Investigating factors affecting ERP selection in made‐to‐order SME sector

Abstract

PurposeThe purpose of this paper is to present the findings of research carried out as part of an industrial project for selection of an enterprise resource planning (ERP) system in a made‐to‐order (MTO) small‐to‐medium enterprise (SME) scenario. It develops a framework or methodology for selection. It also highlights the areas pertaining to the unique needs of, first, the SME sector and, second, the MTO sector, to be considered while selecting a solution. A work book is developed to provide a structured ERP software selection process for SMEs using a comprehensive literature review plus practical experience. This research is potentially aimed at being useful to other SMEs as a guide for a structured selection process.Design/methodology/approachA combination of comprehensive literature review and experience of managing the selection process for an ERP system in an SME was employed for the study.FindingsOver the past few years, the number of large companies buying new ERP systems has reached saturation point. This has led to the ERP developers seeking instead other potential markets among SMEs. The MTO scenario within the SME sector is one which is very capricious in terms of demand forecasting, lead times, routings, etc. When selecting a system, an organisation in such a segment needs a tailored methodology and a list of key target areas to consider.Practical implicationsThe paper represents a very useful source of practical information for the SME sector to consider when selecting an ERP system.Originality/valueThe paper provides valuable insight into the details of ERP selection, focusing on the peculiarities of the SME MTO sector.