3-29. ADVANTAGES OF COMPUTERIZATION a. General.

Computer information systems have proven invaluable in carrying o u t predetermined operations a n d helping decision-makers clarify their ideas a n d plans. Computer speed makes possible extended calculations a n d rapid retrieval of stored information. Computer memory facilitates t h e storage a n d availability of vast amounts of data. b. Increased Timeliness and Accuracy of Patient and Administrative Information. With t h e help of computers, information a n d reports c a n be transmitted a n d delivered much more rapidly t h a n before. Diagnostic answers formerly delayed until a disease actually manifested itself in t h e patient c a n now be obtained in a matter of minutes. Patient studies that used to take 15 minutes now take 15 seconds. c. Greater Individual Productivity. With t h e u s e of t h e computer, predetermined operations are simplified, t h u s reducing t h e time it takes to do a job, and permitting employees to take on additional responsibilities. Reports prepared from statistics compiled by hand, formerly taking days, are now available in several minutes. d. Improved Quality of Care. By using a computer program called Physician Data Q u e r y that identifies t h e latest cancer treatments, physicians c a n find t h e right therapy for a patient with any type of cancer. Up to now there h a s been a shortage of information on which treatments work best for w h a t kind of patients because little research h a d been done on t h e outcome of patients' treatments. Treatment patterns for t h e same condition vary according to geographic locale. (Within a given area, doctors reach a consensus on how to practice, b u t that consensus may n o t be t h e same in another area.) Hospitals, clinics, health-maintenance organizations, a n d other medical groups are now collecting data on how well various treatments work. By 1991, at least 100 patient-outcomes projects should be under way to study cataracts, diabetes, a n d broken hips. Outcomes research, made possible by t h e computer, will provide hard data on success of treatment that will help improve t h e quality of medical care. e. Reduced Personnel Costs and Inventory Levels. Hospitals h a v e reported significant annual savings d u e to t h e installation of computer systems. Increased revenues, a reduction in accounts receivable a n d costly inventory are benefits attributable to computerization. f. Faster, Better Analysis by Administrators. With access to daily, weekly, a n d monthly statistics, administrators c a n make more informed decisions, spot trends, strengths, a n d weaknesses that would h a v e previously gone unnoticed. They also can engage in "what if thinking. Interoffice information systems, that tie k e y administrative a n d management personnel together electronically, reduce time spent in meetings, increase productivity, a n d c u t d o w n on administrative support staff. MD0058 3-22

How can ERP function more effectively in S.M.E.?

The troubles faced by S.M.E.'s with regards to ERP is quiet understandable. However they can be rectified. Even if they are not taken out totally there is always a scope for making things better and making ERP's more user friendly for Small and Medium Enterprises. The vendor's primary concern should be solving ERP

problems in S.M.E.'s. This is emphasized because ERP problems in Small and medium enterprises are many. Some of the suggestions that can be implemented in S.M.E's are as follows
Structuring need based software programs

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.E.'s. 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 (just for the sake of compliance and matching the company's model and that too without any direct monetary benefit ). A balance should be stricken between the two. The company and the vendor should sit together and analyze the pros and cons of every possibility to match their requirements. Both of them should make compromises as and where possible. These adjustments even though may seem to be smaller will have greater impact when it comes to the structuring of software programs.
Rectifying inherent defects in software programs

Software is not given due importance in many of the small and medium enterprises. Software is looked upon as just another operational tool. This will not have major impact at the immediate outset when it comes to other operations (though the loss will be known at a later point of time). However the case will not be the same with ERP. The vendors experience great difficulty when it comes to installing ERP in such companies. They find themselves petrified to handle the resultant consequences because the companies might blame the vendor for the failure without realizing that it is due to their own inability/carelessness in maintaining software programs. That is why he must exercise care in solving ERP problems in S.M.E.'s. The vendor needs to carefully review the software competencies in the company.This study will help him to asses what the company requires more in terms of software .To start with the vendors must initially speak to the in-house IT personnel. They should convey their observations very clearly. This will help them in disseminating the information all over the company and speaking to the decision making body. The senior management may have greater chances of accepting the vendors suggestion when it is supported by IN house IT personnel but with a good faith and in the interests of the company. The vendor should take all possible steps to remove the software deficiencies in the company before thinking of running the ERP application.
Giving Due Attention to ERP

The vendors have an advantage when it comes to working with bigger players. They realize the seriousness of ERP projects not only in terms of the money invested but also in the context of the restructuring and the supposedly redefined functions. This feature is absent in Small and Medium Enterprises. They refuse to show importance as business process reengineering and change management looks like absurd to them. They underestimate the jargon and think it is too much keeping the size of their firm in mind. The ERP vendor needs to make them realize the importance in order to be successful in the project (for both of them).
Conclusion

Unless the ERP vendor and the company sits together to resolve the conflicts it is not going to be beneficial to either of them. The onus of initiating lies with the vendor when it comes to ERP problems in small and medium enterprises. Since he has the required expertise he needs to take the lead in convincing the company and be sure of Solving ERP problems in S.M.E.'s.

