Going Live is Not the End of the ERP Journey Sample for Students

Question: Discuss this Concept a Companys ERP Systems Journey and how Benefits May Vary. Answer: Introduction An ERP is a technology infrastructure that can help the company in integrating information from all the departments within with the customers and suppliers. The technology creates a good customer relation by joining all the functions and the internal departments with the customer. Information can also be shared between different partners, the flow of information is boosted, and the supply chain management is supported. This help the company to grow since the manager will be making a clear decision using up-to-date information (Ram, et al, 2014). Systems like PeopleSoft, Oracle, SAP (system, Application, and product in Data processing) introduced EPR system so as to solve the problem associated with the legacy system, to provide uniform and integrated technology platform so as to boost the companys competitive advantage. And also to enable them to complete worldwide. However, to implement the system will lead to changes in all organization structure and culture, it is expensive, and it takes a lot of time to install and train the employees on how to use it. Therefore, before companies decide to implement the system, they must consider the effect and how they will overcome those effects (Siau, 2014). Since the 1990s most researchers and practitioners have recommended ERP as one of the best development in the field of information technology and as one of the best known IT solution for this decade, this is because, in e-business, ERP has become one of the backbone and prerequisites. In the modern global business, companies have realized that for them to compete efficiently, they must improve their supply chain and also on their organization efficiency. This is because the competition is not with the substitute companies only but with supply chain as well. This as force many companies to make large investments and also to keep up to date in developing and implement better technologies and system as ERP (Jinno, et al, 2017) ERP system can be used by companies as an important tool in enhancing strong information system infrastructure. The system also allows the administration to commence better decision-making relying on information that is accurate and on time. ERP system can advance the quality of the product and responsiveness of the customer and also enhance sharing of information and quality of the information being shared among internal departments as well as external boundaries to the customer, suppliers, and other party involved in the supply chain. Ultimately the business performance is enhanced to achieve competitive advantage in the world market, and the long-term profitability of the company is improved (Katerattanakul, et al, 2014). ERP system journey The implementation of ERP by the companies in their new architectures of information have happened without being planned for. And new function in this architectures has erupted. This shows that ERP is a moving journey. This positions and tasks have erupted in the specific environment that happens without any consideration in the time of implementation and after. For the organizations to grow today, they need first, and accurate information and this can only be achieved through ERP (Nour and Moukket, 2013). The information system today is growing in the line of ERP where almost all process in the company is integrated. Processes like administration, communication and the operation of the business are integrated by both large and small firms to ERP system. Data integration and cross-functionally processes that are supported by the interactive system are on-line to the ERP system. This has led to changes in the development of information system (Galy Sauceda, 2014). During the implementation of ERP, the three common failure factors are the; the poor quality of business process re-engineering, project management effectiveness, and proper consultation was not done. This shows that for ERP to be effective, proper consultation must be done and be maintained well. Again the consultant must have good communication skills not only the knowledge about implementation, as well as the technical knowledge (Schniederjans Yadav, 2013). The success of ERP system implementation deepens on its use by the end users. There for understanding the acceptance of ERP by the end, users is paramount. Most research done indicates that the acceptance of ERP system by the end users is vital to the success of information system. The system must be both efficient and effective. Efficient in the way that the system is reliable and can be used without hitches while efficiency is that the system must serve the needs of the company and its employees well (Holland and light, 2001). Case study of Cadbury and Hershey In our case study, we are going to look at two companies that implemented ERP. One of the company was successful, and the other failed and the reasons leading to their status. The company we are analyzing is the British Cadbury company and the American Herseys chocolate company (Al-Mudimigh, et al, 2001). ERP success implementation in Cadbury In the recent years, Cadbury turns out; Kraft implemented SAP ERP 6.0 in what is regarded as one of the largest global implementation of ERP. The operation cost of the company has been reduced as the result of implementation. By the year 2008, the system was linked to 1,750 application, and more than 11,000 workers were conveying data to the companys SAP resolution (Baxter, 2010). At the start of the year, a glut of chocolate remained at Cadbury, after they installed a new technology offered by SAP the ERP, by the end of 2005, the system led to surplus chocolate bars building up. The new system was the part of Probe (a 5-years transformation project of the IT) aimed at incorporating the supply chain of Cadbury Schweppes supply chain, manufacture, marketing, sales, distribution, and purchasing system in the global, SAP-based ERP platform. The implementation of ERP has been quite smooth for the company, and they are aiming for ultimate saving (Mahara, 2013). Benefits of ERP The