How can ERP Solutions solve the difficulties of local SME companies?

By Chintan Mehta

January 1, 2016

Entrepreneurs take the decision of implementing an ERP system when they get fed up with issues related to productivity and process standardization. When each corporate function works in silos and uses home-grown MS Excel based or MS Access based modules, the situation goes haywire. In the majority of the cases, business objectives are achieved more or less.

However, sometimes experts raise questions about the utility and usability of a ERP system. They feel that it is totally unrealistic to implement ERP by spending huge money. Since the ERP systems are designed for large organizations that have an overall perspective. Small and medium enterprises (SME) do not get any significant benefit from it.

“ERP Solutions effectively resolves operational issues in a local SME”

When each department functions as an independent company, the organization is bound to face issues. When you implement robust simple ERP solutions, there is an incredible improvement in the situation.

Consolidation of processes helps in better decision making

There are adverse business impacts when the organization uses standalone systems with no coordination and communication. Management is incapable of making right decision due to discrete and incomplete information available. There is a time lag in consolidating information and no real-time visibility. An ERP gives consolidated, up-to-date information at the mouse click. As an entrepreneur, you know every bit of the business.

Get rid of manual work and the heap of papers

Local SME operates in the old-fashioned and outdated way using manual processes. It makes the system inefficient and redundant. Storage of piles of papers is a significant operational issue. The inaccuracy of reports and time to consolidate information are quite common. It is not possible to work in this fashion if your organization wants to compete with world-class companies. ERP streamlines operations by removing manual work. Saves money, reduces operational delays and make the customers happy.

Expand business globally without the worries of compatibility

A Small and Medium Enterprise can’t think about global expansion without state-of-the-art ERP system. It is impossible to manage complex international vendors and processes. When you bring ERP in operations, data management, and compliance management becomes easy. You can take the business to a new location, geography or industry.

Grow by merging and acquiring other companies and still manage operations smoothly

When an enterprise grows beyond a limit, it is necessary to implement ERP system so that business processes can be integrated and consolidates seamlessly. Even if you own an SME today, it will grow inorganically by mergers and acquisitions or joint ventures. Experts say that it is a tough situation because there are myriads of systems already running in the other organization. Some of them might be legacy systems that can’t be integrated t yours. Hence, it is always an ideal situation if you have a standard ERP in place. It can integrate, streamline and standardize operations in multi-company organizations.

Complex tax and regulatory issues can be easily managed:

Even if the size of your SME is not big, you may still face legal or tax complexities. It is impossible to cope up with such issues if your operations are not standardized. Unforeseen impacts may arise, and you have to pay huge penalties. When there is a strong ERP system in place, you are always updated with taxation rules, regulatory change, and currency conversion, etc. It is the reason experts recommend a world-class ERP system for all, irrespective of the business magnitude.

It is quite evident that implementing an ERP solution opens the path to convert your SME into an international enterprise.