ERP Outsourcing for Small Businesses | BusinessFizz.com | Article

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Outsourcing has often been seen as an option for large companies who want to make savings in times of financial disarray. Despite this, there is a growing trend for smaller business to outsource but for entirely different reasons. When a small business needs certain specialties or skills that it cannot afford on a permanent in-house basis, outsourcing can be the answer.

One of the more popular options for SME?s (small to medium enterprises) is outsourcing the management of an ERP system. This post looks to explore exactly what this means and what the benefits of doing this are.

What is ERP?

ERP systems streamline internal, and sometimes external, communication within a business by having every department operate from a common system with a shared database. This means that information is easily accessed at all levels of a business by whoever needs it. Each department has its own customizable module with which to access the database so sensitive information, such as customer bank details, can still be kept department specific.

The benefits of installing ERP systems are more to do with what they remove than what they add. Having one system throughout a business prevents the need for duplicate documents because data need only be entered into the common database once. This, in turn, means there will be less time wasted translating data from one departments system to another; making report building easier. The systems can incorporate external vendors too, improving efficiency in the supply chain.

While highly efficient, ERP systems can come with some associated costs. ERP software is quite advanced, meaning a business needs a similarly advanced technological infrastructure to support it. ERP systems also require staff that know how to update it and maintain it, training and hiring these people can be expensive.? It is these additional costs that seem to put SMEs off ERP but this is where outsourcing can help.

What is ERP Outsourcing?

ERP outsourcing can be broken down like this:

• Application Hosting ? The most well-known method of hosting; this is when the businesses ERP software is hosted at a purchased/rented space or resource.
• Application Management ?This when an external agent is handed the task of managing the ERP software?s updates and patches.
• Helpdesk Outsourcing ? Fairly self-explanatory, this where any help with an ERP system is delivered via the telephone from an external helpdesk.

By outsourcing the above, the most expensive elements of ERP implementation and maintenance are made more cost effective. In the current economic climate, outsourcing like this has allowed many SMEs to improve efficiency as whilst spending less.

ERP?s do improve efficiency and, in the long run, make companies money by increasing productivity. Outsourcing makes the benefits of ERP available to businesses whatever their size.

Kevin Ball is an SEO executive for Search Laboratory, Leeds, England. Kevin has been writing professional online content since graduating from Manchester Metropolitan University with a degree in Creative Writing.

Source: http://businessfizz.com/2012/02/erp-outsourcing-for-small-businesses/

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