Implementation of Enterprise Resource Planning - Essay Example

Enterprise Resource planning (ERP) Name Institution Date Table of Contents Running Head: Enterprise Resource planning (ERP) 1 Enterprise Resource planning (ERP) 1 Table of Contents 2 Enterprise Resource planning (ERP) 12 2 Introduction 3 Literature Review 3 Implementation of enterprise resource planning 6 Application of enterprise resource planning in the UAE 7 My perspective on human resource planning 9 Conclusion 10 References 11 Introduction Enterprise resource planning refers to computer software system utilized in managing organizational resources. It is a scheme of utilizing computer technology to connect several functions like inventory control, human resources and accounting across the whole organization. According to Gupta and Kohli (2006), ERP is aimed at facilitating information sharing, decision making and business planning on the enterprise wide basis. ERP offers a means for integration of data and processes within a company. It also enhances a company to integrate its primary business processes so as to promote efficiency and retain a competitive advantage. EPR is a tool or application to develop, manage and maintain information backbone for decision making by an organization’s top management. Literature Review Benefits of enterprise resource planning An ERP software solution aims at streamlining and integrating processes, information flows and operations in an organization, to synergize organizational resources such as people, finances, machines and materials. According to Wagner and Monk (2008), ERP systems incorporate all processes and data of a company into a united system. A typical enterprise resource planning utilizes multiple modules of computer hardware and software to attain the incorporation. A major ingredient of majority of ERP systems is the utilization of an amalgamated database for storage of data for several systems module. Enterprise resource planning has hypothetical roots in strategic management whereby its perspectives suggest differentiation strategy of improvement via innovation and quality. This is convertible into the non-imitable and valuable resources for a company. Therefore, as an enterprise wide tool of business planning, ERP has several usages and applications such as technology strategy instrument, change agent and information management technique. Existing literature provides more applications and definitions of enterprise resource planning than the real components or phases of the process perception itself, which has resulted to the worldwide acceptance of ERP as an enterprise wide scheme designed to incorporate and optimize business processes in order to gain advantage over competitors within the industry (Moon, 2007). Majority of companies across the globe have recognized that within the quickly changing environment, it’s not possible to create and retain a typical designed software package that will be capable to cater to all organizational requirements and be updated. Realizing these needs, organizations have designed and created ERP software that provide incorporated software solution to every functional process in the organization. Even though the original stage enterprise resource planning originated from manufacturing environment, ERP software solutions now cover every basic business function and process of any company, in spite of the charter or business of the organization (Moon, 2007). A usual ERP module entail manufacturing, financials, supply chain, human resources, customer relationship management, decision support system and warehouse management. These solutions are usually inappropriately cited as back office solutions signifying that the customers along with general public aren’t directly involved. This is compared to with the front office systems such as customer relationship management systems that directly deal with consumers, or other electronic business systems like eGovernment, eCommerce, eFinance, and eTelecom or supplier relationship management systems. In the real sense, modules of ERP are enterprise wide and cross functional software solutions. Every functional department involved in production or operations can be incorporated in a single system utilizing EPR software solution. In addition to warehousing, logistics, information technology and manufacturing, ERP also includes human resources, accounting, strategic management and marketing (Shang & Seddon, 2002). ERP software solutions are devised for companies that operate in a wide range of areas. Information technology merges huge number of diverse aspects into a sole unit. Law and Ngai (2007) argue that the most significant enterprise resource planning tools available in modern days include finance, human resources and manufacturing. The ERP finance tools permit organizations to effectively retain their financial information such as information regarding assets, cash, budgets and accounts. ERP also help an organization to manage external and internal factors influencing it. An organization that utilizes enterprise resource planning financial products is able to serve a hug amount of money over long term due to improvement in the productivity of the organization. ERP is helpful in eradicating time consuming activities such as paper work management. An organization is capable to study its processes, performance and earnings through combining its operational information with its financial information. When this information is merged together, an organization can become highly productive and competitive. According to Kennerley and Neely, (2001), synergy is a significant portion of EPR solutions. And