Introduction
Currently, most business enterprises have embraced technology in managing their resources. Such a move entails a crucial step toward reducing the expenses of running organizations. Furthermore, the systems of managing the resources of a company contribute to the efficiency of an organization.
Efficiency entails a company’s tool to edge the soaring competition in the corporate sector. The concept of efficiency requires the implementation of economic resource planning for the organization to enjoy the benefits of managing its resources effectively.
History of ERP
Economic Resource Planning (ERP) can be traced back to the mid-20th century. During this period, most enterprises in the manufacturing industry shifted their focus to the minimization of the cost of production despite the high volumes of production (Garg & Garg 2014). The concept of ERP emerged as an extension of material requirements planning (MRP).
Toward the end of the 1960s, a company that manufactured tractors in the United States collaborated with the IBM to enhance the application of MRP. The two organizations invented random access memory (RAM) that was installed in computers. RAM was two-dimensional and it supported the functions of MRP (Khosrow-Pour 2014).
In the 1970s, the IBM worked towards improving computer hardware to enlarge capacity and increase the speed of computers. Such improvements would also improve the rate of integrating systems of information for organization. As enterprises shifted their focus to marketing, managers were interested in integrating the production and planning strategies of their organizations.
The changes in the market pushed organizations to adopting MRP in a bid to enhance forecasting, scheduling, and procurement of raw materials. Furthermore, organizations used MRP for the management and control of the raw materials (Khosrow-Pour 2014).
In the 1980s, the IBM invented a cheap alternative for the medium and small enterprises that could not afford mainframe computers. The incorporation of MRP systems in the disks that were produced by the IBM revolutionized the use of the software. Most enterprises used MRP to monitor and control manufacturing, hence the emergence of manufacturing resource planning (MRP-II) (Grubisic 2014).
During this time, industries revolutionized further and shifted their focus to the methods of manufacturing and quality of the products. The management teams in most organizations were determined to reduce the overhead costs incurred in manufacturing. The needs of the industry led to the improvement of MRP-II to meet the demands of managers at the time (Garg & Garg 2014).
Towards the end of the1980s, IBM improved its software of communication; hence, the introduction of computer integrated manufacturing (CIM) to integrate information across different sectors within an organization. Furthermore, apart from integrating information, CIM offered different levels of support to the management.
CIM gained popularity across organizations as the system could coordinate an array of functions ranging from engineering to management among others (Khosrow 2014). At the onset of the 1990s, the Gartner Group discovered ERP as they searched for ways to manage their storage towers.
The incorporation of accounting into operations of manufacturing companies contributed to the evolution of ERP. ERP broadened operations of organizations through enabling companies to engage in multiple businesses (Garg & Garg 2014). The evolution of ERP contributed to the strengthening of financial operations through integrating the tools of supply chain across different companies.
At the onset of the 21st century, some of the IT professionals predicted an evolution of ERP to ERP-II. ERP-II depicted an improvement of the previous ERP as it diversified the management of resources. The ability of hosting ERP-II on the web paved the way to improve the rate of interaction between an organization and the external environment.
For example, customers and suppliers could access an organization’s information without visiting the premises physically (Garg & Garg 2014). Furthermore, the former system of ERP was rigid as it failed to accommodate different features of an organization.
However, ERP-II incorporated features that suited most modern enterprises (Zhao & Ye 2014). Additionally, the system could be customized in line with the needs of the organization. The incorporation of flexibility eliminated the need for the organizations to change their operations and processes in line with the modifications of the software.
Although ERP was derived from MRP-II, it is superior to MRP-II and MRP in various ways. First, ERP applies a set of tools for planning the resources of an organization. Furthermore, ERP ensures the integration of financial procedures and operations on real-time basis (Mohapatra et al. 2014). Additionally, ERP extends its ability to plan resources to manage the supply chain of an organization.
Key Features of ERP
Different ERP systems cater for the disparate natures of businesses across the world. Different ERP vendors in the market offer a variety of ERP systems depending on the needs of an organization.
However, different ERP systems should incorporate common features that characterize the common practices across different organizations (Thilenius & Ekman 2014). It is the responsibility of the vendors to integrate different feature of ERP systems to cater for the core functions of an organization.
Financial management
ERP systems have tools for the financial applications that facilitate the management of finances in an organization. In the corporate sector, it is evident that all organizations depict an array of financial functions that can determine the success or failure of an organization.
