Now that Enterprise Resource Planning (ERP) Vendors have outfitted almost all the large organizations, they have turned their eyes on developing systems that work for Small to Medium-Sized Businesses (SMBs). These specialized versions are less expensive and simpler to deploy, allowing SMBs to “take full advantage of ERP with minimal time, effort and manpower.1” But with limited resources at their disposal, SMBs stand to lose their very survival if an ERP implementation fails, which is why many still hesitate to invest in one. With the stakes so high, SMBs must have in place highly effective strategies before they decide on the best ERP system from a myriad of choices. As vendors deploy more effective ERP systems for SMBs, they have developed four key strategies to help ensure the success of an ERP implementation.
Strategy 1: Utilize Preconfigured Solutions
A modern, pre-configured ERP system is defined as “ERP architecture whose functions are configured to suit the needs of the businesses in a specific industry.” They both help “reduce the cost of ownership” and enable rapid implementation “in as little as 8 to 12 weeks2,” meaning minimal disruption to the business. Preconfigured solutions also keep SMBs from spending valuable time on managing infrastructure because industry-specific capabilities and user roles are built into the system.3 Implementation of smart, pre-configured systems is less risky compared to developing a new system from scratch because these are developed based on common industry standards and encompass a variety of business processes.2
Strategy 2: Adopt the Right Implementation Methodologies
A good methodology strategy addresses configuration issues, seamlessly migrates data from the old system to the new, builds interfaces, implements reports and frequently pilot tests.2 However, SMBs may not have the skills to perform these strategies without the help of an ERP vendor that offers these methodologies (such as rapid, modular or process-oriented implementation), along with the correct implementation tools. SMBs should also factor their employees into their implementation methodologies. Employees, including those in the IT department, may feel they have no time, training, or resources to invest in a new project; they are too busy trying to make the business grow. SMB executives often associate the word “complex” to an implementation project of this magnitude, especially if they do not receive enough guidance and planning time to embrace the change. No matter how effective the methodologies may be, without staff buy-in, the implementation will fail.
Strategy 3: Consider Cloud-Based Hosting or Deployment Options
McKay and Marshal define ERP hosting as “commissioning a third party (or parties) to manage” an SMB’s enterprise resources, including IT assets, people, and/or activities to required results.” Once, this hosting model used to be a license user model, and the SMB would then need to find someone to host the solution. Now that ERP vendors have transitioned to Software-as-a-Service (SaaS), ERP systems have gained immense popularity in the SMB universe. They can avoid heavy capital investments to build and maintain heavy infrastructure (hardware, software, office space and skilled personnel) for an on-premises ERP system, and instead, pay a per user/per month subscription depending on the scope of the applications.2 SMBs who “rent” cloud-based ERP systems can then focus on their business’s core functions, and of course, the big picture.
Strategy 4: Find an Implementation Partner That Suits Your Needs
Overall, switching from a basic financial management system or a spreadsheet approach to a sophisticated ERP solution requires some expertise. One of the most important aspects of the implementation project should be to choose a reliable and experienced implementation partner who understands an SMB’s needs as well as they understand the capabilities of the software package4. Partnering with a seasoned leader who has expertise in ERP implementation, configuration, implementation methodologies and customization (if necessary) will give an SMB the confidence needed to choose the right solution for its current and future business needs.
Now is the time to implement to an ERP in the SMB space. Today’s simplified ERPs are smart, preconfigured, and modern. By adopting these four effective strategies and utilizing the expertise available, an SMB can be well on its way to a successful ERP implementation and ultimately accelerating its digital transformation.
1. Baki, B., Cakar, K.: Determining the ERP package-selection criteria: The case of Turkish Companies. J. Buss. Pro. Mgmt., 11, 75-86 (2005)
2. Grandhi, S & Chugh, R 2012, ‘Implementation Strategies for ERP Adoption by SMEs’. In Kim, T, Ko, D, Vasilakos, Stoica, A & Abawajy, J (eds), Computer Applications for Communication, Networking, and Digital Contents. Springer, Berlin Heidelberg, pp. 210-216.
E-Book – ERPs for SMBs: Navigating the Best Path to Success
In this eBook, we will help your Small to Medium-Sized Business (SMB) navigate the best path to find a successful Enterprise Resource Planning System (ERP) designed specifically for your growing needs. And the best way to begin the journey is to run a diagnostic on your SMB to see if it’s ready for the update or the purchase.