growth of Cadbury was first, and it could not cope with the existing technology hence implementing ERP added efficiency and first paced growth. The company strengthen its competitive threat in the industry by acquiring first and reliable system (Ehie and Madsen, 2005). Through the implementation of the ERP, the company emerged with new ways of warehouse management system the structures were moved to the depots and branch offices. The successive implementation took lesser time, and it was cost effective than the previous system. The implementation phase also took less cash compared to the existing technology of the Cadbury. The system was highly welcomed in the company leading to its success and the higher rate of performance (Monk, 2012). A strong consistent feedback system was erected by the company to observer the alterations and to check in if they go giving to the original plans. The whole implementation is a cross function, therefore, it is important to record boost in efficiency. The provider of the system was also selected among the best vendors and those who had good knowledge of the market and the industry hence the process occurred in the rationalized fashion and any probabilities of hiccups in the stage of implementation were avoided (Seo, 2013) mplementation of the system also led to high sales and much profit by the company. Decision-making process was accurate and first since the manager could get all necessary data to make an observation and to comment accurately. ERP Implementation Failures This was implementation done by the largest chocolate manufacturer in Northern America Hersheys. ERP Implementation by Hershey The company resolved in implementing ERP so as to enhance customer service and the competitiveness of the company. The manager of Hershey Company gave endorsement to a project named Enterprise21 in 1996. The system selected by the company so as to manage integration were Manugistics SCM software, SAPs R/3 ERP software, and Seibels CRM software. The company spent a total of $10 million for this project. The project was recommended to be done by four years, but the company needed 2.5 years. They decided to use the Big Bang Approach instead of the recommended Phased approach (Barker and Frolick, 2003). Impact of ERP Failure There was the problem of shipping and processing hence Hershey could not manage to meet its committed delivery dates (Bingi, et al, 1999). The credibility of the company reduced in the market since they could not offer the products as demanded by the clienthe product inventory piled up and by the start of September 2000: the current stock was more than the previous years stock by 25% (Markus, et al, 2000). After Hersheys declaration in the market of its problem due to malfunction of the newly acquired computer system, the stock price of the company plunged by 8% on a day. The company was also cost a total of $150 million in sales due to failure to implement ERP in time. The 1999 third quarter profit and sales dropped by 19% and 12% respectively as indicated in the 1999 annual report (Glover, et al, 1999). Reasons for Failure The implementation schedule was over-squeezedThe company used a wrong approach. They were supposed to use Phase approach, but instead, they used Big Bang Approach. They did a mistake of by sacrificing system testing for the sake of convenience. Go-Live and Cutover activities were schedule during the busiest time of the firms business period (Hossain, 2001). For the implementation to be successful, the following must be considered: Step 1- when implementing ERP, the company must have set goals to determine whether their project is working or not. This will help them to make necessary changes when making decisions. But in the case that the goals of the organization are not clear, it will be hard to know whether achievement has been made or not (Botta-Genoulaz, et al., 2005). When the company is setting a new system there are some binary and quantitative criteria they should make. They include: Doing away with duplication of data entryThe data may be inputted once and used severally The number of excel sheets used in performing a process is reduced Step 2 is choosing the right ERP that will serve your business right. According to Umbel et al (2003), each vendor will claim that their system is the best so the business need a third part who understands the flow of the market and the structure of the business so that the ERP can be tailored to suit the business. Alternatively, the organization can engage a partner whom they trust to understand the requirement of the business. In step 3, the implementation partner after getting the flow of the industry and the structure of the business. An ERP will be designed suiting the finance of the business. The business should have a significant input for the system to be implemented. It is also advised that the business nominate some members to be part of internal project team In step 4, all the stages must be ready before moving to the other step. In this stage it is clear that the system is going to work and before starting next stage, you must ensure that you are conversant with the current stage and other members of the business get good orientation about the system. This will enable every member to know what the business expects and understand how and when to solve a given task. Step 5 the business has start to realize the capability of the system and they are implementing it. It is advised that the business maintains the project ideas, budget, timeline and objective and they should not input other great ideas that were not budgeted for. This will help control the project scope (Hossain, 2001). Step 6 This takes us to the next step in the implementation of ERP. The system is now at go-live since the implementation and the use had started. This step show us that the system must be maintained and necessary improvements must be installed. Step 7 this step must be established from the beginning. Some possibility dollars are allowed in the project. However, though analysis of the business, something may come up (Al-Mashari, 2002). Challenges in implementing ERP. During implementation of ERP, the organization experiences