ERP in SMEs- Interview with Mr. Asheesh Pandia, Brand Management Expert, EMEA region!

AP: SMEs are consistently evolving and they are among the largest employers in India. To be competitive in their marketplace there remains a great interest and inclination among SMEs towards ERP implementation. Lots of small medium companies are either considering or already implementing ERP and that has opened up great new dimensions and phenomenal opportunities for consulting companies as well to reach out for SMEs and provide their solutions. Opportunities are great for those who can provide expertise in ERP implementation especially if they are competent enough to do quick deployment and keep the total cost of ownership very low. Creation of a talented pool of consultants who can do successful implementation if the one of the key challenges that the industry needs to address at the moment. Implementation as well as operational efficiency is where the focus should be currently.

TB: Specifically, what is the current state of application adoption among SMEs in India?

AP: Application adoption is definitely on the rise at present. Solutions are getting increasingly modular, open, secure, innovative, real and comprehensive. There is an enhanced willingness among SMEs as compared to the participation levels in the past and the betterment in perceived relative advantage has played a great role over the last few years. Again, SMEs are fueling the overall industrial growth and they remain as the pivot of this whole revolution.

TB: What are the drivers for application adoption amongst SMEs in India?

AP: In technological context some of the key factors which determine the willingness and ultimately drive the adoption are trialability, compatibility, complexity, relative advantage and of course observability. While from the management’s perspective, organizational readiness, management support and resource size are crucial too for successful implementation. These being favorable influence the application adoption at all levels.

TB: What are the challenges for application adoption?

AP: Organizational readiness or the availability of the needed organizational resources for adoption, management support as well as the ongoing decrease in resource size are still some challenges that need to be addressed currently besides knowledge management. Also, there are other roadblocks like lack of consistency for uniform adoption of ERP systems, misalignment with basic strategies, cultural differences and diversities in work environments and data storage systems. Applications like Cloud ERP could be the next big thing for SME but awareness, security, reliability and connectivity pose a challenge that hopefully the High IQ Networks will address in due course.

TB: Usually an SME-specific offering is stripped off much functionality. Does it help enterprises to have a stripped down version. After all, an enterprise whether SME or large have similar requirements in terms of processes and book-keeping, only scale is different.   

AP: Well, yes and no! This is typical and perhaps a tough one to address with generalized statements for a common target group. Stripped-down, base level implementations or Vanilla ERP is more often than not a trade-off in functionality and rather invariably so which is no secret. But not always and not for every SME for sure too. And that is why and where the knowledge management comes into play. To say it is no good may not be justifiable in every single case because the question is ‘Good for precisely Who?’. The face of SME is changing with time, business, functionality and strategic orientation. So if we speak of a typical SME of today which is advanced, focused, strategic, smarter and relatively bigger too than ever before, scale would be about the only thing that scrapes through to segregate it from a larger enterprise. And although it may be too early to say but in any case this difference too will gradually be blurring with time because the bigger organizations are condensing on the resource front and the smaller ones expanding with growth and for organic or nuclear betterment.

TB: In what ways is it different from the standards ERP offering?

AP: First, it will be a good idea to explore some different scenarios and different approaches thereof respectively. An SME that went live in four months with financials, distribution, scheduling, and manufacturing modules states that they made a corporate strategic decision to go with as Vanilla an implementation as could be and would use what was there in it unless a specific process absolutely had to have it. Another SME argues that companies shouldn’t get hung up on thinking that some custom business process is going to give them a competitive edge. It says that it is what your users know that makes the best competitive edge rather and that they will get their competitive advantage from how they use the information in the system. They would rather spend their time on what the data means and not on creating business processes. Companies do go for Vanilla or stripped-down systems if they could perform well with only them and that may well be an intelligent approach at times depending upon your business and strategy.

In a way, it may make very little sense to further customize those apps that already are ‘companies-in-a-box’ and that again is another approach. Perhaps that is why several SMEs are turning their customization efforts to outward or customer-facing applications, such as customer-relationship management, and not spending the time and effort on inward-facing applications.

Still, the best change we observe in ERP customization today isn’t that users are doing less of it, but that they have begun to view it as a ‘continuous process’ and that seems promising. ‘Incremental’ could invariably be a good approach to implementation sorting with the least customization first and moving on to the tougher and more demanding programs and functions.

