ERP implementation

Introduction

Organizations today are faced with the challenge that requires a strategic response to growing market demands.  In the competitive environment, a good business strategy can determine business success and ensure its survival. Currently, the most effective business strategy focuses on the efficient use of IT.  The ERP (Enterprise Resource Planning system) is a business software system packaged to allow the organization efficiently and effectively manage resource utilization.  It provides an integrated solution for the information processing needs of the organization.  ERP supports the standardization of business processes as a result of its ability to produce and avail information in a real time environment, automate and integrate business processes and allowing sharing of common data and practices across the organization. 

While ERP systems are one of the most popular management systems used in businesses, organizations stumble on some challenges in its implementation.  The challenge is because it affects an entire organization including people, processes, and culture. (Beheshti et al, 2014) The failure in high failure rate has been widely recognized. This paper focuses on the steps an organization should take to ensure successful implementation of ERP.

Critical factors in ERP implementation success

Teamwork and composition

The design and implementation of ERP depend on internal staff and cross functional teams.   The organization should allocated their respective jobs and given incentives and compensation to successfully implement the system on time and within the budget.  The familiarity with business processes and functions is necessary for the successful implementation by the team.  Additionally, information sharing within the organization is critical and requires partnership trust.  An organization should, therefore, manage partnerships to aid collaboration and achievement of shared goals.  (Ansarinejad et al, 2011)

Top management support

Management support is vital throughout the implementation process. Project approval should be received from top management and be aligned with the organization’s strategic goals.  The successful implementation of ERP can, therefore, be achieved by tying management bonuses to ERP success. ERP project should be explicitly and publicly identified as an organization’s top priority. Management commitment can be determined by the involvement in providing needed resources to ensure the successful implementation. The top management should legitimize that projects goals and objectives and communicate the significance of the new structures and systems to employees. New roles, structures, responsibilities and policies should be established and set to enhance the implementation of ERP.

Business plan and vision

A clear plan and vision should be established in the organization to steer the direction for the ERP project implementation. The business plan communicates the tangible and strategic benefits, costs, time and risks that will characterize the implementation of ERP. The organization can clearly focus on the benefits and determine the most suitable model for the implementation process.  The organization can easily identify and track projects goals and benefits while making work easier.

Effective communication

The successful implementation of ERP requires effective communication. Managers should communicate expectations at every level of the implementation process to ensure coordination. While management needs to communicate the importance of ERP, user input should be taken into consideration as it may reveal early signals of inefficiencies.  The communication to employees should be done in advance to prepare them for change.

Project management

ERP implementation should be steered by a good project manager or a group of managers to drive the successful implementation of the project.  The management scope should be established and defined. The scope should also determine the extent of involvement in business units and business process reengineering. Evaluation of changes should be carried out against the benefits and only made when necessary.  The project manager helps in the planning, coordinating resource involvement and managing conflicts and issues.  The measurement of budgets and schedules against the targets also forms a part of the project managers’ responsibilities. (Nwankpa, 2015)

Change management program and culture

The process of change is important during the initial project phase and throughout the lifecycle.  The organization structure and culture that include people should be aligned with the common aims and shared values to ensure success. The organization culture should be open to change with an emphasis on a strong willingness to embrace change.  Management should ensure that users are fully involved to reduce the resistance to change that accompanies such projects. Re-skilling and training are critical to ensure that employees understand how business processes and systems may change. Support should also be providing to staff and managers during implementation.

Business process reengineering and customization

Organization processes should be aligned and molded to fit the ERP system. Minimal customization should also be done to ensure that the business fits software. However, the modification should be avoided and in its place purchase newer versions to avoid and reduce errors.  The organization can take advantage of process modeling tools to aid customization.  Broad reengineering should be carried out before selecting the system to use.  Iterative reengineering should be conducted to take advantages of improvements from the ERP. Ribbers, (Ribbers & Schoo, 2002)

Steps in the successful implementation of ERP

Step: 1 Strategic planning

Strategic planning involves assigning a project team, setting objectives, evaluating information flow and current business processes and developing a project plan. A project team should be selected incorporating employees from all departments. All members should be allocated specific tasks and more importantly be committed to the success of the project.  Current business processes should be examined, and information gathered to determine additional areas of improvement required. Objectives should then be set objectives and clearly defined before the implementation of ERP. (Shanks, 2000) Given that ERP systems are massive, a clearly defined scope is needed. A project plan should then be developed to include defined goals and objectives, responsibilities, training procedures, and timelines. 

Step 2: Procedure review

The second steps entail the identification of manual processes that require automation, reviewing of software capabilities and development of standard operating procedures.  The procedures should be documented.

Step 3: data collection and clean up

The third step involves the conversion of data, the collection of new data, review of all data input and data clean up. (Chen et al, 2009)

Step 4: Training and testing

The fourth step involves pre-testing the database, Verifying testing, training the trainer and performing final testing.  The data base should be tested to ensure the accuracy and effectiveness of all information. Testing should be verified to ensure that standard procedures were correctly followed.

Step 5: Go Live and evaluation

A final go live checklist should then be developed, and the solution evaluated.  A structured evaluation that relates back to the initial goals and objectives in the planning stage should be developed.  A post-implementation audit should then be carried out to ensure that the organization realizes business benefits anticipated. The ERP system should be periodically reviewed to maximize its return on investment. (Fui & Lau, 2011)

Conclusion

ERP supports the standardization of business processes as a result of its ability to produce and avail information in a real time environment, automate and integrate business processes and allowing sharing of common data and practices across the organization. However, the successful implementation of ERP is a challenge to many organizations. Various critical factors should be considered to ensure the success of the system.  Additionally, a well-designed implementation plan is critical to the implementation of ERP.

References

Beheshti, H. M., Blaylock, B. K., Henderson, D. A., & Lollar, J. G. (2014). Selection and critical success factors in successful ERP implementation. Competitiveness Review, 24(4), 357-375.

Ansarinejad, A., Amalnick, M., Ghadamyari, M., Ansarinejad, S., & Hatami-Shirkouhi, L. (2011). The critical success factors in erp implementation. International Journal Of Academic Research, 3(1), 65-80.

Nwankpa, J. K. (2015). ERP system: A model of outcomes. Computers In Human Behavior, 45335-344.

Ribbers, P. M., & Schoo, K. (2002). Program management and complexity of ERP implementations. Engineering Management Journal, 14(2), 45.

Shanks, G. (2000). A model of ERP project implementation. Journal Of Information Technology (Routledge, Ltd.), 15(4), 289-303.

Chen, C. C., Law, C. H., & Yang, S. C. (2009). Managing ERP Implementation: A Project Management Perspective. IEEE Transactions On Engineering Management, 56(1), 157-170.

Fui F. & Lau J. (2011) Critical factors for successful implementation of Enterprise Systems. Bsiness Process management . journal, Vol 7 No 3.

Carolyn Morgan is the author of this paper. A senior editor at MeldaResearch.Com in legitimate essay writing service. If you need a similar paper you can place your order from research paper services.