INFS2621 Enterprise Systems For System Implementation Cost
Questions:
2. How single instance of an ERP applied in particular to CorpEx and Company Y.
Answers:
Introduction
The paper focuses on “Enterprise Information System” which is a kind of information system that helps in improving the functions of an enterprise business processes (Grainger and McKay 2015). The main aim of the paper is to reflect on the case study “The long and winding road of enterprise system implementation: finding success or failure?" in order analyze the issues as well as challenges that CopeX, as well as Company Y, faces due to the implementation of ERP.
The report illustrates the significance of single instance of an ERP, its application to CorpeX, management of change, the importance of user acceptance, project management and governance of the project. The paper also reflects the reasons of failure of ERP implementation in Company Y and methods for addressing various key issues.
The issues that are likely to be significant from using a single instance of an ERP include:
System Implementation cost: It is analyzed that the most significant challenge or issue of utilizing a single instance of an ERP is that the implementation cost. The implementation of the new system for handling all the business units centrally requires a large amount of money (Jinno, Abe and Iizuka 2017). Therefore, implementation of a single instance of an ERP is very much costly.
Risk associated with New ERP implementation: In order to utilize a single instance of an ERP, the most significant step is to implementation. It is analyzed that there are numerous risks, which are associated with the implementation of the new system.
Loss of flexibility: One important risk, which is associated with the single instance of ERP, is loss of flexibility. They lose their flexibility due to unique requirement of the business.
Reduced IT staff: The IT staffs that are working in the organization will get reduced after the implementation of the single instance of ERP because the system helps in managing all the business operations of various business units centrally (Ruivo, Oliveira and Neto 2014). The individual who is working in the organization will lose their job after its implementation
with a company.
Greater Reliance on Business Continuity plan: It is analyzed that by utilizing a single instance ERP, one of the major challenge that can arise is greater reliance on business continuity plan.
Consider both advantages and disadvantages
Advantages of a single instance of an ERP include:
Reduce the cost, which is associated with Information Technology Support costs: The implementation of single instance ERP within an organization helps in reducing the number of staff, standard maintenance, concurrent user licensing and use of interfaces. It helps in saving the entire information technology support cost of an organization.
Enable strategic cost: the implementation of a single instance of ERP enables the strategic vision of an organization by the portability of work, use of proper data as well as a platform for shared services (Galy and Sauceda 2014). It is analyzed that platform for various shared services are utilized various End to end process optimization.
Enabling business process management: It helps in enabling the procedure of business management by achieving global benefit from various initiatives of the project, internal benchmarking, consistency of master data, transparency of information, capital managed that are centrally managed and transferability of various resources.
The disadvantages of a single instance of an ERP include:
Costs: One of most important disadvantage is system implementation cost inn context to single instance ERP (Poba-Nzaou et al. 2014).
Less Flexibility: Organizations lose their flexibility due to unique requirement of the business with the help of single instance ERP.
Reduction of IT staff: With the implementation of single instance ERP, the number of IT staffs present in an organization have to leave their job because with the help of single instance ERP all the processes, as well as tasks of business units, are managed centrally.
Single instance of an ERP is applied to both CorpEx and company Y for bringing numerous benefits, which assists in contributing faster as well as reporting in a much more consistent way (Chou et al. 2014). It also helps in making the manufacturing much more efficient as well as consistent in order to distribute it across various regions. Numerous members of the Australian team including the manager of the project planned to implement a single instance of ERP across Asia Pacific regions. It is analyzed that most of the organizations utilizes an earlier version of the applications (Ram, Corkindale and Wu 2013).There is a number of the newly acquired company, which directly change them to single instance ERP in CorpEx.
In company Y, Barker analyzed the situation between the two companies, and by hearing about the stories of NZ project, it is very much important to have proper co-operation. As Barker have a proper understanding of single instance ERP, it is implemented in company Y for gaining various types corporate benefits, which are delivered with the help of the ES strategy.
