Implementing an Enterprise Resource Planning System

Introduction

Enterprise Resource Planning (ERP) systems are enterprise software systems that allow companies to automate business processes, share data and practices across the enterprise, and produce and access real-time information (Sumner 2005). The main objective of ERP systems is to integrate all departments and functional information flows across an enterprise onto a single computer system that serves all the company's needs (Turban and Volonino 2010). ERP systems are widely used by organizations of all sizes and in many industries because their potential benefits are too significant to disregard. The Banner system at the U of M is an example of an ERP. It is a collection of software modules - each module supports a different functional area of the organization such as accounting, human resources, supply chain management, scheduling, and facilities management. All modules can access one centralized, integrated database. Companies implementing ERP solutions can choose which modules they want to install, and the modularity of the system allows them the opportunity to acquire additional modules as needed. SAP and Oracle are major providers of ERP systems that provide solutions for organizations of all sizes. When rolling out an ERP system, companies can choose to install a module as "off the shelf" software or they can have it customized by asking the software developer to modify the program so that it aligns with their current business processes. Customizing a module is very expensive and time consuming however, and in most cases, a company will change its business process to fit the software rather than change the software to fit the business process. The problem that often occurs when implementing ERP system "off the shelf" is that the end-users resent having to change the way they do their jobs. Workers get comfortable with their current ways of conducting their jobs and may feel threatened when they are required to abandon their old ways of doing things and are required to learn new ways. The resistance to change is identified as a considerable reason for the failure of information systems implementations and therefore it is an issue that needs to be understood and managed (Hee-Woong and Kankanhalli 2009). The business processes that the ERP systems are designed to support are consideredbest practices". Although best practices may actually be better than a company's "current practices", the best practice may replace unique or traditional practices that were the source of competitive advantage for a company. Implementing a ERP solution could lead to loss of competitive advantage. (Fu, Gmeiner, Schiereck and Strahringer 2007) In addition, forcing workers to adopt the best practices of an ERP system may be counter-productive and inappropriate for a particular company's corporate culture, which leads to "culture clash" and creates further problems (Parthasarthy 2007: 5).

Please read the write-up and answer the questions below. Answers to each question should be a paragraph of at least three sentences. Sentences can cite facts from the write-up however should conclude with a sentence or two expressing your own thoughts and conclusions.

1. What are the pre-requisites for implementing an ERP solution? (0.5 mark)
2. Why are ERP systems are more difcult to implement throughout an organization than a standard; software installation? (0.5 mark)
3. What is competitive advantage? How can implementation of an ERP lead to loss of competitive advantage of the company? (1 mark)

4. Search internet for one success and one failure real case of ERP implementation.

List 2 reasons for success/failure of each case.( 1 mark)

Implementing an Enterprise Resource Planning System

Introduction

Enterprise Resource Planning (ERP) systems are enterprise software systems that allow companies to automate business processes, share data and practices across the enterprise, and produce and access real-time information (Sumner 2005). The main objective of ERP systems is to integrate all departments and functional information flows across an enterprise onto a single computer system that serves all the company's needs (Turban and Volonino 2010). ERP systems are widely used by organizations of all sizes and in many industries because their potential benefits are too significant to disregard. The Banner system at the U of M is an example of an ERP. It is a collection of software modules - each module supports a different functional area of the organization such as accounting, human resources, supply chain management, scheduling, and facilities management. All modules can access one centralized, integrated database. Companies implementing ERP solutions can choose which modules they want to install, and the modularity of the system allows them the opportunity to acquire additional modules as needed. SAP and Oracle are major providers of ERP systems that provide solutions for organizations of all sizes. When rolling out an ERP system, companies can choose to install a module as "off the shelf" software or they can have it customized by asking the software developer to modify the program so that it aligns with their current business processes. Customizing a module is very expensive and time consuming however, and in most cases, a company will change its business process to fit the software rather than change the software to fit the business process. The problem that often occurs when implementing ERP system "off the shelf" is that the end-users resent having to change the way they do their jobs. Workers get comfortable with their current ways of conducting their jobs and may feel threatened when they are required to abandon their old ways of doing things and are required to learn new ways. The resistance to change is identified as a considerable reason for the failure of information systems implementations and therefore it is an issue that needs to be understood and managed (Hee-Woong and Kankanhalli 2009). The business processes that the ERP systems are designed to support are consideredbest practices". Although best practices may actually be better than a company's "current practices", the best practice may replace unique or traditional practices that were the source of competitive advantage for a company. Implementing a ERP solution could lead to loss of competitive advantage. (Fu, Gmeiner, Schiereck and Strahringer 2007) In addition, forcing workers to adopt the best practices of an ERP system may be counter-productive and inappropriate for a particular company's corporate culture, which leads to "culture clash" and creates further problems (Parthasarthy 2007: 5).

Please read the write-up and answer the questions below. Answers to each question should be a paragraph of at least three sentences. Sentences can cite facts from the write-up however should conclude with a sentence or two expressing your own thoughts and conclusions.

1. What are the pre-requisites for implementing an ERP solution? (0.5 mark)
2. Why are ERP systems are more difcult to implement throughout an organization than a standard; software installation? (0.5 mark)
3. What is competitive advantage? How can implementation of an ERP lead to loss of competitive advantage of the company? (1 mark)

4. Search internet for one success and one failure real case of ERP implementation.

List 2 reasons for success/failure of each case.( 1 mark)