1. Currently businesses are mostly wish to implement ERP system than functional information system. Compare and contrast ERP and functional information systems?
2. Justify ERP is a best solution for business?
3. What are the main reasons companies experience failures in implementing ERP system?
4. Explain the term legacy system?
5. What are several key things companies should do to avoid ERP system failure? Explain the reasons for your proposals?
6. Why do you think ERP systems in particular are?
|
Serial no |
Characteristics |
Functional Information System |
|
|
1. |
Ease of Integration |
ERP system helps in facilitating wide integrated information system covering various functional areas of the including accounts, sales, human resource and distribution (Bansal 2013). |
The functional information system is limited to a specified functional area, which can be accounting function for example. |
|
2. |
Flexibility |
ERP software helps in enhancing co-ordination among various entities of business applications due to its flexibility |
The Functional IS is not being able to go beyond a particular entity in which they are utilized due to its inflexibility (Tarhini, Ammar and Tarhini 2015). |
|
3. |
Cost- Effectiveness |
ERP software deployment is very much cost effective as the software is modular and an organization can select particular modules, which are appropriate. |
The Functional Information Systems are very much costly as their applications needs to be separated for providing operations (Sadat et al. 2014). |
|
4. |
Ease of Communication |
ERP system helps in sharing information by facilitating proper integration of all entities of the organization (Chang et al., 2015). |
It does not support communication with other entities of organization. |
Enterprise Resource planning is considered as the best solution for the organization. This is due to the following reasons:
Efficiency: An ERP system helps in eliminating various repetitive procedures for reducing the problems that mainly occurs due to manual entry of data. The system is quite helpful in streamlining the business procedures for making it much more efficient for the organization to collect various data.
Integrated Information: With the help of the system, the organization can keep their data in single location by keeping it consistent as well as up to date (Chofreh et al. 2014).
Reporting: Reporting can be made easier as well as customizable by utilizing the ERP software. The company can respond properly to various complex data requests with the help of improved reporting.
Customer Service: It is very much easy to give high quality customer service by utilizing an ERP system (Seethamraju 2015). With the help of ERP system, various sales as well as the people of customer service can interact with the consumers for enhancing the relationship between them.
Security: ERP systems help in improving the accuracy, consistency as well as security of data. It is analyzed that restrictions of data can be enhanced by using ERP systems.
The main reasons companies experience failures in implementing ERP system are as follows:
Lack of proper resources: Most important problem occurs when there is lack of external as well as internal resources. Therefore, it is very much important to understand the needs of the resources in various phases of the project properly.
Poor Implementation strategy: Implementation must be done in an effective way in order to achieve success. The implementation of ERP faces challenges due to lack of clear strategy of the problems that the ERP is expected to resolve (Cao, Nicolaou and Bhattacharya 2013). It is very much important to have a good strategy factor for the business processes, financial benefits as well as deadlines for ensuring that they are fully addressed.
Inexperienced consultants: The ERP implementation faces numerous challenges due to inexperienced employees. Therefore, it is very much important to identify various experienced leaders for the project properly before it is implemented.
Secondary Customization: Interfaces, data conversion as well as customization are considered as the three main reasons of technical issue in the ERP implementation (Zeng and Skibniewski 2013). Customization mainly helps in increasing the cost as well as time to deploy of the implementation.
Project Management: The implementation of Enterprise Resource Planning can get affected due to the project manager. It is analyzed that both the size as well as scope of the project needs an experienced project manager for overseeing the different activities of the project.
Legacy system refers to those obsolete computer systems, which may still be in use because either its data cannot be changed into any other newer or standard formats or its application programs cannot be updated. The system is mainly used for saving the cost of redesigning or replacing. The main implication of the Legacy System is that it is large, monolithic as well as difficult to modify (Antero 2015). The system requires proper maintenance and thus it involves modification as well as patching. Older hardware may need some added compatibility layers for facilitating device functionality in various incompatible environments. Legacy systems are used by organizations due to the following reasons
The key things that organization needs to do in order to avoid ERP system failure includes:
Understanding current situation: It is very much important to understand the current system of the organization, data as well as processes for analyzing the problems in the present system (Tarhini, Ammar and Tarhini 2015). The shortcomings of the present system must be shortlisted and based on that new ERP system must be implemented.