Evaluate
The management of change
Change management is defined as an approach that is utilized for transitioning various individuals, teams as well as organizations by using methods, which are intended to re-direct the utilization of resources, procedures for business, budget allocations as well as other modes of operations. Some of the principles of change management that includes:
Start at the top: The procedure of change management must be started from the higher authorities of the organization as they provide strengths, support as well as direction to the entire organization so that the organization can cope up with the changes (Al-Ghofaili and Al-Mashari 2014).
Involve every layer: As various transformation programs within the organization define different strategy and set proper targets for designing as well as implementation, they affect the various level of organization, so it is quite significant to involve every layer.
Create ownership: Leaders must support the change management as their support plays an important role.
The user acceptance for the project, including cultural aspects
The user acceptances of the project include:
Financial aspect: The implementation of the ERP system in the company has a negative impact in context to the financial aspect, as the implementation of ERP requires large amount of money (Veiga et al. 2014). The organizations have to use a huge amount of money in order to implement the new system for managing all the business operations of the organization.
Cultural aspect: ERP implementation within an organization has a positive impact on the cultural aspect of the business. This is because the legacy system is replaced by the ERP system, which helps in managing all the operations of the organization automatically.
Social aspect: The customers of the organization will e benefitted if the system can manage all the operations of the business properly as well as effectively (Schniederjans and Yadav 2013). Therefore, ERP implementation would have a positive impact on the social aspect of the business.
The chances of user acceptance can be increased by using the following steps:
Understanding users: It is important to understand the users by proper categorizing them. The categorization must be done based on motivation, somewhat motivated, and very motivated.
Involving users: It is very much important to hold limited review sessions with the actual users (Lozano and Bayonaore 2016). It is very much important to involve the users in the project status report for enhancing the chances of user acceptance.
Match the intensity of test: It is very much important to match the intensity of test in order to increase the chances of user acceptance.
Planning the test: The user acceptance test must be planned by utilizing three levels of test planning which include strategic level, logistical level and test script level.
Project Management is a procedure of initiating, planning, executing, controlling as well as closing the work of a team in order to meet some of the specific goals for achieving success. Project management helps in assisting planning, organizing as well as implementing a project (Garg and Agarwal 2014). A project is defined as an undertaking with some particular start and end parameters, which are generally designed in order, achieve some outcome. It is analyzed that the project management plan will effectively as well as efficiently guide all the aspects of a project from start to finish with some ideal goals in order to deliver the outcome of a project in a proper time (Ghofaili and Al-Mashari 2014). There are a number of advantages of project management, and the advantages include benefits in work environment, developing existing skills, learning new skills, continuous course involvement and also assists in discovering a new skill.
Project governance is defined as a framework of the management, which assists in making project-related decisions. Effective project governance within an organization helps in allowing an effective strategy that is generally formed with the help of the governors of the project. The formation of an effective strategy helps in providing proper guidance, direction as well as a way for measuring the performance (Ram and Corkindale 2014). It also helps in providing accountability in context to project areas. Correct governance within an organization helps in determining the factors that are leading the company to either success or failure. Proper governance helps in assisting or sharing the business case for maximizing the profit for exploiting the gap that is present in the market.
The reasons for failure of ERP implementation in Company Y includes:
Lack of understanding of the system: The employees of the organization do not have a proper understanding of the system, as the system is too much new for them. Without proper knowledge, the system is implemented. This is one of the major factors behind the failure of the ERP system.
Very slow response time: The response time of the system is very much slow, and as a result, the employees of the organization faces problem in its implementation, which leads to failure of ERP in company Y.
Multiple screens for common transactions: in the system there are multiple screens for transactions, as a result, the employees of the organization get confused, and as a result, it will bring a devastating impact on the revenue of the organization.
