ERP SOFTWARE CHALLENGES FACING SMES There are many reasons why an ERP software solution is beneficial for a business – no matter the size. However, there are also many challenges that Small and Medium Enterprises are likely to face that can prevent business owners from even considering to implement an ERP solution at their organization. ERP implementation is a joint effort between the ERP Service Provider and the company; which can take time, effort, support, training, planning and discipline. Here are some challenges that can make SME executives hesitant to begin ERP implementations at their company: ERP Implementation is complex Our small team is too busy Staff is resistant to change Our IT budget is very limited Not enough human resources to support an ERP system No need for an ERP system - we are just a small business ERP system implementations are known to be complex. There are many phases in this project [IT analysis & consultation; ERP selection; Planning; Installation & Setup; Testing; Deployment; Training..] which must take everyone’s involvement and support. Business processes and procedures may change, work habits may be broken, budgets may be stretched but if all planned right and if the right ERP solution is chosen, this ‘complexity’ can be avoided. Employees at small businesses are usually too busy working towards attracting new customers. An ERP implementation project is most likely too much of a distraction for the team and there’s just no time to allocate to such a project. Years ago, only large enterprises used to implement ERP systems. Nowadays however, ERP adoption among SMEs has increased. Unfortunately, many small business owners are still hesitant as they believe there is no need for such a system at their organization; they can simply walk over to their employees to get the reports they need. Unfortunately, this isn’t the most efficient way, especially as the company begins to grow. Implementing an ERP solution is a very big change for the entire organization. User resistance is likely to occur especially if new processes and procedures are introduced. This resistance has the capability to prevent an implementation from being completed successfully and for the business to reap the benefits of an ERP system, as hoped. Having enough financial resources is one of the biggest challenges that SMEs face when deciding to implement an ERP solution. In many cases, their IT budgets are quite small; which either leads them to end up with the wrong solution(s) for their needs or from preventing them altogether from implementing a system. Unfortunately, most accountants do not fully understand IT and therefore do not make the best IT investment decisions for the company. One of the main differences between SMEs and large enterprises is that Small & Medium organizations are more likely to experience staff shortages and many will seldom have an on-premises IT team. Not having enough employees and a lack of IT knowledge can be a big factor for companies turning away from ERP. Created by www.namtek.ca The above 6 challenges have the power to stop SMEs from successfully implementing an ERP suite to improve their business processes. Fortunately, there are ways to overcome them. User resistance can be prevented with user training & management support, ‘Software as a Service’ & a qualified IT consultant can replace in-house IT departments and proper planning & budgeting can ensure a successful ERP implementation.

ERP Software Challenges Facing Small & Medium Enterprises

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Page 1: ERP Software Challenges Facing Small & Medium Enterprises

ERP SOFTWARECHALLENGESFACING SMES

There are many reasons why an ERP software solution is beneficial for a

business – no matter the size. However, there are also many challenges

that Small and Medium Enterprises are likely to face that can prevent

business owners from even considering to implement an ERP solution

at their organization. ERP implementation is a joint effort between the

ERP Service Provider and the company; which can take time, effort,

support, training, planning and discipline.

Here are some challenges that can make SME executives hesitant to

begin ERP implementations at their company:

ERP Implementation is complex Our small team is too busy

Staff is resistant to change

Our IT budget is very limited Not enough human resourcesto support an ERP system

No need for an ERP system - weare just a small business

ERP system implementations are knownto be complex. There are many phases inthis project [IT analysis & consultation;ERP selection; Planning; Installation &Setup; Testing; Deployment; Training..]which must take everyone’s involvementand support. Business processes andprocedures may change, work habitsmay be broken, budgets may bestretched but if all planned right and ifthe right ERP solution is chosen, this‘complexity’ can be avoided.

Employees at small businesses areusually too busy working towardsattracting new customers. An ERPimplementation project is most likely toomuch of a distraction for the team andthere’s just no time to allocate to such aproject.

Years ago, only large enterprises used toimplement ERP systems. Nowadayshowever, ERP adoption among SMEs hasincreased. Unfortunately, many smallbusiness owners are still hesitant as theybelieve there is no need for such a systemat their organization; they can simplywalk over to their employees to get thereports they need. Unfortunately, thisisn’t the most efficient way, especially asthe company begins to grow.

Implementing an ERP solution is a verybig change for the entire organization.User resistance is likely to occurespecially if new processes andprocedures are introduced. Thisresistance has the capability to preventan implementation from beingcompleted successfully and for thebusiness to reap the benefits of an ERPsystem, as hoped.

Having enough financial resources is oneof the biggest challenges that SMEs facewhen deciding to implement an ERPsolution. In many cases, their IT budgetsare quite small; which either leads themto end up with the wrong solution(s) fortheir needs or from preventing themaltogether from implementing a system.Unfortunately, most accountants do notfully understand IT and therefore do notmake the best IT investment decisions forthe company.

One of the main differences betweenSMEs and large enterprises is that Small& Medium organizations are more likelyto experience staff shortages and manywill seldom have an on-premises ITteam. Not having enough employees anda lack of IT knowledge can be a bigfactor for companies turning away fromERP.

Created bywww.namtek.ca

The above 6 challenges have the power to stop SMEs from successfullyimplementing an ERP suite to improve their business processes. Fortunately, thereare ways to overcome them. User resistance can be prevented with user training &management support, ‘Software as a Service’ & a qualified IT consultant canreplace in-house IT departments and proper planning & budgeting can ensure asuccessful ERP implementation.