ERP systems should provide tools that support accounting functions such as maintaining general ledgers, managing both fixed and financial assets of an organization, and tracking the movement of cash in and out of the company (Corkindale & Ram, 2014). For the movement of cash, ERP has tools that enable the management to track the payments remitted by the customers and the payments made to the suppliers of the company.
Currently, most businesses are venturing into the global market despite the size of the enterprise. With such considerations, ERP systems have tools that support the use of different currencies and languages depending on the nature of the market in which a company operates (Corkindale & Ram, 2014).
For example, for subsidiaries in foreign countries, ERP systems recognize the currency and language of the host country. Additionally, ERP provides the management with as array of financial tools for the creation of budgets within an organization. Such tools forecast the financial needs and targets of an organization and supply the management with the information concerning the company’s forecasts.
Furthermore, tools for the management of risks and taxes provide the management with the information concerning the viable ventures and the company’s tax position (Zhao & Ye 2014). Such information determines whether the company should invest in a venture depending on the degree of uncertainty.
Management of human capital
Employees constitute a significant part of an organization, hence the need to manage the human resources. ERP systems provide applications that facilitate the functions of HR managers. Some of the applications provided by ERP include the tools that track performance within organizations (Corkindale & Ram, 2014).
Apart from determining the performance index of an organization, performance management application tracks the performance of individual employees through appraisals. The tool then provides the executive with reports concerning the performance of employees.
Depending on the needs of an organization, some of the ERP packages provide tools for the management of payroll and salaries of employees. However, some of the vendors have expanded their systems to include additional tools that include applications for the management of the needs of employees (Garg & Garg 2014).
Business intelligence
Business intelligence entails a competitive tool through which employees of an organization review reports of a company with a view of implementing ways to improve the company’s performance (Thilenius & Ekman 2014). With the soaring competition in the corporate sector in the contemporary times, enterprises cannot overlook the significance of reports generated across different department concerning organizations.
ERP packages have tools of analysis that allow employees to review data collected across different departments. The analytic tools begin by collecting information from different departments and storing the reports in a centralized database (Mohapatra et al. 2014). The tools also generate unified decisions concerning the findings of different departments and generate reports that are useful to the management.
In enhancing intelligence within enterprises, ERP tools provide room for the automation of reports across department (Peng & Gala 2014). Such automation contributes to the generation of reports and recommendations to improve the performance of the company on timely basis. Additionally, centralization of reports improves the visibility of data across an organization.
Management of customer relationship (CRM)
ERP systems have the ability to integrate tools that fulfill the needs of customers. By responding to the needs of customers on a timely basis, ERP improves a company’s competitive advantage. Some of the tools that enhance the performance of CRM include applications that respond to the quotes placed by customers (Corkindale & Ram, 2014).
The applications fix flexible prices of the quotes depending on the company’s policy on pricing. For example, the application will apply discounts where possible and provide such information to the customer when responding to the quotes placed.
In the management of services, ERP tracks the activities of the company’s department of customer care. In most companies, the department is charged with offering support to the customers by responding to their enquiries concerning an organization and its products.
For the management marketing, ERP offers tools that facilitate the marketing of an organization and its products. These tools create literature to be used by the sales and marketing personnel in promoting their products (Thilenius & Ekman 2014).
Enhancing manufacturing operations
Initially, ERP emerged from the modules that were designed to cater for the diversified needs of manufacturers across the globe.
Although ERP systems are used in both manufacturing and non-manufacturing organizations, the feature related to manufacturing customize the services offered depending on the needs of customers (Grubisic 2014). Some of the tools of ERP configure capability of products depending on the nature of an organization.
Functional Modules of ERP
Functional modules entail the tools and applications offered by the ERP systems. However, these tools vary depending on the nature of the organization in which they are installed. However, functional modules of ERP can be customized vendors to suit the needs of an organization. Such a move depicts the flexible nature of the ERP modules as they respond to the needs of an organization (Khosrow-Pour 2014).
Manufacturing module
ERP provides applications that manage the process of production within the organization. The module contains tools that manage the supply chain of materials for production and formulate the timeline for the execution of production (Grubisic 2014). Furthermore, the module contains applications that determine the quality of materials and engineering capabilities of the production plants.
Sales and distribution module
This module entails applications and tools that manage sales of an organization. The module receives and processes orders placed by customers and responds to the customers concerning the status of their orders (Khosrow-Pour 2014).
Furthermore, the module formulates a schedule through which the order is handled by the department of sales. The schedule entails a formulation of timelines and activities that the order passes prior to delivering goods to the customer. Furthermore, sales module maintains a database for the information of the company’s clients (Garg & Garg 2014).
