Enterprise resource planning in manufacturing SMEs in the Vaal Triangle
Dlodlo, Joseph Bhekizwe
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The adoption of Enterprise Resource Planning tools has improved business processes in organisations. This increase has, however come with challenges for the small and medium business sector. First the adoption and deployment of proprietary ERP comes at great cost for organisations whilst it is also difficult for the organisations to ensure that scalability is introduced due to the dynamic change in the SME sector. The adoption and use of open source ERP tools then presents an opportunity for the SME sector. The usage of open source software has increased over the years. This increase has also extended to open source ERP tools. These tools offer the same functions as the proprietary at a fraction of the cost. Despite the benefits that open source ERP offers diffusion of this technology into the SME sector in South Africa has been minimal. This means the SME sector in South Africa is not benefiting from the widely available cost effective open source ERP available in the market. An opportunity therefore exists for them to utilise the technology to gain competitive advantage. The research was done primarily to determine the open source ERP adoption patterns of SMEs in the Vaal region. The research sought to determine the drivers for ERP adoption and barriers to adoption. Focus was specifically extended to investigating knowledge on open source alternatives. The results from the research indicate that the SMEs understand the benefits of adopting ERP for their businesses. The research further revealed that the adoption factors identified in the literature are still relevant in South Africa. The factors identified included costs, lack of training, lack of support, lack of knowledge and the lack of open source vendors. The empirical research also identified that the SME still harbour fear about open source ERP tools due to lack of training ,support and knowledge .From the study it is clear that a new approach needs to be taken to encourage adoption of open source ERP. These approaches include giving incentives to SMEs to adopt open source ERP. These incentives may be in the form of training packages and skills workshops to help overcome the barriers and improve implementation of open source ERP. The research identified the critical need for increased formal education and training in open source software development and emphasis on ERP tools. Government research bodies need to play a role in this area. For an example, there is need for SME and university collaborations in open source ERP deployment, whereby the latter needs to include software development tools in their curricula for SMEs so as to increase awareness. Clear–cut comparisons of existing proprietary systems against open source systems by focusing on functional and technological requirements need to be undertaken. This will help to reflect a cost benefit analysis as well as interoperability between the open source ERP and existing systems. During the adoption process, SME are encouraged to go through the full life cycle of open source ERP adoption. In this cycle the SME needs to do a thorough analysis regarding selection, implementation, integration, migration, training and evaluation of installed tools. That way they will gain the competitive advantage afforded by the tools.