Previously, enterprise resource planning was used only of large business companies. It required lots of money to be invested. Small scale and medium sized companies were not ready to invest a large amount for buying software and employing staffs for managing ERP software.

Keeping this in mind, ERP vendors started diversifying their enterprise resource planning software by releasing many versions of the software which could assist small companies too.

Also, small sized companies might not require all the tools and customizations available for the big companies. The ERP software got tailored particularly to meet the small sized companies and for increasing the productivity. After this, small sized business people also started buying ERP software which matched their investment amount.

From the early 1990’s ERP helped the companies in driving down their cost and also helped them in operating more efficiently. Effective data management also helped streamlining the business process effectively. Planning, manufacturing, marketing, sales and quoting services kept on improving. Stock control, financial tracking and customer service also got better with ERP. Many time consuming and labor related processes were eliminated by the small business with the usage of enterprise resource planning software.

The flexibility which ERP offers is definitely a very big advantage which interests the small business. Flexibility and the real time control over the price and the jobs are the key features for a small sized company. Concise reporting is also a main factor which decides the quality of the company.

Based on these needs, ERP vendors have made installation of the related software as very less complex with much less manual job needed. The user friendliness of the applications also got improved. Adding more users or customers will no way affect the functionality of ERP.

Many small businesses are already enjoying the benefits after successful ERP implementation. The profit of the company has certainly increased after the usage of ERP provided the implementation procedures are followed perfectly. Business which implemented ERP successfully saw their business profit increasing within one year itself.

A good ERP system comes with essential features that will provide the functionality of comparing the hours of working of the professionals and the actual hours of work which was paid as a salary. In fact, many small businesses just doubled their return on income with just using this service effectively. With this ERP, they were able to monitor the time of production, cost, employee activity, overall performance of the company and many more crucial information.

Before setting up ERP systems, small business must first identify the business requirements. The impact which the ERP is going to have on the business should be well analyzed. Cost factor involved in implementation should be set aside initially. Once the requirements are well planned, then comparison can be made on different vendors available and the vendor which provides cost effective service and be opted.

For example, the sales unit should be aware of how many products are there in the inventory and the inventory department should be aware of how much products are in the middle of manufacturing and the manufacturing unit should be aware of the raw materials available for further manufacturing. If these data are properly communicated, then the productivity of the company can be increased to a huge level.

Synchronizing the information is of most important to manufacturing company because every part of their business units requires communication with the other part. In order to achieve this synchronicity usage of Enterprise resource planning software is necessary. Enterprise resource planning software is designed specifically to integrate all data available across the company and produce meaningful result from the data. Every data is collected and integrated into a unified system.

Though enterprise resource planning is an integrated system, it requires many software and hardware modules for its functionality. If the requirements posed by the vendors who provide enterprise resource planning software are successfully met the company, then the ERP system implementation should be successful. There are a very few challenges involved in the ERP implementation. If those hurdles are crossed and if the ERP system in is installed successfully, then it is definitely going to serve the company in raising the productivity to a high level.

Here are some of the benefits which the enterprise resource planning software gives to its clients specifically to the manufacturing companies:
1. Integrated service – ERP systems helps in integrating the data and providing synchronized service to its users.

2. ERP systems require feeding of data only once. When data is fed to one of the systems, then it gets automatically populated to every part of the software in no time.

3. The amount of paper work required is reduced to a huge amount. There is no need to keep loads of records in paper to keep track of the company’s performance. There are lots of applications and customizations available with the tool itself which could produce reports with a single click.

4. The inventory cycle time can be reduced to a huge level. The inventory cycle is the time taken for the product to get fully manufactured and delivered to the customer. Reduction in inventory cycle time means increase in the production. With this, the satisfaction level of the customer gets improved and also attracts more customers.

5. Labor costs are reduced to a considerable amount of time. With the availability of data in real time managing employees and managing real time production data can be in control.

6. Production time can be decreased with the usage of enterprise resource planning software. It helps in eliminating repetitive process and helps in breaking down the production time.

These benefits over takes some of the minor disadvantages of the ERP software and because of this reason many companies opt for enterprise resource planning rather than any other methods.

ERP has a variety of applications and processes which are available throughout their all business units. Implementing an ERP system is too complex and it can be done only by experts who have in-house skill in this software. This is also the most cost efficient way. There are many consultants and technical advisers available who can assist and implement the software provided requirements are clearly stated.

There are basically three types of services associated with ERP. They are consulting, support and customization. The amount of time required to implement ERP varies for different companies. The factors which depend on the time of implementation are the size of the business, number of modules the business includes, customization required for ERP as demanded by the company, the possibility of the implementation of the demand posed by the company.

ERP systems are distributed applications. They can’t be implemented all at once. There are a number of phases and steps involved in implementing an ERP system. A typical ERP implementation system requires one year and it involves around 150 consultants. This is for big and medium sized companies. But, for small scale companies which have less than 100 employees, the amount of time required for implementation is less. For these companies, planning and implementation doesn’t require more than 3-4 months. With the increase in demand for customization of the software, the time to implement will also increase.

For a successful implementation of ERP, companies should hire third party consultants for a short time till their implementation is over. The companies which implements ERP should also employ some staffs who are dedicated to manage the ERP systems.

Some of the management services required are business analysis, program management and change management. Employing these staffs is also a prerequisite for implementation of ERP. A significant amount of time is required to plan for data migration. This is also the most important point in implementation.

Process preparation:
Most of the ERP vendors have a standard process for their clients. The companies are generally forced to implement the ERP software according to the standards. During this process, vendors make a clear understanding of the business operations of the company and gathers as much as information required from the company.

Configuration:
Before starting the installation of the software, a check is made on the systems to verify whether they could meet the requirements for the software and service to run without any problem. If the systems don’t meet the requirement, the company should upgrade their system configuration. Once the configurations are verified, installation procedure is started.

Services:
After the installation is done, vendors trains the staffs who are going to use the ERP. Trainings are given on using the ERP applications.