HRM Module
The HR module entails a group of applications and tools that facilitate the administration of HR function of a company. The module integrates various administrative functions of an organization to reduce the company’s overheads that are related to the execution of HR tasks.
The tools for the HR module provide applications that enhance the management of personnel, company’s payroll, and personal development of the employees (Corkindale & Ram, 2014).
Tax management module
Among manufacturers, companies are entitled to a variety of taxes that include excise duty. The tax module provides an application that captures the information concerning the tax position of an organization (Corkindale & Ram 2014).
In other sectors, the module integrates information concerning the company’s sales and purchases. From the information, the module generates reports concerning the tax position of the organization.
Material and inventory management module
The module for the control of inventory entails the ERP applications that facilitate the tracking of the movement of materials and products in and out of an organization. The module provides information concerning reorder level and appropriate lead times to avoid shortages (Zhao & Ye 2014). Furthermore, the application reconciles balances in the inventory and sends status report to the management.
Total quality module
Managing quality entails a core competence of an organization. ERP enables the management of total quality through tools that control the quality of processes and products within the organization (Garg & Garg 2014).
ERP systems achieve this function through integrating quality assurance and quality control to monitor the development of new products. Furthermore, the module monitors the quality of purchases made by the organization and provides real-time information concerning the efficiency of the company’s processes.
Finance and accounting module
Departments within organizations are regarded as the cost centers. The management of these departments remits reports concerning the expenditures and incomes generated by their sections.
The finance and accounting module provides a common platform through which cost centers remit their financial reports (Zhao & Ye 2014). Furthermore, the module provides the finance department with tools to determine profitability of the entire organization.
Benefits of ERP to business
For businesses to reap the benefits of ERP, they should have high levels of effectiveness when operating the systems. ERP improves the level of responsiveness and productivity within an organization. With ERP, companies can deliver their products on time, hence increasing the level of sales.
Furthermore, systems that implement ERP have reduced lead times, thus creating sufficient time for the procurement officers to place orders and manage inventories efficiently (Khosrow-Pour 2014). Moreover, ERP provides crucial information concerning the company’s productivity and the quality of the goods produced.
Such information provides the management with insights concerning areas of the organization that require improvement (Garg & Garg 2014). In such an environment, ERP creates an opportunity for other techniques of management to reach their maximum potential.
ERP fosters effective planning and scheduling of resources through accurate forecasts. The formal system of forecasting highlights the needs of an organization in relation to the availability of materials and production schedule.
Through ERP, organizations are in a position to implement valid schedules of shipping their products to the customers through a proper and efficient management of an organization’s supply chain. Apart from coordinating the activities of distributors, ERP also ensures cooperation among suppliers of an organization (Thilenius & Ekman 2014).
Advantages of ERP
The absence of ERP systems within an organization creates a loophole for the implementation of software that cannot communicate the needs of the organization to the management.
Therefore, ERP facilitates proper and effective communication within an organization through integrating functions of different sections across an organization (Garg & Garg 2014). The integration of functions across different sections improves productivity and the level of efficiency in the organization.
In designing products, ERP harbors features of engineering that provide the management with tip on how to improve the quality of products. Engineering features of ERP help the system to evaluate various processes used in production coupled with highlighting the areas that need corrections or improvements.
Such a move contributes to the reduction in the overhead costs incurred in the production as the manufacture reduces the volume of defective products (Thilenius & Ekman 2014).
For the management of the company’s chain of supplies, ERP keeps track of the system of distribution. Once a customer places the order, ERP provides routine reports concerning the status of the order until the client receives his/her products. Furthermore, the system provides the management with reports concerning the status of suppliers and the quality of their supplies (Peng & Gala 2014).
Accounting entails a significant sector of an organization. ERP system integrates the accounting functions of an organization to determine the level of the company’s profitability. Some of the accounting functions include tracking the payment of vendors and the payment for the purchases.
In large organizations, the executive may experience challenges in obtaining information from different departments. In such organization, information is highly decentralized, as each department files and manages its information.
However, the system of ERP helps in centralizing data in a common database. Centralization of information enables the executive to control the processes of an organization from a central point (Peng & Gala 2014). Furthermore, accessing information from a central point helps in the elimination of possible changes as information passes across different systems.
ERP systems play a significant role in safeguarding the security of an organization’s information. The system allows the consolidation of various models of security in a single structure to protect sensitive information concerning an organization (Weng & Hung 2014).
