Question

Why are ERP systems important to organizations? What are the typical components of an ERP system? What is meant by the term "a suite of suites"? What are three approaches to ERP integration? What are some of the issues associated with an ERP implementation? What is the success rate for ERP implementation? What is the primary benefit of a successful ERP implementation?.

Answer 1

1.ERP (Enterprise Resource Planning) is a business management software that allows an organization to leverage a suite of integrated applications in order to streamline and automate processes and create a leaner, more accurate and efficient operation. ERP provides total and complete visibility into core business processes and optimizes systems through superior resource tracking and reporting, database management and data sharing and improved information systems. ERP systems can allow businesses to expand without the addition of IT or staffing expenses. ERP systems, thus enable business growth.

2. There are six main ERP components

- Human Resources: HR ERP component handles the full spectrum of employee management, right from onboarding to offboarding and from benefits administration to timekeeping.

- Customer Relationship Management: The customer relationship management (CRM) ERP component allows to keep track of all of the customer and lead data within the ERP solution. The insights gained from a CRM can help optimize the organization's marketing and sales efforts.

- Business Intelligence: The BI component of ERP collects and analyzes data, providing with actionable insights related to the business processes.

-Supply Chain Management: The supply chain management (SCM) component of ERP systems is important to optimize the supply chain, and that starts by collecting real-time data. The SCM component, with the help of real-time data, can assist with demand planning and create an up-to-the-minute accurate production plan that meets demand.

- Inventory Management System: Inventory management works in tandem with the SCM pro cess component and also has its presence in other processes, such as sales and warehousing. The main purpose of these components is to manage order fulfillment and stocking a warehouse.

- Financial Management: This component deals with data from all of the other ERP components. Since every business process involves money in some form or another, whether it’s paying employees or paying for shipping goods, the financial management component works with all of the other components in the ERP system.

3. Suite of Suites refers to a characteristic where the system acts as a homebase for the many departments one can access. It is somewhat similar to a Liberty homepage which holds registrars, assist and blackboard databases.

4. There are three common ERP implementation strategies-

- Self Directed- The Company which has purchased the ERP software takes on the complete responsibility of the software implementation using internal resources to execute.

-Collaborative: The Company that purchased the ERP software teams up with an outside implementation services provider who has the necessary expertise in systems and business experience. This approach involves the partnership and teamwork between the Company’s internal team and the Implementation Services provider.

-Turn key: The Company that has purchased the ERP software turns over all implementation tasks and responsibilities to an outside implementation services provider. The Company’s personnel and End-Users have minimum to no involvement in the implementation and typically don’t receive training or interact with the system until it’s been completely configured and ready for production.

5. There are 7 common challenges companies experience, during implementation-

- Implementation should be done in stages. Trying to implement everything all at once will lead to a lot of confusion.

- Adequate training is important during and after the implementation. The staff should be comfortable in using the applications or else, it will backfire, leading to redundant work and functional inefficiencies.

-Improper analysis of requirements will lead to non-availability of some essential functionalities. This might adversely affect operations in the long run and reduce the productivity and profitability.

- Lack of support from the senior management can cause unnecessary frustrations in work place. Also it will lead to delay in operations and ineffective decisions.

- Compatibility issues with ERP modules can cause issues in integration of modules. Companies associate with different vendors to implement different ERP modules, based on their competency. Hence it becomes very essential to have a way to handle compatibility issues.

- Cost overheads can happen, if requirements are not properly discussed and decided during the planning phase.

- Not allocating sufficient budget for infrastructure will result in reduced application speed and other software issues.

6. The ERP implementation success rate has been found to be 67 percent. One of the main reasons for the success rate is having to do with people and process, and also change management.

7. Some of the primary benefits of a successful ERP implementation is optimization of all business processes, timely and accurate access to reliable information and the ability to share information between all the components of the organization, elimination of unnecessary operations and data, reduction in time and costs of litigation and avoiding redundancy,