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Implementation challenges in SME segments

Low Computer proficiency

Most of the small and medium companies employ fewer qualified professionals. In some companies we have seen older employees who do not have basic computer literacy managing the functionalities.

In one company in Chennai, production entries were to be made by an experienced, old person who had never used a computer. We started teaching left click and right click in mouse. When it comes to learning, age is not a barrier. We have seen successful implementation with people like them as they feel proud to use computers. In a machine shop near Erode, the entries are being made by non graduates and workers. They openly thanked us for allowing them to touch a computer that they would not have done on their lifetime. In our experience it is not prior computer proficiency or age that is a barrier. Any one with an interest and urge to learn can be made to enter data in an ERP.

Bill of Material Creation.

There are four major masters that need to be created – Item master, Bill of Materials, Customer Master and Vendor Master. There are other masters which have fewer records.

Even though companies have list of vendors and customers ready with addressees, items will be without a code. That gets created by spending few hours.

Bill of Materials is one master which most of SME companies need to do lot of work to collate data. Even though items are getting produced for years, the consumption details are not documented well. Even if they have some data, it will not be an updated one.

The drawing and design changes would have altered the raw material requirement. Also in die casting, plastic companies, the bye products and weight of components will have to taken. Also ERP handled production BOM and that handles purely consumption data and levels of BOM depend on control points in production.

Our first session of discussion will be to explain the bill of material purpose. We collect data in excel sheets that can be uploaded easily. In our experience, the quantity in BOM gets fine tuned for correctness during the course of usage of ERP

Employee Attrition

With the economic development and change in business scenario, every enterprise irrespective of size experience attrition of employees quite often.

Functional personnel who gets trained in ERP if they leave, the usage of ERP comes to a halt. In SME, companies cannot afford to have redundant employees and so periodically ERP usage is hampered due to this reason.

We in InteGREATZ impart training in cross functional entries. Stores person will also be trained in purchase and production. Similarly production person can enter stores entries. Since the product is user friendly and easy to enter, we get this done.

Even if there is attrition, the in-house manpower can train a new entrant and until he/she joins there will be no stoppage of entries. We also provide remote training to personnel so that entry in ERP is maintained smoothly.

Low Motivation of employees

This problem lies in many small and medium companies where owner handles all major critical functionalities. When professional hierarchy is not in place, majority of employees are close to head of the enterprise. When the owner of an enterprise is not an experienced professional and does not handle employees well, employees especially supervisors stay less motivated.

In those circumstances, attrition happens and if it does not, they don’t show any interest in getting systems implemented.

We have in many occasions discussed this issue with the owner and have requested to go in for HR consultancy if required.

As ERP implementation partner, we cannot sort out this issue ourselves but it is a major challenge.

Low Man power Allocation

SME companies have few competent persons to run department functionalities. They will be always be under pressure and will not be able to allocate their time for implementation of ERP.

Training them will be a task and making them enter the data also is very tough.

We handle them in different ways. One by explaining them the purpose of ERP and what benefits it will give. This has helped in few instances. But in another company, the employees would like to enter but all of them will be overloaded. Even we have stayed after office hours and trained in night shifts. Even with all these if we find the problem, then we discuss with the management to allocate more man power to handle the situation.

Before starting implementation we discuss with the owner the importance of time. We adopt a different strategy for a company in Chennai. We wanted to make the employees see value and usefulness in using InteGREATZ. We developed all their day-today management reports before starting implementation and showed them in InteGREATZ. This gave them some relief and then they started using InteGREATZ and not much efforts were required later.

Parallel System running

It is simpler to implement a company where no computer system exists. If a company has a legacy system running, resistance to change is a great task. This is compounded when the management insists on comparing the results of ERP with the legacy system. Employees will find it difficult to enter both systems and finally implementation will not be successful.

An ERP like InteGREATZ with fully loaded features will be far superior in business process handling when compared with the legacy system which may not capture many data. So comparison will never yield any result and most time will be spent in finding the difference between the two.

Instead we adopt a unique methodology. Since InteGREATZ is implementable within a week, we load all their master data and transaction entries for a week in test database. All reports will be shown for acceptance. Then we will ask the company to stop using the legacy system. Entry will be made only in InteGREATZ.

Separate MIS preparation

Management Information reports are vital for an organization to control a business. Most of the small and medium companies prepare these reports which are cross functional but prepared manually in excel reports. Since many involve financial inputs, accounts department personnel create those reports. In some companies each functional head prepare such reports by collating all data.

We observed that many companies use ERP but still depend on MIS reports prepared manually. In InteGREATZ we always develop all those MIS reports in excel sheet itself but from the data from ERP. We also request them to eliminate excel reports so that data integrity is achieved.

By giving MIS reports from InteGREATZ itself we instill confidence on the owner that MIS report can be got from ERP and entry into ERP is a must to get these reports online. Also when they understand that un productive time is saved, ERP implementation is also successful.

Indifferent attitude of owner

Many managing directors and owners treat ERP as another computer or a CNC machine and they do not get involved directly in the project. They used to complain that they are not getting any report from the system but on the contrary the real reason would have been that their personnel would not have entered any data.

This indifferent attitude is one of the major reasons for failure of ERP implementation. The owner should understand the benefits of ERP implementation and once started the project should be spearheading that by looking for results. He should set a personal target to see all major reports from ERP system.

We insist that owners show us the reports in their laptop or desktop system when ever we go for a review. We tell them that unless he is committed employees will not be getting involvement.

Most of the SME companies do not have an understanding of what they can get from an ERP. So entry into ERP is seen as an additional work and not a tool for growth.

So we prepare the team before starting implementation and check out with the owner for status. We load the software in his laptop and review with him. When we go behind owners, implementation is always a success. After all together we win.

Poor Infrastructure

Investment in computers and ERP is always done in stages. Most SME find it difficult to invest enormously in IT infrastructure in one go. So the configuration of server and also systems used to be below par. Even the net working within their company used to be weak. When there is lot of data transfer happens, there are chances for a disconnect from the data base and so entry will be disrupted.

We always insist the companies to install a good infrastructure before ERP implementation. Proper power back up is necessary. Without that due to sudden power outages, database used to crash. Many companies do not have internet connection in all computers. This is always a challenge with small companies.

Employees not prepared

The purpose of investment in an ERP is not well articulated to all employee concerned with the implementation. This is vital for success.

In few companies, the decision and selection of ERP is done at senior level and the real users are taken for a surprise when the implementation starts. It is better to discuss with all employees and that will give a comfortable feeling for employees also. It shows a sense of involvement and they show higher level of commitment.

In InteGREATZ we always start of our meeting with all members of the team with a kick off meeting where we deliberate the advantages of ERP and how each person is responsible for the successful implementation. Since success is a joint effort, we need to involve, hear them and also accept their short comings and complete the project.