ERP vendors Strategies to SMEAbstract: This assignment gives a small picture of Enterprise resource planning (ERP) and its vendors for both small and medium scale organisations (SME). Many key ERP vendors are now targeting SME’s as the growth in large businesses is now saturating with strategies which consist of developing a simple to execute, cost effective and simple to improve or upgrade ERP system’s for SME’s. The increasing demand in the SME’s for these system is due to high competition and these system can give them a distinct edge over the competitors.
Although pricy systems, issues regarding consultancy and upgrade problems in the future are hindering the implementation of ERP system in these Small and Medium enterprises but ERP vendors are constantly focusing on coming up with a solution which overcomes these issues makes the systems specially designed for small and medium businesses. Introduction: Even as many new Small and Medium businesses (SME’s) come into existence every year, we have observed that about 50% of these companies come to an end and are closed within 3 years of their inception. Even as we know that all organisations weather small or medium desire to grow, but only about 40% of these companies survive beyond the first 10 years.
A big bulk of these organisations doesn’t even plan for the long term they do not have any long-term business strategy and hence their focus is mostly on short term survival. These organisations consider changing only when the results of the business starts to go towards south and the company itself starts to falter as a consequence of not following the ever-altering market. The Organisations which continue to exist and prosper are mainly the ones who were committed towards changing and were keen on taking risks and take action towards the changing situation (Levy et al, 2005). In today's intensely competitive business setting there has to be much greater relations between the customers and the manufacturers.
ERP (Enterprise Resource Planning) is a strategic tool, which not only equips the organisation with the necessary capabilities to integrate but orchestrate secluded functions into streamlined business Processes. It even optimizes the assets that are available or helps to gain a competitive edge in the chaotic business environment.
The great progression in information technology and severe reduction in the prices of computers have made it possible even for the small organizations to consider the ERP systems. The innovative creation of computers, initiation of client server technology and scalable relational database systems, has greatly contributed for the easy deployment of ERP systems. Most of the ERP vendors are trying to attract the small and medium enterprise segment with a range of options. As per the IDC, even though responsiveness and current acceptance of ERP system is quite high in large businesses, it's the SME segment that has the potential to fuel the future growth.
There is huge market for ERP system in Small and Medium businesses, as there are over 20,000 small and mid size companies. (Markus M. L. & Brehm, L. Heinzl, A., 2001)