Discuss the viability and issues in ERP implementation.
Global Bike Inc is a multinational corporation headquartered in the US. The brand manufactures bikes, which can be used for racing. It has implemented a ERP Sap processes in its organization which has played an efficient role in its growth. It has been able to coordinate its four main processes which are finance, marketing, human resource and operations. This system has enabled the business enterprise to complement its expansion initiatives in the global market. As such, the brand has been able to deliver high – performance bikes to the rides in the global market.
According to May et al. (2013), the ERP system implemented in the business organization has been assisted the business enterprise to diverge into two major business areas in the US and the Germany. Both the production plants have manufacturing centers as well as the production centers. In addition, GBI has established a partner network to maximize its scale of operations and the scale of operations in the global market. However, Staehr (2012) noted that there remains pertinent issues in the implementation of the ERP system which are- integration of ERP, software goals as well as the customization of the software as per the organizational needs. In addition, there is flexibility as well as the presence of legacy systems in the business organization. According to Kim et al. (2013)., identifying the needs of the business organizations as well establishing a structured budget are the relevant factors that must be considered while adopting a specific ERP SAP system in the business factors . Thus, Global Bike Inc has to take into account the above attributes while implementing a specific SAP ERP system to satisfy its operational needs.
According to Meyr et al, (2015), the SAP ERP system has been able to gather essential Data of Global Bike Inc and has coordinated the functional as well as the non- functional business processes .The ERP system has also enabled the business entity to offer SAP career opportunities to the new recruits in Global Bike Inc. This has assisted the business enterprise to use ERP SAP to enhance the operational policies of the brand.
The GBI annual report has been registered in the website of SAP UAC. Mamoghli et al. (2015), the SAP ERP system has been playing a pivotal role to assist the business enterprise to align its operational activities to the long-term goals and objectives of the business organization. Thus, the ERP system has been playing an effective role for the growth of the company.
The GBI Global office is divided into two major operational centers, which are – GBI US and GBI Germany. In the GBI US, the ERP system has been playing an effective role in coordinating the Miami centre of distribution, the distribution centre of SanDiego as well as the Dallas manufacturing plant. According to Andersson & Olandersson (2013), the cross-functional activities of Distribution and the Manufacturing have been achieved through the inherent support of the ERP system. In this regard, it can be said that the SAP ERP system has made it possible to produce goods with the minimum amount of time and effort. In the case of GBI Germany; the SAP ERP processes have reduced the operational expenses of the business enterprise. Thus, Alaskari et al.(2013) noted that greater coordination has been achieved between the Heidelberg manufacturing plant as well as the Hamburg distribution centre.
The following are the challenges or issues of ERP Implementation
ERP integration – ERP integration has been a critical issue for Global Bike Inc. According to Johansson, and Carlsson (2013), there are uncertainties regarding the selection of the processes that are to be integrated with the help of the ERP software. In a multinational corporation like the Global Bike Inc, choosing of processes that are to be coordinated within the ERP software remains critical. Therefore, it remains essential that the ERP software is implemented in a manner which reduces the operational costs of a business enterprise.
Developing ERP software goals – Ostroukh et al. (2014) mentioned that setting of ERP goals is essential in implementing the ERP activities in a structured manner. As such, it remains essential that there is a specific need for the implementation of ERP system. This can result in unnecessary costs for the management of a business enterprise and wastage of resources. Powell (2013) mentioned that having a fixed ERP goal could be complicated in the case of a large business organization with its operations spread out in multiple countries. Therefore, this has been a pertinent issue for GBI in the context of its existing operations. This has also hampered the procedure of recognizing the need and setting proper goals for the adoption of the ERP system.
Customization – According to Andersson and Olandersson (2013), the ERP system requires in-depth customization to suit the business enterprise in making specific structured goals. These results in the project being delayed as well as the cost overruns associated with the project. According to Johansson and Carlsson (2013), the ERP software shall require total customization of the system to adapt to the needs of a particular business enterprise. This may hamper the operational functionalities of a business enterprise and reduce the productivity in the initial stages.