Back to the question how different is it from the standard offering? Entirely different perhaps, depending on where your organization fits! Process knowledge management – that’s where the true answer hides. Regarding the alternative customization, someone once said appreciating the standards and best practices, “ERP is like a Jet Airplane leveraging which companies can fly instead of driving an old worn-out car. But most of the companies after buying the Jet want to add headlights just the way they have in the present ‘car’, want to add indicators, horn, brake etc. and finally they turn a Jet into the same old car”.

TB: Who plays a larger role in influencing the SME segment for ERP adoption: channel or the vendor?

AP: Both the channel and vendor have highly influential roles to play especially at this stage. SME is no more just another vertical categorization or a single-instance remote option; it is a strong massive community and a huge possibility, evermore connected than before with the numerous upcoming platforms. Engagement is the key and both the channels and vendors have equal opportunity and responsibility to bootstrap, get involved and jumpstart the revolution. And this is true for any market and technology for that matter, at a phase when both have heavy growth potential and positive curve. Channels and vendors are two ends of the spiral that reflects the ultimate market growth and penetration. For instance, ‘awareness and acceptance’ are the two keys for any technology or market to thrive. If vendors were to come up with better educational initiatives they would be creating more awareness. Channel participation on the other hand would strike and testify enhanced acceptance to all the rest in its own community. It is a mutual thing with a win-win possibility if everyone plays its role well. Take SME Channels publication for example, would it be difficult to see the excellent value in the important role you play?

TB: Does the SME market have the financial capabilities to invest in an ERP app?

AP: The financial capacity of SME market is limited for the most part as long as traditional offering is concerned. But given the proven operating efficiency and other cost benefits that follow the seamless integration and flow of information through ERP apps, it is seriously considering cost-effective implementations. Modern offerings have an easier access to this huge market which has not been fully understood, appreciated or tapped. Both the players and small medium companies face the financial challenge at one point or the other but keeping the costs low would a win-win situation for both parties at this phase. Players need more and more satisfied SME clients with successful and proven implementations in order to build a strong portfolio and get the competitive edge. The same is applicable to mid-size market clientele; quick and tried-tested but reasonably priced implementation puts them ahead of the competition. Given that perspective, there is absolutely no dearth of capability, willingness and opportunities awaiting participation in this market that can absolutely be tapped with aggressive competence.

TB: What is the scope of cloud-based ERP for this segment? Is it viable as most SMEs are located in clusters near secondary towns and cities where connectivity is not enterprise-grade?

AP: The future definitely is Cloud for most enterprise applications including ERP; only that it is more about the ripe time and migration rate. Newer mid-market entrants are embracing cloud computing to gain competitive edge but Cloud is still seems wee bit cloudy for most SMEs and immature as well! And speaking of geographical connectivity challenges, it actually is a huge roadblock currently. For SMEs that face the connectivity issue, it may be a good idea to wait until that gets resolved first. In the process, they will benefit from the development in Cloud ERP offerings too. Most of the modern ERP systems are Cloud-friendly already, they will gain acceptance as Cloud itself becomes more prevalent as an enterprise application deployment platform. These systems need the flexibility of phase by phase implementation, gradual migration and even downgrade or move-back-to-in-house options.

TB: What is the roadmap for ERP among SMEs. Will it be the traditional on premise ERP or will it be essentially cloud-based?

AP: Overall, the scope seems very promising and there are several vendors as of now including Acumatica, Agresso, CDC Software, Consona, Compiere, DataXstream and virtualised SAP, DSP managed services – advisors for Cloud based Oracle E -Business suite, Dynacom, Epicor, Global Shop Solutions, IFS, Intaact, IQMS, Lawson, Microsoft, MyERP, Netsuite, Oracle Cloud Computing Centre, Openbravo, Plex systems, Sage, SAP Business by Design, Salesforce and Glovia Cloud Solution and Syspro. Besides, when Salesforce.com has brought customer relationship management (CRM) systems successfully in the cloud, why wouldn’t ERP make it? As long as small medium enterprises contain cost or rather save substantially switching from in-house systems to cloud-based software-as-a-service (SaaS), it sure is the way to go.

About Author: Asheesh Pandia is a distinguished Brand Management and Corporate Communications consultant with around a decade of international cross-industrial exposure and has been extensively published & exclusively featured in some of the best technology and engineering publications. Based out of Canada, he currently provides branding and communication consultation to several MNCs especially on elevating and differentiating their brands and creating more focused and better perceptions.  He writes independently for numerous publications across Asia-Pacific, EMEA and Americas and is a proactive member at many professional global communities and non-profit organizations.

Please send email to [email protected] for your views, feedback & questions regarding the article.