Additionally, most security features that are supported by ERP protect the company’s information from unauthorized access. In another instance, ERP system permits the implementation of internal controls that contain checks and balances to monitor the operations of the organization.
Disadvantages of ERP
Customization of ERP is limited and expensive as most organizations lack a comprehensive policy that protects the integrity of data. Furthermore, installing the system may require the organization to buy additional hardware, as the current one may not be compatible with the ERP system (Khosrow-Pour 2014).
Although some employees may reject the idea of implementing ERP systems, the management will incur additional expenses in training the IT personnel.
In most cases, ERP systems may require the re-engineering of processes within an organization. Such a procedure can contribute to a firm losing its competitive advantage, especially when handling the company’s data. For the ERP systems hosted through cloud computing, there is the risk of exposing the organization’s database to the competitors (Peng & Gala 2014).
In the implementation of ERP, the rigid nature of the systems makes it difficult for employees to adapt. In addition, high levels of accuracy are required when working with ERP. The system incorporates highly integrated links that are interdependent of each other. In such a situation, compromising accuracy undermines the standards of other applications (Khosrow-Pour 2014).
Additionally, the systems are almost permanent given the high costs of switching from ERP to other systems. Such high costs undermine the company’s level of flexibility, especially in the execution of strategic decisions concerning suitable systems. ERP systems contribute to the centralization of information through the creation of a common database.
However, such a move can cause an overlap of duties and responsibilities among some employees (Peng & Gala 2014).
For example, the top management and the IT personnel can access the company’s database and make changes to the data and information provided. Apart from the challenge of overlapping duties, ERP interferes with the level of morality amongst workers. Most workers will lose confidence as they are monitored from time to time.
Furthermore, in the creation of centralized databases, some of the managers may decline to disclose all information regarding their department. In addition, the centralization of information increases the risk of losing data in case the tools of security fail.
According to the research, ERP systems are not suitable for the small enterprises (Weng & Hung 2014). Chains of command within small businesses are simple and the client-base is usually limited. ERP systems may be too complex for such simple businesses, which can hamper the operations of small enterprises to significant extents.
Types of ERP packages
There is a diversified line of ERP packages in the market. However, the cost of purchasing the packages plays a significant role in determining the type of package to purchase for a given organization (Snapp 2014). The prohibitive costs of purchasing ERP packages deter most organizations from using ERP systems.
The move has pushed the developers of ERP to focus on research and development to develop and market products that users can afford. Some of the common ERP packages include Dolibarr, ERP5, iDempiere, LedgerSMB, and Odoo among others (Snapp 2014).
ERP vendors
The nature and classification of ERP market
The sector of ERP evolves from time to time in line with the changing demands of the market. Among the contributions of ERP, the system plays a crucial role in drawing the difference between SMEs and large enterprises. With most enterprises appreciating ERP, the move has led to the emergence of additional vendors to provide ERP to the businesses (Weng & Hung 2014).
The classification of vendors of ERP systems depends on the nature of the clients and the packages on offer. According to the research, ERP vendors are grouped in three tiers, viz. tiers 1, 2, and 3 (Snapp 2014).
The first category, tier 1, comprises multinational vendors who operate in different regions across the globe. Furthermore, packages offered by these vendors are complex and they require technical assistance of the vendor to implement.
In the second category, Tier 2, vendors sell their products to the medium companies and their revenues do not exceed $1billion. In contrast to Tier 1, products offered by vendors in Tier 2 are cheap and easy to implement. Furthermore, the systems are tailored to meet requirements of specific industry (Snapp 2014). For Tier 3, vendors target small and medium organizations whose revenues do not exceed $ 50 million.
Vendors in this category supply simplified systems for the application within a single organization across its departments. However, as the company expands, its needs may outgrow ERP solutions that it had implemented earlier.
Main ERP vendors
Oracle
The Oracle’s philosophy is tailored toward offering applications that address the challenge of cost of ownership (Zhao & Ye 2014). The applications offered by Oracle are integrated to shield users from incurring additional expenses during implementation of the system.
Microsoft
ERP systems developed by Microsoft lack flexibility as users can hardly customize the software to suit the needs of a company. However, Microsoft has cheap products that are simple to understand (Zhao & Ye 2014). Unfortunately, Microsoft maintains copyrights to the ownership of the systems, hence failing to fulfill the users’ ownership experience.
Sap
Sap is tier 1 product tailored to cater for the diversified needs of large organizations. Such an aspect contributes to the complexity of Sap’s systems, hence the need for additional training of IT personnel (Zhao & Ye 2014). Furthermore, Sap applications increase the cost of ownership as users incur high costs of implementing the applications.
