¶ … ERP Fail and Succeed
In order to increase its productivity and compete favorably, any company has to implement an elaborate Enterprise Resource Planning (ERP) system. Failure to do this will lead into a weak company without high possibilities of attained stipulated short-term and long-term goals. By definition, an ERP system helps consolidate enterprise information and control all business processes in an organization. Implementing an ERP successfully is not that simple. Its success or failure is depended on a variety of factors hence starting the process without an elaborate plan makes you vulnerable to a great number of snares along the way (Vinatoru & Calota, 2014).
Since an ERP focuses on integration and management, the company stands a better chance at making resource usage and distribution more elaborate and timely. This will in turn increase the company's reputation, and hence, competitive edge in the market. Despite the fact this is a plausible reason as to why a company should adopt an ERP solution, most of the companies that use the system made the move due to a variety of other different reasons.
These include:
1. Business needs like the need to cut down on inventory costs, improve on order management and establish a transparent pricing policy for the sake of clients and employees
2. Technical issues like the need for one system that will handle the entire business process and replace multiple systems that have proven ineffective at the job.
3. A mix of the above mentioned factors whose result is constraining the company's profit margins.
With an ERP, a company can store its information and automate all its functional domains. This, however, does not mean that all ERP implementations are successful.
Causes of ERP Failure
According to statistics more than half of all launched ERP projects fail. This is a concerning 60% of failures in all tested implementations. The fact that failure is relative could however make things look better. A good example of a number of criteria options that could define failure include:
Functional Requirement Failures:
This will happen when the client does not find the functionalities needed in the system. This could lead to re-engineering or change of the system as a whole. Regardless of the solution taken, this will lead to an increase in cost, drop in quality and increased time to delivery. To avoid this, developers ought to investigate all the requirements adequately before implementing the solution. Using prototyping tools like use-cases and JAD would reduce on errors (Ghosh, 2012).
Management's Divided Attention:
Even though the management is the one that solicits for the ERP management, there are instances where their lack of dedication leads to the project's failure. In most cases, the managers are not aware of the project's scope hence they do not know how much they are subscribing to. Without enough commitment, the ERP is definitely bound to fail. In most cases, the top-level managers will delegate responsibilities to the low-level managers. Even though this is a management strategy, it will more often than not slow down the implementation process. The most success will only be realized if a top-level manager willing to commit to its success (Ghosh, 2012) spearheads the project.
Insufficient Training:
Every ERP user must be adequately trained before rolling out the system. They need to be aware of its capabilities and understand how to leverage these powers to make their work easier. This will ensure that each employee understands his or her responsibility in working well and delivering in a timely manner since the ERP focuses on the success of each individual for everything to run efficiently (Ghosh, 2012).
Improper Package Selection:
In the modern day market, finding an ERP package in the market is not hard. You could either purchase a complete system of the shelf or buy packages to constitute your own system. Even though this is cheaper, you stand at risk of choosing a package that does not meet all your needs as a company. This could be due to lack of technical information or a mere misunderstanding of your requirements (Ghosh, 2012).
Underestimations:
This applies to the time and effort needed to bring the project to completion. If the estimated completion date is passed, the business might have to incur an extra cost or perhaps loose on productivity and customer trust since things will not be going as planned. It is better to do an overestimation than an underestimation (Ghosh, 2012).
Incompatibility:
An ERP that does not fit to your current business process is worthless. It will either force the company to change its way of operation or cause gaps that could lead to poor synchrony in tasks and work processes. This results from assumptions and a poor...
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