Anoop Phanse 11FN-074
Rohit Chandak 11FN-0
Saurabh Rathi 11FN-091
Shail Sheth 11FN-097
Soumyarup Chatterjee 11FN-106
Sourabh Bhave 11FN-107
Microsoft | ERP Implementation in SMEs |
In the post-liberalization and opening up of the economy business era, ease in international trade barriers, economic liberalization, globalization, privatization, disinvestments and deregulations have thrown several challenges to small and medium-sized enterprises (SMEs) in the fast-developing economies like India. Compressed product development cycles, cut throat domestic and global competition, economic downturns, rapidly changing ...view middle of the document...
In effect, this can greatly assist the organization to carry out its operations in more effective and efficient ways and allow the workforce to interact and collaborate in an information-enabled environment.
Using ERP, large manufacturing firms are linking up with their suppliers and customers located in any part of the world. Employees are sharing information with each other on a real-time basis. ERP can expedite responses to customers’ orders and queries, reduce inventory, shorten production cycle time, improve quality, enhance the efficiency of delivery of products and services and strengthen in-company coordination (Markus et al., 2000; Jaiswal, 2007).
After focusing on the large-scale firms, the ERP vendors are now targeting on SMEs (Yen et al., 2002; Olhager and Selldin, 2003). In recent times, many multinational companies have restricted their operations to partnering only those midsize companies that are using compatible ERP software. Hence, it becomes essential for many midsize companies to adjust their business model and adopt ERP software that is compatible with the large enterprises with which they deal (Rao, 2000). However, ERP implementation in SME and large organization cannot be viewed at par as there is vast difference in characteristics between two. Particularly in SMEs, there are severe resource limitations in terms of management and manpower, R&D, finance, marketing, etc. SMEs deal with small number of customers and operating in limited markets. Their structure is flat and flexible (Addy et al., 1994; Burns and Dewhurst, 1996; Ghobadian and Gallear, 1997).
Though the ERP is needed in all organizations, its implementation is not successful all the time. There are many failures, even for large firms that have the resources needed to perform a careful planning and implementation (Bingi et al., 1999; Hayes et al., 2001; Mandal and Gunasekaran, 2003). One-third of ERP implementations fail, or not successful to their expected goals. ERP implementation is a complex and huge cost involvement procedure (Sarkis and Sundarraj, 2003). There have been horror stories of ERP implementation and improper implementation has taken the companies to bankruptcy and in several cases organizations decided to abandon the ERP implementation projects. Some of the reasons are lack of support of top management, resistance from employees, poor selection of ERP systems and vendors, marginal end results, etc. (Bhatti, 2005).
A misnomer that has gained acceptance in the recent past is that ERPs are meant for large organizations. This statement is partly true. The ERPs marketed are expensive and smaller organizations cannot afford them (Rao, 2000). Taking into consideration the uncertainties in business environment, most of the ERP vendors are moving their attention towards SMEs by offering cheaper and simplified solutions that appeal to this market segment such as ERP system with compact packages, flexible pricing policies, new implementation...