Flexibility – Meyr et al (2015) mentioned that the ERP system has not been flexible enough to deal with necessary changes in the external market environment. Thus, any changes in the external market environment relating to changes in the consumer preferences as well as the demand of the goods or change in the economic condition of a particular place shall not be provided with an appropriate business solution within the ERP system. May et al. (2013) mentioned that the re-engineering of the processes would be pertinent requirement to offer benefits to the organization. However, this would not be possible, as it requires considerable time and resources for the business enterprise. In addition, there would be resistance from within the business organization, since the workforce would not be adequately trained enough to deal with such alterations in the workplace.
Legacy systems – There has been issues regarding the integration of different functional systems including the legacy systems in the business organization. The successful implementation of different ERP systems is concerned with the adhering to the legacy systems as per the rules as the regulations of a particular place (Johansson & Carlson, 2013).
Coordinating different modules – Powell (2013) mentioned that ERP requires the coordination of different functional modules within the ERP system. These include- the production planning as well as the inventory control. Besides this, the functions of finance as well as the human resource policies have to be managed efficiently to serve the overall purpose of business organization. In this regard. it can be said that the the issue of implementing an effective ERP system lies in executing an appropriate combination of technologies, policies as well as the issue of a perfect association of the internal and external business processes . In addition, it relates to dealing with the financial as well as the non-financial resources of the business enterprise. To enhance the ERP system it is essential that it is combined with other business software’s which are – system of supply chain, CRM as well as the Knowledge management (Staehr et al., 2012). In addition, it includes B2B exchange and the ecommerce storefront available online. However, this attribute in most organizations has not been emphasized upon. According to Andersson and Olandersson (2013), it is essential that this ERP is analyzed in an adequate manner to understand its in-depth methodology and architecture. This would assist to gain maximum utility from the SAP ERP processes implemented in the business organization.
References
Alaskari, O., Ahmad, M. M., Dhafr, N., & Pinedo-Cuenca, R. (2013). Critical successful factors (CSFs) for successful implementation of lean tools and ERP systems
Andersson, J., & Olandersson, B. (2013). Strategies in implementation of ERP systems-The impact of vendor-consultant relationships on the role of the consultant in ERP implementation.
Johansson, B., & Carlsson, S. A. (2013). An Approach for Identifying Business Requirements for Development of Prospective ERP Systems. In Building Sustainable Information Systems (pp. 247-257). Springer US.
Kim, J., Nicolaou, A. I., & Vasarhelyi, M. A. (2013). The Impact of Enterprise Resource Planning (ERP) Systems on the Audit Report Lag. Journal of Emerging Technologies in Accounting, 10(1), 63-88.
Mamoghli, S., Goepp, V., & Botta-Genoulaz, V. (2015). Aligning ERP systems with companies’ real needs: an ‘Operational Model Based’method. Enterprise Information Systems, 1-38.
May, J., Dhillon, G., & Caldeira, M. (2013). Defining value-based objectives for ERP systems planning. Decision Support Systems, 55(1), 98-109.
Meyr, H., Wagner, M., & Rohde, J. (2015). Structure of advanced planning systems. In Supply chain management and advanced planning (pp. 99-106). Springer Berlin Heidelberg.
Ostroukh, A. V., Gusenitsa, D. O., Golubkova, V. B., & Yurchik, P. F. (2014). Integration of PDM and ERP systems within a unified information space of an enterprise. IOSR Journal of Computer Engineering (IOSR-JCE), 16(02), V6.
Powell, D. (2013). ERP systems in lean production: new insights from a review of lean and ERP literature. International Journal of Operations & Production Management, 33(11/12), 1490-1510.
Staehr, L., Shanks, G., & Seddon, P. B. (2012). An explanatory framework for achieving business benefits from ERP systems. Journal of the Association for Information Systems, 13(6), 424.
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