Magazine: Hungarian SMEs and business management system use

The Hungarian government supports the acquisition of enterprise resource planning (ERP) systems by SMEs in many ways. However, ERP system use is only spreading slowly, in part because firms that wish to introduce them need to change their business processes and because many businesses don’t have the budget for adopting the system either. Just before the summer a programme was launched at the website vallalkozdigitalisan.hu, which aims at informing SMEs in the countryside about the efficiency increasing effect of IT solutions. SMEs aren’t jumping at the opportunity at the moment, because the government will launch a HUF 10-billion non-refundable financial support scheme for introducing ERP systems this autumn, in which 4,000 businesses are expected to participate. Péter Herczeg, managing director of Zalaware Kft. told our magazine that in his view the majority of Hungarian SMEs can be considered digital illiterates, therefore they are unaware of the advantages of ERP systems. They say that these systems are costlier than human labour. They don’t realise that businesses which haven’t introduced an ERP system yet will suffer a competitive disadvantage.

Miklós Harsányi, an executive of Woodpecker Software added that Hungarian SMEs are in a difficult situation when they have to decide which ERP system to adopt. In his view the state funding system for introducing ERP systems may make companies want to start using one that hadn’t originally thought of it – these firms often lack the necessary dedication for adopting the system and this may have a negative influence on the end result. Unfortunately this phenomenon may also dilute the supply market. Dr Márton Kabai, owner and managing director of Szitár-Net Kft. experienced it many times that IT development is just a pain in the neck for enterprises, something that they don’t like but must do. The majority of Hungarian SMEs only use software for just a few business management tasks (invoicing, bookkeeping, etc.). To make things worse, the solutions offered by IT companies also differ very much in quality, therefore many company executives are disappointed because they didn’t get the service they had expected for their money.

György Kornis, managing director of Számadó Kft. reckons that SMEs are wary of introducing ERP systems because it takes a lot of time and money. Enterprises need to specify the goals they wish to realise by using such systems, together with the tasks of workers and the content of executives’ reports. In the next phase IT service providers need to familiarise themselves with all of this and develop a system that is customised to the partner’s needs. In order to simplify this process, off-the-shelf software products have been developed. Miklós Urbán, project director of Webstar Csoport Kft. spoke to our magazine about those small companies that use an ERP system because it is a requirement of their international owner. Many micro- and small businesses are of the opinion: if they could manage everything on paper in the past, they will continue to do so.

Gergely Márton, managing director of Commit Kft. opines that by the time a company feels the need to introduce an ERP system, it already uses many programmes, from invoicing to accounting and stock keeping. Mr Gergely recommends these businesses to adopt an integrated business management system, which can make everyday work easier and processes more transparent. Péter Szegvári, the head of PC Trade Kft.’s software development business line told Trade magazin that Hungarian SMEs purchase very few software products, because they don’t have the right approach. The heads of these enterprises should understand that soon their businesses will be unable to continue functioning without using ERP software. Business management systems shouldn’t be looked on as expenditure but as investment. It is also true that executives are afraid of changes. Introducing an ERP system means that operating processes will change and some of the employees might be afraid of losing their job. Péter Czernecki, managing director of 10xONE thinks Hungarian SMEs are concentrating simply on survival and aren’t thinking in the long term.

Tamás Steinmetz, managing director of TTC-Soft Kft. thinks that the Hungarian system of grants distorts the market very much. Grant schemes aren’t harmonised with the business periods of companies. Companies need the money from grant programmes, so they are waiting for these to be announced, but very often when the funding becomes available they are unable to use it efficiently. Most of TTC-Soft’s customers are medium-sized businesses, who want to introduce an integrated ERP system. Unfortunately very often they lack the necessary finances to buy the system, so they rent one. Tamás Gál, director of technology of CO3 Kft. believes it is difficult to introduce a business management system in Hungary because companies have their unique, individual structure – due to the fact that they grow organically, they lack consciously planned and developed processes. Because of this they are afraid of adopting a system and changing their good old business processes.