ERP for SMEs – is proprietary software an alternative?

Abstract

PurposeTo show that developing proprietary software is the best alternative for many small and medium‐sized enterprises (SMEs). Full control of the software makes it possible to remain flexible and dynamic, and to conform to the need of the customer at any time.Design/methodology/approachThe approach is case based.FindingsModern development tools make in‐house development feasible. Costs are often comparable to that of using standard ERP systems. In‐house development does not need to encompass all functions, as it is easy to integrate off‐the‐shelf systems with proprietary development. Being in control of core software is important for the day‐to‐day activities of a company, and also for gaining a strategic advantage.Practical implicationsIn‐house development will be most useful for niche companies. Further, SMEs will have an advantage as they more easily can integrate standard systems with proprietary software.Originality/valueMany managers have excluded the possibility of developing their own software, based on experience with time consuming and expensive projects in the past. Thus, implementing standard ERP systems is often viewed as the only solution. However, these systems may impose a rigid structure on a company, threatening the dynamic nature of many SMEs. We show that many companies have a better alternative.