Essay: Strategies Used by ERP Vendors

Essay: Strategies Used by ERP Vendors
08/06/2011 Comments Off on Essay: Strategies Used by ERP Vendors Academic Papers on Business Studies,Sample Academic Papers bernard

Sample Essay

ERP vendors have to formulate strategies based on requirements of SMEs with respect to individual modules of ERP and ERP as a whole. Several ERP vendors including established brands and smaller vendors have developed certain strategies and solutions for meeting requirements of SMEs. The first strategy implemented by various companies to focus SMEs is to offer predesigned ERP compact packages. These compact packages are ready to use off the shelf systems which can be implemented in much less time than a standard ERP package.

General modules relevant to a specific industry are included in these packages with very low or no customisation options. The two main advantages of these packages are lower costs and reduced time for implementation (Hossain, Patrick and Rashid 2002). SMEs with minimum customisation requirements can easily implement these preconfigured ready to implement packages and even if a need arises for slight modifications, the vendor firm can be requested to make the adjustments necessary for implementation. Another strategy implemented by ERP vendors is slashing prices by a significant margin for SMEs. In 2007 major ERP vendors including SAP, Oracle and Microsoft slashed prices by up to 50 percent to increase sales in the SME market (Mukherjee 2007). This strategy still continues to date where ERP vendors offer lowered prices to SMEs in hopes of generating higher revenues and achieving greater market share. A relatively recent technology has been developed and implemented by ERP vendors is Software as a Service – SaaS which save considerable time and money for SMEs. The infrastructure of ERP system under SaaS is hosted at a location other than the SME and all modules and processes of the system are available to the company for use from another location through internet connectivity.

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