different type of challenger therefore a proper communication and adequate planning must be done so that implementation can be successful. Some of the challenges experienced while implementing ERP are: (Botta-Genoulaz, et al., 2005) Implementation must be done in order, it cannot be done at once. Trying to implement everything at the same time will lead to disorganization hence the process will fail. The employee must be trained appropriately after and during implementation. They must be combatable and swift in using the technology because when they are not conversant with the system, most of errors will occur leading to functional inefficiencies. Profitability and productivity of organization can be reduced incase proper analysis is not done. Therefore before implementation, proper analysis must be done. Before transition is made, it must be discussed with the senior management because without their support, operations will delay and ineffective decisions will be made. Compatibility of the system is very essential just like the case of Cadbury where they chose compatible system and they succeeded so before the implementation, the company must look for a vendor which is must proficient in their market so that a good ERP can be tailored. Companies always experience challenge due to poor planning. So before the plan is executed, a proper planning must be put in place with clear breakdown of what will be done at what stage and what is required to fulfil it. Investing in Investment in substructure is very important. Good storage with adequate will be needed for ERP application module. Not allocating appropriate budget for structures may result in reduced application speed and issues with other software it also important to have a strong hardware security so as to avoid cybercrime. The challenges faced by organizations during implementation of ERP varies depending on the market the institution is operating in. therefore, it is important to hire experts who understand the market trend and nature this will ensure implementation is successful without drawbacks. (Hossain, 2001). Pre-evaluation screening: before a company look for a solution, a proper survey must be done to determine the need of the organization. In the initial stage, a thorough investigation of the companies need should be conducted. The individuals from different department that will use the ERP system must be cooperated in this investigation. This will enable the organization to understand their challenges, resources, tools, and needs. Evaluation: during this stage, the companies contrast different vendors through their offers and evaluate the merits and demerits of each vendor. They then match the companys need of ERP to obtain the best vendor who addresses their needs at a relative cost (Glover, et al, 1999). Gap analysis: here, an analysis of the market gap and the desired solution is done. At this stage, the company can go back to the desired vendor to inquire how the gaps can be addressed or if the ERP system can be tailored to suit the desire of the business (Umbel, et al, 2003) Training: after the company has adopted the ERP system of their choice. A training program should be scheduled to enlighten the employee on how the business will operate with the new system. Training will depend with the number of employees available and the size of the organization. A refresher is also important for the employees Testing: before the company roll out the system, a thorough test must be done to ensure that the information and the data collected by the company are accurate (Ngai, et al, 2008). Accurate data will help the manager in making accurate decisions. After the process, the system is now rolled out. It is advisable for the company to have one expert who will be taking notes of the question asked, problems or any other issue. The expert will address the questions or contact the vendor for answers. According to Vandaie (2008) data across all the department are shared by the ERP system into data and reports that can affect or improve every aspect of the company. Some of the departments that benefit from the new system are finance, sales, supply chain, marketing, human resource and operation. Once the system is in place, data and silos break down enables everyones contribution to the organization transparent. Positive contribution to this gain are many since there is no guess work in making business decisions. Decisions are made based on data. Success leaves clues, and companies who have been successful in the past with ERP implementation left us a blueprint to follow. These five steps can help you smoothly transition into the world of ERP. Conclusion From the case study, it is clearly noticed that an ERP implementation project should not be forced into a difficult timeline. To look for critical issue, the company should over squeeze implementation. And it is also realized that during busy schedule cut down should not be scheduled unless the business will fail. Instead the company should test the phrases to be implemented. There is no implementation that will have 100% efficiency so companies should expect operation performance deep and learning curves. Companies should implement their policies during off peaks because during this time, they give their employee and customers good time to interact and to learn the system. It is also noticed that the number of activities during implementation should reduce so that the number of services exposed to risk are reduced in case of an error (Ngai, et al, 2008). References Al-Mashari, M., 2002. Enterprise resource planning (ERP) systems: a research agenda. Industrial Management Data Systems, 102(3), pp.165-170. Al-Mudimigh, A., Zairi, M. and Al-Mashari, M., 2001. ERP software implementation: an integrative framework. European Journal of Information Systems, 10(4), pp.216-226. Barker, T. and Frolick, M.N., 2003. ERP implementation failure: A case study. Information Systems Management, 20(4), pp.43-49. Baxter, G., 2010. White paper: Key issues in ERP system implementation. Large Scale Complex IT Systems, pp.3-9. Bingi, P., Sharma, M.K. and Godla, J.K., 1999. 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