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Analysis of ERP Software

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  • "EPR Introduction:ERP is a software architecture that facilitates the flow of information among the differentfunctions within an enterprise. Similarly, ERP facilitates information sharing acrossorganizational units and geographical locations. It enab..

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  • "EPR Introduction:ERP is a software architecture that facilitates the flow of information among the differentfunctions within an enterprise. Similarly, ERP facilitates information sharing acrossorganizational units and geographical locations. It enables decision-makers to have anenterprise-wide view of the information they need in a timely, reliable and consistent fashion.ERP provides the backbone for an enterprise-wide information system. At the core of thisenterprise software is a central4 database which draws data from and feeds data into modularapplications that operate on a common computing platform.( January 2000. By HaimMendelson).ERP based on the promise of tightly-integrated corporate functions, globally optimizeddecisions and fast and easy access to accurate information, enterprise software has become anessential part of the operations of large businesses in many industries. By 1998, over 20,000firms around the world spent $17 billion on enterprise software, following annual growthrates that ranged from 30% to 50% (January 2000. By Haim Mendelson). The implementation of ERP packages is a major effort. Licensing the package is only thebeginning.ERP implementation costs include consulting, process redesign, data conversion,training, integration and testing. A Gemini Consulting survey of 220 companies in a widerange of industries found that the average SAP R/3 implementation effort consumed 141person months and cost $7.5 million (January 2000. By Haim Mendelson).ERP systems provide standard applications to manage the financial, human and physicalresources of a user organization, integrating data and business processes under a unifiedinformation system sharing a common set of data. ERP systems are composed of modules byfunctional area, such as finance and accounting, human resources management and supplychain management that can be implemented in stages. The modular design also allows the implementation of selected functions only (Jorge Flores Callejas, Cihan Terzi UnitedNations, and Geneva 2012). ERP systems had a positive impact on organizations in which they were implementeddepended on the implementation approach, change management and training strategy that hadbeen implemented users learning curve, data governance, internal controls that had been builtinto the system, users accessibility to the system; and organizations capacity to collect andreview user’ feedback once the system had been implemented.ERP also enhanced internal controls and the availability of timely and consolidated financialdata, notably supporting the strengthening of financial controls. (Jorge Flores Callejas, CihanTerzi. United Nations, Geneva 2012).ERP support to achieve more cost-efficient ERP implementation, maintenance and growth. High customization of ERP systems had a negative impact on ERP systems’ usability andaccessibility. Indirect costs tended to be omitted from ERP projects’ budget, as well as theprojection of maintenance and upgrade costs, despite the fact that they constitute the biggestcost proportion in an ERP system’s life cycle and that there is a direct causal relationshipbetween the initial customizations made to such a system and its future maintenance andupgrade costs (Jorge Flores Callejas, Cihan Terzi. United Nations, Geneva 2012).ERP also enhanced internal controls and the availability of timely and consolidated financialdata, notably supporting the strengthening of financial controls.ERP systems have the abilityto automate and integrate business processes, share common data and practices across anorganization, and produce and access real-time information.( Jorge Flores Callejas,CihanTerzi. United Nations, Geneva 2012). ERP systems and their centralized, integrated databases through web browsers facilitates theoutsourcing/off shoring of support services functions, as well as the development ofcentralized shared service centres for the provision of those services functions.(same) Enterprise resource planning systems, also called enterprise systems (ES) are among the mostimportant business information technologies that emerged during the last decade. While notwo industries’ ERP systems are the same, the basic concept of ERP systems is focused onstandardization and synchronization of information, and as a result, improved efficiency. Thebenefits of ERP systems include coordinating processes and information, reducing carrying costs, decreasing cycle time, and improving responsiveness to customer needs. (Miroslaw J.Skibniewski, 2008). Currently, many construction firms have implemented their ERP systems adopting a best-of- breed approach in which separate software packages were selected for each process orfunction rather than using full packages of major ERP vendors.( Miroslaw J.Skibniewski,2008).Although virtually nobody really doubts their importance for running business, there is asentiment regarding their implementation – both in terms of time and money Cunninghaminvestigated 7400 IT projects and discovered that 34 % of them were late or over budgetAccording to about 90 % of ERP implementations are over budget or late. According to thecurrent Standish Group report on ERP implementation projects, cited in projects are, overage,178 % over budget and take 2, 5 times longer than intended. ( F. Sudzina, Andreja Pucihar). Total cost of implementation is an important part of total cost of ownership, and therefore itis important to know how large is the disparity between actual and planned total cost ofimplementation of ERP systems. . (F. Sudzina, Andreja Pucihar).ERP Implementation:Implementing ERP well is a difficult, but not impossible task. It requires not only that youwork hard, but that you work hard on the right things (The ERPFocus.com Editorial Team).In spite of their benefits, many ERP systems fail (Adel M. Aladwani). In an effort to remaincompetitive, there has been an increasing need in organizations to connect the informationsupplied by each department into a common entity. ERP systems are designed to address thisproblem of fragmentation as they integrate and streamline internal processes (Koch, 2003) byproviding a suite of software modules that cover all functional areas of a business. However, increasingly we hear of the failures of ERP implementations (Sherry Finney,Martin Corbett).A quick review of ERP research revealed different strategies forimplementing ERP successfully. One can classify these strategies into organizational,technical, and people strategies. Organizational strategies for promoting ERP implementationsuccess include change strategy development and deployment, change managementtechniques, project management, organizational structure and resources, managerial style andideology, communication and coordination (Al-Mashari and Zaire, 2000; Gable and Stewart,1999; Sarker and Sarker, 2000)Many ERP systems face implementation difficulties because of workers’ resistance. It is wellknown by now that improper implementation of Enterprise Resource Planning (ERP)software projects can cause considerable problems for companies. For instance, HersheyFoods Corporation in 1999 reported a 19% drop in 3rd-quarter profits and a 29% increase ininventories over the previous year due to order processing problems caused by its faulty $112million ERP implementation.The city of Oakland too reported problems of missing or erroneous pay checks generated forcity employees by its $21 million ERP project. Miller Industries reported a $3.5 millionoperating loss in the 4th-quarter of 1999 due to the costs and inefficiencies of its ERP system,Inc. reported a $11 million reduction in operating earnings from its improper ERPimplementation(Jaideep Motwani, Dinesh Mirchandani, Manu Madan, A. Gunasekaran, Int.J. Production Economics 75 (2002) 83–96). Whereas Casebook Water & Power Technologies, a $30 million manufacturer of waterpurification systems has seen improvements in materials management, project management, "

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