ERP SYSTEM IMPLEMENTATION IN SMALL BUSINESS

Introduction

The nature of conducting investment has drastically changed in this very age of internet and small business just like big empires are feeling the heat all the same. The advance in technology is real and it is breaking the demographic barriers hence welcoming diversification with a connection to the global clients, suppliers, and other investments partners. For the small business, it is a life opportunity since they are now open to the vast global markets which have made huge elevation to their net revenue. This whole elevation has resulted to both pro and cons, however, the significance exceeds the cons in an extra mile. For a while small business owners have been contemplating on the issue of joining the barricade and well so far they have to bow out and accepted to reap the benefits. Initially, the Enterprise Resource Planning (ERP) have only been associated with a large organization but not anymore, the perception of maintenance of ERP and installation being expensive and bringing complexity is just a rhetoric notion. Auspiciously, nevertheless, technological advancement has transformed the nature of ERP in a better way (KURBEL, 119, 2012). Apparently, numerous purveyors offer ERP systems with no complexity- easy to install, use. They have been customized in such a way that small entrepreneurs can find it within their reach in terms of solving technical and financial outlook.

The utilization of spreadsheets and word documents are no longer sufficient for small business management especially in this twenty-first century. Perhaps trying the test of the new technology would not cost that much apart from the boost of the business earnings ratio. The business owners only need to be provided with the basis of tackling all the issues that concern with evaluation of the right ERP selection system for their right business. One of the big significance small business would reap would be over-all control of their business data apart from achieving a more comprehensive and mature product. Conversely, notably, organizations have made extra strides in business volumes courtesy of the ERP implementation and the change is worth. Likewise, some portion of businesses have not benefited that much from the implementation of the same, this is owed to the complication came along and unfortunately made them incur hefty losses (NKHOMA & GILL, 11, 2014). This puts henceforth puts the question of what are the system failures which should be avoided when implementing ERP (CARVALHO & JOHANSSON, 117, 2012). Also, what are these vital steps which organization should follow so s stay focused and continue reaping the outcomes? This paper will focus on this issues and workout on the perfect implementation and in particular in the small businesses.

Literature Review

Enterprise Resource Planning (ERP) is software which is used in organization for the purpose of business course management whereby systems assimilated applications systematize voluminous back office tasks allied to the services, technology, and also personnel (NKHOMA & GILL, 10, 2014). Many explanations are the reasons why several companies have finally decided to go for the implementation of the new business system, obviously such decisions are not made over night but they are carefully researched and prior planning laid down for advance schedule. If the organization wanted to continue surviving in the new era they have got to heed to paradigm of shift in the business models. Nonetheless, it reaches a point where the management is forced to make changes due to the customer demands, corporate change or the external compressions (KURBEL, 120, 2012). Additionally, lengthened global competition rather than being an exemption and turned out to be a norm in the business world. This has been escalated by the fact that unprecedented integer of various products out there in the market to gratify consumers’ desires all-in-one computing system. An efficacious Enterprise Resource Planning can be the backbone of the business astuteness for any working organization which chooses to conceptualize it in their systems. They are capable of offering a unified feed to the management, this a tool which can elevate small business organization to match the giants business in terms of fetching markets and product competition (KURBEL, 119, 2012). Upon installation of the application, organizations can be assured of configurable data systems that will integrate not just information but also info based processes in about and cut across functionality spaces within the organization. Up to this point it important to note that, the packaged software ERP is designed to work in two way traffic independently (BIDGOLI, 709, 2004). It is simply the company vast information that has a face of business aspects, a hitch will only arise whenever unsuitable software package is used since this will render the whole organization unstable.

