The answer to this question is case specific. It will be difficult to generalize the theory for it. For big organizations Big Bang theory is the best choice. Mostly decision on this depends on the readiness audit result, available strength of consulting human power – both internal and external – relevance of ERP at various units, time-frame, and the budget.
The drawback of the big bang implementation approach is that the project is often rushed. On this process sometimes details are overlooked, and sudden changes to business processes may affect negatively. Many times the projects that implement an overly aggressive big bang approach are more risky and result in less satisfaction with the system’s abilities to meet important business requirements.
Therefore it is advisable to go for the key modules such as sales order processing, material planning including purchasing and factory management at the first stage. Modules such as human resources, document management, maintenance and even financials can be implemented later. If there is more than one business unit involved it is best to implement in a relatively easy but not untypical unit first then roll out the implementation to the other units.
Scalable ERP – As this is one word you may be hearing from many quarters and have no idea what is it. Let us explain you with a simple example. Today you are company tomorrow you become an organization and then a group. You may want to increase your branch or your users on the system, eresource gives you the flexibility to scale the ERP whichever way that you wish.
Therefore it has been said that eresource ERP system is scalable where the system administrator can create new users, and there is no limit to the number of users created. However, the number of concurrent users is subject to the license restrictions.
First and foremost, the vendor should supply the product and its documentation as soon as the contract is signed. Only after the software is delivered, can the company develop the training and testing environment for the implementation team. The vendors are responsible for fixing any problems in the software that the implementation team encounters. So the vendor should have a liaison officer who should constantly interact with the implementation team.
Another role the vendor has to play is that of the trainer – to provide the initial training for the company’s key users, people who will play lead roles in the implementation of the system. These key users are the one who will define, together with the consultants, how the software is to serve the company. In other words, it is these in-house functional experts who will decide how the functionalities are to be implemented, as well as how to use or adapt the product to suit the company’s unique requirements.
So it is very critical that these key users are given a thorough training on the features of the package. Vendor’s training should achieve the goal of showing the key users how the package works, what are the major components, how the data and information flows across the system, what is flexible and what is not, what can be configured and what cannot, what can be customized and what should not, what are the limitations, what are the strengths and weaknesses and so on.
The roles and responsibilities of ERP vendors does not end with the training. The vendor also plays an important project support function and must exercise quality control with respect to how the product is implemented. It is the vendors who understand the finer details and functions of the product and can make valuable suggestions and improvements that could improve the performance of the system.
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Role of Technology in the ERP Selection Criteria:
The existing technology in an organization will play a very important role in the ERP selection criteria. Each organization will have its own technological environment : how the business is being done, what kind of hardware and software are in use, what is the database management system that is used for storing the operational and historical data, how is the data processing done and so on.
These factors can greatly influence the selection process in the sense that they can limit the number of packages available for evaluation. So, the management has to decide whether the ERP systems will be selected keeping in mind the existing infrastructure or, if the existing systems will not be considered. But it is always a better idea to find a package that is compatible with the hardware, software and technology that the company already has in place. Also, if the organization has the necessary infrastructure then it can think of buying the required components from the vendors and integrating them with the existing system.
For example, if an organization is using an HR management system and is quite satisfied with it, then it can go in for the other modules and not for the complete offering from the vendor. Later, if the organization wants to switch from the old HR management system it can then purchase that particular module of the ERP package. So, it is not imperative that all the components offered by the vendor be bought. The evaluation committee in association with the vendors can select the required components and then integrate them with the existing infrastructure. But do not forget here to get the vendor’s assurance that the existing system will integrate smoothly and seamlessly with the purchased components.
One of the newer components of most modern midmarket ERP packages, BI (Business Intelligence) shines a bright light into the heart of a company’s performance. In general, an ERP suite’s analytics or BI tools allow users to share and analyze the data that the ERP applications collect from across the enterprise from a unified repository.
The end result is more informed decision making by everyone from executives to line managers to human-resources professionals to accountants. A variety of automated reporting and analysis tools can help streamline operations, as well as improve an organization’s business performance. With greater control and visibility of data across the enterprise, business leaders can better align the company’s operations with its overarching strategic goals.
BI solution could be a combination of Data-warehouse, dashboards, ad-hoc reporting etc. In the simplest terms, BI (Business Intelligence) is just a facilitator for reporting and hence it is the decision making solution for Businesses so that they can cut costs and hence increase profits.
ERP implementations are notoriously resource intensive, highly complex, time-consuming and unpredictable in terms of cost. The primary challenge that often leaves companies marooned when it comes to ERP is that most companies cannot handle a project of such complexity and one that requires huge amounts of resources.
