort in work life, maturity in planning, attitude changes, transparency, visibility etc are either practically impossible to measure or correlate such improvements to ERP implementation. For the real effect of ERP system, companies are supposed to set their objectives prior to implementation followed by measuring of the achievements after implementation, and only then should they conclude about the effects of ERP.

We must also remember that as the Indian market seems to be filled with many ERP solutions, companies must pay extra attention while choosing the right ERP system. Apart from operational efficiency, successful implementation also holds the key for an ERP system. The structured implementation programmes such as eresource ERP's Guaranteed On-Time implementation, can speed up system deployment and return on investment.

(Mr. Sudheer Nair is the CEO of eresource Infotech Pvt Ltd., one of the leading enterprise solution companies in India. Eresource provides end-to-end solutions that leverage technology-enabling customers to grow their business. Eresource serves many client in India and abroad and as one of the pioneers of Web-based ERP solution. For further details please contact Eresource Infotech on: +91 -22 - 4111 8000 - 8049).