Another reason to go for ERP option is the ultimate ability to a proliferation of information which is of great significance in the organization and consistency part from the accuracy of the information content (NKHOMA & GILL, 10, 2014). There is no doubt that, in this era we still got some business which still suffers from manifold versions of certainties which in the reality of it they are both incorrect and inconsistent. For instance, if the finance department and the contact center have different access to the database which has not been integrated then you can be assured of a critical issue when attending customers’ calls relating to the billing dysfunctionality. Such problems can be wiped out with an introduction to the Enterprise Resource Planning they may look like a small issue but has a hefty contribution towards the gauge of consumer satisfaction bearing in mind it will be one organization having a twofold version of facts.  The clientele dissatisfaction would lead to opening more wounds and the automatic one would be drastic drop in revenues which I don’t think any company would want such (BRADY, MONK & WAGNER, 34, 2011). The integration of information of information in all departments is easy and way out and the costs are far better in comparison to the insignificance. There have been a multiple of organization who have realized upsurge of profits just with the help of the ERP installation. Small business should not be got up in the confusion and rhetoric’s which few suggest that the application is cumbersome the escalation of the beneficial service is what one is bound to reap from when you have got the right amalgamation of the applications. The packages should be fitted in accordance with the business and the needs which they need, research has shown that the system are under-utilized due to the problems of misfits. Most of the ERP systems have been facelifted with the up to date functionality and capabilities of accommodating enhanced flow of information across the business entity internally and externally (DEVOS, LANDEGHEM & DESCHOOLMEESTER, 213, 2013). Moreover, the ERP system poses the ability not only their own walls but even further in a quest to connect with suppliers, customers and the distributors.

Success and Failures of the ERP Systems

Small companies have the tendency of investing big a huge portfolio into implementation and maintenance of resource planning systems, the mistake would if this, not their main objective. Therefore, it is a requirement by the organization to consider and have a keen look at the objectives of going for ERP option. The indispensable stepping stone are times superfluous such as benefits analysis, risk valuation and performance objective apart from the cash flow depth. The system can bot work like a magic and the notion of just implementing it without turf rubrics tend to have unpleasant repercussions. Although an imprudent approach and arrays a sequence of happenings that is bound to lead to the letdown of the key objectives (BIDGOLI, 710, 2004). Consequently, such results to a conclusion, that ERP systems being labeled as bad investment decision yet the proper application and turf plan lay down. Organization sometimes does not get to comprehend why they really need to implement ERP systems, but it is occasionally tougher to deliberate an ERP solution as the vendors object is to close a business deal as faster as they can. There should be proper validation application and make sure it caters all the business prerequisite or project plan for that matter (NKHOMA & GILL, 11, 2014). This is the initial stage which if completed as planed time spent on later fixation at the later stage would not occur. It is advisable for an organization to understand the business objectives that they are after then there after appropriate decision is made in regards to the route to a cruise. ERP system has proven record of installation which has gone a long way in helping a small and average organization with their deliberate competitiveness. Let us not forget that upon installation it will incorporate all the data within the affected departments and it will not have a smooth and swift plan then it might hit a standstill (DEVOS, LANDEGHEM & DESCHOOLMEESTER, 213, 2013). Some organizations have been reported to have scrapped the whole thing out of their system due to the miscommunication of several systems and this is courtesy of unreliable information apart from the system failures emanating from the application mix up (CARVALHO & JOHANSSON, 117, 2012).

For Enterprise Resource Planning to realize success within an organization it must have complete backing project management and project Champion. These are very important people in making sure that the project is implemented in accordance with the plans coming from the organization objective (BRADY, MONK & WAGNER, 34, 2011). They will focus on making sure that the project goals are realized and this will be done in several phases within a given time frame and budget as well. The project should possess the characters of complete know-how of the technological change apart from the vast field of implementations. The life of the project solemnly depends on him and furthermore he must capable of managing resistance which arises in several occasions especially from those departments who have not yet realized the importance of going digital. The implementation of the ERP is the key to improving an efficiency of all business processes they reengineer the main means of smoothening the existing system data process.

Strategic Analysis

This is with regards to understanding the organization business setting and the inner business, also emerging commercial policies to stand competitions. This where the SWOT comes in, identifying major internal and well as peripheral prospects and the coercions from the workforces, suppliers, clients, and other stake holders involved in the business. Managers are to have a keen look at the business strategies to capitalize so as adapt the business process redesign once the threats have been identified and analyzed. In a number of considerable organizations, redesigning the fundamental commercial process has been a foremost enthusiasm for the new-fangled IT investment. Similarly, some cultures inside an organization are of worth any benefits in terms of financial gains, this a call to the management team. They ought to investigate on how some of these nonfinancial values have a connection to the real financial benefits and tune it well so as to aid the revenue rise. Certain department when well-articulated and set fit and finally it will be a route for success (BIDGOLI, 711, 2004). There is no doubt for the perfect and smooth running of ERP systems IT enabled and investment decision need to in hand with the induction of the new system lest it might not work in the designated way (NKHOMA & GILL, 12, 2014). One may ask how this is even possible and the relation it exists, but, I can reassure you that paralleling IT enabled firsthand business process with the existing business is definitely the turnaround deal.

