Enterprise Resource Planning (ERP) systems
ERP systems are the first wave of enterprise systems, which enhance data and process integration. ERP systems integrate the office functions within the business. Such functions include material management, financials, and order entry in a business. However, ERP systems have been difficult to implement.
Specialists note that the adoption of these systems provided the basis for successful implementation other complex systems. The three big players of ERP systems include “Material Global Manufacturing”, “Valvo manufacturing” and “Asea”
Factors of ERP systems’ implementation
First, the management should have an active engagement in the project. In this way, the top managers participate in the project not only in planning, but also in its execution. The management can achieve this engagement in two ways: First, by forming an active project oversight board and secondly, by being dependable sponsors of the project.
The managers in such projects should be of high level in order to ensure the project accomplishes the goals and the required changes of the business and to ascertain that the ERP system arrays with the business processes. The leaders should have experience in project handling; they should be individuals who have executed projects of major impacts to that enterprise.
They should have proven success in project leadership for the enterprise in the past. Furthermore, the team members of the project must be managers with the deep understanding of the processes within the business. In fact, the team members should compose of the best players (managers) in the business. These team members must be available full time to cooperate with the experts.
The enterprise should contract third parties to provide specialized expertise and knowledge. Internal team members may not have the technical expertise to configure the ERP systems to suit the needs of the business. As a result, the enterprise should contract vendors and consultants who have specialized skills in that specific ERP package.
In addition, the enterprise should change the management to suit the needs of the ERP system. This implies that the enterprise should train its human resource on the new systems. By doing so, the business ensures that management change becomes an integral part of the implementation process.
Finally, the leaders should ensure that the enterprise module used for ERP achieves the minimum requirements of the business goals. Finally, for successful implementation, the leaders should ensure that the ERP module provides 80% acceptable solutions.
Material’s
To achieve the 2000 goals, Material Manufacturing decided to purchase ERP system in 1994, through advice of hired CIO. The enterprise signed contract with SAP and PeopleSoft for system’s modules and human resource respectively.
In 1995, the business released the implementation plan and formed a full time project team. The enterprise engaged the services of one of Big 5 consulting firms. The concerted efforts of the team members led to implementation of the system in 1997.
Valvo’s
Based on the recommendation by the new management, the business contracted SAP in 1996 to provide modules for its ERP implementation. With CEO in the active engagement role and the leadership of the new CIO, the implementation of the project started late in 1996 and was completed in 1997. Due to the benchmark provided by the Material Manufacturing, the Valvo’s ERP implementation remained within the set price tag.
Asea’s
In order to restructure its materials, sales and distribution management, Asea contracted SAP to implement the ERP system. With the country manager as the sponsor, co-led by the company’s manager, the business completed the implementation four months later. The team members composed of full time APSS members. The plan closed at a price tag of $150,000.