ERP In Pune Defines Top 5 Challenges Faced By SMEs In Implementing ERP

April 08, 2017

ERP In Pune Defines Top 5 Challenges Faced By SMEs In Implementing ERP

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ERP in Pune were implemented by big organizations out of compulsion and not out of choice before the new millennium started off. The challenge such companies were facing were non-standard, non-synchronized data and broken information flow along with non-refined business processes. These challenges were becoming a hurdle in their growth story. The need of the hour was to have a robust and scalable solution that could handle multiple business functions, geographies, and systems. These issues were addressed by the ERP solutions created by large giants coupled with robust serves and reliable networks.

 

SME’s however, have a common perception that ERPs are best suited to large companies only due to the high cost, the complexity of implementation, high maintenance costs and lack of analytics knowledge to use the information additionally provided by such systems. However, over the last decade, with technology becoming simpler many economical and robust solutions have been introduced in the market. They require minimum skill sets, are available as pay-as-you-use options and have a possibility to become leaner and efficient organizations.

 

SME’s play an important part in framing the economy of a country. In fact, in the various domain, SMEs are driving development and competition. However, with the changing competitive environment, it has become imperative for SMEs to implement systems to scale up their operations and move to the next level. With dynamic nature of the market and hyper competition from the world over, SMEs are encountering various challenges and key issues that need to be addressed in a systematic way. Similarly, understanding these challenges becomes as critical as the relevant knowledge of the business.

 

One such key challenge is to adopt and implement automation and usage of enterprise resources planning systems. Nowadays, there are a wide variety of tools and techniques that are designed and devised for SMEs to produce their products more efficiently.

 

Sophisticated tools like six sigma quality, factory automation, design for manufacturability etc. have enormous potential to support SMEs with their planning and execution task. Using such tools help such enterprises to deliver better quality products, faster and more profitably. But none of them ever will ever yield their full potential unless they are coupled with effective forecasting, planning and scheduling processes. But despite making executing business simpler, SMEs face following challenges to implement ERP systems.

 

1. Top Management Interest And Participation

The top management must deeply drive the implementation of ERP systems if the goal is to run the business better. It is the top management who has the leverage on how the business has to be managed and run, and like any other project, the involvement of the company leadership is very essential. There has to be a flow of direction and diktat from top to bottom to meet the set challenges positively. They should involve professionals and business experts to address all sorts of challenges that can encounter in the entire process.

The leaders need to guide employees to accept the change and play a key role in the effectiveness of the implementation of the new system. Cloud ERP solution implementation also demands re-engineering of certain processes, retraining of employees, business partners and in certain cases even customers People usually do not like change, and this creates resistance and delays for any organizations. This can only be addressed by intervention and participation of senior management.

 

2. Limited awareness

Implementing cloud ERP solution is a new way of doing the same business, and it requires a buy-in from all stakeholders throughout the organization including top management, employees, vendors, and suppliers. The changed process and faster flow of information within and outside the organization shows the effectiveness of ERP and displays a major shift in company’s thinking. A lot of awareness of such a step needs to be created even before the start of the project.

 

Every individual connected with the organization will be affected by the implementation of such system and thus they need to have the awareness, motivation, and education about the conclusive intent.  SME’s especially have a limited awareness of capabilities of ERP solution followed by confusion on various ERP vendors.

SME’s need to plan the implementation system with clear organizational objective, create an internal team and plan the entire implementation phase in detail. This will not only simplify the process but also clarify the goals to all stakeholders who are involved in it. Such awareness will also clarify the benefits which are gained by implementing an ERP system vs. ERP cost of ownership

 

3. Scope of project implementation & strategy

One of the biggest challenging task for an SME is to identify the scope of web-based ERP implementation. Since ERP affects various functions in an organization, various stakeholders need to be involved in the process. Along with scope, ERP cost and timelines are other two critical areas of any project. Various projects fail when these three aspects are not well defined. Any deviation from the scope of the project must be well identified in time by the steering committee, and relevant actions must be taken after their due deliberation and approval.

 

Re-alignment of any scope, methodology or requirements are not advisable mid-way since it disturbs the final plan implementation. For SME’s implementing an ERP solution with built-in best practices at one go is most suitable since it gives desired results at low cost and with scarce resources. Depending on availability of resources SME’s can also take phased roll out as an option.

 

4. Communication Acts as Challenge For ERP In Pune

Since mode and mediums of communications are not well structured with SME’s, project communication becomes one of the top most components for the success of any enterprise wide application implementation. The communication plan should be well defined at the initial stages with clearly defining roles, responsibilities, and channels. If an SME has operations spread across the location, then the complication of implementation multiplies. Additionally training employees and keeping them updated on web based ERP is another challenge that needs to be addressed by SMEs. Without training the employees aren’t able to handle needs of the new system. In fact lack of proper training is one of the major reasons for the failure of ERP solutions.

 

5. Customization

Many SME’s have pre-defined systems and processes based on their experience. At times SME’s may demand customization from ERP software providers to support specific existing processes. However, tampering with existing ERP packages and practices becomes very critical considering the endeavor to bring out the best results with all meager means at disposal.

For SME’s, it is recommended in the initial stages to take ERP systems which address their current requirements without pursuing too many customizations, which has empirically proven of its long-term pangs and repercussions. In such cases, lack of thorough planning can act as a major stumbling block for successful ERP implementation.

The factors that affect implementation of an ERP systems for SME’s can be practically endless however, results show that the companies which have successfully implemented such system have achieved many levels of success and gained enormous benefits as a result. ERP systems in past have helped companies with speedy flow of smooth information, reduced their operational costs and maximize business revenue. Proper care should be taken by SME’s by appropriate planning and execution to address the above challenges while implementing ERP systems.

 

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