GUEST COLUMN: ERPs for SMEs, the difference between good and bad management

Monday, December 5, 2011

by María Victoria Puentes, CEO, Manager Software

All companies, regardless of their size, need up-to-date, organized information that allows for on-demand forecasts to make business decisions.

ERP solutions make it possible to consolidate, organize and manage all of the information generated throughout a company's value chain: purchases, sales, portfolio, logistics, finances, customers, etc. SMEs also obtain positive externalities that otherwise would not be possible, such as high standards for information security, operational continuity and, of course, the freedom to work from anywhere in the world.

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Today, internet and cloud-based management systems are giving small companies the ability to more efficiently manage their business, with clear improvements in their processes, growth with increased profitability and access to industry best practices. The main benefit is that there are no investments in licenses, and the expenses related to maintaining and updating servers and applications are no longer an issue.

According to a recent Cisco study, there are 716,000 SMEs in Latin America and less than 40% of them use an ERP solution. SMEs in general have low IT penetration, which has a significant impact on productivity. By adopting less IT, SMEs are at a disadvantage in terms of management and the ability to take advantage of business opportunities. However, internet and cloud-based management systems mean a change is on the horizon.

For SMEs, having an ERP solution is a primary need. Business for these companies is extremely competitive and having access to timely and reliable information to make decisions is essential - not only for their survival, but also for sustained growth.

Distinct alternatives are available, mainly falling into two groups. One is to buy a software license, something which is already obsolete and which necessitates all of the technological resources that SMEs generally don't have, in order to ensure minimum standards for security and performance. The other option is to opt for a 100%-web solution where what the company is getting is a service. It receives all of the benefits of having an ERP solution without concerns about issues that are not part of the core business, such as technology or business process design.

Having an ERP means having access to timely and reliable information, which ends up making the difference between good and bad decisions. The big issue is that the information is available to the company's decision makers anytime, anywhere.

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