ERP: why small business speaks "no"

At what stage of development of the young company does acquisition of the ERP system become really necessary from the financial, operational and technology points of view? This question occupies most of heads of medium and small business who aim at development of the company. Often it unexpectedly arises when the company endures a boom of sales or normative disasters, and it becomes clear that the tables Excel are not able to service business any more.

It is the typical scenario for the small and medium companies, Cindy Jutras, the head of Aberdeen Group Inc research company, in the last report claims. According to her, the ERP system allows to standardize it the companies business processes and to obtain more exact information on finance, the personnel and a status of supply chains.

"ERP is more than necessary infrastructure creating transaction accounting systems on which business is based", - the expert writes. "It is also potential source of cost reduction and rationalization improvements", - she noted. Some large companies which passed through ERP projects can not agree with this thesis, but it is a subject for a separate research.

Not each small company goes eventually for implementation of ERP, the report says, and also the majority is not ready to invest large sums in implementation, maintenance of systems and their upgrade, but ERP systems in this sector nevertheless are in demand.

579 medium-sized and small companies from which 70% did not invest in ERP yet participated in a research. Experts selected six key reasons why they did not make up the mind to such step: 39% said that their business is too small; 34% - have experience of effective work without ERP; 33% have internal attempts to create such system; 28% referred to high cost of software and services; 21% intend to work further effectively without ERP; 10% said that such systems are too difficult.

What should occur to induce these companies to review the views? 44% called emergence of available inexpensive solutions which will allow them to minimize risks from the project among such factors. 40% noted as a factor the explosive growth of business, 29% - growth out of limits of the predetermined threshold, 27% - need to conform to regulatory requirements, 19% - approach of catastrophic events which will show that business cannot effectively work any more.

In these arguments there is no mentioning wide functionality of ERP systems which can outstrip with interest by opportunities the used by business of the table and office applications. Along with the above-mentioned reasons the lack of such understanding is the main obstacle for the small companies in implementation of ERP.

By words Yutras, in the market is many the effective alternative ERP models: this SaaS offer and cloud solutions meaning payment of use of a system on a subscription, for example, of NetSuite or Workday. At the same time the expert believes that business should not stop trying completely implementations of ERP systems.