The Importance of Enterprise Resource Planning: Improving the Level of Production - Research Paper Example

Abstract The public sector in Oman requires implementation of Enterprise Resource Planning (ERP) in is management. It would improve the level of production. ERP would assist in creating competitiveness within the markets. Most organisations around the world are trying hard to implement ERP in its operation because it connects all departments within an organisation. Many benefits have arisen from using ERP. The common advantage is when organisations benefit from a smooth business flow. A smooth business flow would result to improved profits and customer satisfaction. All these advantages show the importance of ERP, and why businesses are working hard to implement it (Alves, 2013, pp. 1-2). Keywords ERP implementation, Public sector, critical success factor of ERP, Adoption of ERP, Process engineering Introduction Enterprise Resource Systems is a plan that most managers across the world are putting enough resources to implement. Experts argue that ERP is the basis for a company to maintain its competitiveness. ERP is a tool enhances the efficiency of service delivery in any organisation. According to (Hamed, 2013, pp. 1-3), ERP could link various operations in different offices inside a firm. The management will have an easy time coordinating various activities. The paper shall compare various researches aimed at evaluating the advantages of ERP and the scope of its application. Methodology In understanding the scope of ERP systems, the paper evaluated various topics regarding ERP. The topics gave a wider context about the systems. The review relied on information from critical evaluation of various articles. The articles had in depth information about ERP systems. Furthermore, critical thinking was important in identifying other information about ERP, which was not present in the articles. In addition, the approach of logical deduction came in handy when deducing findings from the evaluation of articles. I. Key Findings I.I Succeed factor of implementing ERP Maintenance of competitive edge is the main reason for implementing ERP. In his perceptive article, Alves argued that, an ERP system enhances efficiency in any organisation (Alves, 2013, pp. 1-45). Business managers would know how to join all processes that are important in realising profits. Maximising production is the primary aim of any business. In addition, Ziemba argues "there are challenges in identifying the administrative advantage of ERP systems (Ziemba, 2013, p. 6)." Many managers have tried their best in trying to implement challenges. Only few companies have been able to implement it efficiently. It requires visionary and proactive leaders for quick implementation according to Ziemba. His article tries to credit ERP for improving the level of business in any organisation (Ziemba, 2013, p. 7). Information is very crucial for survival of any business. ERP is a tool that would ensure there is a smooth flow of information from the leadership to the junior staff members (Ziemba, 2013, p. 10). Technology advancement is very crucial for any management. A business that keeps in place with the latest technological trends would survive through harsh economic times. ERP advocates for installation of latest technological systems. It would be smooth to maintain the data for every employee, making supervision an easy task. Every business always maintains their inventories. There is no better tool of maintaining inventories rather than the ERP. Furthermore, ERP would assist any business in billing and master schedule. All these advantages would see the business develop crucial tools like demand and sales. To improve demand and sales, a business with ERP in place should offer a stage for capacity planning. In the end, the business shall realise high profits. ERP offers both tangible and intangible benefits to any company. The tangible benefits come in place when a company feels the effect of the bottom line of its operation. The intangible benefits come in place when a company feels effects that are less quantifiable. Example of tangible effect is an increase in profits, while example of intangible effect was when customers put a smile on their faces after some good services (Ziemba, 2013, p. 6). In various literatures, authors have tried to explain advantages of ERP. In total, the benefits of ERP are into five areas. They are operational benefits, strategic benefits, technological benefits, managerial benefits, and organisational benefits according to Trkman in his article. The company would enjoy these benefits and at the same time grow the business. ERP would ensure businesses operate at low costs while maximising their level of production. Investment opportunities depend on the choices of the management (Trkman, 2010, p. 1). A good investment idea comes from the managers that have incorporated ERP into the company's policy. Furthermore, ERP would foresee staff overheads. It would lead to savings of and redirection of funds to other sectors of the company building. I.II ERP implementation in public sector Some public organisations always implement ERP in their systems. Alves conducted a research aimed at identifying the procedures of implementing ERP in the public sector. The public demands a lot from public organisations. It requires managers to be effective and transparent in their undertakings (Alves, 2013, p. 5). In Oman, most public businesses operate manually. Operating like this cause information to run slowly from the management to other employees. The public institutions require quick decision making because it is for the interest of the public. Operating manually would reduce the time taken to make decisions. The government saw this as an alarming issue and vowed to automate the operations of the public system (Khaled et al., 2010 pp 2). The government gave out tenders to install software that incorporated ERP. (Syed , 2011 pp 8) Considered the costs government spent while installing the software. In addition, researchers in the public sectors used bibliographical searches to identify the implementation of ERP in the public sector. It requires skilled personnel to differentiate systems in public and private institution according to research from Khaled. Public companies have started implementing ERP, across the globe in a growing trend (Khaled , 2010, p. 5). (Ziemba, 2013) , in his article has identified the legal procedures that affect implementation of ERP in public institutions. Involvement of government tries to differentiate the public and private institution. Legal procedures are the only systems that are common between public and private institutions. Hamed in his article argues that the major difference between private and public institutions is culture (Hamed et al., 2013, pp. 1-2). The culture of the private system view information as the basis of their business and is always a secret. The tradition of the public system allows sharing of information with other firms without many restrictions. ERP is the main basis for the development of information. Researchers used purposive sampling in identifying the people who gave this opinion. The public institution allows middle managers to decide on the informational advancement of the institution according to Hamed. Top managers have no powers in deciding the information system of the public institutions (Hamed , 