PeopleSoft
PeopleSoft resembles formal computer programs and it focuses on the best practices that improve the operations of users. Furthermore, PeopleSoft has improved applications to minimize the cost of implementing and maintaining the system through incorporating simplified structures and tools (Zhao & Ye 2014).
Siebel
Applications produced by Siebel focus on the experiences of customers through ensuring customer satisfaction. Siebel’s system of ERP incorporates simple tools, hence making the system affordable to users. Apart from the high returns on investment, Siebel incorporates additional features that provide automated response to the complaints aired by users (Zhao & Ye 2014).
ERP Best Practices
ERP systems incorporate best ways to perform the operations and processes or an organization. However, the degree of flexibility among systems of ERP varies depending on the features incorporated by different vendors. However, the system should highlight best practices of an industry through reducing the time within which projects are implemented (Peng & Gala 2014).
ERP systems also incorporate tools that enable an organization to adhere to compliance without difficulties. For example, tools and applications that support accounting procedures should comply with the international standards, such as IFRS. Additionally, flexible systems of ERP help an organization to comply with industrial standard that change from time to time.
Methodologies of selecting ERP system
The management cannot rely on the size of an organization to determine the best system of ERP. However, the management can use a formal methodology to determine the best system that can provide for the processes of the company. According to research, the best system of ERP is one that achieves high levels of acceptability among users through its approval by the management (Thilenius & Ekman 2014).
Furthermore, the system should focus on improving the value of shareholders through improving returns on investments (Peng & Gala 2014). Additionally, in choosing methodology for the ERP system, the management should consider both time and budget constraints of the business.
Proper system selection
A proper methodology contributes to the selection of an appropriate system of ERP in line with the functionalities of an organization. First, the management should involve the company’s stakeholders in search for an appropriate ERP.
Through a structured approach, stakeholders gather information concerning ERP systems in the market and place tenders to attract attention of many vendors. Involving many vendors provides stakeholders with an array of options from which they can choose the appropriate system (Weng & Hung 2014).
When shopping for ERP systems, demonstrations by vendors are significant. However, vendors should tailor demonstrations to meet the needs of their clients in relation to the processes of an organization. In such as case, the IT personnel should accord vendors sufficient time to prepare from the demonstrations in line with the requirements of the user company (Snapp 2014).
The management should also consider the cost implications associated with a methodology used in the selection of ERP system. Given budget constraints, methodology used must not exceed the budgeted expenditure.
Furthermore, the method should yield more benefits than expenses. For objectivity, a significant proportion of the stakeholders should accept the criterion prior to viewing potential systems in the market (Corkindale & Ram 2014).
Poor system selection
At times, the management adopts objective methodologies of selecting systems of ERP. In such instances, the management and IT personnel fail to have a comprehensive evaluation of the set of requirements prior to choosing a system of ERP (Khosrow-Pour 2014). According to research, it is crucial to evaluate needs of users prior to implementing a system to avoid a mismatch between the functionality of the system and the processes of organization (Khosrow-Pour 2014).
Furthermore, relying on the demonstrations by vendors contributes to making uninformed choices. During such demonstrations, vendors focus on the simple processes that omit most significant functions of an organization. Demonstrations by vendors can limit the extents to which enterprises meet the diversified and complex needs of customers (Zhao & Ye 2014).
Moreover, over-emphasizing on the cost of the system can contribute to selecting a system that does not meet the needs of an organization. However, in considering the cost of a system, the management should also regard the quality of capabilities and infrastructure offered by a system (Khosrow-Pour 2014).
In most organizations, the department of IT is charged with the responsibility of selecting and implementing system within the organization.
However, decisions based on a single entity of an enterprise create the possibility of biased decisions that will affect the entire enterprise (Mohapatra et al. 2014). Such decisions can lead to the implementation of faulty ERP systems that yield negative results and undermine efficiency of the entire organization.
Factors to consider prior to implementing ERP
Organizational issues
The evaluation of a company’s objectives and vision plays a key role toward the integration of the operations of the organization. First, the management should be in a position to comprehend the current processes and implement decisions on time.
In some circumstances, integration of business processes requires the management to change the outlook of the organization through reengineering (Khosrow-Pour 2014). In such a situation, the management should question its ability to introduce changes into the structure of the organization.
