MANAGING ERP IMPLEMENTATION PROCESS
Introduction
The current world is faced with stiff technological advancement and so does the business world. Information and technology must be fully integrated and utilized in order to achieve goals and objectives in any business. Research has shown that companies that have integrated their processes in their businesses have experienced more success in terms of efficiencies in operations(Adam & O’Doherty, 2000). It is important that information and data is efficiently shared between the business organization, customers and suppliers who might be geographically dispersed. Enterprise Resource Planning is a dream comes true for most companies since it helps in integration of all business units.
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ERP has been found to reduce inventory since it gives room for better visibility and efficiency. ERP also creates cost savings by reducing duplication of work. In addition to this, ERP is more efficient, and this ensures that transactions are processed at the highest capacity levels. Research has also indicated that use of ERP has a high return on investments majorly because it encourages lean processing. Most of the companies agree that the use of ERP allows for maximum utilization of employees as they become less transactional while becoming more analytical. Moreover, the process of decision-making becomes easy through ERP since this depends on accurate and real time-data (Anne & Shanks, 2002).
This paper seeks to conduct a case study on the quantitative and qualitative benefits of ERP for Company X. This paper will go ahead and evaluate the cost of introducing and ERP system. The paper will then compare the productivity of Company X with and without an ERP system.
Description of the business and technical drivers for the ERP project
Company X is a subsidiary company of Company P that specializes in metal-based components, systems and integrated systems to the construction and engineering industries. Company P operates in over 27 countries and has subsequently employed over 11, 000 people. Company P saw little progress in terms of profits and revenues and was forced to come up
Enterprise resource Planning (ERP) is any integrated cross-functional software that reengineers manufacturing, distribution, finance, human resources and other basic business processes of a company to improve its efficiency, agility and profitability.1 On an initial view, an ERP system appears to be the cure for any company’s issues. The installation of such a system offers an organization the opportunity to re-structure their procedures, to coordinate branches’ systems in other geographic locations, unify information and inspire employees via granting them permission to company information. Now these chances exist at heightened costs financially. There are also implementation horrors and labor issues with which must be dealt with. A
2.The ERP solution increases the efficiency and decreases the costs. It also provides reliable information and the processing of information is very quicker so that, it can reduce the paperwork burden. The ERP is very flexible it can in any business environment. At the same time it’s so expensive to implement the ERP and also to replace it. Because of that, the negotiating power of suppliers is increased.
The adoption of the ERP software package throughout the enterprise will have a positive effect on the company. Through the elimination of data conversions and manual data reentry, the company can significantly reduce the time it takes to complete the monthly General Ledger, Income Statement, and Balance Sheet reports. The adoption of a single system instead of three will save Riordan money by reducing the IT staffing needs as it
In general, ERP systems are designed to standardize information entry and create data storage for information sharing across the organization. There are numerous advantages of ERP but skeptics argued on the fact that these advantages can be also achieved by simplification and lean production methods. IT systems could be effective and reliable in the long run but at the same time there is an uncertainty about whether it will align with the concerned business process. For instance, the ERP system implemented at the Korey plant to replace MRP system failed. Though it met the requirements of individual unit and enabled employees with wide range of
In order to survive in this competitive business world, every business must produce or provide not only a better product or service, they must also provide better customer service, minimize their production costs and overhead costs, have a more efficient management system, a highly reliable infrastructure…the list is endless. Many of these can be achieved through a customized enterprise resource planning system (ERP). ERPs serve as “one comprehensive database to house all of [the company’s] corporate information” so that “when you enter new information in one place, the system automatically updates related information.” However, if these systems are not implemented correctly with the necessary change in management of people and technology
In all facets of business, it is certain that a properly implemented ERP system will help save labor, resources, and overhead. The system will aid in discovering unneeded labor and misuse of the organization 's resources. It will help optimize the businesses ' processes. For instance, the human resources department is able to identify the necessary level of laabor to accommodate an unexpected change in customer demant as soon as a sales spike occurs. These types of decisions can be made on the spot and this can rid the organization of communication difficulties during times of crisis (ERPwire.com).
