Small Businesses Missing ERP Benefits

Research shows small and midsize businesses require just 6% less capability, on average, from their ERP systems but they settle for lower

Small businesses are not getting the full potential out of their enterprise applications, new research reveals.

When it comes to enterprise resource planning (ERP), smaller organisations - businesses with less than $50m in annual revenues - have similar needs to their larger counterparts. Research from analyst house the Aberdeen Group shows SMEs require just six per cent less functionality than 1,200 companies of all sizes surveyed.

But they don't achieve the same business benefits when rolling out systems.

This is in part because small businesses aim for simple, streamlined ERP systems - and thus overlook more advanced capabilities.

Cindy Jutras, vice president at Aberdeen, told "Because [small businesses] look for ease of use, they stop short of taking advantage of what they really have."

One area SMEs excel is with speedy rollouts - 86 per cent launch their ERP systems in the first year after beginning implementation compared to 47 per cent for large companies.

This is not just because they have fewer seats either, according to Jutras. "They are less likely to be affected by 'feature creep' than large businesses," she said.

Aberdeen recommends SMEs develop metrics to measure business benefits of their ERP systems. Of those that do reap the rewards, Jutras said: "It's amazing how much more business benefit they get. It proves the old saying: 'What gets measured, gets managed'."

SMEs would also do well to align business processes with software functionality and to eschew manual spreadsheets for automation in all basic business functions, said Aberdeen.

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