April 20, 2015

Potential benefits about the utilization of ERP system

Nowadays, ERP system are being increasingly adopted by organizations of any kind and size, in order to avoid technical obsolesce and create sustainable competitive advantages. Some experts note that most multinational firms are using ERP software packages and even more small and midsize companies are on the route of adopting them.

ERP system acquisition and implementation generally enhance productivity and working quality, since the system offers standardization and simplification in multiple, complicated operational procedures across the company . Moreover, information can easily be transferred, shared and exchanged among users who are working at different business divisions. In general, the literature has identified the following potential benefits of ERP system implementation:

- improved coordination across functional departments;

- increased efficiency in doing business;

- reduced operating costs (lower inventory control cost, lower production costs, lower marketing costs, lower help desk support costs);

- facilitation of day-to-day management;

- rapid access to information for decision making and managerial control; and

- support of strategic planning (through the planning of available resources).

BY: Ziwei Wang 1452383

- One comment Not publicly viewable

  1. Haizaq Bin Mohd Hasni

    To add, critical factors for ERP Integration should be considered before any organization could enjoy the fully benefits of ERP system utilization.
    Among of critical decisions that need to take into account are as follows:

    a) ERP Implementation Team need to fully understand how their organization works in order to have an appropriate ERP system. Failure would mean the the ERP project implementation would be half complete or even worse, come into stop abruptly. Eventhough ERP system is flexible and highly customizable, frequent changes would affect company daily operation

    b) Champion of ERP implementation either internal staff or consultant must stay in close communication with the stakeholders. Bringing the stakeholders into the early system implementation will allow them to fully understand the system and this in return would make them more appreciative with the ERP system and could motivate their subordinate to as well

    After these critical factors is put into consideration, any effort to bring the ERP system would be easier and less complicated.

    Source: Malhotra, R. and Temponi, C. (2010). Critical decisions for ERP integration: Small business issues. International Journal of Information Management, 30(1), pp.28-37.

    20 Apr 2015, 20:11

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