No budget too small?

Cloud computing and mobility have changed ERP landscape forever, opening up the technology to companies that could never have afforded it in the past.

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No budget too small? Trying to move to an ERP before it is necessary can actually kill companies, experts warn.
By  Ben Furfie Published  January 24, 2012

Cloud computing and mobility have changed ERP landscape forever, opening up the technology to companies that could never have afforded it in the past. However, does that mean that just because it is now within budget, SMEs should make the leap?

Three letters strike absolute fear into enterprises of all sizes, from heads of IT in governmental departments down to the IT manager of your average medium size commercial business. Perhaps the only person those three letters isn’t absolutely terrified by those three evil letters is Abdul down in finance. You see, Abdul isn’t an IT guy. Sure he likes his computers and gadgets, and that has landed him in the unenviable position of being ‘the IT guy’ within his small company of 50 or so people, but if you were to say ERP to him, he’d probably reply ‘ER-what?’.

He knows about trends like mobility and cloud computing – mainly because the boss came to him a couple of months ago asking him how to get Microsoft Office on his new iPad – but ask him whether his company is ready – or worse, needs – to make the leap to ERP, and you’ll probably be met with a blank expression before he scurries off for five minutes to check Wikipedia.

Okay. So that might be a little bit of an exaggeration for dramatic effect, but the point being made is very simple. As trends such as cloud computing and mobility continue to change the way enterprises do business, small and medium businesses are taking note. Indeed, unlike many trends that have come and gone before, it is entirely plausible that small and medium sized businesses are actually in a better position to take advantage of the benefits than their much bigger brethren are.

“Like large corporations, small and medium size enterprises are seeking ways to streamline their business processes, cut costs, drive growth, and increase profitability,” says Melvina Tarazi, vice president, head of business development and industries at SAP MENA. “Small and medium sized businesses – and in particular midsized ones – can benefit from their size with regards to their business agility, especially compared to larger enterprises.”

That ability to quickly react to trends such as mobility and cloud computing without needing to necessarily worry about issues like legacy systems and corporate structures that usually act as brake on the ability of larger enterprises to adopt new technologies.

Those two trends are the ones having the largest impact on companies of all sizes, and much of the change in the way IT interacts and helps businesses is down to one trend in particular: cloud computing.

According to Tim Truesdale, director of EMEA regional product management at Infor, it is being driven by companies such as his investigating how they can integrate cloud computing’s capabilities into traditional offerings, such as accounting software and ERP solutions, as well as demand from enterprises and smaller businesses for that type of package. “This is reducing the capital investment,” he says. “It is switching expenditure to operational costs and helping SMEs to reduce their internal IT infrastructures without compromising functionality.”

It is this shift in IT – the move away from needing access to large pools of capital, be it from a businesses’ existing liquidity, or from access to gearing – that has fundamentally changed the balance of, and access to, various technologies.

One such technology is ERP. Aside from the hint in the name, enterprise resource planning, the traditional barrier to adopting ERP has been a lack of capital to invest in the hardware necessary to run such a solution. However, with the rise of cloud-based ERP providers, that issue is no longer an obstacle, especially for the companies for whom cash flow was never the problem.

“SMEs have now found it essential to use software-as-a-service, and cloud models thanks to their nature of being more secure, mobile and costing less,” says Vikram Suri, managing director for the Middle East and India at Sage Software. The financial software company has seen demand for its finance solutions, which are traditionally seen as for medium sized companies, skyrocket in recent years as enterprises in the Middle East cut back on large budget show projects.

He says that unlike their much larger counterparts, because executives often do the job or two or three people in SMEs, their time is much more precious, and so any technology that allows them to be more productive on the move, without having a large capital cost attached will naturally prove attractive. He points to the growing trends of cloud computing and mobility as two enablers, adding that Sage Software has seen demand bolstered in the region because of this. “The use of mobile-based applications gives executives who are constantly travelling the advantage to approve, give discounts and payments, as well as providing sales people with the ability to book and close orders while on the move,” he adds. “Both give SMEs the benefit of efficiency that they have otherwise lacked until now.”

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