The emergence of the Internet, progressing customer demands, pressure to hasten business process, and the need to institute more collaborative relations with key suppliers, and business associates are all pushing establishments towards ERP solution.
What is ERP System? (ERP) Enterprise Resource Planning is defined as an “information system suite that integrates information plus information based procedures within and across functional regions in an organization.” Traditional stand-alone programs were designed for specific clients, with limited functionality, in addition to being isolated from other programs. In contrast, ERP is a business implement that integrates all the programs required by a business as a whole, and links the organization to other initiatives in a network form. It is usually made up of several modules like a distribution module, a financial module, or a production module. Today, ERP have other new functions for example supply chain management,, electronic commerce, product data management and warehouse management. Consequently, ERP opens a window of opportunity for companies to compete globally, better the revenue and respond to competitive pressures.
ERP Characteristics and Basic Operations.
ERP enables company-wide Integrated Info System covering all useful areas like Manufacturing, Purchases, Human Resources, Receivables, Inventory Payables, Selling and distribution, Accounts, etc..
– ERP does core business activities plus betters customer service gratification.
– ERP facilitates info flow across departments or different units of the organisation.
– ERP bonds the gap between business associates allowing ongoing teamwork.
– ERP is a good answer for improved project management.
– ERP is made as open system architecture, implying it allows automatic introduction of the newest technologies such as Electronic Data Interchange (EDI), Video conferencing, Internet, Intranet,: Electronic Fund Transfer (EFT), E-Commerce etc.
– ERP not only reports the present requirements of the business but also offers the opportunity of constantly improving as well as refining the business processes.
– ERP also provides business intelligence gears like Data Mining, Executive Information System (EIS), Decision Support Systems (DSS), Reporting and Early Warning Systems (or Robots) for allowing people to make better choices and thus develop their business processes.
– ERP trails a wide range of dealings with an organisation as well as plans for future actions based on these actions.
ERP motivating forces:
1. need to better supply chain efficiency.
2. need to better customer access to merchandises or services.
3. need to decrease operating costs.
4. need to respond more quickly and flexibly to a varying marketplace.
Global ERP Application:
Traditionally, most global companies have managed their systems on a regional basis, since there was no single resolution that was universally acceptable.increasing productivityIn today’s vibrant business environment, present is a strong requisite for the organisations to grow into globally competitive. The fundamental for success lies in consumer satisfaction, in understanding consumer needs and providing worthy goods and services in the shortest period possible. An analysis of past international ERP projects, highlight on the significance of aligning organisation configuration with business process plus business strategy with IT policy in order to participate in the international marketplace.
Integrates Across Entire Supply Chain
To support a worldwide outlook, many companies implemented or are in the procedure of executing Enterprise Resource Planning (ERP) Systems, so as to improve level of coordination amongst national entities of the same company, and also with business associates. However, to attain this level of synchronization it is key to have a global market plan, a collective IT infrastructure, besides business processes being in place.
Increase Performance Enabling Technologies:
Customary ERP systems required refined and expensive information technology frame like mainframe computers. Nowadays, with the progression of information technology in addition to the cost reduction of computers it makes it possible for SME’s to ponder ERP Systems. In addition, the power of Server architecture and scalable interactive database management has led to easier deployment of ERP Systems in many locations.Integration Across All Business Processes. In a nutshell, implementing ERP can change the way an organization does business. It aids the enterprise link its resources, use and allocate resources in the best possible manner plus control them on real time. For example, in the case of ‘Threads’ the change from Legacy system to ERP system occasioned reduction of data redundancy, an better in client responsiveness, reduction of overheads, and customer service levels all through the firm. This has been enabled by implementing a mutual global ERP system all through its European operation.
Critical Causes for Realization of ERP:
The fruitful implementation of an ERP project necessitates management to plan prudently, and have all needed human plus financial resources in place. Here is a list of the main critical reasons for the success of ERP:
1- Top Management Support:
Among the most important causes for the success of ERP, plan is the top management commitment as well as support. The role of top management comprises developing an appreciating of the capabilities and limitation of the suggested system, setting goals then communicating the corporate IT Plan to all employees .
2- Project Management:
Another key cause for the success of ERP is handling the project life cycle from instigating to closing phase. The Project Manager has exclusive responsibility and ability for planning and monitoring the project scope to meet the project deliverables in the specified time frame and within budgetary constraints.
3- Selection of the suitable package:
Selecting the suitable package is an important managerial verdict. Analyzing and assessing the organization needs and processes aid in taking the correct choice that best outfits the business environment. An alert selection of the right package gives minimum modification as well as successful implementation and utility. On the hand, selecting the incorrect software may mean an obligation to architecture and program that do not fit the organizational strategic objective or business process.
4- User training & education:
A quality application can derail by poorly educated employees who do not recognize how to operate the ERP system correctly. The knowledge transfer to personnel is arguably more significant than the quality of the system. In view of that, companies should use counselors to run trainings on how the system workings, and how they affect the business process.
5- Business Process Re-engineering:
This is a per-requisite for going forward with implementing ERP structure. An in depth BPR education has to be done afore taking up ERP system. Business Process Re-engineering conveys deficiencies of the existing system besides it attempts to maximize productivity by restructuring and re-organizing the HR, divisions and departments within the organization.
In conclusion, ERP implementation could developed into a complex and uncertain process if, not managed correctly. Organizations need to recognize the critical issues that touch the implementation process. For example: selecting the suitable software package, securing commitment plus support from top management, having adequate understanding among team members, cooperation from business associates, training employees plus keeping them informed. All those matters and other more can reduce the failure of ERP project, in addition, maximizes the achievement of ERP implementation.