Question

What is the purpose of ERP? Describe some of the key considerations and risks that are associated with ERP implementation. Please add any issues or concerns involved when a company implements the system. At least 3 pages, please!! Thanks!!

Answer 1

ERP refers to Enterprise Resource Planning is a business process management software that allows to integrate applications and manage them , automate certain tasks related to services, human resources and technology. The basic purpose behind using an ERP system is to handle the non core business activities of the firm so the business can focus more on the core activities of the business , also ERP can be used to have singular database that connects all facets of the organisation such as sales , marketing , human resource , manufacturing , production , development etc.

Some of the key considerations behind using and ERP are

• Cost - One of the main factor behind using an ERP is its cost and if the cost is justified with the quantity of the data that organisation process and tracks , if the manual processing of data is more affordable than automation then implementation of ERP should be avoided . There are also different levels of ERP softwares like SAP comes in one of the most expensive categories of ERP softwares , only bigger companies would be willing to adopt this type of software.
• Transition Time- It takes time to transition from manual to automated , the companies should self evaluate if transitioning is a better option and how much time intensive it would be to train people on certain things and process changes.
• Automation - The automation part is tricky , companies should choose a ERP system which provides insight according to companies needs and help them in automating there day to day reporting and process related tasks , if the ERP doesn't provide this services should be looked first.
• Industry oriented - ERP should fit the type of industry it is designed for , each ERP can't work for all the industry and departments , customisation and actual benefit of ERP should be tested before implementation and if the ERP fits in the particular Industry should be tested.
• Leveraged Managers- The success of ERP implementation is done by selecting experienced project managers who know the industry , know the requirements and the working of the industry , successful implementation is driven by successful managers.

The Risks associated with ERP Implementation are

• Poor Planning - If no proper planning is done regarding the technology infrastructure as per the requirements of the project ERP implementation could bring more harm than benefit the project.
• Proper Recruitment - There is always a risk with recruitment of right people and retaining them who are experts in IT/ ERP implementations.
• Proper Training : There is also a risk with Insufficient training of employees  and re developing there skills for the new implementation of new methods.
• Internal External Failure - There is a risk when internal resources respond poorly with outside experts and this leads to a failure in meeting the expectations of the implementation.
• Customisation of ERP : There could be a risk of not being able to the retain standard specifications of the softwares and to build legacy applications
• Redesigning of Process - There is a risk to redesign business processes that supports  enterprise-wide design and cloud integration .

Some issues related to implementation of ERP could be

• Retention of Employees
• Maintenance Cost of software
• Employee Training
• Acceptance of New methods by employees
• Time it would take to implement
• If sufficient training and customisation is done according to organisations needs
• Lack of proper planning and analysis.