Discussing ERP's intervention in small and Medium Enterprises

ERP for small business calls for voluminous investments. The amount was fairly affordable to small business entities. There is no doubt or two say about its benefits. But the question that kept ringing in the market was can everyone afford it. The answer was a stubborn no initially but not anymore. ERP outsourcing, Open Source ERP's and ERP applications designed for S.M.E.'s (Small and medium Enterprises) have successfully overcome the above said limitations. Some relevant issues concerning ERP for S.M.E.'s are the following:
Evolution of ERP in S.M.E.'S

Enterprise Resource planning was a term restricted purely to elite class. This scene was witnessed in the IT market for some long time ever since ERP was introduced. The large organizations went ahead with ERP process unmindful of negative consequences, not to forget mentioning the fact that they took every proactive measure to curb the same. Needles to say firms were interested in serving such large players. So the fate of Small and Medium enterprises remained unanswered. ERP for S.M.E's remained a mere dream.
ERP Vendors and Corporate giants

It so happened that the number of larger companies without ERP turned out to be nil. Thanks to the awareness created by vendors and IT researchers. No doubt companies

were initially hesitant lot and apprehensive on just hearing the word ERP. However the industry proved them otherwise. Then came a stage where a company could not exist but without ERP. Even if their performance was satisfactory they were not able to gain any competitive advantages. This explanation of how goliaths adapted to ERP has lot of significance in studying their intervention with S.M.E. These bigger companies were not providing the required business to ERP vendors. Even though there are many big companies the number of vendors was always greater in multiples. This means only the best could strike deals and there was no possibility for mediocre or average vendors (in terms of performance).The best players also found that they had none to serve after a point of time because almost every company in the market successfully established ERP (whether on the first or further attempts).
Stabilization of ERP in S.M.E.S

SO they had to naturally look for greener and fresher pastures. S.M.E.'S was the only answer. The next question was how to provide best services at an affordable cost and still make profit. In this case the vendors had to be worried only about the number of sales they could make and not the quantum of profits because the number of vendors was few and far between when compared with the number of S.M.E.'S choosing to go for ERP. As the saying goes "necessity is the mother of Invention" vendors had to devise cost effective applications to meet the demands of the Small and Medium enterprises. This was the origin of ERP for S.M.E.'S. This benefited them in terms of business .On the other hand the firms enjoyed greater benefits by making use of this application. Hence ERP and S.M.E. was weighed on the same scale. Conclusion S.M.E.'s are becoming the popular choice of ERP vendors. There is an increasing awareness of ERP in S.M.E. market. It has practically helped to unravel the myth that ERP is exclusively meant to business empires. ERP and S.M.E have become important part of enterprise strategy.

Issues concerning Open source ERP in SME'S

Open Source applications are tools that has made it possible for S.M.E.'s to realize their ERP dreams. It refers to the software programs that can be copied and reproduced without even paying the license fees. This has done away with the hassles faced by the companies. However there are some restrictions and the question of proprietary or nonproprietary technology comes to the picture in determining the judicious use.

Some of the issues concerning Open Source ERP for S.M.E'S are as follows:
ERP'S intervention in S.M.E.'S

ERP was enjoying a large segment among big players. The subsequent applications only increased its scope. There was no looking back especially when the industries suffered from dearth of connectivity and communication. ERP has turned out to be the apt solution to meet the fast-moving channels in the corporate sector. However as stressed earlier it was not possible to cater to all the sectors. The concept of free licensing helped Small and Medium industries to have an edge by establishing ERP. Open source applications have gone a long way in enhancing the scope of ERP in particular and the applications of any software in general.
Proprietary and Non proprietary technologies

The two major types of Open source are classified as Open source with Proprietary technologies and Open source applications with non proprietary technologies. There are many nuances of open source ERP .These technologies determine the extent of usage and scope of open source applications. Proprietary technology prohibits the copying of the software except for some conditions. Thus proprietary technology poses some restrictions to the users .On the other hand nonproprietary technology is devoid of the restrictions. This neither imposes many precincts like that of the former.
Open source and S.M.E.'S

