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Opportunities and challenges of implementing ERP in Small and Medium Enterprises

Report on Opportunities and challenges of implementing ERP in Small and Medium Enterprises on outcome of ERP execution

Opportunities and challenges of implementing ERP in Small and Medium Enterprises

 

Introduction

In order to sustain in this highly competitive global market, the small and medium enterprises must implement Enterprise Resource Planning (ERP). It is business process management software, which enables the companies in the usage  of integrated applications for the purpose of managing the business and also helps in various back office functions relating to technology, human resources and services (Carvalho, et al., 2018.p.32).  It is known globally to the big companies along with the  small and medium enterprises  that giving the correct information at the correct time facilitates huge success in the growth of the companies in this cut throat competition.

Implementation of ERP in Small and Medium Enterprises has opportunities as well as challenges.

Opportunities of implementing ERP in Small and Medium Enterprises

There are a number of opportunities involved with the implementation of ERP  in Small and Medium Enterprises, which are enlisted below –

?             Proper Management of Time – In this competitive nature of the business environment, it can be easily said that money equals time. Thus wastage of time means wastage of money but with technological advancements, it is possible for the organizations to implement ERP system, which helps to reduce the wastage of the time taken from the order of the purchase till the time required for providing appropriate quotations (O'Regan, 2018).

?             Low Routine Tasks – Wastage of Human Resources leads to huge loss of the SMEs and this can be overcome by implementation of the ERP as it helps in the reduction of the routine tasking or similar kind of information almost every time.

?             Forecasting – The information, which is derived after the implementation of ERP is very much accurate and thus allows the SMEs to make more realistic and effective estimates.

?             Increased flexibility – The ERP systems are very flexible as in accordance to the needs and demands of the SMEs, it can be tailored.

 

Challenges of implementing ERP in Small and Medium Enterprises

There are a number of challenges involved with the implementation of ERP  in Small and Medium Enterprises, which are enlisted below –

?             Lack of organizational leadership - The higher authority of the SMEs may barely understand the implementation aspects like scope, size and the technical problems which take place at the top level (Singh, 2018).

?             Shortage of skilled manpower - The less skilled employees create  a negative impact in the implementation procedure after the adaptation of ERP, the most updated technology.

?             Reduced competitive advantage - Competitive advantage comes from experience and knowledge of the employees. Business practices, which are carried out  using the ERP may seem to be contrary for the industry practice.

?             Ineffective communication - The expectation of the management need to be communicated to the ERP vendors at every levels within the organization. Thus ineffective communication leads is one of the major challenges faced by the SMEs due to implementation of ERP (Eseryel, 2018). 

Conclusion

 

The given task focuses on the opportunities and challenges  of implementing ERP in Small and Medium Enterprises. Thus, before implementing ERP in the day to day business activities of the SMEs, the above mentioned factors must be assessed thoroughly.

 

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