Lack of budget and skilled personnel prevent many companies from focusing on the steps necessary to ensure that the new ERP is configured and rolled out in a fashion to best meet the business needs of the company. Then there are many people, technological, business process, implementation and operational issues that increase the risk of ERP implementations.
Assembling the information need to feed the SCM applications from legacy systems can be tedious as it is difficult to get that information flowing on a fast, reliable basis from all the areas of an organization. An ERP system integrates all that information together in a single application and SCM applications benefit from having a single major source to go for up-to-date information.
Majority of the management people who have tried to install SCM applications say they are glad they did ERP first. They term the ERP projects making your information house in order. Now most ERP solution providers have SCM modules so doing an ERP project may be a way to have these both in one go. What the organizations must do is that they must evaluate whether these applications meet their needs.
Many times software applications that automate the logistics aspects of SCM do not gather information from around the company, so they tend to be independent of the ERP decision. But it is better to have these applications communicate with ERP in some fashion. It’s also important to pay attention to the software’s ability to integrate with the Internet and with ERP applications because the Internet will drive demand for integrated information.
As the business world is getting sophisticated, more and more companies join the race, the competition is getting stiffer day by day. In such a scenario, ERP vendors are gearing up to meet this challenge by offering more features and better capabilities for their products.
So, the future will see a fierce battle for market share and mergers and acquisitions aimed at gaining strategic and competitive advantage. The ultimate winner in this race will be the customer, who will get better products and better services at affordable prices. These are some of the reasons for the increasingly popularity of the ERP market.
Described below are some of the reasons why many companies replaced their manual or semi-automated systems with ERP system.
Increased business agility : Improved productivity and reduced development time makes less time needed to get a product to market. This coupled with the ERP system’s ability to manage and track problems, fix them, rebuild the systems easily, accurately and quickly and release them faster results in improved customer satisfaction. So the company can be more agile and more responsive to the needs of the customer without compromising product quality.
Improved productivity : ERP systems improve the productivity and efficiency of organizations by eliminating data redundancy, streamlining processes, introducing best business practices and so on.
Error reduction : ERP systems automate most of the monotonous and repetitive tasks that were done earlier by people. Thus, SCM tools have greatly reduced the opportunity for human error.
Information integration : One of the major functions of ERP is to provide sufficient, relevant and accurate information about the software system to the different people in the project – programmers, managers, analysts, auditors and so on – allowing the functioning of the business processes to proceed smoothly.
Automation : ERP systems automate many processes. They also automate the workflow so that a single action like an entry into the order-processing system triggers a number of related events and actions in all the various but related departments automatically. This level of automation reduces data entry, errors, data duplication and helps the organization to react and respond faster. By automating the business processes and tasks, ERP systems have improved development productivity and give people more time for the system development process.
Reasons for ERP Failure:
ERP solutions are designed for a large audience of companies looking to achieve success by following a template of best business practices. However, the system often fails to achieve its promise because people who are supposed to be the main users of the systems reluctant to change their attitudes.
This leads to costly program modifications to replicate those processes. This, in turn, can result in unnecessary manual tasks and issues of software maintenance, which neutralize the original benefits of the software.
When making an ERP software selection, examine the processes encoded in the software. If you can agree to model your company’s best practices based on those processes, you’re choosing the right solution. If you can’t, continue looking.
Once the ERP system is chosen, it’s not uncommon for management to turn the project over to a subordinate to manage the implementation. The problem is that the subordinate, who is usually chosen from the end-user base or IT department, typically isn’t given the authority to implement necessary business process changes.
Project management is a discipline, which requires the ability to delve into detail while keeping a perspective on the original business objectives. The project manager needs to have the ability to overcome impasses through a judicious combination of political guile and management direction.
The most successful ERP projects are led by a member of the management team who has actively participated in both the software selection and implementation efforts. When selecting your project manager, choose the one who has the most to gain from the ERP system.
Reason for accepting ERP?
The decision-makers of organizations have been fully convinced about the benefits of eresource ERP system. Our officials and technicians have succeeded in convincing and successfully implementing ERP system in most of these organizations which took the morale of the decision-makers and the end users to new height.
Another factor is eresource ERP business application is driven by business goals and not IT goals. This application also making a good communication with the end users in a language they understand well. Another major factor for end users accepting this application is that training and skills to use eresource ERP can be developed quite easily. The above factors all together contributed for the user acceptance of eresource ERP.