the notion of merging numerous processes into a sole whole allows an organization to attain long term success. Apart from business and finance process, EPR is useful in materials maintenance. EPR enables an organization to effectively automate the procedure of purchasing materials as well as maintaining them. There exist modules that are utilized in tracking purchased supplies and to calculate on the way these materials should be distributed. This in turn assists an organization to predict demand market demand on basis of economic statistics, history along with data from its employees. The organization is then able to make decisions on the time when products must be developed based on the availability of raw materials. Proper implementation, use and management of enterprise resource planning leads to high cost effectiveness. In spite of the enormous initial investment, when an ERP system is installed, it considerably lessens operations cost in an organization (Kennerley & Neely, 2001). An ERP system facilitates efficiency of the entire organization through smoothly incorporating its numerous divisions. Additionally, it assists in minimization of paper documents and offers an online format which facilitates swift information storage and retrieval. ERP ensures a rapid response to shifts in market conditions and promotes productivity of an organization through offering every department with their own database and data. ERP is helpful in integration of business functions. Because ERP system incorporates process and data from diverse units of the organization, it enhances simpler access of data and improved work flow. The numerous software modules of EPR assist in the coordination of several business functions and processes in the organization. This form of integration offers a chance for the several business units to share unified adaptable and thus enables appropriate business communication in the organization. The centralization of data into a single location eradicates the difficulty of coordinating changes undertaken by several people and departments (Law, & Ngai, 2007). Implementation of enterprise resource planning Regardless of the benefits potential benefits, ERP have several drawbacks. Majority of ERP systems tend to be complicated expensive and large. ERP implementation also needs a huge time and financial commitment from a company’s information technology department or professionals from outside the company. Additionaly, since ERP system affect most key departments in an organization, they tend to generate changes in several business processes. Shang and Shedon (2002) argue that implementation of ERP needs employee training, new procedures and both technical and managerial support. Top management support is identified as the most significant success factor in the implementation of ERP system. The support of top management in the implementation of ERP has two major aspects which include provision of essential resources and provision of leadership. In addition, the functions of the top management in the implementation of ERP comprise development of an understanding of limitations and capabilities, establishment of feasible objectives for the ERP system, exhibition of commitment and communication of corporate strategy to organizational employees. However, the support of top management doesn’t end with initiation and facilitation of ERP, but should extend to the entire process of implementation of ERP system. In addition, the support of top management must offer direction to the teams involved in ERP implementation and supervise how the system is progressing (Al-Mashari et al, 2003). Application of enterprise resource planning in the UAE The emergence of information technology has transformed business atmosphere in which UAE organizations operate. Organizations are endeavoring to survive and attain competitive advantage by improving the quality of their products and services, reducing inventories, diversifying their services and products and cutting their supply chain costs. According to Wu and Wang, (2006), the advent and implementation of enterprise resource planning system in the UAE have enabled to overcome these difficulties. Modern day firms in the UAE are recognizing that they can be more productive and flexible through integrating their business processes and functions more closely and, in several cases, incorporating these business processes to focus upon effective customer service and management of organizational resources. Businesses are utilizing ERP systems to integrate information as well as information based processes across and within functional areas in the organization. ERP systems are being utilized in hundreds of large and small to medium size organizations in UAE. According to Wu and Wang (2006), ERP is benefitting UAE organizations but its implementation is a risk undertaking and if organizations don’t pay close attention to their limitations and requirements, it may worsen the situation of these organizations. ERP software is usually very complex to implement because organizations are required to change their present business processes in order to fit the framework of the ERP. Bharti technologies is the leading It solutions organization in the UAE that offers ERP software in Dubai and Abu Dhabi. The company offers ERP software that is packed with influential features which are enormously simple to use and implement. The ERP is also flexible and modular, comprehensive in scope, incredibly robust, totally secure and fully customizable. These packages entail customer relationship management software solutions, inventory and human resource management software