There is a considerable advantage in using Open source applications in S.M.E.'S. Small and medium industries cannot afford to install large applications. This is not only because of cost but also due to other practical difficulties. There are many more nuances of open source ERP. In this context it becomes wiser to use open source applications that can serve the dual purpose of reducing (or not even paying) the license fees. Open source applications can help the companies to reduce the technicalities by offering comprehensive solutions on need basis that is the company can decide to make a copy of only those functions required by it. The company need not necessarily take a note or install all the functions of software. On the contrary they can choose only those applications required for their daily routine. This happens to be a main advantage for an S.M.E. When compared with bigger companies. They have to invariably select all the functions from software irrespective of the fact whether they are useful or not. Their operations are extensive and hence they may only need more than what is available in a particular software. On the other hand the autonomy of choice is available with S.M.E's. Moreover even if bigger companies copy

the entire software verbatim the idle functions may cause extra storage process and may even disturb the process. These limitations don't find a place in S.M.E'S. Conclusion The explanations above make it clear that Open Source ERP's have come a long way in helping and easing the enterprise operations of S.M.E's. It is not right to say that outsourcing is better or open source applications are better. Both of them have their own advantages and disadvantages and situations always decide the merit of their application.

What are the market prospects for ERP in S.M.E.'S?

The ERP market shows lots of avenues irrespective of the size of the company. As a subject matter of this link it becomes important to analyze the market opportunities of ERP in S.M.E.'S. S.M.E. market and ERP is analyzed from various dimensions. Some of the issues requiring attention are as follows
Competition among larger and smaller players

The competition for ERP market in S.M.E.'s is quiet fierce. The vendors have increased considerably with the influx of bigger players in the fray. Formerly only the smaller vendors catered to S.M.E.'s. However the situation is totally reversed in the current scenario. The numbers of vendors are increasing not only due to the intervention of bigger players but also due to the intrusion of many smaller ones. This makes it difficult for all of them to compete as the best only get to strike a deal. This market scenario has thrown more demands from the companies because they now have many vendors to choose. On the contrary the emerging increase has also resulted in more complexions in the market because each vendor is different and unique when it comes to the issue of software.
Saturation point for ERP market in S.M.E.'S

It has been largely argued that S.M.E. market has attained saturation point for ERP. This statement might appear logically true. There was not enough number of players for the ERP products in the S.M.E. market formerly. S.M.E. market for enterprise resource planning was not competitive. Hence these existing ones made a killing with the software companies. Some of them handle lot of project simultaneously and successfully. All this makes one to conclude that the Small and Medium Enterprises. market for ERP is quiet saturated.

On the contrary it is not so though it might be tempting to think so. The needs of small companies are quiet different when it comes to ERP unlike the larger companies. The larger companies may have some common parameters in common whereas it is not possible to find the same in small and medium enterprises. Their requirements are largely varying. Infact it is not possible for bigger companies to place such demands considering the magnitude of the operations and the volume of investment required. The minds of the ERP vendor are still tuned to this framework even in the case of small and medium enterprises. This drawback has remained unanswered though there are exceptions. The companies are not yet satisfied even though the market sound saturated. This is an important issue of S.M.E. market and ERP. The intervention of new vendors from different segments has given a positive response to this problem. Many of them have made commendable alterations and started to suit the needs of Small and medium ERP companies requiring ERP. The market still shows greater opening if companies can come forward to rectify this or deploy the existing ones. This statement is made on the assumption that other drawbacks are nil.
Opportunities for innovation

ERP vendors are frequently coming out with inventions and modular improvements not to forget mentioning the upgradation in the market. Small and medium enterprises can afford to go for such modifications are invested in newer ones if it is demanding and worth (assuming that finance is not a problem).Though larger companies have a greater capacity to do the same it is not practically advisable .Hence S.M.E.'s are still prosperous when it comes to ERP market. Conclusion The ERP market for S.M.E.'s is undoubtedly promising. It should be noted that vendors will have a great opportunity when they explore into the untapped areas to facilitate better flow between S.M.E. market and ERP.

What are the common problems for ERP in SME'S?

