April 17, 2015

Challenges in Implementing Enterprise Resource Planning system

Challenges in Implementing Enterprise Resource Planning system

Enterprise Resource Planning (ERP) is a software solution that integrates business functions and data into a single system to be shared within a company. While ERP originated from manufacturing and production planning systems used in the manufacturing industry, ERP expanded its scope in the 1990’s to other "back-office" functions such as human resources, finance and production planning. Moreover, in recent years ERP has incorporated other business extensions such as supply chain management and customer relationship management to become more competitive.

In spite of ERP’s significant growth from the late 1990s to the present day, there are a number of challenges that companies may encounter when implementing ERP. Most multinational firms are using ERP and that more small and midsize companies have begun to adopt ERP. Despite ERP’s promises to benefit companies and a substantial capital investment, not all ERP implementations have successful outcomes. ERP implementations commonly have delayed an estimated schedule and overrun an initial budget.

Furthermore, the literature indicates that ERP implementations have sometimes failed to achieve the organization’s targets and desired outcomes. Much of the research reported that the failure of ERP implementations was not caused by the ERP software itself, but rather by a high degree of complexity from the massive changes ERP causes in organizations

Reference:

Ehie & Madsen, 2005; Helo, Anussornnitisarn & Phusavat, 2008).

Scott & Vessey, 2000; Helo et al., 2008; Maditinos, Chatzoudes & Tsairidis, 2012).

By: SEONGWOO JUNG

ID Number: 1036499


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  1. In addition, some researchers have found that failures in ERP implementations are not only due to the system complexity, but because of lack of involvement of stackeholders in the outcomes of the ERP implementation (Upadhyay et al. 2011). Therefore, ERP implementations should be also be focused in solving the human aspect of the project like creating communication channels rather than marely a project from the IT departament.

    Upadhyay, P., Jahanyan, S., and Dan, P.K. (2011) ‘Factors Influencing ERP Implementation in Indian Manufacturing Organisations: A Study of Micro, Small and Medium-Scale Enterprises’. Journal of Enterprise Information Management 24 (2), 130–145

    19 Apr 2015, 17:34


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