Managing and developing intellectual capital in many of today’s organizations is becoming the greatest asset. Different firms of different sizes operating in different sectors are seeking a way of performing this task effectively and efficiently. Among the different tools under considerations, many consider Enterprise Resource Planning (ERP) software packages essential tools to effectively manage, retain and share knowledge among stakeholders at all echelons. ERP implementation causes changes to the receiving organization given its comprehensiveness and integrity.
As a result challenges which results into additional risks and realization of new opportunities arise and proper action must be taken to avert or reinforce the challenge for better results. ERP solution system is as an opportunity for business entities whether small or large to use software applications that are specifically designed to upgrade the various business functions and attain the best business practices (Markus and Tanis, 2000, Marnewick and Labuschagne, 2005).
Effective implementation of ERP software applications ensures that the major functional parts of a business enterprise are linked together in a common amalgamated software system (Sandoe et al, 2001, Rao 2000). This process makes it possible for the business activities to be instigated more efficiently and cooperation among the workers becomes more effective through the interactive information system. The process of implementing ERP in Small and Medium Businesses (SMBs) is beset with extra challenges and opportunities due to their specialty.
The SMBs have limited financial and human resources, limited experience in project management and sometimes limited managerial competencies which determines the agility of their operations. Problem Statement Implementing ERP, projects require specialized application because they affect the receiving organization to different degrees. In implementing an ERP, solution divisions and departments within an organization have to be integrated into a single business platform, which affects the business model and the organization culture (Markus and Tanis, 2000).
This makes the project risky and intricate. Due to global business factors, economic expansion and IT revolution ERP solutions are becoming a requirement for business success. SMBs being key players in the economic activity are not left out in this competition. However, the process and success stories of ERP solutions in SMBs is lacking as past studies mainly focused on the large scale enterprises ERP solution process and application.
In addition, the present trend of ERP solution project implementation by SMBs in the diverse business sectors and industries calls for the exploration of the opportunities and challenges of Implementing ERP Solution Projects in SMBs to pave way for the identification of ways of avoiding or minimizing losses in the implementation process (Soh et al, 2000). SMBs organization structures and organizational cultures are not all well defined. This coupled with the rigidity of the organization structure and culture present serious challenges to the implementation of ERP projects in SMBs.
Additionally ERP projects are more successful in easy to change and agile organizations. However, unlike in large companies, the senior management team of the SMBs is normally part of the daily business operations and lacks in-depth knowledge and skills necessary to have organized long-term plans for the business and even the adoption of ERP solution projects. Similarly low capital base and lack of properly trained personnel have remained a major setback in the running of the functions of SMBs. This problem is compounded by lack of sufficient funds to sustain training and engage quality consultants in such trainings.
According to Sandoe et al (2001) many SMBs lack dedicated IT staff able to perform the risk management function exposing major business operations to unnecessary risks. Likewise, within internal functions of a SMB, organizational changes that would give room for adoption of technology are limited due to lack of unused resources. The impact of unsuccessful implementation of ERP solution to a SMB are said to be greater to the entire operations of the business enterprise while the success of wisely implemented ERP system will have a whole organizational positive impact (Rao 2000).