a. Risk Factors
Implementing an ERP system is not easy and can be very challenging. Managers should be able to recognize and implement strategies to minimize risk, if they recognize the nature and magnitude of the risks they face in the implementation process, they are able to minimize the risks by employing project management and control strategies to address the challenges they face. There are some risks involved with ERP implementation, which involve technology, organization, people, and project size.
The technology risks depend on how consistent the new technology is with the current organization and operating system. When an organization introduces technology that is inconsistent with the current database, operating system, and network management environments, the risk is greater. Companies are at a higher risk of failure when the system implementation will require major changes in their current infrastructure.
The next area of risk is organization factors. When business processes are redesigned to fit the purchased software package, the risk of excessive time and cost investments decreases. In addition, customization poses the risk of extra, if not excessive project costs.
The third area of risk deals with people resources. If the IT employees are familiar with the application-specific modules of the ERP system, then the likelihood of implementing the system effectively will be enhanced. Although, if the current skill mixes of the IT employees do not
ERP projects are most definitely expensive and risky, nevertheless despite these potential costs KEDA decided to embark on its ERP implementation project in hopes of obtaining a high return on investment. One of the factors that led to this decision was the fierce competition of global and local competitors. In an effort to retain its position within the industry and combat the threat of other businesses, KEDA needed to evolve. Specifically, through choosing a new ERP system, KETA hoped that this strategy would improve operations and become a productive advancement to the structure of the company. Since the Chinese government stopped their support and the MRP-II couldn’t manage the multiple system operations, they had to seek out a new alternative.
An extensive research was done to fetch the historical background of company, the functioning of its legacy systems, and the issues that are being faced by the company as a result of ERP implementation. However, there are only few studies that showed ERP case studies for the company relative to the ERP issues.The web searches provided a restricted account of data on company’s ERP profile. In order to find details of the issues that are being faced by the
Today Enterprise Resource Planning (ERP) is extensively adopted by many organizations regardless of kind and size, mainly because it provides enterprise-wide view of information across all their business operations and help organizations achieve consistency across all their functional departments. The potential benefits of ERP system implementation include improved coordination across functional areas, increased efficiency, reduced operational costs, rapid access to information for decision making, managerial control and support for strategic planning.
As a result of the vast nature of the ERP implementation process, risks are always present and existent. The related risks are commensurate with the scale of the ERP system project. Risks range from broad to narrow and pervasively affect the outcome of business processes after the “go-live” date when the ERP system is fully operational and available to end users (employees, lower level managers, etc.).
The problem presented by Joseph-Armand Bombardier is the upcoming third round of ERP implementation in his organization. Even though a big improvement over the efficiency and success of execution between the first ERP round (Mirabel plant) and second round (Saint-Laurent plant), there is still room for improvement.
Risk assessment is one of the most crucial elements in the implementation of an ERP system that determines the success or failure of the whole system. GBI is vulnerable to various implementation risks and failing to assess these risks appropriately may result in budget and resource allocation problems. A careful analysis has been undertaken in this report to identify six major critical risk factors which need to be
Enterprise Resource Planning (ERP) system, as a software package or one integrated system, is designed to standardize the collection of organizational data resources and to permit these resources can be shared throughout the company, which finally support the management of companies (Klaus et al., 2000; Mabert et al., 2003; Wang et al., 2008; Ifinedo, P., 2011). Since this kind of systems allows inputting and outputting information and the information could be shared across the whole organization in time, companies all over the world are now utilizing the ERP systems to improve operational efficiency (Davenport, 1998; Klaus et al., 2000).
On the daily basis, modern businesses or organizations are faced with strong internal and external pressure. In an attempt to tackle these inevitable situations, the organizations struggle to balance demands regarding quality, stability and changes. This implies that the organizations continue to put in many efforts into developing and keeping or changing their practices and rules in order to achieve their strategic goals. To ensure efficiency and effectiveness in these ever changing efforts, the organizations attempt to integrate all departments and functions across an organization into a single computer system to serve specific needs of those different departments. The enterprise resource planning (ERP) system is a typical single software program that serves the needs of people in different units, such as in human resource department, finance, warehouse, administration, supply chain, customer relationship management, and marketing. While ERP combines all the departments into a single and integrated software program that runs off a single database, each department has its own computer system optimized for the specific ways each department performs its job.
