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Enterprise
Resource Planning is essentially, an integrated software solution used to
manage a company's resources. Many companies use ERP software to integrate the
enterprise-wide information and process for example their financial and
accounting, human resources, manufacturing and production, logistics, sales and
marketing functions. ERP was designed mainly to provide a total,
integrated company’s resource to manage the business process efficiently and
effectively (Fang & Patrecia, 2005). It helps to organization to achieve
operational excellence and enhance the decision making process. The success or
failure of ERP implementation is closely related to how the companies handle
the process. The organization should understand strategic factor of the
organization, tactical strategy of organization and culture of the organization
before implementing the enterprises application in the company.
Strategic factor:
Enterprises application should support the way the organization does
business. Companies implementing the software would have to first select the
function of the system, what a activity they want to run and wished to use and
then organization need to map their business process to the predetermine
enterprises software. The enterprises software should be compatible with the
technology that has been using by the company. According to the business types
the organization should select best software. The support of the top management
system is very important in the implementation of the software. Management must
be involved in every step of the implementation process .They need to see the
long term benefit of the software in the organization. A clear business plan is
backup by the enterprises software. Most enterprises software vendors include
SAP, Oracle and SSA global (Laudon & Laudon, 2010). There are number of
enterprises software package for different organization according to their
goal. The organization need to customize the software according to their
business so before running the enterprises software they must have a clear
vision of the goal and objective of organization and they must make a ERP
strategy that support organization strategy.
Tactical factor:
Companies need to identify their current business structure and business
process associated with their existing IT systems before implementation of the
ERP system. The system and software should be reengineering according to the
need of business process. The enterprises software is very expensive and its
take long time to complete the whole system. The organization is more depend on
enterprises software vendor. So the organization must understand the term and
condition of the vendor before using their software. The vendor switching cost
is very high. The organization must include the good team member in the
organization that knows the operation and importance of having ERP software in
the company. The company must retained their experience employee and must train
the employee about how to use and how can they manage the resources and
information by implementation of software. Organization have to research on
risk associated with the implementation of the software. It helps to manage all
the resources of the organization. They need to have consultant in the
organization and must evaluate the system regularly. They need to check the
bugs and error in the organization. So before running the enterprises system
they must design and reengineer the software according to strategy of the
company. They have to train and retained the employee in the company.
Culture of the
organization.
Besides strategic and tactical factors, cultural factors are another
perspective that company need to think before implementing the software .When
two companies implement the exact same ERP package, the results sometimes
are different , it’s because of the culture difference in the company.
Organization culture effect the performance of the organization. The higher the
culture diversity in the organization, its effect more on result. If in past
all the employee use to manual system to manage information and resources then
the implementation of the software may create conflict on them. Whether to use
or not. It is new for them. The organization must understand the culture and
common belief and values of employee before implementing them. The
communication factor plays an important role. Without having good communication
among the employee company cannot ensure the effectiveness performance of the
software. They should be two way communication and must support organization strategy.
They have to change their responsibility and roles according to the new
requirements of ERP systems. Communication effectively would enhance their
willingness to change and take part, and result in the increase speed of
business process reengineering. Organization need to understand the culture
difference between employee culture and company culture and also they need to
map the culture with customer. A common problem when adopting package software
has been the issue of the gap between the culture of vendor and culture of the
organization. If there is huge culture diversity the implementation phase will
effect more so to bridge the cultural diversity, they have to choose among
changing the organizational culture and business process to fit into the off-the-shelf
ERP systems, or customizing the package to smooth alignment of the software
functionality to business requirements.
Enterprises systems are built to support the various business process and
implementation of the software must manage the resources. In system there is
centralized database system that support various function of different
department. So before running the enterprises software the organization must
understand the different process that is needed to do business more effectively.
Some of the success factor of implementing the enterprises software in the
organization are: Clearly defined goals, top management support, representative
steering committee, sufficient and appropriate resources, competent team
members, effective communication, formal risk management, defined and effective
decision-making structure, and focus on organizational change issues, system
quality, employee satisfaction and study of diversity in culture in the
organization.
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