Enterprise Resource planning helps S.M.E.'s to enjoy unimaginable benefits. Nevertheless the problems of ERP in S.M.E.'s remain unsolved. There are still ups and downs in it. There are some problems for S.M.E.'s in the ERP market .They are not only from the addressed in the company's perspective but also in the vendor's perspective. The problems of ERP in S.M.E.'s are as follows:

Cost

The small size of the companies proves to be another challenge to the vendor. Since there are too many S.M.E.'s in the market they demand a very low price from the vendor. It becomes practically impossible for the vendor to offer at such quotations as he would not even be guaranteed of a return in the costs. Small business erp is not expensive software but still requires lot of work. Another issue is that there are a large number of companies in the segments and the vendors are few in numbers. Hence the former is able to exercise a considerable influence over the later. This issue also makes things difficult for the company. At times they have to comprise on quality due to unfair demands. There has been no full stop to this as the companies have failed to change their attitude in this regard. The companies can definitely claim cost advantages due to the competition .But if they are bound to be unreasonable they cannot expect the vendor to deliver the best. They need to keep in mind that the vendors have come a long way after exploring their segment which was untouched for quiet a long time. The companies are not able to avail the best business erp small software due to these difficulties.
Choice

Companies have to exercise adequate care in choosing their ERP vendor and Small business erp Software. This is a big dilemma for companies because they are unsure of choosing software offered by a branded player or a small player. That really makes no difference as long as the software and vendor suits all the requirements. Some companies debate that only a branded player can satisfy the requirements even though the recipient is a small concern. While the other argues that only small vendors are flexible when it comes to customizations. Each argument has its own merits and demerits. However companies tend to select the wrong option on the basis of these prejudices. As said earlier the companies need to take care of their requirements as the first priority before deciding on the software or vendor.
Customization

The bigger players have a trouble when it comes to offering solutions for S.M.E.'S. The level of customization and the work demanded by the S.M.E.'s some times appear to be too much for a bigger player. Moreover their businesses have always been focused to corporate giants. So when it comes to the question of S.M.E.'s it takes a great deal of time for them to understand the business and design software programs based on modality. Even if they are able to meet the requirements the companies always demand more. Branded and big vendors don't even yield to the first level and the software programs supplied by them prove to be of little use to the company. On the other hand companies also find that small ERP vendors are not competent enough to match the requirements of

the companies. So they approach the bigger companies. Finally they land up in understanding that no one can help them to the desired extent.
Confidentiality

Big vendors don't even offer the source code when it comes to S.M.E.'s. This has resulted in lots of functional errors and the very purpose of ERP has been questioned by and large. On the other hand when it comes to the companies they hesitate to disclose confidential information because they are well aware of the fact that the vendors are limited, few and far between in the S.M.E.'s market. This means your vendor and the company's vendor could be one and the same. The apprehension of the companies look natural but it stops the vendor in restructuring the minutest detail in the software to match the company's needs for lack of adequate details. Conclusion S.M.E.'s market still continues to be a "bed of opportunities" for ERP Vendor in spite of the above mentioned drawbacks. Equally promising is the demand for ERP from Small and Medium enterprises. Some proposal should be put forward for the welfare of both parties to counter the problem of ERP in S.M.E.'s. Toolbox for IT Topics ERP Blogs

Enterprise Resource Planning and Business MGT

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Importance and Benefits of ERP System in SME Segment

Nick Mutt | Aug 29, 2009 | Comment (1) ERP (Enterprise Resource Planning) is a system which integrates various business data in a single database and provides cross function reporting on click of a single button. Earlier ERP was made for large organizations but, now it is made for medium and even for small organizations. In this global competitive market, organizations need to upgrade with latest technologies. Most of the large organizations are using enterprise resource planning system. To deal with those large organization SMEs (Small and Medium Enterprises) need to work on a similar type of technologies. In this case, importance of ERP system for SMEs increases. Of course, there are lots of business benefits of enterprise software. Apart from all other basic benefits, enterprise software gives an information system with three important capabilities i.e. 1. Consistency and reliability of business data across the organization 2. Streamlined transaction processing within and outside organization 3. Provides operations level reporting on a click of a button These capabilities, basic and important as they are, ensure that organizations are ready for specific solutions that improve overall performance. The areas that will increase the basic ERP requirements are like supply chain management (SCM) with electronic collaboration between supplier and customer, customer relationship management (CRM), business intelligence (BI), product data management, complete product life cycle (PLC) management, inventory and warehouse management using RFID tools. For these applications, ERP system becomes the substratum, a kind of gateway to expert functions. That is, enterprise software is a sine qua non for other applications. In fact, the latest trend is that with basic enterprise resource planning software, tailormade system is given by ERP companies. ERP vendors are speeding-up to integrate most of these additional capabilities. This type of customized or tailor-made enterprise system is easy to install and implement for SMEs. It also takes less time to implement and chances of implementation failure are lesser