Current Scenario of ERP in Nepal

In the year 1990, Gartner Group first used the abbreviation ERP to extend upon the capabilities of material requirement planning (MRP), manufacturing resource planning (MRP II) and computer integrated manufacturing. From then, ERP has been providing an integrated and updated view of core business processes by tracking business resources such as cash, raw materials, production capacity and business commitments status (i.e. orders, purchase orders, payroll, etc).

While ERP has evolved over the past decade and a lot of companies worldwide have harnessed the benefit from it, however, in context of Nepal, the concept of ERP is still new where only handful big giant companies have fully implemented it whereas SME’s have the perception that ERP is only an accounting/financial/HR software but in reality ERP is an integrated software which helps to function all business operations.  Here are some of the current scenarios of ERP prevailing in Nepal:

  • Only a handful number of companies have implemented ERP

Currently, the majority of the companies are relying mostly on traditional software for gathering information, processing, modeling for their business operation. The scenario here is such that the information is recorded and utilized manually or through software that performs a limited function at a time. Basic software or a series of software that are not integrated is used to perform required business functions. While the global market is advancing towards using high functionality software for their business functions, Nepalese companies are still stuck with traditional low value driven software.

  • Nepalese market have the perception that ERP is only for the manufacturing industry

Yes, it is true that ERP in history was mainly used by manufacturing industry as it has been evolved after MRP, MRP II which is the why people have the misconception that ERP system is only for the manufacturing industry. But in reality, ERP is an integrated software which helps in managing various departments, multiple subsidiaries, around the business for proper functioning and decision making of the company.

  • Nepalese companies are cost hesitant to implement ERP

Most companies regard implementing ERP system as their expense rather than an investment. It’s true that ERP software requires a major investment, but there’s also an even bigger cost in not making the investment. There is a prevailing mindset in the market where people want immediate growth when they put on huge investment. However, implementation of ERP will give gradual while effective growth for the company in the future.

  • Misconception regarding data security

Nepalese companies are very hesitant to provide its data to the implementation which is the result of lack of knowledge regarding benefits and security of Cloud ERP. So, the companies must understand that implementing ERP will provide gradual clear view of the business in real time which will be beneficially for decision making for long turn return. Restrictions to data can also be enhanced by managers of the solution, so you can make your own software as secure as you’d like. With one source of accurate, real-time information, ERP software reduces administrative and operations costs.

The knowledge regarding ERP is very less and vague in Nepal. Investing and updating of software for the future is neglected because most of the companies have the mindset of no goal for the future and just operating in the present. This is the reason why many Nepalese companies are hesitant to change. Companies need to understand that with software like ERP, they can save time and increase productivity levels. By having redundant processes automated, users have more time to work on other pressing projects and tasks. Similarly,  implementation of the software is just as important as the software in terms of successful projects, referrals from industry representatives regarding the implementation team are the second most valuable indicator. So, it is very important for companies to understand that the growth of a company needs proper investment, time for gradual implementation and well integration of the system.

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