The Fourth Discussion Point is Covered Under the Umbrella of Automation
Similar to the previous argument around agility, automation in ERP increased the SMEs competitive edge compared to other similar organisations and gained them ‘points’ when pursuing business opportunities with international counterparts, which mandated this out-of-the-box integration through ‘open standards’ and ‘best industry practices.’
This is in agreement with Elbardan, Ali, Ghonei (2015) comments on the principles and objectives of an ERP solution, which are to achieve standardisation, visibility, best practice, and integration.
Also stressed by Yoo et al. (2007), that ERP systems are provided from the top tier vendors with assumptions inherited from reference industries, countries and managerial interests.
It is well known and also by design that smaller ERP systems have lesser functionality, and the ability to expand and scaleup and may cost the SME severe customisation costs to achieve the levels of automation they were hoping for.
In the case study-based research by Zach and Munkvold (2012), in all the four cases, it emerged that customisations needed to be carried out in the non-tier 1 ERP systems (all of them local solutions) these four different SMEs have adopted, to make up for the SMEs increasing demands.
These smaller ERP solutions are also limited in out-of-the-box integration to other industry systems and lack the best-of-breed functionality rendering the need for continuous customisation.
As per earlier remarks, the interviewed SMEs within this study have clear long-term objectives and any capital investment required to fit this vision.
Automation in ERP is Key When Surrounded by Limited Resources
Seeking to do more with less, innovating continuously, fitting seamlessly in the supply chain, and limited human intervention to the minimum necessitates a high level of automation (Beheshti et al., 2014).
The SMEs understand that the local smaller ERP solutions fit their budget and their statutory requirements perfectly but miss the bigger picture of automation.
The Notion of “Doing More with Less” with Automation
This notion of doing more with less becomes more relevant and important within the context of this study. In my professional career, I had the opportunity to deliver several keynotes at acknowledged industry events where the main theme of the presentation precisely reflected this topic.
This study confirms this notion and its correlation toward automation throughout the organisation’s internal processes and also outside its boundaries aiming toward an extended enterprise concept across the value chain.
The more the automation, the lesser the need for human intervention and associated errors, wasted time and effort, and attainment of faster throughput.
These are all advantages SMEs aim for, and due to the richness of tier 1 ERP solutions in this domain, the higher the chances the SMEs who recognise such advantages shall vote towards the upper tier of ERP solutions.
The 3 most acknowledged studies for their depth within the influential factors domain of ERP selection, those of Everdingen et al. (2000), Bernroider and Koch (2001), and Buonanno et al. (2005), do identify ‘Process, Data and Interface Improvement’ as highly influential factors towards the choice of ERP solutions.
It is interesting to note that all the other 8 studies do not include this factor which is quite surprising and another reason why the author judged the 3 cited studies as the most relevant and points of reference within this study’s domain.
This article was contributed by our expert Kevin Attard
Frequently Asked Questions Answered by Kevin Attard
Q1. What are the benefits of automation through ERP?
As discussed in my article. The more the automation, the lesser the need for human intervention and associated errors, wasted time and effort, and attainment of faster output.
Q2. What criteria should be used when selecting an ERP software vendor?
The main element to keep in mind while selecting a Vendor is that the ERP solution should fit the requirements of an organization, and the ERP Vendor should be viable.
Q3. Which ERP system is used for SME?
SAP Business one is widely used by most of the SMEs
