A lot depends on the size and capabilities of your IT staff. I work for a non-profit with a rather small IT group that has specific skills to support the organization, but don't have the skills to develop complicated systems. In fact, our position is we are not in the software or even application integration business. So the direction we have taken is to buy and learn. Let the experts build the software. Find one that we can live with and then figure out how best to use it in our situation. It does require concessions on our part, but we can live with that considering the alternative is we'd have to become more technical than we would want.

The previous writer make some excellent points. To add to them....There is software out there to assist small-mid size companies. I would recommend you do your research. Team up with your IT and Legal department to assist you. What are the requirements of your departments, they are your customers? Have vendors come in an demo with your IT, Legal and yourself.

If you have the means to develop then you have the means to purchase and customize. Problem solve both and look to the future growth of your organization. Weigh all the pros and cons of both before you decide.

Thank you Mr. Martin and Mr. Judith for your comments... as suggested, what if don’t suits, What if the products are not available in our budget (Arabic Interface)? As of our IT team they recommend going for some modular application on top of SharePoint Foundation and can fulfill our requirements cutting the cost.
Question: Will it fulfill ERM requirements? Can it be called ERM application? What would be the risks?

I can't speak to SharePoint Foundation as we have a full implementation of SharePoint, but I believe for small businesses a Content Management system like SharePoint that offers Content Types and Workflows could fill the bill. It may not be optimal, but on smaller scales usually something a small business can live with.

I do not advice for in-house development. if you do your research, you will find many applications fit with your budget. SharePoint could be a good option but it is not the only solution we have.

If there is an active AIIM chapter in your city, try to attend their next meeting. You'll be able to meet other local organizations that provide insight to you, and find a support group to help you through this process. If you are an AIIM member, there are excellent whitepapers that address how to select which feature are critical to you. Check www.aiim.org