 The assimilation benefits the managers sound IT investment, this business process is classified into two groups that are BPR which is in the physical flow and information flow. The BPR information tide vicissitudes on the way make, transform, propagation, and the storage of the information itself, and the IT does a lot to this type of data making sure that it reaches all the departments at all times. The time consuming of physical movement is limited apart from the lowering the cost related process time frame before it is actually put into use. Information Technology (IT) theatres a significant purpose in accomplishing BPR in physical flow, for illustration reasons let us consider how EDI works in delivering business triumph (BRADY, MONK & WAGNER, 34, 2011). Electronic Data Exchange re-engineers inter-organizational data interchange through electronic invoices and orders catering in one big data base. There are three foremost phases of reshaping comprise of the breakdown of the prevailing process, a creation of redesign intents and lastly the designing of all fresh new and advanced process (NKHOMA & GILL, 12, 2014). The process design key aims to incorporate the time cycle reduction of information to direct through strict guidelines for the IT department to follow. They are then analyzed in accord with the frequency of each and every event or transaction, method of the process and lastly the flow in between this process.

Acute Success Dynamics

The success of the ERP implementation entirely depends on the management will make the project successful lest the whole investment project will come down tumbling. At the top of the management is the board of the directors and the senior most managers who are responsible for the smooth running of the company, it should be noted that this is the very people who are responsible for the ERP victory. This is type of people who are capable of making financial decision bolstering projects, as their role involves, developing and indulging all the precincts and proficiencies of the very proposed system of ERP solution option. After the roll out of the project with the stipulated budget and timeline, the management will see through that the project is progressing in the time schedules. Further, the top management ought to communicate to all departments especially the IT department where it would be the backbone for realization and triumph of the ERP project (BRADY, MONK & WAGNER, 34, 2011). All the personnel within the organization boarders have to embrace the inception of the project so as to counter inside the organization resistance. The support emanating from the top management does not only stop at the launch and facilitation but it goes along the way up to the implementation process of the ERP systems (NKHOMA & GILL, 13, 2014). The support has to be relentless and with robust management apart from their obvious mandate in the monitoring of the progress.

Project management teams also have a significant contribution towards ensuring that the project runs smoothly. The manager of the entire project is responsible for making sure that the phases of the project are closed swiftly and within the timeline. Similarly, the team will also be responsible for management of the life cycle right from the onset to the closing phases of each and every important part. Whereas, the project team which ought to be competent as far as technology is concerned is a must consideration since from there on they only deal with technological challenges in each and every aspect they do. The team will link their competencies with the organization objectives in regards to the inception of the ERP systems (NKHOMA & GILL, 13, 2014). These are kind of people who contemplate on the question why the system introduction is necessary for the organization; they should and instill ideas on how the system will work to the departments which have been affected.

Problems Of Implementing The ERP Systems

Hearsay from some organization that has faced some problems with the implementation process is always related with the application mix-up. When the objectives of the company is not well articulated then the system might fail, like for instance the extent of disturbance might not be inclusion of the vendors and it will be a mistake once they are incorporated in the system against management will. As a company we might consider the ERP system and invest a large amount of money hoping the results would be fruitful, first of all we ought to be knowledgeable to the extent this system will go. Otherwise later we might be disappointed by the major setback it would have taken us, to avoid substantial losses and sales knowledge as to be put at the fore front. At first, the resort of causing too much disturbance to the vendor related activities is out of question (BRADY, MONK & WAGNER, 34, 2011). But come to realize later that actually the whole system have to extent to such departments for requisite finished the process. From the vendors point of view there would be nothing to complain about and not even the technical view (KURBEL, 120, 2012). While a number of issues is responsible for the downfall in way which was not expected going by the smooth manner which ERP system.