The integration of business processes requires the management to invest in the systems that facilitate the process of integration. ERP systems require an organization to invest a significant proportion of its economic resources in implementation of the applications. In considering cost implications of ERP to an organization, the management should weigh the benefits of ERP against the costs incurred in implementing the system.
Projects that contribute positive returns to the investments made by shareholders should be adopted, whereas those that generate losses should be abandoned (Mohapatra et al. 2014). Most ERP systems in the market do not support the functions of the companies that experience rapid growth.
Rapid expansion of companies may render ERP solutions irrelevant as the system fails to respond to the changing needs of an organization. The rigid nature of ERP systems requires the management to evaluate the nature of their organizations prior to implementing integration (Zhao & Ye 2014).
Employees’ reaction
Employees may resist change due to implementing ERP systems. Reluctance to embracing change arises from the changes in the governance of the institution and style of leadership. However, the management should begin by supporting the implementation of ERP systems for the subordinates to follow.
Furthermore, the management should train employees to prepare them to handle the new system (Mohapatra et al. 2014). Additionally, employees across departments should be involved in the implementation of new system to hinder their resistance to change.
Instituting change into the organization
The integration of ERP requires the organization to alter most of its crucial processes. For example, the new system may require the management to redefine responsibilities of employees in line with the requirements of the new system (Corkindale & Ram 2014).
In large corporations and multinational enterprises, the management should consider implementing flexible ERP systems that address different issues depending on the country in which subsidiaries operate. In such an environment, the system should also address mismatch that may occur between the functions of ERP software and requirements of an organization across different countries.
Ways of implementing ERP in an organization
Implementation through joint venture
A company can collaborate with another in the same industry to implement ERP. Sharing contributes to spreading risks of an organization, and thus a company will not bear heavy losses in case the system fails.
However, most organizations are reluctant to venture into joint ventures for the fear of undermining their competitive advantages (Mohapatra et al. 2014). Additionally, sharing of ERP systems undermines the security of a company’s databases.
Partial/full implementation
Depending on the needs of an organization, the management can choose to implement ERP fully or partially. In partial implementation, the management may implement a system to perform specific functions depending on the needs of the organization (Khosrow-Pour 2014). For the partial and full implementation, an organization may decide to collaborate with another company of implement the system on its own.
The process of implementing ERP
The management should perform various activities prior to implementing ERP. The management should begin with assessing the current situation of the organization through a feasibility study. The study should focus on the nature of the organization’s hardware, software, and availability of qualified employees to implement ERP. In the case of improvement, the organization should set goals and objectives that govern implementation.
Determining economic viability of the system shields the organization from possible losses occurring from implementing the system (Mohapatra et al. 2014). In case the cost of implementing the system exceeds the benefits, the management should reject the project.
For the economically viable systems, managers should move further to recruit additional staff to implement the project. However, training the current workforce eliminates the possibilities of employees resisting changes. Training also prepares employees across different departments to assume participate in implementation of ERP (Mohapatra et al. 2014).
The third step entails the formation of a steering committee to evaluate different needs of the organization to determine the appropriateness of implementing a system of ERP. The steering committee should comprise employees and experts from different sections of an organization. Furthermore, the committee works closely with external consultants to identify appropriate modules that match the needs of an organization.
In the course of implementing ERP, IT specialists advise the management to invest in training workers across different departments. However, the type and level of training depends on the roles assigned to employees. However, training must also be provided to the external shareholders such as suppliers and customers for them to interact with system and the company without challenges (Corkindale & Ram 2014).
Final installation of ERP system requires the managers and IT personnel to configure the company’s current software to support the operations of the new system. Furthermore, the new system may require new hardware that supports the new formats of databases.
However, routine inspection and maintenance of the new system will highlight various problems that may arise as the system operates. After implementing the new system of ERP, managers should review the system to ensure that the system fulfils objectives of the company (Mohapatra et al. 2014). Furthermore, a post implementation review highlights some of the areas that may require modifications.
Conclusion
Implementing a system of ERP within an organization entails a process that requires considerable levels of commitment. Successful integration of the system contributes to various benefits that lead to improving efficiency within a company. However, prior to implementing ERP, the management should consider some of the fundamental issues that may affect the organization’s ability to embrace drastic changes in the structure.
Furthermore, the management should incorporate appropriate strategies to deter resistance to change. For example, the management should involve employees in the process of implementation and train and equip them with skills to handle the new system.
However, the management has the duty to decide the method of integration. For example, managers can implement ERP through sharing the process with another company. Additionally, the management can decide to venture into partial of full integration depending on the needs of an organization.
Reference List
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