6 TIMES B2B Hyderabad, November 2003

Techonlogy
and current adoption of ERP is high in large organizations, it's the SME segment that will fuel the future growth. There is big market for ERP for SME, given that there areover 20,000 small and mid size companies. The awareness of the ERP concept among SMEs is less than 35%, compared to over 80% in large organizations as per a survey conducted by IDC. The key operational business drivers for SME segment will be to increase operational efficiencies increase labour and capital productivity, reduce fixed and variable cost and integration with tier 1 supplier, subcontractors and distributors. The pressure from large OEM players to streamline their supply chains will force SMEs to streamline their operations and drive the demand for ERP in the SME sector. Since all ERP vendors are focusing on this market, the Indian SME segment will have lol of options to choose from at very competitive prices. ERP vendors are offering customized packages that can be implemented within 4 to 6 months. When It comes to marketing approach towards SME, it has to be different from the large enterprise segment. For the SME segment, the success factor lies in being able to put oneself in the SME organization's shoes and think like them.Strategies for successful ERP implementtation in SMEs Many organizations have implemented ERP projects during the last few years with mixed results. While there could be several reasons why projects have not translat ed into expected benefits, a lot have to do with understanding the business requirements, finding the suitable software package that fit the needs and planning the project carefully. The typical cost involved in ERP projects could be in the areas of hardware, software, customizetion, data conversion and training. The potential benefit could be in terms of increase in sales, improvement in margins, saving in inventory carrying costetc While evaluatingERP systems, the key issues to be examined are the functional fit with the company's business processes, flexibility and scalability of the software and complexity and user friendliness ofthe package.

The other issues are the ability of the package to support multi site planning and control, the necessity of regular upgrades, customization required, and local support infrastructure as these would increase the total cost for the organization. Experience has shown that for successful ERP implementation, companies need to focus on certain issues such as selecting cross functional team with the best peo-ple in it, obtaining top management support, developing effective and open communication system, deciding the level of customization, continuous monitoring and eval- uation of project performance, training end users and keeping employees morale and motivation high.

When it comes to marketing approach to wards SME, it has to be different from the large enterprise segment. For the SME segment, the success factor lies in being able to put one self in the SME oranizations shoes and think like them.

ERP for SME...

A propellent for profitablility
S Vijay Venkatesh In today's fiercely competitive business environment there has to be much greater interaction between customers and manufacturers. ERP (Enterprise Resource Planning) is a strategic tool, which equips the enterprise with the necessary capabilities to integrate and syn- chronize isolated functions into streamlined business Processes. It also optimizes the resources available in or- to gain a competitive edge in the turbulent business environment. The improvement in information technology and drasticreduction in the prices of computer have made it pos- sible even for the small organization to think about the ERP systems. The new era of PC advent of client server technology and scalable relational database systems, all have contributed for the ease of deployment of ERP systems. ERP is the finest expression of the inseparability ERP is the finest of business and informaexpression of the tion technology. The essence of ERP is the funinseparability of busidamental premise that ness and information the whole being greater technology. The esthan some of its parts.ERP automates the sence of ERP is the tasks involved in perfundamental premise forming business prothat the whole being cesses such as order fulfillment, payments, mategreater than some of rial receipts, material reits parts. quirement planning, invoicing etc., and make the same data available to all the other functions instantaneously.ERP implementation in India is picking up very fast. Last few years have seen a few products coming into the market and the leading companies taking initiatives to implement ERP. But most of this implementation has not yet witnessed the expected results. Successful implementation is a long journey towards enterprise excellence. For best performance, ERP solutions should be modular, open, simulate reality and also be comprehensive in terms of coverage and scope. The SME segment and ERP Most ERP vendors, MNC and Indian, are wooing the small and medium enterprise segment with variety of options. As per IDC, although awareness

While the above issues arc important for successfully implementing an ERP package, a few more questions need to be answered in the SME context. What does ERP really cost? What is the hidden cost of ERP? How do I evaluate an ERP system? Will ERP fit the way I do the business? How long an ERP project will take? What will ERP fix in my business? When will I get pay back from ERP and how much will it be? Why isn't every one implementing ERP? What about Implementation, Support and Upgrades? We shall address the above issues in the forth-coming articles. (The author is the Managing Director of an ERP company for SME. The readers may send their queries. He can be contacted at vijay@syscon-solutions.com