Information Technology Reference
In-Depth Information
ERP for Small and Medium-Size Enterprises (SMEs)
Organizations that are successful in implementing ERP are not limited to large
Fortune
1000
companies. SMEs (both for-profit and not-for-profit) can achieve real business benefits from
their ERP efforts. Many SMEs elect to implement open source ERP systems. With open
source software, anyone can see and modify the source code to customize it to meet their
needs. Such systems are much less costly to acquire and are relatively easy to modify to meet
business needs. A wide range of organizations can perform the system development and
maintenance. Table 9.3 lists some of the open source ERP systems geared for SMEs.
Table 9.3
Vendor
ERP Solutions
Open Source ERP Systems
Apache
Open For Business ERP
Compiere
Compiere Open Source ERP
Openbravo
Openbravo Open Source ERP
WebERP
WebERP
The lower cost of open source ERP systems is a powerful advantage for SMEs like frozen-
food maker Cedarlane. IT director Daniel Baroco says the firm saved “a couple of hundred
thousand dollars” by choosing an open source ERP system. Such cost savings were critical
for the then-$40-million business.
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Vertex Distribution is a medium-sized manufacturer and distributor of rivets, screws,
and other fasteners. Mark Alperin, COO with CIO responsibilities for the firm, chose the
Compiere open source ERP suite due to its low cost and the flexibility it offered to modify
the software to meet the needs of his business. Alperin says: “We have our own programming
staff, and the ability because of that to customize services on our own and respond to customer
needs is an advantage.” Prevention Partners, Inc., a maker of health program posters, buttons,
and related signage, also chose an open source ERP program, WebERP, for the same reasons.
Galenicum, a three-year-old supplier of raw material for the pharmaceutical industry, chose
the open source Openbravo ERP system.
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Recognizing that cost plays such a heavy factor in choosing an ERP vendor for SMEs,
SAP offers an appliance-like system that comes preconfigured with its ERP software, a
database and Linux operating system running on hardware from IBM or Hewlett-Packard.
The offering lowers the total cost of ownership for customers.
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The following sections outline how an ERP system can support the various major business
processes.
Business Intelligence
As discussed in Chapter 5, business intelligence (BI) involves gathering enough of the
right information in a timely manner and usable form and analyzing it to shine a spotlight
on the organization's performance. BI has become recognized as an essential component of
an organization's ERP system. BI tools are used to access all the operational data captured
in the ERP database and analyze performance on a daily basis, highlight areas for improve-
ment, and monitor the results of business strategies. The most widely used BI software comes
from SAP, IBM, Oracle, and Microsoft, with JasperSoft and Pentaho offering open source
solutions.
In the retail industry, BI can enable retailers to gain customer knowledge and improve
sales visibility across the enterprise so the firm can react to and better predict customer
demand and maximize sales. Each week more than 13 million customers visit one of Lowe's
14,000 stores, which are stocked with more than 40,000 items. All this business generates
each item it carries at each of its stores to help plan the appropriate level of inventory to meet
