SMEs can benefit from open-source ERP

Small medium enterprises (or SMEs) in South Africa do not have any options in terms of intelligent software that can give them the same benefits enjoyed by big companies with big budgets. In particular, I am referring to enterprise resource planning (ERP) software. By Phehello Mofokeng, director of Geko Labs, a Johannesburg-based ERP integration and implementation firm.

In today’s highly competitive marketplace, the implementation of ERP enables companies to turn their growth strategies into profit, track expenditure, monitor time spent on projects or work and cut costs. But the moment one mentions ERP, many SMEs are consumed with fear and envy.

Truth be told, many SMEs are convinced that ERP is out of their reach. They believe it’s not meant to be utilised by them. They think ERP is for big companies with equally big budgets and with corporate needs, complex process and intricate outputs. This cannot be any further from the truth.

Currently, big companies are the only ones who enjoy the rich benefits of ERP.

That said the time for big, clunky and very expensive ERP is over. There are now options available for SMEs.

This new breed of ERP software is not only scalable, but it is either affordable or completely free to modify, to use and to own.

Open-source ERP has matured and many SMEs are carving out a business niche for themselves in this area. SMEs are using the open-source ERP and selling it to other SMEs and big corporations with excellent results that sometimes over-shadow the ability of big-name ERP brands.

The beauty of this is that the software just works; whether in single instance installation or installation that serves multi-tenants; whether for an SME or for a multinational corporation.

SMEs need to stop thinking like small businesses

So why do SMEs need ERP or Customer Relationship Management (CRM) or Business Intelligence (BI)?

Well, there are too many reasons. Primarily, SMEs – just like any type/size business in the new economy – need to know what they are doing. And ERP is great at helping customers achieve this.

ERPs and CRMs do far more than just accounting – from billing, managing inventories, payroll at the tip of your fingers, sending mails and creating sales pipelines. The beauty of using the same technology used by big companies is that SMEs will gain deep business insights and intelligence.

For me, the ability to have all your business data in one place is incredible, where a business owner does not have to search for information across computers, files and spreadsheets.

Because many (if not all ERPs) are database-driven, you can stop doing repetitive filings across different applications.

ERPs also allow a business person to manage his resources (including human resources) in one place. Also, personnel can have access to the same up-to-date information – including customers and transaction or deal histories.

The potential danger here is that people can accidentally see information or transactions that are above their pay-grade. But many CRMs and ERPs have fine-grain user control and roles-based permissions that can prevent this even before it happens.

Big ERP vs independent ERP

There are big name ERPs in the industry. They are very expensive and very chunky and often they are difficult to install (with too many dependencies that only certain IT professionals can understand). Let us take nothing away from them, for they do work and they are often well-architectured.

The new breed of ERP is open – that is, you can open the source code and remake the software in your own image, to fit your own company’s requirements.

Most of these ERPs have a “customer” interface – for the SME’s customer. That is, they allow the client of the SME, direct access into their portion of the SME’s business. This means, less emails, less phone calls and less friction between SME and clients.

Clients can track progress of their job, make enquiry on the spot, communicate immediately and keep an eye on what is going on regarding their job/task, plus create support tickets, etc. This is a good thing for SMEs and for business in general – it avoids the communication gap even before it happens.

I think the best benefit of using open ERP is that you can even host it on your own – on premises, or on your server or computer. Licensing is very open and liberal therefore, you are not “locked in” with one vendor or one brand of software. The cherry on top here is that most of these ERPs can be integrated into the SMEs’ current workflows and other software. They are built like that because SME software vendors know that SMEs have very limited resources and time.

I am happy that alternative ERPs are now available to SMEs and they are just as powerful as the big time, big brand name ERPs.

There is a plethora of ERP integrators and implementers in South Africa as well – to support adopters, to offer training and to implement for clients willing to go this route. And most importantly, these ERPs introduce the SMEs, to how big corporations do business and this somewhat levels the playing field.

ERP is suitable for manufacturing sector, advertising/media/marketing, retail, consultancies, government – in fact, every industry needs ERP, more so, SMEs.

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