Considerations to Think about When Implementing an ERP essay
In actuality, the implementation of ERP opens wide prospects for an organization in terms of its business development. I, in person, strongly believe that ERP is beneficial for your organization, although its implementation will need considerable efforts and certain financial resources from the part of your company. However, before taking the final decision I would recommend to take into consideration both pros and cotnras of ERP that could influence your decision. At the same time, keep in mind that, while you considering to implement ERP or not, your rivals may have already started ERP’s implementation.
Benefits of introducing ERP
Obviously, ERP may bring considerable benefits to your organizations. At any rate, many organizations have already implemented ERP successfully. However, you cannot just start your ERP without careful consideration of its effects on your organization. In this regard, I would recommend you to evaluate the readiness of your organization to the implementation of ERP. For instance, consider carefully whether your employees are ready to accept ERP and to change their traditional functions and performance. Will they be able to use the full potential of ERP? Frankly speaking, as a rule, employees need some training to use ERP effectively (Behzad, 2003). Naturally, they may use ERP without any special training, but the effectiveness of ERP will be lower compared to those organizations, which employees have had training.
As for benefits of ERP, they are obvious. First, ERP contribute to the automation of internal business processes and improvement of the organizational performance. In such a way, your employees will not waste their time on routine but unnecessary work, such as filling in forms, when transferring your products from the production facilities to the stock, and from the stock to sales department, and from the sales department to retailers (Olson, 2004). Whatsoever, you will save time and money after the implementation of ERP, while the performance of your employees and, therefore, the performance of your company will increase substantially.
Moreover, the implementation of ERP leads to the improvement of the company-customer relationship due to the better customer relationship management. ERP will help to deliver information for stakeholders fast and accurately (Olson, 2004). In fact, ERP helps not only to process information for your internal business processes but it also helps to prepare the information your shareholders, customers, and other stakeholders may be interested in. More important, this information will be delivered to them in a plausible form.
ERP will also save costs on accounting and increase the efficiency of employees performance since ERP will save time due to automation, while employees will be able to focus on their functions properly (Ward, 2006). The accounting system of your company will reach the high level of automation that decreases the risk of error. Similar effect will be observed in other units due to the automation of internal business processes by ERP. Naturally, you should expect your company to improve its performance consistently. In fact, I would highly recommend you introducing ERP, if you have problems with your internal business processes or if your organization is under-performing (Andrew, 2003). Employees will work more efficiently and productively because they will have more time to focus on their direct functions and responsibilities. In addition, ERP will facilitate their work that will increase their job satisfaction, while job satisfaction will lead to the improvement of employees’ performance.
Difficulties the company may face while implementing ERP
On the other hand, I would not recommend implementing ERP relying entirely on your own IT department. Such introduction of ERP may be costly and it may take long time. Outsourcing is a better option. If you have a strong IT department, you may try, but as a rule, companies cannot develop an effective ERP, if they are not operating in the field of IT (Olson, 2004). This is why I recommend you considering the possibility of outsourcing of ERP because a reliable IT company will develop help you to implement and to maintain your ERP.
Nevertheless, whether you choose outsourcing or your own IT department, you should come prepared to investments into ERP, although benefits of ERP outweigh its costs definitely (Vilpola, 2008). ERP will need the purchase of hardware and software, while the implementation of ERP may need additional training of your personnel. But you cannot introduce a change without paying for it, can you?
As you implement ERP, you should pay a particular attention to the information security which is one of the major issues today. Along with numerous benefits of ERP, there are certain risks concerning the information security, such as the risk of information breaches. Today, many organizations are concerned with their information security. Therefore, you should not underestimate the risk of information breaches, even if you think that you have nothing to hide. For instance, you may expose your customers’ to the risk of identity theft, if your IS and ERP are not protected effectively.
Conclusion
Thus, I would recommend you implementing ERP to improve your performance but you should come prepared to invest into the implementation of ERP and to secure your IS.
