In the modern business management and dynamic and fast pace economy, ERP become not an option for SMEs, it is no longer a-nice-to-have software.
Why the ERP solution became not an option for SMEs?
Analysis
In a report released by World Economic Forum (WEF) in collaboration with the National University of Singapore shows that 67% of the world SMEs are fighting for survival due to several factors, one of them is that 75% of the world SMEs do not consider digital transformation and business automation to keep up with current market technological demands.
Although, a survey, by McKinsey & Company, pointed out that SMEs spend significant time and expenses on non-core business activities. SMEs’ pain points are related to financial administration and time spent on financial administration or banking. These two expenses make up 25% of the average SME deposit balance. Adding IT expenses, the result goes up to 34%, which shows the significance of these non-core activities.
And, according to latest analysis, Between February 2020 and April 2021 70% to 80% of SMEs lost 30%-50% of their revenue, which caused around 6% drop in the global GDP, due to brunt of global disruptions, and this returns to their ability to absorb shocks, their limited financial capital and uncontrolled cashflow.
Meanwhile, according to EY SMEs survey result: 25% of SMEs globally adopted FinTech solution, 56% of them use a banking and payments FinTech service, while 46% of SMEs use a financing FinTech service, and 93% SME adopters prefer to find a technological solution where possible. Ref. Ernst & Young Global FinTech Adoption Index 2019: Define FinTech as organizations that combine innovative business models and technology to enable, enhance and disrupt financial services.
Conclusion
SMEs are struggling for survival as the recent economy changes impacted them heavily, they are seeking help to be able to resist the economic changes.
Digital transformation and ERP became not an option for SMEs, as it can help them tackle more than 90% of their problems, including saving money and time as a result of processes automation, give them business visibility as a result of data analytics, last but not least, gives them decision support model that can help them make effective decisions to overcome hard situations, but surprisingly 75% of SMEs unlikely to adopt ERP, this complicates the issues for them and make life harder, as they will not be able to coop with the world hard economic status.
Implementing ERP solution should help SMEs overcome challenges related to lack of financial and banking administration skills, save time taken in several repeated processes.
At iX Dev we encourage SMEs to use iX ERP as a simple, easy to use and secure tool to start their digital transformation journey and empower their businesses to perform better and grow faster, and survive during the hard times.