2013, p. 7). The public institutions have a great challenge in implementing ERP in their systems. The challenge comes from the public and strict supervision mechanisms. It is common for the public institution to face supervision from the legislative arm of government. The legislators may differ on the means of applying ERP in public institutions. I.III Challenges facing implementation of ERP There are many challenges that affect the adoption of ERP. A survey was important in identifying these challenges. The rationale for using survey is that it would provide a large pool of information. The challenge comes when an institution, either public or private, lacks effective management according to research from Ainin. An effective management will take a leading role in implementing ERP project (Ainin, 2010, p. 900). Institutions have a challenge in identifying a competent manager, who would implement ERP project with much required ease. Commitment and lack of willingness from employees are other challenges in implementing ERP. There are some employees with personal ambition when it comes to implementation of ERP. The personal ambition may hinder effective implementation of ERP. Latest technology requires persons who would dedicate their whole time in studying the technological trends. Lack of willingness would be an obstacle for employees who are required to learn the trends in technology. Lack of education is another challenge facing implementation of ERP according to (Hamed, 2013, p. 5). Managers who lack proper educational background on the technology will find it a hard time applying ERP in their systems. Apart from education, lack of proper training is another challenge ERP implementation is facing. There are times when the ERP faces failure due to improper installation. Failure in installation arises from employees. They received improper training, and lacked the knowledge of installation. Lack of communication is another challenge affecting implementation of ERP systems. Communication is necessary because it connects various functions within an organisation (Trkman, 2010, p. 4). Furthermore, ERP is important in joining various levels of the company. It could be made possible with effective communication in place. With effective communication, the company would experience minimum resistance within different ranks. The employees would accept implementation of ERP with minimum resistance (Ziemba, 2013, pp. 5-10). There are functions of ERP that demands an effective communication. It would be a challenge to the organisation if there were no effective communication in place. Syed argues that, the management has to be aware of various advantages of ERP. Comprehensive information about the advantages of ERP would encourage the management to implement it. Communication is important in passing the information about ERP's advantages (Syed et al., 2011, pp. 289-296). Employees who have in-depth information about ERP would be happy implementing it. Communication has a task informing the employees on the plans of management (Ziemba, 2013, pp. 4-10). The management should make it clear on their purpose of implementing ERP in the organisation. It would be difficult if there were the lack of proper means of communication. The challenge of communication would deny the organisation with sponsorship if the stakeholders were unaware of the importance of ERP (Syed, 2011, pp. 289-296). Communication would ensure important stakeholders are aware of the importance of ERP according to Syed.. Another challenge of implementing ERP is lack of proper IT requirements that are necessary for implementing ERP. The most important requirement is capital investment. An investor, who would sponsor the implementation of ERP, should be there. Apart from the lack of investor, mismatch is another challenge in the implementation of ERP. It happens when managers do not understand the relationships between ERP and other sectors of the institution. Lack of crucial resources such as the labour and technological accessories are challenges that affect implementation of ERP (Hamed et al., 2013, p. 22). Furthermore, firms may lack multiple ERP solution. It may result to overspending while trying to solve problems by their single ERP system. Survival of the business is important for the implementation of ERP. Some business leaders forget that the business has to find a solution and implement quickly ERP systems. The challenge may cause the business to shutdown unexpectedly (Hamed , 2013, pp. 2-15). I.IV Business process of implementing ERP ERP relied solemnly on top management for implementation. Ainin supports the idea of delegating of duties from top management. He argues, "The institution used the process of consultation and delegation of duties from technological experts to implement the systems." The organisation ensured all employees were aware of the plans of the company. Proper training and education are important before implementation of ERP (Ainin, 2010, pp. 911-925). After user training, the management demanded the organisation to provide top-level user satisfaction. User satisfaction is crucial in accepting ERP into the systems of the institution Furthermore; the institution allowed employees involve communication among themselves. It assisted in the proper understanding of ERP systems. All this required top management support (Ainin, 2010, pp. 911-925). The top management are the ones who offer financial and logical support. They are the ones responsible for hiring experts who would advise the management on the proper ERP systems. A management blessing would generate a great organisational impact that would ensure proper implementation of ERP. (Hamed , 2013) Conclusion ERP poses many advantages to businesses. It would see an increase in production levels and efficiency in service delivery. Managers have to dig deeper into their pockets and invest in ERP systems. The public system has challenges while implementing ERP systems. The government has a role in ensuring the institutions under government employees have put in place ERP systems. It would serve the will of the people. Various stakeholders in the business field have to join hands in eradicating the challenges that affect the adoption of ERP. Furthermore, a company or businesses have to ensure there are positive fruits of ERP in the end. It is possible if they implement in the right procedure; the business process engineering. Appendices 1 Literature review Alves gave a deep context about ERP. Alves' study had results from recently conducted research. He did a study in 2013, in various organisations across Oman. The study was crucial in identifying the advantages of ERP and its role in improving efficiency in an organisation[Mar13]. The review used mostly the work by Ainin because it proved logical when deducing the findings. It provided the basis for critical thinking when evaluating the ERP systems (Ainin, 2010, pp. 911-925). Ziemba's article was useful to the study because it gave a systematic approach to the literature review. It proved useful because the researcher did not have to use direct observation in various organisations in Oman. In addition, if the study could rely on a test, it would be costly and time consuming. The article by Ziemba relied on vigilant task that study conducted (Ziemba, 2013, pp. 1-10). It gave the required information to this research. References Mar13: , (Alves, 2013, p. 5), Read More