ERP & CRM deployment in Small and Medium Enterprises (Introduction)
Factors that lead to successful management of business transformation as an outcome of erp & crm deployment in small and medium enterprises, Part 1.
The incredible rate of change and growth in Information Technology has made it difficult for businesses to stay evolved. Business systems that improve work efficiency and data transparency such as ERP (Enterprise Resource Planning) and CRM (Customer Relationship Management) have been widely and successfully adopted by big corporations since their inception. However, in-depth studies of the business transformation and management strategies related to these IT based systems have been focused primarily on large enterprises. In this series of articles, we investigate the key factors that lead to the successful management of business transformation in Small and Medium Enterprises (SME) in relation to ERP and CRM deployments. Evidence was gathered from interviews with 5 individuals across 3 SMEs whom were heavily involved with the business transformation. The questions were focused on the processes and outcomes of the system deployment. Through this investigation, we will provide the relevant knowledge for SMEs that ensure they are well prepared and equipped to manage their business transformation. Leadership, communication and training were recognized as having the greatest influence on a successful business transformation. It was also concluded that a lack of experience and resources contributed to failings in the implementations.
Today’s harsh economic climate coupled with the dramatic rate of change in information technologies, is forcing more and more organizations to transform their businesses in order to stay relative and competitive. McKeown and Phillip (2004) describe business transformation as a series of competitive strategies to help organizations adopt significant improvements. Watson and Holmes (2009) mentioned that using information technology systems, such as Enterprise Resource Planning or Customer Relationship Management, makes it extremely complicated to plan business strategies. Venkatraman(1994) also highlighted three major factors that he believes are the foundation for business transformation – cost, quality, and response to customers. However, changes are not only a budget issue, they are also related to the whole improvement of organizations. Although extant business transformation research reports have illustrated that success factors relating to the management of business transformation, most of these reports focus on large companies(e.g. Watson and Holmes, 2009; Radhakrishnan, Zu and Grover, 2008; Chapman and Kihn, 2009), very few research reports are devoted to success factors in small and medium-sized businesses.
Small and medium companies are very important in Australian society. They make a significant contribution to the economy with approximately 90% of Australian businesses considered to be small and medium businesses (AUSTRALIAN SMALL BUSINESS KEY STATISTICS AND ANALYSIS,2013). According to Australian Bureau of Statistics (2013) defines a small business is 0-19 employees and a medium-sized business is 20-199 employees.
In this report, we will identify the factors that lead to successful management of business transformation in relation to the adoption of an information technology system. We also show other important elements exist to influence a business transformation with IT system, such as resistance from employees, implementation, and feedback on change.
Most business managers believe that using IT is useful to help organizations to make advantages in business environment, while it is still highly complicated to implement transformations.(Watson and Holmes, 2009; McKeown and Philip, 2003) There are many reasons to effect results, such as lack of depth analysis to understand where is the most required part to be improved (Radhakrishnan, Zu and Grover. 2008), or using inappropriate secondary data to do analyze that leads to fail to implement business transformation.
This report is organized into five sections. In the following section we discuss relevant literature on business transformation with IT systems, factors to influence business transformation, successful management process, and Integration of Business Models. The third section describes the research design, including paradigm, methodology, analysis method, and collection method. The fourth section discusses the findings from our research to make a clear understanding of our results and there are some discussions on the basis of these findings to have a depth thought from our report. Recommendations and a conclusion of this report are included in the fifth section.
The term “Business Transformation” is best described by McKeown and Phillip (2003) as “…an overarching concept encompassing a range of competitive strategies which organizations adopt in order to bring about significant improvements in business performance.”. Although the concept of ‘IT influenced’ business transformation has existed since the mid 1980’s (Venkatraman 1994), its potential has not always been recognized as having significant benefit – even when a transformation has been deemed a success. This could be partially due to the unclear distinction between ‘successful business transformation’ and ‘business success with transformation’. In this analysis, we explore the types of business transformation that takes place as an outcome of Information Technology applications, and identify the factors that lead to successful management of business transformation.
Stay Tuned For Part 2