Cloudy promise ? ERP selection in German SMEs
28 July

Cloudy Promise ? ERP selection in German medium-sized companies

The middle class For some years now, the target group that many manufacturers of Business Software orientation. This is where most of the companies in the ERP-The sector still has real growth opportunities in a fiercely competitive market. Those wooed in this way can choose from a wide range of products and service providers. On closer inspection, however, the choice seems limited. Depending on the current trend, everyone is more or less blowing the same horn and interested parties are uniformly covered with buzzwords. Right now all SAAS and cloud Computing on the tip of the tongue, not so long ago was bpm the hypetheme before that SOA.


Moreover, we still remember times in which Software on Demand and all types of software hosting were the top topics.   All these currents have the same characteristics: They are based on technology and/or methodological theories.

Often the typical SME meets these buzzword bombardments with some lack of understanding. When looking for an application, they often enough have other things in mind than the "latest technology sow" being herded through the IT village.

This often causes frustration on both sides, for the reason that is at the root of all frustration: people don't understand each other.

Misconception 1: Technology instead of solutions

I can still remember a Cebit a few years ago, at which the SAP for the first time aggressively addressed the SME sector. With shaking heads and comments such as "I'm in the wrong place", some listeners left a lecture on the typical size of medium-sized company that SAP had in mind with its offer. There was talk of companies with 3,000 employees. At the latest with SAP Business One the target size has moved sharply downwards. Now even companies with only 10 employees are eligible for SAP software.

Other providers have developed in a similar way, and everyone is advised to do so. For the German SME sector is of a size where the K in the term KMU (small and medium-sized enterprises) has its meaning. According to the IFM (Institute for SME Research Bonn) work more than 70% of all employees in companies with a workforce of less than 500 employees.

So far so good: the market has been recognised and is being worked on.

Communicating ERP to SMEs

What unfortunately has not quite kept pace are the Methodsto bring the offers to the man. Classically, sales staff are still sent into the field, equipped with PowerPoint, a series of sales training courses and more or less talent to sell the ERP software to sell to the supposed customer. A rain of buzzwords then descends on the prospective customer, with which he often cannot do anything. In the best case, those tortured in this way speak up during a presentation. Often, however, there is an embarrassed silence: Who likes to admit that they did not understand 5% during a presentation?

Other contact persons in the past and today

This behaviour stems from a time when a conversation between the supplier and the prospective customer for ERP software took place on the basis of a similar professional team. The contact person 20 years ago with whom the topic Business Software discussed was an IT manager with a similar background to the consultant facing him. And most importantly, these contact persons also had a say in the decision-making process. The companies were simply big enough to afford their own IT department with the appropriate experts. In addition, everything that had to do with IT was surrounded by the nibbles of the almost magical.

Today the situation is radically different: In 90% all cases in SMEs, the management decides whether and which ERP solution is introduced in a company. or the commercial management. The first requirement for software is that it must be profitable. If it pays off, it is initially irrelevant whether it is used as a Software as a Service (SAAS) or as On-premise - model is installed.

If there are concrete problems or requirements, the customer wants to have them solved and, above all, wants to know in advance what costs are involved.

Misconception 2: What works above also works below

The other day, a managing director complained about the stubborn middle-classes: "..They do not think in Processes, they still think in terms of cases...". And this despite the fact that we have long known from large-scale industry that if you want to achieve improvements in the handling of processes, you have to pay attention to and work on the entire process. And this is independent of how many departments and positions in the company it passes through. In the meantime, there are sophisticated software tools that control a process across applications and tasks. Of course, you have to check all processes in the company beforehand. analysis have undergone.

Medium-sized companies at their limits

Nevertheless, one comes up with bpm regularly reaches its limits in the SME sector. Of course, some processes are often rethought and reorganised during an ERP implementation. But to be honest, this usually happens as a result of a mixture of requirements brought in by the software and the actual need for action. In essence, however, processes have often been established in the company informally, which have simply become established through their sustainability. This is often related to people, not positions. Of course, these people have the disadvantage of being difficult to replace, but they often have the huge advantage of simply functioning autonomously from any higher-level control.

Focus on flexibility

The requirement for ERP software in such an environment is flexibility. New circumstances and changing roles across departments must be quickly comprehensible and implementable in the software.

However, a special role is also played by how intuitively software interfaces can be operated, i.e. how easy it is for a user who has changed over to adopt a new process.

Misconception 3: Standard software offers standards for all

The paradigm of  standard software has now been successfully established in the market for a good 30 years.  The advantages of standardised processes within an ERP software are obvious:

  • the cost of acquisition is initially lower
  • the immediate availability has a positive effect on the implementation period
  • it is more mature and therefore less error-prone
  • the introduction and training process is often standardised
  • a large number of users ensures constant further development

Limits of standardisation

Now, the conclusion is obvious that the benefits for the company grow with the degree of standardisation. However, this has its limits, especially for German SMEs. How often have we been confronted with the statement when once again a special functionality did not correspond to what the customer imagined, but the standard offered: "...they must have implemented this function a thousand times already ...we don't do it that way alone.."

In such a case, one often has to accept that this one particular process, as unbelievable as it may seem, is handled in a very special way by this one company. Then there is nothing else to do but adapt the software accordingly. Of course, at this point the discussion can lead to whether it would not be better to rethink the process. That is the processes to the standard. However, it has to be said that it is precisely this detailed, company-specific implementation of processes that often distinguishes German SMEs from their colleagues in other countries. It is precisely because someone here is obsessed with detail that German workmanship is created.

The requirements for a Modern ERP for German SMEs, is therefore as much standardisation as possible with as much flexibility as necessary.

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