solutions. Bharti’s ERP software solutions assist traders and manufacturers from small to medium sized enterprises to see their business functions and processes more visibly. Data integration across UAE organizations makes sure that companies have more visibility in every area of its business, from everyday operations to strategic decision level. In regard to production and inventory, financial data enables organizations to identify chances for efficiency improvements and cost savings. A great level view of the main business indicators enhances more accurate and faster management decisions and the webEPR interface enhances organizations to get information when and when they need it. The EPR systems offered by Bharti Company include customer relationship management solutions, EPR software solutions, EPR accounting software, Inventory EPR software solutions and small business EPR software. Law and Ngai (2007) note that this ERP solution integrates external and internal management information across the whole company, embracing accounting, manufacturing, HRM and sales and service. Enterprise resource planning automates these activities using an integrated software application with the aim of facilitating information flow amid all business functions and processes in the boundaries of an organization and management of connections to exterior stakeholders. My perspective on human resource planning Enterprise resource planning is a very vital tool in the modern world. As more organizations do business on a worldwide scale, it is vital for them to rationalize their processes and operations. Through streamlining business processes into a sole unit, organizations are able to operate at an increased level. This results to increased level of productivity and the subsequent increase in profits. ERP is also important in any organization because it results to increase levels of flow of information, as well as increased quality of information. Due to the actuality that organizations are operating within an information age, proper flow of information is a critical in these organizations. Organizations are required to quickly transfer information from one location to another and when there is quick and effective, the organization is capable to operate on the data in a short duration of time. Nevertheless, it isn’t merely adequate to convey information quickly. An organization is required to ensure that the data is of high quality because is the data isn’t high in quality; it will not be useful to the organization. In addition to data quality and information flow, enterprise resource planning is a powerful tool in any organization, whether big or small since it permits an organization to efficiently control its inventory. A powerfully incorporated enterprise resource planning system enhances interactions of sales, marketing, product processes, quality control, stocks and supply lines. This eradicates occasional loss of data as well as retyping errors. ERP integrates all functions and departments across an organization into a single computer scheme that is capable of serving the particular needs of these different departments. Competitive advantages emerge to organizations that are able to contain costs so that higher revenues lead to increased profits. A well designed and implemented enterprise resource planning must minimize costs and raise productivity via improved operations. The immediate benefit of implementation of an ERP system is the is minimization of operating costs like reduced production costs, reduced inventory costs and reduced marketing costs. Through prevention of duplication of information, an ERP system offers chances for cost minimization as well as value added tasks resulting to higher margins. Standardization of business processes is needed for successful implementation of enterprise resource planning and lays the foundation for gaining improved efficiencies. Conclusion Enterprise resource planning is very important in the management of organizational resources. A proper implementation and utilization of an ERP system enables an organization to integrate its business processes and data into a single unit which in turn enables an organization to be more effective and to maintain a competitive advantage. Since ERP incorporates data and processes from different units in the organization, it facilitates simpler accesses of data, and improved work flow. References Moon, Y., (2007). Enterprise resource planning (ERP): a review of the literature. International Journal of Management and Enterprise Development, 4(3): 235-264. Wu, J., & Wang, Y., (2006). Measuring ERP success: the ultimate users’ view. International journal of operations and production management, 26(8); 882-903. Law, H., & Ngai, T., (2007). An investigation of the relationships between organizational factors, business process improvement, and ERP success. Benchmarking: An international journal, 14(3): 387-406. Al-Mashari, M., Zairi, M., & Al-Mudimigh, A., (2003). Enterprise resource planning: taxonomy of critical factors. European Journal of Operational Research, 146,352-364. Shang, S., & Seddon, P., (2002). Assessing and managing the benefits of enterprise systems: the business manager’s perspective. Information systems journal, 20912): 271-299. Gupta, M., & Kohli, A., (2006). Enterprise resource planning systems and its implications for operations functions. Technonovation, 26, 687-696. Kennerley, M., & Neely, A., (2001). Enterprise resource planning: Analysing the impact. Integrated manufacturing systems, 12(2); 103-113. Wagner, B., & Monk, E., (2008). Enterprise resource planning. New York: Course Technology Publisher. Read More