What are the challenges of implementing an ERP system?
With the extraordinarily rapid growth of ERP’s implementation from the late 1990s to today, there are lots of inevitable challenges that companies may confront during ERP implementation process.
1. Decision-making challenge
a. Selection challenge
When a company decided to execute a managerial information system implementation project, the first question that companies will face is how to select the most suitable applications on type, size, and scope that are required in the future companies business from the tons of solution applications offered on market. There is no single answer on how to find what you need; in order to make decisions; companies have to seriously consider the combination of their own conditions and requirements with the needs of business.
There are some facts indicates that the implementation of ERP not always successfully accomplishes the companies’ goals, targets, and anticipant outcomes and profits. However, the surprised truth reported by much of the research say that the main reason of failure on ERP implementation is due to the high degree of complication from the massive changes ERP causes in organization rather than ERP itself. An ERP implementation is a huge commitment from the organization, causing millions of dollars and can take up to several years to complete. 1 But when companies implement successfully, the value, profit and benefits provided by ERP can be enormous. What is more, it
Although all of above factors played very important role in the success of ERP implementation, the most important one should be the clear understanding of its strategic goal. Cisco did correctly to define themselves and realize the current problem and make plan
The implementation of an Enterprise Resource Planning System (ERP) system is very complex, and it needs to have a well design implementation plan, well-structured approach, and will require substantial changes on staff and work processes. In the case of Bombardier, the company have learned valuable lessons from their previous implementation process to help them to achieve the project goals. For example: after the implementation at the Mirabel plant, the company decided to add more training material as well as one day refreshers course since they recognized the importance of user preparation. They realized that the project needs to be a manager’s project and no just IT. Also, they senior management made the project a clear priority, and ensure
ERP projects are most definitely expensive and risky, nevertheless despite these potential costs KEDA decided to embark on its ERP implementation project in hopes of obtaining a high return on investment. One of the factors that led to this decision was the fierce competition of global and local competitors. In an effort to retain its position within the industry and combat the threat of other businesses, KEDA needed to evolve. Specifically, through choosing a new ERP system, KETA hoped that this strategy would improve operations and become a productive advancement to the structure of the company. Since the Chinese government stopped their support and the MRP-II couldn’t manage the multiple system operations, they had to seek out a new alternative.
Kumar, P. (2010). Successful implementation of ERP in a large organization International journal of engineering science and technology. Vol. 2(7), 3218-3224. Retrieved from http://www.ijest.info/docs/IJEST10-02-07-151.pdf
Cisco Systems, Inc.: Implementing ERP [HBR case #699022] Reviews Cisco System's approach to implementing Oracle's Enterprise Resource Planning (ERP) software product. This case chronologically reviews the diverse, critical success factors and obstacles facing Cisco during its implementation. Cisco faced the need for information systems replacement based on its significant growth potential and its reliance on failing legacy systems. The discussion focuses on where management was particularly savvy in contrast to where it was the beneficiary of good fortune.
An extensive research was done to fetch the historical background of company, the functioning of its legacy systems, and the issues that are being faced by the company as a result of ERP implementation. However, there are only few studies that showed ERP case studies for the company relative to the ERP issues.The web searches provided a restricted account of data on company’s ERP profile. In order to find details of the issues that are being faced by the
This article presents a clear understanding of the critical success factors, software selection steps and implementation procedures involved in successful ERP system implementation. This article majorly covers topics regarding evolution, benefits and significance and pitfalls of the ERP systems as well as critical success factors and ERP system selection. This article is a helpful resource for getting an overview of the implementation procedures and critical success factors of ERP systems and companies can use this as a powerful tool to develop strategies and techniques to manage their
In general, ERP systems are designed to standardize information entry and create data storage for information sharing across the organization. There are numerous advantages of ERP but skeptics argued on the fact that these advantages can be also achieved by simplification and lean production methods. IT systems could be effective and reliable in the long run but at the same time there is an uncertainty about whether it will align with the concerned business process. For instance, the ERP system implemented at the Korey plant to replace MRP system failed. Though it met the requirements of individual unit and enabled employees with wide range of
ERPs are notoriously difficult and time consuming to install since they impact all areas of a business’s processes. Forty percent of all ERP installations are only completed partially and another twenty percent are complete failures resulting in a removal of the system (Yick, 2011). This leaves successful, complete, ERP implementations in the minority and NIBCO’s selection committee did not want to create additional opportunities to fail, especially with the data issues that were occurring with their legacy systems (Brown, DeHaynes, Hoffer, Martin, & Perkins, 2012).
ERP implementation is unlikely experience that any company will have. It has to be planned prepared and stimulated from the entire stakeholder otherwise it will sunk the millions of dollar and it drain the companies market. In case of Nestle USA, it confronted a lot of difficulties due to improper implementation plan yet be able to recover as a successful project. Many organisations have gone through the similar situation that there are plenty of lesson to be learned. We can conclude that ERP implementation needs big consideration on business requirement, business process reengineering, stakeholder’s involvement, hardware and software and other units.
The problem presented by Joseph-Armand Bombardier is the upcoming third round of ERP implementation in his organization. Even though a big improvement over the efficiency and success of execution between the first ERP round (Mirabel plant) and second round (Saint-Laurent plant), there is still room for improvement.
An effective communication has been suggested to be one of the success factors that have an impact on users’ acceptance of an ERP implementation (Amoako-Gyampah & Salam, 2004). Furthermore Ngai et al. (2008) rightfully pointed out that communication is vital for an organisation to achieve an advantage from the ERP system implementation. In order to overcome user resistance before and during the implementation of ERP, operative and explicitly communication is very important in all
This paper investigates the implementation of ERP project at FoxMeyer Drugs in 1993. The paper will identify lessons learnt from the failure of the project implementation. However a critical analysis of what went right and wrong will be carried out.
Regardless of what industry your business is a part of, implementing an ERP system is a crucial venture that must be taken seriously for it necessitates strong commitment by the project team and solid support by the business leaders for guaranteed success. It is a known fact that ERP deployment is among the most costly, labour-intensive, lengthy, and complicated tasks a project team can take on.
Implementations of so many ERP systems face strict challenges of totally fail because of terrible challenges: the gap among systems capabilities and business requirements, lack of knowledge on the consultant’s fraction, and mismanagement of the execution project.