All entries for April 2015
April 17, 2015
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
Ehie & Madsen, 2005; Helo, Anussornnitisarn & Phusavat, 2008).
Scott & Vessey, 2000; Helo et al., 2008; Maditinos, Chatzoudes & Tsairidis, 2012).
By: SEONGWOO JUNG
ID Number: 1036499
April 12, 2015
An ERP system enables businesses to harness different departmental information systems and databases with programs that harmoniously work together and utilize a single database. ERP application is available for key business functions such as order processing, production control and finance. By using a common technology platform and database throughout the company, businesses can integrate departmental activities and achieve a range of cost, operational and productivity benefits. Implementing an ERP system requires careful planning to achieve the target benefits and minimize the risk of project failure.
However, the requirements for the ERP are not favorable for most SME’s for the following reasons:
• Expensive. The common and available ERP systems are expensive for most of the SME’s
• The Design of the ERP systems are complex. Most SME’s process are simple and may not need complex application
• ERP system delivers more than what users need, normally this results from the lack of user participation and effective communication between the developers and users hence hard to align with their current business processes.
• ERP requires more than one skilled personnel for the management and implementation of the ERP system, this is an additional overhead for the SME’s
• ERP systems envisages to provide solutions to a complex process which is only available for the large and established companies.
• Functions are dependent – Processes are required to be initiated to see through the workflow, many SME’s have limited processes to warrant the need for the ERP
• It’s a common assumption that the organization focuses on technological change aspects rather than considering social ones for the deployment and implementation of ERP
However, Although the core SAP solution is especially built for a large enterprise, the majority of SAP’s customer base is composed of more than 77% of small businesses. That is why SAP started to develop their solution suitable for those small and midsized businesses, which are SAP Business one and SAP ByDesign.
• Al-Mashari, M., Ghani, S.K. and Rashid, W., 2006, A Study of the Critical Success Factors of ERP Implementation in Developing, Countries. International Journal of Internet and Enterprise Management
• Huang, Z. and Palvia, P., 2001, ERP Implementation Issues in Advanced and Developing Countries, Business Process Management Journal,
By: Waqo Shuke Galma
ID Number: 1461443
April 09, 2015
The intendancy of executive team toward ERP implementation and The failures in ERP implementation.
The intendancy of executive team toward ERP implementation
1. The executive team is a leader to reform individual’s conscious.
Before starting to implement the ERP within the organisation, the executive team must not overlook the current situation and take role as a leader to instil in the importance of reforming the organisation. Moreover, the executive ought to persuade this matter to overall organisation structure. The executive is responsible to announce and explain to employees about ERP implementation. It is a wise idea to go around the organisation from one department to another department to have direct communication to individuals and convince them to take action.
2. The executive team should involve in designing and decision making processes.
There is a big difference between ERP implementation and create new project. In order to build ERP system, a new information centre must be created. And those new information will have direct result in reformation of work, management, culture of organisation. As a result, the overall organisation gets effectively improved.
3. The executive team continuously lead the ERP implementation.
The executive team is not only an initiator but also the persons who follow up to monitor the processes and results. The employees are not responsible to push forward the implementation but altogether with the executive team otherwise the implementation will not be succeeded and effective. Therefore, the executive team must continuously lead the ERP implementation within the organisation.
The failures in ERP implementation
1. The executive team is not able to lead the reformation. The target of ERP implementation is to reform working condition such as reducing capital costs, maximising processes, or increasing efficiency. But on the other hand, in practical aspect, the organisation is continuously using the same business processes as previous.
2. The ERP implementation takes time to develop and it is quite costly. If it is not being used as plan, the time is waste as well as the cost of development is increasing and then higher than organisation budget. Therefore, ERP will become an expensive tool.
3. The cost of ERP maintenance is quite high. The ERP implementation creates new organisational information system by using ERP package which is ease to maintenance and increase the capital costs.
4. It is quite complicated to upgrade ERP package. The ERP package provider has to inform about the cancellation of old ERP version maintenance. But when the provider attempt to upgrade new version, there are some errors occur. Therefore, the costs of upgrading new version of ERP is as equal as implement new version of ERP.
Article by: Jiratha Thiradanon (1431453)
April 04, 2015
Several vendors are endorsing that their Cloud based ERP is the best option to be purseud; thus introducing their own version of terminologies and gathering requirements which eventually dispute with the true cloud based ERP.
From the vendors perspective in order to qualify for a cloud application, multiple useers are requuired must utlise the same software application. This is, however, can be productive in terms of future cost of upgrades and product updates through running similar infastructure.
Furthermore, multi tenancy occur at infrastructure level, platform levels and application levels. Optioning for multi-tenant infastructure and multi-tenant platform can be a trade off between achieving cost and flexibility. Depending on the company demand Multi-tenancy makes sense to option for application level only if the cost of software is low. Whereas, flexibility comes secondary.
Also depending on the size of an organisation cloud server can be hosted internally. However, it can be argue that no matter the size of the company is, still difficult to hold the the cloud internally. Further limitation being company only consist of signle server making it impossible to add more capacity will be a major drawback.
3>PERSONAL HOSTING SERVER VS CLOUD:
The amount of data a company produces and hosted on personal server is a kind of an outsourcing its ERP operations. But if the company grows its operation adding more data, it is certainly make sense to host it on an external cloud because of capacity limitation. But major question of concerning whether the intellectual (data) is protected properly.
Article by; Noor Butt - 1466360
Reference: (Acumatica, 2015) Cloud Base ERP from vendors perspective