September 21, 2018

Over -arching ERP Challenges: Achieving Organisational Understanding

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Generally, ERP is surmised to be equipped with state-of-the-art technology along with the integration of capabilities and increased functional area coverage such as adding human resource’s functionality, maintenance, project planning, document management capabilities etc. In short, ERP is a sort of software system that permits coordinated exchange of data using common data structures and coordinated procedures among a wide variety of functional organisational areas. In spite of the size of the investment, ERP is one of those software systems that are preferred by the management of the business entities especially those with complex and/or costly legacy environments. ERP makes sound arguments for data-centric enterprise software development. It shields the enterprises from the complexities of having developed standard data structures for sharing and operating procedures for coordinating activities among organisational components. Still, there are biggest challenges pertaining to ERP software system. One of the biggest ERP software system related challenges faced by organisations is recognising that the integration of previously un-integrated job functions which requires knowledge worker’s support, different organisational functions to use the same software and they will both be entering information that affects the others. To do this accurately, these knowledge workers must have a much broader understanding of how others in the organisation perform their functions than they did before the existence of ERP solution. ERP implementation suffers from two common problems — inaccurate expectations and customization / tailoring challenges. The first thing to be realized while considering ERP is that inaccurate expectations are the norms. Now-a-days, most of the ERP implementations result in cost and schedule overruns, because ERP attempts to permit organisations to capitalize in planned information sharing cost avoidance and this makes sense when existing organisation procedures and data structures can successfully be adopted to match those implemented by the ERP. Most organisations discover how compatible the new ERP is with their existing systems and processes they turn on the new system. When it is discovered that the ERP differs from the system it is going to replace, the organisation is faced with the possibility of customization or tailoring the ERP. Moreover, most organisations approach the customization /tailoring decision without the proper information required for reaching to a good decision. Besides that, there are other ERP hidden costs like costs pertaining to training, integration and testing, customization, data analysis & conversion, consultations, replacing your best and brightest etc. After ERP, you cannot go home again –the implementations are too valuable. As they have worked intimately with ERP, organisations can not afford to send their project people back to business because there is so much to do after the ERP software is installed.

 

As per the latest survey, similarities and differences in CFOs and CIOs perception regarding the best practices for ERP implementations have been found. The best practice in the areas of project team composition, team training, war room and end-user training associated with ERP implementation, are found to have the perceptual differences, while the need for executive management endorsement gained the consensus. Ultimately challenges of ERP still exist.

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About Suvendu Narayan Roy 36 Articles
Author and Faculty member of Finance Analyst -Financial and Political Reputed Article writer Director - Knowgen Educational Services Pvt.. Ltd Co-editor JCBR, a cross functional business research journal