Temporary staffs: Company Y employed temporary staffs for the organization, and those staffs do not proper knowledge about the previous system or the problems associated with the system (Bintoro et al. 2015). Therefore, they implement the new system without having any knowledge o the previous system, and as a result, the ERP implementation will fail. Incomplete transactions:
The symptoms, as well as situations, which became the root causes of the failure of the ERP implementation, include:
Unresolved issues: Company Y does not solve all its problems due to which it needs implementation of the new ERP system. The unresolved problem increases challenges before the company in context to ERP implementation
Immediate resolution: Company Y does not take proper time for identifying the problems and as a result, the time that is invested for planning is very much less (Bernroider, Wong and Lai 2014). Therefore, the immediate resolution that is made is implementation of ERP system raises a number of risks.
Lack of proper understanding: The employees of the organization do not have an appropriate amount of knowledge and the company Y employed temporary staff and as a result is act as one of the significant factor in the failure of ERP implementation.
Use of CorpeX team members: The Company Y takes help from CorpeX team members, which raises the issue in the ERP implementation much more (Karim and Arif-Uz-Zaman 2013). This is because they do not have proper knowledge about the ERP system.
The management of the Company Y must be blamed for the project failure. The management of the organization must be responsible enough to analyze the problem that is occurring in the legacy system. Based on the problems, the new system must be planned which will be helpful in resolving the issues of the legacy system, but the organization provided immediate resolution without reviewing properly (Grainger and McKay 2015). The organization must need to employ staffs that have proper knowledge on ERP system. This would have brought positive impact on the implementation of the project, but the management of the Company Y employed temporary staffs who do not have proper knowledge about the legacy system.
The methods that must be considered by CorpeX for addressing the key issues include:
Analysing flexibility of the system: the flexibility of the system must be considered by CorpeX in order to determine the key issues that are associated with the failure of the ERP implementation.
Manageability of the system: It is quite important to identify the manageability of the system in order to identify whether the staff of the organization are capable of managing all the operations of the organization with the help of the newly implemented system (Abu-Shanab et al. 2015).
Operation handling capability o the system: The operations of the newly implemented system must be analysed in order to address the key issues. If the ERP system is unable to perform the operations properly, then it is analyzed easily that the system is facing severe issues.
Customer satisfaction: If the customers of the organization are not satisfied with the service of the system then it can easily analyze that the system is facing some problem. Therefore, satisfaction of the customers became a factor for analyzing as well as addressing the key issues.
It is analyzed that customer satisfaction must be considered as a factor in order to address the key issues. This is because the organization can be able to know about their performance with the help of this factor (Egdair, Rajemi and Nadarajan 2015). If all the operations within the organization are performed properly, then the customers will be satisfied with the service. If the customers are not happy with the service, then the company needs to review the problems associated with it. Therefore, customer satisfaction is one of the significant factors for addressing key issues in an organization like CorpeX.
Due to the recommended plan, the customers of the organization will reflect that they are not happy with the services of the company as they facing problems with transaction, delivery and much more. The staff of the organization will report that they are facing problems in handling the system, as there are numerous pages for transactions. The staffs of the organization do not have appropriate knowledge about the system, as they are unable to handle it properly. The management of the organization will reflect that the factor would be helpful in addressing the risk, as customer service is one of the main goals of their business. If they are able to provide it properly, then their business will be considered as successful.
Conclusion
It can be concluded that both the company faces a number of challenges due to the implementation of ERP system. It is analyzed that the main reason behind the problems is lack of understanding of the system, very slow response time and multiple pages for transactions. It is analyzed that in the system, there are multiple screens for transactions and as a result, the employees of the organization get confused, and it will bring a devastating impact on the revenue of the organization. It is identified that customer satisfaction must be considered as a factor in order to address the key issues. This is because the organization can be able to know about their performance with the help of this factor.
References
Abu-Shanab, E., Abu-Shehab, R. and Khairallah, M., 2015. Critical success factors for ERP implementation: The case of Jordan. The International Arab Journal of e-Technology, 4(1), pp.1-7.
Al-Ghofaili, A.A. and Al-Mashari, M.A., 2014, August. ERP system adoption traditional ERP systems vs. cloud-based ERP systems. In Innovative Computing Technology (INTECH), 2014 Fourth International Conference on (pp. 135-139). IEEE.
