Enterprise Resource Planning and System Integration - Essay Example

According to Informationbuilders.com. (2016), enterprise resource planning and system integration are defined as the integration of separate stove-pipe systems with other different enterprise information resources to meet the requirements of the B2B model. Several ERP systems have been developed in the past such as PeopleSoft, Lawson and Oracle among others. The iWay software for system integration is discussed on this website, and it is depicted as software that is compatible with all of the existing solutions for ERP integration. Business Enterprises require robust ERP systems and the iWay software is designed in such a way that it has the business intelligence of being an effective tool for this kind of enterprise resource planning and system integration.

Study.com. (2016) focusses on how ERPs can be used to optimize and improve the efficiency of business operations. Business processes and operations are often very complex which means that trying to perform them manually can be very tedious, time-consuming and prone to multiple errors. This means that implementation the ERP systems can be very challenging. Some of the challenges of implementing the ERP systems include high implementation cost, disruption of the existing system and hence the business operations, time-consuming since the implementation is often done in phases, causes difficulty in the business management for some time and the customization of the ERP systems to fit the business needs which attracts additional costs.

Aptean.com (2016) examines that most companies continually need to be in communication with other organizations or even with business partners who make it necessary to have other systems such as the electronic data interchange system. The most challenging bit of ERP integration is the integration of the ERP systems with the other applications within the business enterprise. Most companies will have other systems besides the ERP systems such as the manufacturing execution systems abbreviated as (MES), quality management control systems, transport management systems, and the warehouse management systems. Much as these systems may be effective and seemingly independent, they all work effectively with the help of the ERP integrated systems.

Abstract

The growth of the ICT in the recent decades has driven and influenced all the necessary facets of computer applications across the business world (Dechow & Mouritsen, 2005). On the other hand, the business applications have become more complex with distinct functional units which require integration which would ensure smooth flow of decisions and also ease up decision making. It is currently a global trend for SMEs to provide the right information within the required time to ensure that their businesses survive in the now competitive industries that are characterized by complex practices.

The beginning of the 90s and the end of the 80s marked the birth of the use of ERP systems. These systems required experts and consultants to implement them and tailor them based on the specific design and requirements presented by a company. This led to many large corporations to redesign and reengineer their operations to be able to accommodate the software modules logic to ensure that a streamline in data flow existed within the organization (Gupta, 2000). The ERP systems have evolved in the past decade and that has been as a result of the development in the computer software and hardware systems. The evolution has led to the ERP vendors to add more functions and modules to the main module which has resulted to an extended ERP. The added modules were known as add ons. The extended ERP incorporated e-business solutions which include (SCM) supply chain management and (CRM) customer relationship management, and advanced planning and scheduling.

It is important to note that most organizations are of the notion that once they implement the ERP systems they would get overnight success. There is usually high expectation that an organization would achieve all round cost savings and improvement of services by adopting an ERP system (Hitt, & DJ 2002). However, the success is reliant on how well the system fits the administrative functionalities. Additionally, it is dependent on how well the configuration and tailoring of the ERP systems is in line with the overall business strategy, culture and the structure adopted by the business. Generally, the ERP system is usually expected to develop both the front end and backbone functions of an organization simultaneously. It is important to highlight that many organizations deploy and choose these systems for many tangible and intangible reasons. However, for an organization to reap and gain substantial benefits from these systems they need to overcome a set of challenges which arise as a result of phasing out from the previous systems to the new systems (Muscatello, et al., 2003).

The ERP system has a customer order fulfillment interface, but most companies consider it as not being very effective in meeting the company’s customer relationship management needs on its own. This does not, however, mean that the ERP customer order fulfillment function is of no benefit at all (Muscatello, et al., 2003). To reap the best results out of this ERP interface, companies link the ERP systems with the company’s customer relationship management systems. The use of these systems side by side has been found to yield utmost results in developing and maintaining customer relationships

Analysis

The implementation of the ERP systems is one crucial aspect for the success of any organization adopting ERP systems (Motiwalla, & Thompson, 2012). It is certain based on the analysis of the different sources that these systems have proven to be beneficial to the success of any organization. However, this is dependent on how well the systems fits the overall organization goals. It is certain that many organizations usually fail to analyze the compatibility of the system to the organization which therefore results to many organizations failing to attain maximum benefits from the implementation of the system (Muscatello, et al., 2003). It is of importance to note that more than 60% of companies known as the Fortune 1000 have either installed or are in the process of embracing ERP systems with the aim of supporting their back end business activities. The cost incurred in implementing these systems is usually very high. This explains why many small and medium enterprises still haven’t embraced these systems. It is therefore due to this that many ERP vendors are targeting this untapped market (Hitt, & DJ 2002). These vendors have simplified the systems and are now offering cheaper versions which are affordable to the SMEs. Some of the challenges of implementing the ERP systems include high implementation cost, disruption of the existing system and hence the business operations, time-consuming since the implementation is often done in phases, causes difficulty in the business management for some time and the customization of the ERP systems to fit the business needs which attracts additional costs. Nonetheless, ERP integration systems are more effective than the manual systems.