Making decision of what to select between “best of breed” and Enterprise Resource Planning (ERP) systems are never easy. There are many controversy or chaos issues surrounds this thought and debate. Which one is better? What factors need to be considered? This paper will address the difference between “best of breed” and ERP System that needs to be considered, such as the definition, advantages and disadvantages each of them.
In case study III-4, titled “ERP Purchase Decision at Benton Manufacturing Company, Inc.,” describes in detail what a major manufacturing company experiences while considering a substantial investment with the implementation of an ERP (enterprise resource planning) system. Among the company’s management personal opinions vary, some doubt the need of such a system while others support and justify the expense. The question at hand; whether or not to implement a costly system with a lengthy transitioning phase? In his attempt to answer this question, Walter McHenry, CEO and President of Benton Manufacturing has formed a two man team to investigate and further
Changes occur on a daily basis in the world of accounting information systems (AIS). Few things have experienced as many changes as Enterprise Resource Planning (ERP) systems in the past decade. Companies operating an ERP are seeing benefits such as productivity increasing and overhead costs decreasing. This research is geared towards informing readers of the benefits of adopting an ERP system. This paper will define what an ERP is, list some of the benefits of implementing an ERP, analyze what size companies can benefit from the systems, and analyze how ERP’s have influenced AIS. I hope to provide useful information to readers that helps them to propel their businesses forward and maximize profitability. There has been a lot of research on the topic of ERP’s and their benefits, and I hope to contribute a productive analysis on the subject.
Enterprise Resource Planning, which is also known as “ERP” is a kind of system that truly allows a business full organization of data and task management. The idea to flawlessly implement such a system to replace an older or outdated one is not an easy task. Therefore there are many processes and timelines put in place so that these changes can be done with les problems. Organizations that have the ERP system in place allow each department manager to have access to valuable information within the company. Organizational systems have a primary objective to integrate all information throughout the company and apply changes in the business processes so that the organizational structure can better evolve with time and with management. It improves the organization’s productivity and helps with managerial decision-making, all due to ease of access of information from the ERP system. The operational side improves dramatically also, with the diverse information across all projects and all departments. There is a constant flow of tasks that need to be completed by certain deadlines, and ERP systems allow for that access of operational tasks. The real objective for ERP just like any other system is to convert data into useful information for all owners and shareholders. The system is versatile and is great for a wide range of companies, from manufacturing companies, to repair shops, and even e-businesses.
Successful implementation of an Enterprise Resource Planning (ERP) is not impossible in real life but for that it must be developed through a proper planning and implementation. ERP are designed to upgrading an organization’s ability to generate more timely and accurate information for its supply chain. Organization must be ready for reengineered before the success of productivity can be realised. Most of the companies have faced heavy problems while trying to implement ERP systems and have led to serious problems.
Enterprise Resource Planning (ERP) system is a software package or one integrated system that is designed to institutionalize the collection and sharing of organizational data resources (Klaus et al., 2000; Mabert et al., 2003; Wang et al., 2008). 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).
Due to dramatic changes in organisational management, technology plays an important role in today business environment. According to Groomer & Murthy (1989) incorporation of information technology solutions are becoming increasingly important for all businesses in order to operate successfully. One way that many businesses have implemented information technology on a large scale (Groomer & Murthy, 1989) is by setting up Enterprise Resource Planning (ERP) systems to achieve their business transaction and data processing needs. According to the business need, selecting the appropriate information system such as Enterprise resource planning (ERP) will be appropriate and suitable because it improves efficiency. However it should be borne in mind that every business has its own dimension; therefore, there is the dire need of appropriate selection and need based customizations (Kleiner et al., 1999).
ERP system integrates technology that ensures the operation are managed and used effectively by organization (Maguire et al., 2010). This system enables an organization can observe the different departmental functions in one database. It improves and shortens the business process, so restructure is essential for existing business.
This paper presents the evolution of the ERP system since time and how firms have been employing it for generating revenues and providing better solutions to customers .It describes the stages of ERP implementations, the obstacles that firms encountered in generating benefits from the system, advantages, limitations and some critical success factors associated with it and points to be noted during the implementation of ERP system.