Essay: The Demand of ERP in Small and Medium Enterprises

By | April 27, 2011

Sample Essay

Until few years ago ERP was a term that has its use limited to only larger organisations. Some of these organisations went ahead with ERP process not realizing the undesired consequences and hence when met with issue, took proactive measure to curb them.

The massive expenditure on implementation of ERPs by large organisations made them the prime target of marketing by ERP vendors, since they made large profits from each of the implementations. Hence, the use of ERP by small and medium enterprises remained a dream. However, the aggressive marketing by ERP vendors had a major negative side effect as well. The awareness creating through this led to the massive adoption of ERP software by large organization which meant that ERP vendors soon started running out of business. This problem was further deteriorated by the fact that the number of ERP vendors increased to the multiples of ERP customers which also caused intense competition among vendors and meant that medium or mediocre ERP vendors had no possibility of getting business. Hence the ERP vendors then refocused their attention to small and medium enterprises. This change in focus was also boosted by the fact that SME saw tremendous growth in the recent years. This growth also increased their data and information needed, and many SME saw their legacy system struggle under the strain. Hence, they were also forced to look for alternative solution which would not able to handle their current needs but would support expansion with the growth of business. This need for business and apparent demand in SME sector, made the ERP vendor redesign their system according to the needs of SME which was further facilitated by the availability of open technologies such as a .NET reducing the barrier to entry in to the ERP system (ERP Wire, 2010).

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