Al-Ghofaili, A.A. and Al-Mashari, M.A., 2014, August. ERP system adoption traditional ERP systems vs. cloud-based ERP systems. In Innovative Computing Technology (INTECH), 2014 Fourth International Conference on (pp. 135-139). IEEE.
Almajali, D.A., Masa'deh, R.E. and Tarhini, A., 2016. Antecedents of ERP systems implementation success: a study on Jordanian healthcare sector. Journal of Enterprise Information Management, 29(4), pp.549-565.
Bernroider, E.W., Wong, C.W. and Lai, K.H., 2014. From dynamic capabilities to ERP enabled business improvements: The mediating effect of the implementation project. International Journal of Project Management, 32(2), pp.350-362.
Bintoro, B.P.K., Simatupang, T.M., Putro, U.S. and Hermawan, P., 2015. Actors’ interaction in the ERP implementation literature. Business Process Management Journal, 21(2), pp.222-249.
Chou, H.W., Chang, H.H., Lin, Y.H. and Chou, S.B., 2014. Drivers and effects of post-implementation learning on ERP usage. Computers in Human Behavior, 35, pp.267-277.
Egdair, I.M., Rajemi, M.F. and Nadarajan, S., 2015. Technology Factors, ERP System and Organization Performance in Developing Countries. International Journal of Supply Chain Management, 4(4).
Galy, E. and Sauceda, M.J., 2014. Post-implementation practices of ERP systems and their relationship to financial performance. Information & Management, 51(3), pp.310-319.
Garg, P. and Agarwal, D., 2014. Critical success factors for ERP implementation in a Fortis hospital: an empirical investigation. Journal of Enterprise Information Management, 27(4), pp.402-423.
Grainger, N. and McKay, J., 2015. The long and winding road of enterprise system implementation: finding success or failure?. Journal of Information Technology Teaching Cases, 5(2), pp.92-101.
Jinno, H., Abe, H. and Iizuka, K., 2017. Consideration of ERP Effectiveness: From the Perspective of ERP Implementation Policy and Operational Effectiveness. Information, 8(1), p.14.
Karim, A. and Arif-Uz-Zaman, K., 2013. A methodology for effective implementation of lean strategies and its performance evaluation in manufacturing organizations. Business Process Management Journal, 19(1), pp.169-196.
Lozano, J.C. and BayonaOré, S., 2016, October. Determinant Factors in Post-Implementation Phase of ERP Systems. In International Conference on Software Process Improvement (pp. 257-266). Springer International Publishing.
Poba-Nzaou, P., Uwizeyemungu, S., Raymond, L. and Paré, G., 2014. Motivations underlying the adoption of ERP systems in healthcare organizations: Insights from online stories. Information Systems Frontiers, 16(4), pp.591-605.
Ram, J., Corkindale, D. and Wu, M.L., 2013. Implementation critical success factors (CSFs) for ERP: Do they contribute to implementation success and post-implementation performance?. International Journal of Production Economics, 144(1), pp.157-174.
Ram, J. and Corkindale, D., 2014. How “critical” are the critical success factors (CSFs)? Examining the role of CSFs for ERP. Business Process Management Journal, 20(1), pp.151-174.
Ruivo, P., Oliveira, T. and Neto, M., 2014. Examine ERP post-implementation stages of use and value: Empirical evidence from Portuguese SMEs. International Journal of Accounting Information Systems, 15(2), pp.166-184.
Schniederjans, D. and Yadav, S., 2013. Successful ERP implementation: an integrative model. Business Process Management Journal, 19(2), pp.364-398.
Veiga, J.F., Keupp, M.M., Floyd, S.W. and Kellermanns, F.W., 2014. The longitudinal impact of enterprise system users’ pre-adoption expectations and organizational support on post-adoption proficient usage. European Journal of Information Systems, 23(6), pp.691-707.
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