One of the major problem as per the case above is obviously the choice of the timeline for implementation. This was a ripe time for the company to concentrate on core activities which would generate income (JACKSON, SAWYERS & JENKINS, 7, 2008). It will be hard for any organization to make it through when they are in the restructuring process since the competitors will come in knocking and outdo you in terms of market sales. We have to understand that by indulging in the restructuring process at this time will be as good as giving rivals an easy win. Competitors will strive at each in a quest to become the market leader apart from defeat of rivals to be the market supreme. The injustice done to the system is what we can all avoid it spent a lot of efforts and crucial time in executing the Enterprise resource forecasting (NKHOMA & GILL, 11, 2014). Yes, it was a nice move but the blunder was not restructuring the whole business course and making a paradigm shift in it. The repercussions to this are a whole confusion among the staff and disrupt of customary operation of business. This kind of mistake is common in the industry and it is committed especially where the expertise and diversification is limited properly due to financial constraints apart from other resources. Paying a full attention to the ERP solution resulted to the uncertainties that materialized inside the business which could have been resolved if realized earlier. We can tell that amount of focus ERP received was relatively low hence the succumbed to the tragedy, after changes and damages caused it would be not easy to come out in full force and face the challenges. Since the ERP was nearing the completion point and looking back at the common mistakes was not part of their problems it is now that we realize that we wish we checked out. At the final touches point the shock grew up and all over a sudden it was frenzy since the interconnection proved to be harder just like the reality check in. The inclusion of the vendor in this whole thing was a big mistake which the management had no idea it would result in such setback (KURBEL, 119, 2012).

As to the problem of the application misfits which sadly, there are many ways which ERP systems can be selected and chances of not fitting your business is possible if rigorous research is not administered. Shelf ware results from failing to consideration the whole bunch of users in the organization who will determine the usage of the new. The systems have to align with what the suppliers, distributors, and manufactures users so as to minimize miss communications. We have to understand that whenever the systems are installed it has to match the other stakeholder who benefits the firm and communication frequently exists (BRADY, MONK & WAGNER, 34, 2011). To avoid a shutdown this tool has to be of the same nature, you cannot suppose the ERP vendor to apprehend the business you carry and the industry practices in a day to day basis. The challenge of the ERP is that the total cost cannot be really estimated at once since it will endure a series of events. This has to do with the type of the software chosen and we all know that it differs from one package to the other the type of software has to consult all financial and resource of the company so as to avoid problems in the near future.

Conclusion

The small business has benefited in a number of ways courtesy of ERP system introduction, the rise of revenue and sale is just a tip of what this system is capable of incorporating and bringing a whole bunch of success. Managing the systems is the key to attaining much-needed triumph with the ERP system apart from getting the perfect amalgamation (NKHOMA & GILL, 14, 2014). No doubt, the milestone which has been so far attained with ERP systems is worthy course, however, the setbacks have to be noted and organizations not to void going on such direction any longer. The well-articulated strategies and constructive analysis is a major area which it should concern all companies before opting for the plan.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reference

KURBEL, K. (2012). Enterprise Resource Planning and Supply Chain Management: Functions, Business Processes and Software for Manufacturing Companies. Berlin, Springer Berlin.

 NKHOMA, M. Z., & GILL, T. G. (2014). Information technology in Vietnam (and Southeast Asia): Discussion cases. Santa Rosa, Calif, Informing Science Press.

 

BRADY, J. A., MONK, E. F., & WAGNER, B. J. (2011). Concepts in enterprise resource planning. Boston, Course Technology.

 

DEVOS, J., LANDEGHEM, H. V., & DESCHOOLMEESTER, D. (2013). Information systems for small and medium-sized enterprises: state of art of IS research in SMEs.

 

 

BIDGOLI, H. (2004). G - O. Hoboken, NJ [u.a.], Wiley.

 

 

CARVALHO, R. A. D., & JOHANSSON, B. (2012). Free and open source enterprise resource planning: systems and strategies. Hershey, PA, Business Science Reference.

 

 

JACKSON, S., SAWYERS, R., & JENKINS, J. G. (2008). Managerial accounting: a focus on ethical decision making. Mason, OH, Thomson/South-Western.