Enterprise resource planning (ERP) systems attempt to combine data and processes in organizations. The data is centralized as a single database. This database functions as a hub that stores, shares, and circulates data from within the different organizational units and business functions. ERP systems are one of the most adopted information technology (IT) solutions in organizations. Besides the possible cost savings, one of the main drivers for an ERP adoption would be the technical and operation integration of business functions to complement the information stream with the material flow of goods or services. In order for the management and employees to utilize the use of the competitive capabilities of ERP systems, they
Cisco System, Inc is a Computer Technologies company that was founded in 1984. The company’s primary product is the “router.” The router is hardware and software that control Intranet and Internet traffic. With the growth of the Internet, Cisco products became in high demand. In 1997 Cisco was ranked among the top five companies in return on revenues and on assets. Cisco has been
The Enterprise resource planning system has become more popular in business management system and although provide great benefits to large organisations. However, implementation of an ERP has not been successful in all organizations. Since with the implementation of an ERP it certainly have a great effect on the entire organizations such as process, peoples are culture. There are certain numbers of challenges that the companies faced through an ERP implementation. Although many universities and business organization has started using an ERP system to overcome the problems arising with disparate system in order to improve the management and administration .ERP is generally a software which is helpful in integrating various functions of business and data in a single system which is to be shared among all peoples working in an organizations. For instance, ERP has now started expanding its scope worldwide in1990’s to perform various other functions such as human resource, finance and production planning process.(vandacle2011).However now ERP has started incorporating various organisations to build consumer relationship to become more competitive in business world. ERP helps in increasing operating efficiency of the firm (Beheshti, 2006) .ERP helps in sharing the same information in a single system because all data are entered in a single system and are communicated within the entire organizations and a as result cooperation and interaction of peoples
ERP ensures the fundamental of business applications to be automated and reduce the cost and complexity of the business models which leads to a successful business (She & Thuraisingham, 2007). According to Berchet and Habchi (2005), Davenport (1998), among the important modules for ERP system are marketing, sales and distribution, enterprise solution, production planning, quality management, assets accounting, materials management, cost control, human resources, project management, financials , and plant maintenance. It potentially allows company to manage business better with great benefits of improved process flow and decision
First, it is important to understand what an Enterprise Resource System (ERP) is and how it affects an organization. An ERP will integrate the organizational data across all functions; one only needs to enter data once, which is used by all through a single database. (Wailgum, 2007) This is significant because it will align the business processes by integrating the functional areas of finance, sales, supply chain, manufacturing, quality, and shipping and all users of the system. (Web4ERP, 2012) The success or failure of an ERP implementation is the alignment and direction of senior business executives with the IT implementation team, and business users whose job it is to interface with the new system. IT cannot and should not be making all the key design and configuration choices, the business must take the lead and own every aspect of the implementation. As it was shown in the “Why ERP” book, little effort was made to include all the people using the system. They went with the implementation decisions of the IT person who had implemented it in Mr. McDougal’s brother’s company with little regard for understanding how the business operated or what
Nowadays, information and the value of information become the very important things, especially in the business concepts. Therefore, the company is like a race against the time to manage all resources in a single integrated database to supply real-time data. They are implementing a computer software as well as Enterprise Resource Planning (ERP), an information system which is used to integrate and control all company resources (Mabert 2003). There are at least three stages of the key success factors of ERP implementation in an enterprise: the planning effort, the implementation decision, and the implementation management. The first factor, planning effort, is all stages before ERP project commencing such as executive support and their contribution in the project planning, team formation, and technology issues. Implementation decision, as the second key success factor, is the strategies to implement the project, such as the big-bang approach or the phased-in approach, include software customization and re-engineering. The last factor, management implementation, is all actions or variations during the project implementation (Mabert 2003). In conjunction with the key factors of ERP implementation mentioned above, this essay aims to discuss the benefits as well as the disadvantages of ERP, then to analyze the role of ERP in supporting budgeting process.
By evaluating the following article, a thorough analysis could be made on how probable risks may involve succeeding the execution of Enterprise resource planning. Surveying a wide range of 118 major companies to examine the results, the authors could determine these aforementioned risks. Various deducing methods which further relied on cross-inspectional questionnaires were introduced i.e. a quantitative approach. How ever this approach must be taken under consideration as it has limitations. This review is built on criterion of research, contemplating to the questions, methodologies and functions of it.