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The Smart Techie was renamed Siliconindia India Edition starting Feb 2012 to continue the nearly two decade track record of excellence of our US edition.

ERP Implementation for Midsize companies Necessary Expense or Strategic Investment?

Vinay Singh
Thursday, January 6, 2011
Vinay Singh
Enterprise Resource Planning (ERP) has become quite an established term over last couple of decades. For most of us it means a tool that helps an organization run various functions of its day to day operations and also help drive strategic decisions. ERP Systems have the potential to cover a wide arena from functions as Human Resources, Supply Chain Management, Customer Relations Management, Financials, Manufacturing functions and Warehouse Management functions.

Evolution of ERP followed the general evolutionary trend of Information Technology (IT). Long ago organizations worldwide started realizing how adoption of an ERP system makes some of them distinctly competitive and others an exact opposite. On the other hand ERP product development over last three decades has ensured that ERP products are not just a competitive differentiator for large companies, but a critical enabler for midsize companies as well. For every midsize company, not enabling itself with a good ERP system today is like trying to conduct business without using basic technological tools like emails.

To clarify for the uninitiated, Enterprise Resource Planning (ERP) is an integrated system which facilitates the required collaborative effort for various departments of an organization such as marketing, sales, production, quality management, materials management, logistics, financial accounting and financial control. At the very basic level, integration of such a system helps in ensuring accuracy of information, productivity, efficiency, scalability and above all reliability. This system unleashes possibility of implementing management practices that make one organization fundamentally different from another.

The main problem faced by S.M.E.’S when it comes to ERP is that their requirement is limited while the product offered exceeds their specifications in all ways (including the costs).The gap between these two needs to be analyzed by the companies and S.M.Es. It is not possible for the vendor to bring down their standards for the sake of the company neither is it feasible for the later to upgrade for the sake of the former. So, for a proper management their should be a balance between the two. The company should discuss with the vendor to analyze the pros and cons of every possibility to match their requirements.

Basics of guaranteeing on the investment
Not every collection of features is an ERP product:
ERP is a software product. ERP product market has evolved over last two decades to have clear market leaders and a host of other products. Choosing the right product is very basic to ensuring that one gets highest return from the investment. Implementing an ERP system and fine tuning it to be a business enabler over a well defined roadmap requires that the product chosen by you does not exhaust itself as you go beyond operational execution and look to enable your strategic insight, competitive edges and USPs. Just as it is well understood today, that developing a software system from scratch as your own ERP is a big waste of energy, choosing a product that covers 75 percent of your operational execution is as imprudent.

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