Introduction
Small to Medium-Sized Enterprises (SMEs) compete globally today, mainly because globalization has provided them with the opportunity to compete internationally. However, as much as globalization has brought in such opportunities, SMEs are nevertheless exposed to competition, and challenges that relate to operations and administration. This usually comes in terms of ever-multiplying need by customers and suppliers alike, and that which comes because of pressure in foreign markets. Operationally, for example, SMEs experience a motivation to reduce cost and expansion of opportunities for returns (Gross, 2009).
Risks to consider when implementing EPR in SMEs
Regardless, SMEs have adopted several methodologies including Excel Spreadsheets and incompatible software applications. Enterprise Resource Planning (ERP) comes in to solve some of the challenges that the SMEs experience. ERP, as an application, is normally used to configure/integrate a business entity ‘processes and systems’ electronically and thereby promote an increased level of efficiency (Gross, 2009). However, there are risks that an organization must contend with and factor in when choosing an EPR operation so that the associated risks are avoided or at least minimized (Remenyi, 2007).
The risks to consider are many, one being that the requirement in executing a scheme with ERP usually needs a lot more time than simply putting in place a software programme package. This usually entails the process of a business restructuring which is seen to be a prelude to the success of ERP endeavours. Again, such is usually evaluated based on how useful the solution is. Further, this measurement is usually taken against the increased levels of the transparency of the whole system (Gross, 2009)
The other risk is on the enhanced clearness and transparency, especially if some departments do need to conceal the level of transparency. Since the importance in terms of applicability of ERP is usually appraised in terms of its usefulness in promoting transparency, it is risk factor stuff. ERP makes it possible for various departments to have privy extensively of various departments in the entire organization, sometimes this creates discrepancies that would bring about conflict (Gross, 2009). If anything, some employees can always transfer such outside the organization.
The other issue worth considering is the fact that SME has to be acutely cognizant with the specific bottlenecks that ERP entails, besides having to be aware and understand its own business, Information Technology (IT) requirements, as well as the needs around its operations. The disadvantage of not being aware of such is that it then sets itself up of getting in a system that will not adequately fill the ‘important gaps’ presumed (Yang, 2009)
The other risk factor is on the ‘nature of internal restructuring’ that comes with implementing the system. Usually, the organization implementing the system must re-organize and plan its operational as well as organizational pecking order and configuration. However, it should be noted that execution of ”pre-customized solution” fails to provide SME with the advantage of being supple to plan the organization as it is good as it may see it. Instead, usually, the SME must always re-organize (Parthasarathy, 2010).
Conclusion
EPR in as far as business entities are concerned is advantageous yet complex to implement at the same time. Because it is, a business decision like any other it requires planning, organization and filtering of risks so that the consequences are eliminated or at least reduced.
Reference List
Gross, J., 2009. How Small and Medium-Sized Businesses can navigate the ERP Maze. Pemeco Inclusive. (Online). Web.
Parthasarathy, S., 2010. Enterprise Information Systems and Implementing IT Infrastructures: Challenges and Issues. NY: IGI Global snippet.
Remenyi, D., 2007. Proceedings of the 3rd European Conference on Management Leadership and Governance. London: Academic Conferences Limited.
Yang, J., 2009. Information Systems: Modeling, Development, and Integration: Third International United Information Systems Conference, UNISCON 2009, Sydney, Australia, April 21-24, 2009, Proceedings. Berlin: Springer.