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Many new SMEs start each year and only 50% of them manage to exist in the market and rest 50% quits in the first 3 years of business itself. Though it is assumed that all SMEs desire growth, only 40% survive beyond 10 years.

Many of the firms do not think of long-term business strategy but focus only on survival. They think of change only when the business begins to fail as a result of not keeping track of the changing market scenario. The firms who survive and grow are the ones who have the ability to take risks and respond to the changing circumstances.

50% SMEs fail to retain and grow their business because of the following reasons;

1.They fail to increase their business process efficiency and productivity.

2.They fail to walk along with globalization.

3.Many SMEs have MNCs as their clients; they fail to impress them due to improper production planning and increased delivery turnaround time.

4.SME’s fail to gain competitive advantage and respond quickly to the dynamic market scenario.

5.They fail to recognize their business process benchmark due to improper resource planning.

6.They fail in proper analysis of their various business functions thus fails in proper tracking of their financial position.

7.They don’t have single point of access for all business functions.

8.They fail with customer engagement and retention.

9.They fail to store their data with high security.

10.The flow of operations becomes unmanageable and they could not pick up the flow instantly when required.

To become a part of 40% successful organizations, SME’s need to have a proper ERP system. An ERP system helps in eliminating the above risk factors.

In India, it is believed that by 2018 all the SME’s will adopt cloud-based ERP system in order to achieve success and be a part of trending globalization.
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