Draw on Obtainable ERP Insight: It is very much needed for accessing the experiences of other employees associated with ERP in other organization. It also helps in verifying the success rate as well as potential of ERP partners.
Understand and Control Costs: It is quite important to establish proper budget for ERP related costs (Seethamraju 2015). Proper budget documentation must be utilized in collaboration with the stakeholders for managing and controlling costs of the project.
Assemble an Effective Project Team: The project team must include all the stakeholders as well as key users from different affected groups of business. The project team of the organization must be guided by strong as well as fully dedicated project manager.
Use training to ensure user adoption: It is very much important to provide proper training assistance to the employees of the organization (Cao, Nicolaou and Bhattacharya 2013). Proper training design must be created depending on the roles, responsibilities as well as requirements.
Poor selection of ERP: The main reason of ERP system failure is that the organization generally focuses on cost as well as speed of implementation (Antero 2015). These two factors must not be provided much priority as the most important need for any organization to analyze how the system will work with the practices as well as processes of the organization.
Lack of executive Involvement: The ERP system faces failures due to lack of proper management within the organization (Seethamraju 2015). It is very much important that the management must involves with each of the processes of ERP implementation for analyzing its scope of works, its aspects, time as well as need of resources.
Unrealistic expectations: ERP vendors provide guarantee that the ERP solutions can be implemented quickly at a very low cost but statistics show something else which leads to number of challenges (Zeng and Skibniewski 2013).
Training on the new systems: Numerous challenges occurs by relying on the ERP vendor’s training as they are not always capable to train all the employees within a specified time.
References
Antero, M., 2015. A Multi-case Analysis of the Development of Enterprise Resource Planning Systems (ERP) Business Practices. Copenhagen Business SchoolCopenhagen Business School, Institut for IT-LedelseDepartment of IT Management.
Bansal, V., 2013. Enterprise Resource Planning. Pearson Education India.
Cao, J., Nicolaou, A.I. and Bhattacharya, S., 2013. A longitudinal examination of enterprise resource planning system post-implementation enhancements. Journal of Information Systems, 27(1), pp.13-39.
Chang, B., Kuo, C., Wu, C.H. and Tzeng, G.H., 2015. Using fuzzy analytic network process to assess the risks in enterprise resource planning system implementation. Applied Soft Computing, 28, pp.196-207.
Chofreh, A.G., Goni, F.A., Shaharoun, A.M., Ismail, S. and Klemeš, J.J., 2014. Sustainable enterprise resource planning: imperatives and research directions. Journal of Cleaner Production, 71, pp.139-147.
Sadat Safavi, N., Zakaria, N.H. and Amini, M., 2014. The Risk Analysis of System Selection and Business Process Re-Engineering Towards the Success of Enterprise Resource Planning Project for Small and Medium Enterprise.
Seethamraju, R., 2015. Adoption of software as a service (SaaS) enterprise resource planning (ERP) systems in small and medium sized enterprises (SMEs). Information systems frontiers, 17(3), pp.475-492.
Tarhini, A., Ammar, H. and Tarhini, T., 2015. Analysis of the critical success factors for enterprise resource planning implementation from stakeholders’ perspective: A systematic review. International Business Research, 8(4), p.25.
Zeng, Y. and Skibniewski, M.J., 2013. Risk assessment for enterprise resource planning (ERP) system implementations: A fault tree analysis approach. Enterprise Information Systems, 7(3), pp.332-353.
Zeng, Y. and Skibniewski, M.J., 2013. Risk assessment for enterprise resource planning (ERP) system implementations: A fault tree analysis approach. Enterprise Information Systems, 7(3), pp.332-353.
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