ERP Implementation

Enterprise Resource Planning Implementation

It is an undeniable fact that businesses today face more challenges in order to succeed than any time previous. Industries face more competition than ever, customers expect more service than ever, and shareholders expect more profit than ever. To survive, businesses have to look for any advantage possible, and one of the ventures many have sought out is enterprise resource planning implementation.

Enterprise Resource Planning (ERP) systems are highly integrated enterprise-wide information systems capable of automating all necessary business processes. The best systems manage the processes in a way that lowers costs all the way through the supply chain, shortens the time from order to delivery, reduces inventory, expands the variety of product, configures order delivery dates more accurately, and invoices correctly. This occurs because the ERP collects data from all departments and records it in a way that is usable by the head of every division, thereby increasing the communication between them. At the end of the day, the goal of every company is to reduce costs and increase profit and this is exactly what ERP promises which is why for the past ten years, businesses have looked to ERP systems when faced with having to replace legacy systems.

The Enterprise Resource Planning Implementation begins once the new system has been agreed upon and purchased, and this is a major concern for businesses. Research conducted in the late 90’s showed that a full forty percent of all ERP implementation projects were failures, in the sense that once the new system was finally in place, it was unusable by the purchasing company. Even today, businesses report that almost ninety percent of ERP implementation projects are not completed in time, nor within the agreed upon budget.

There are three basic ways for companies to implement ERP. First, there is a piecemeal method of implementation.  In this method, only a bare bones rendering of the software is implemented to begin with, and only later, once the basic configuration is operating properly, is functionality increased. As modules are added-on they are separately interfaced with the legacy system. The second method is to add all of the modules and functionality that a business needs at one time. And the third is to implement the ERP so that it can run parallel to the legacy system until all personnel have adapted at which time the old system will be shut down.

Every method creates problems for a company due to the fact that ERP software is designed on the basis of best business practices. Thus, a company implementing ERP is subsequently required to adapt its operating structure to these standardized processes.  Implementation would be easier if the ERP were pre-adapted to the business’ structure.

Written by :

Amy Cruz