Introduction
Today Information technology has become a part and parcel of the business world. We can hear news of companies spending in the millions on enhancing their IT capabilities. We can say that it has become a necessary cost to stay in business rather than get any competitive advantage. At the same time we hear a lot of news about how some company spent so much on getting new systems and at the end failed causing the company enormous losses. Also, if we look at the trend of the past two decades, we can see that databases and ERP have been a common topic for discussion when it comes to integrating new systems in the organisation and letting go the old legacy systems.
It hence becomes necessary to understand that why did organisations actually want to move away from the legacy systems and move to ERP systems. Did they foresee any added benefit to the organisation by spending so much for moving from disparate systems to ERP systems? Was this change only from a cost benefit perspective or was there any other advantage as well? If yes, what other benefits would the organisation get from implementing ERP systems when compared to the functionality provided by the old systems which had been working well for a long time?
While we attempt to get answers for these questions, it may also be necessary to look at those companies who integrated ERP successfully and also look at those who failed to integrate successfully. An understanding on this matter becomes essential because
Enterprise resource Planning (ERP) is any integrated cross-functional software that reengineers manufacturing, distribution, finance, human resources and other basic business processes of a company to improve its efficiency, agility and profitability.1 On an initial view, an ERP system appears to be the cure for any company’s issues. The installation of such a system offers an organization the opportunity to re-structure their procedures, to coordinate branches’ systems in other geographic locations, unify information and inspire employees via granting them permission to company information. Now these chances exist at heightened costs financially. There are also implementation horrors and labor issues with which must be dealt with. A
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.
Pros. An ERP system is a necessary investment for Riordan because it integrates all departments and their respective functions across the organization into a single IT system (UMaine, 2009). There are three main benefits of ERP systems that directly address problems with Riordan’s operations. One benefit is a logical solution to a mess of incompatible applications currently in use by the organization. ERP also allows global access and sharing of organizational data as well. Additionally, implementing an ERP system will help the organization bypass the difficulties and expenses of replacing legacy systems (UMaine, 2009). An analysis of Riordan’s current issues with its Finance
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.
The adoption of the ERP software package throughout the enterprise will have a positive effect on the company. Through the elimination of data conversions and manual data reentry, the company can significantly reduce the time it takes to complete the monthly General Ledger, Income Statement, and Balance Sheet reports. The adoption of a single system instead of three will save Riordan money by reducing the IT staffing needs as it
The reason behind NIBCO's decision to implement an ERP system is that the company realized that the architecture of the current information system was not sufficient in supporting the matrix and the cross functional organization structure that had been implementing by the company in 1996 (Brown, DeHayes, Hoffer, Martin & Perkins, 2012). NIBCO's expectations to benefit from the ERP system was directly associated with the reason why the company decided to implement the system. The organization realized the importance of upgrading its architecture in order to resolve the issue of the year 2000. It must ensure that the new information technology system is coordinated with the organization's structure. Further, the management expected that the new system would be able to integrate the organization's systems and provide support to the growth ambitions of the company (Daryl, 2002).
In today’s business environment, companies use integrated information systems to gain competitive advantages. The primary objective of senior management is to generate a 10% profit to reinvest into the enterprise and expand their divisions. Several of Bandon’s competitors have implemented ERP with integrated CRM solutions. In order for Bandon Group, Inc. to compete with businesses such as Xerox, it is necessary to integrate the business applications. According to Monk, Ellen, & Wagner, “increasing information system efficiency often results in the effective management of business processes, which is essential to maximizing profit and sustainable growth” (2009). Bandon Group has common critical problems and issues within the organization today; there are also opportunities and challenges that need to be addressed. The technology department is small and strained. With the range of various technical solutions that have been implemented across the divisions it has become very difficult to provide data migrations, network support, technical support and training (Sumner, 2005). An ERP system can dramatically reduce costs and improve operational efficiency as it removes feudal decision-making and facilitates data integration and transparency between business units
Muscatello, Small, and Chen (2003) state that ERP systems, when they are implemented effectively, can bring impressive strategic, operational and information-related benefits to those firms that adopt them. However, in such situations, a failure in implementation might bring about the financial collapse of the firm. They further state that in the modern world, most of the information about the failures and successes are based on reports that are made concerning ERP implementation in big manufacturing and service organizations. However, it is stated that those who sell ERP systems are now steadily turning their marketing sights on small and medium-sized manufacturers. It is because of this that Muscatello et al state that researchers have been given the opportunity to gather, analyze and disseminate information that will help these firms to
This article has fairly covered an overview of Enterprise information systems and suggested management solutions for the improvement of the technical and economic efficiencies of the business operations using ERP systems. This article is a helpful source for identifying the benefits and economic effectiveness of ERP systems implementation.
The task to find out more information on the enterprise resource planning systems (ERP) an integrated systems package has been assigned to Beutler. The company has looked at the strengths and weaknesses of seven ERP packages they have been presented. Due to the high risk of using a Big Bang Approach, a high-risk project it was vital that the
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 Babin Kunjappa Florida Institute of Technology Course: MGT5115 | Term: Summer 1 2015 Course name: Global Information Technology Management Professor: Dr.Nabie Conteh Date: June 19, 2015 ERP Implementation CHALLENGES, CHANGES AND BENEFITS OVER LEGACY SYSTEMS, AND CRITICAL SUCCESS FACTORS FOR ACHIEVING GOALS 1 1 TABLE OF CONTENTS Abstract .................................................................................................................................. 2 1.
Scholars from around the world have written for years on several common theses for why ERPs are growing in representation. Commonly, authors incorporate ERP platforms and
It was stated that an adequate training that is provided to end users can increase the likelihood of ERP implementation success, whereas the lack of suitable training may cause ERP system implementation failure (Nah et al., 2003). Moreover Khandekar & Sharma (2005), Tharenou et al. (2007) argued that in order to achieve the organisation’s financial, managerial and performance objectives from the ERP implementation, training programs that are designed to enhance users’ skills and develop human resource capabilities are vital. In addition, training and education reduces user resistance and increases ease of use, as the result, increases the chances of ERP systems success and willingness to use (Bradley, 2008). An implementation an ERP system without sufficient training possibly will have a negative impact on the organisational performance (Somers & Nelson, 2004).
The emergence of ERP systems has marked a commencement of a new era of efficient and productive decision making. These systems not only enabled the companies to integrate their key processes but also responsive to real time information (Al-Mashari, 2001). Thus, the implementation of information systems led to various perceived benefits such as augmented flexibility in information generation; improved quality of financial reports; increased application integration; and ease of database maintenance. Thus, the effect is felt on organization planning and decision making at all levels in an organization. (Spathis and Constantinides, 2003). Hence, organisations are forced to stay up to date with new technologies for its survival.