• Enterprise resource planning (ERP) Enterprise
Resource Planning (ERP) is a software solution
that integrates business functions and data into a
single system to be shared within a company.
• ERP has expanded its scope in the functions such
as human resources, finance and production
• Moreover, in recent years ERP has incorporated
other business extensions such as supply chain
management and customer relationship
management to become more competitive
• ERP allows different departments with diverse
needs to communicate with each other by
sharing the same information in a single system.
ERP thus increases cooperation and interaction
between all business units in an organization on
• Many companies are using information
technology solutions, such as ERP systems, to
manage their business processes and to integrate
all the different operations in order to enhance
information flow within the company as well as
collaboration with partners, suppliers and
How Information Flow ?
• ERP uses Internet technologies to integrate
the flow of information from internal business
functions as well as information from
customers and suppliers.
• The key principle behind the system involves
entering the data from a series of modular
applications only once.
• Once stored, the data automatically triggers
the update of all related information within
Steps to choose a right ERP
Software for your organization
Step 1-Select an experienced ERP
• Designate your ERP project lead, evaluation
team and key stakeholders.
• The management should be fully involved in
the decision as the ERP system involves nearly
all the departments of the organization.
• The top management should participate in the
selection of the vendor and other activities.
Step 2 – Review Your ERP Objectives
• How well defined and documented are your
current and future business and application
• Do you have a documented IT Strategy and a
solution architecture vision in mind?
Step 3 – Define Your Business Needs
• Your business needs should align with your
corporate strategy, goals, current state, and
desired future state vision.
• It is also important to define or perhaps refine
your business capability requirements.
Step 4 – Qualify ERP Software Products
• Define your high-level application
• Don’t forget to research and evaluate ERP
products against your software selection
criteria. In addition you need to prepare for
and review product demonstration(s) to
assess which product(s) best meet your needs
Step 5 – Qualify ERP Implementation
• It is important to understand and evaluate the
providers’ planning, implementation and
support approach and capabilities.
• This process includes checking references and
finally assessing which providers you want to
do business with.
Step 6 – Select Your ERP Solution
• Choose the ERP solution that best meets your
current and expected future needs.
Step 7 – Launch your new ERP project
• While going through the ERP software selection, the
management team should keep the time frame
required for implementation, cost of the
implementation and customization in mind.
• The implementation requires a lot of time, money and
effort, so the management team should know how to
select an ERP system correctly.
• If the ERP system is a good match for your
organization, it can provide many benefits, such as
helping to increase the overall productivity of your
Biggest Challenges/Difficulties When
• Most multinational firms are using ERP and more
small and midsize companies have begun to
adopt ERP. Despite ERP’s promises to benefit
companies and a substantial capital
investment, not all ERP implementations have
• The literature indicates that ERP implementations
have sometimes failed to achieve the
organization’s targets and desired outcomes.
Much of the research reported that the failure of
ERP implementations was not caused by the ERP
software itself, but rather by a high degree of
complexity from the massive changes ERP causes
• The major problems of ERP implementation
are not technologically related issues such as
complexity, compatibility, standardization, etc.
but mostly (about) organization and human
related issues like resistance to
change, organizational culture, incompatible
business processes, project
mismanagement, top management
Top management commitment and support
• Since ERP implementation inevitably causes
organizational changes, it requires the
engagement of senior management from
across the organization who is able to resolve
conflicts. Without the commitment of senior
management, ERP implementation has a high
risk of failure.
• The composition of team members plays a crucial role in ERP
• If a project team does not clearly understand the changes in
its organizational structure, strategies, and processes from
ERP implementation, it will not be in a position to benefit
from ERP’s competitive advantage.
• In order to best implement ERP, project team members should
be selected with a balance between members with business
experience within the organization and external experts with
specialties in ERP.
• “a lack of proper understanding of the project needs and the
inability to provide leadership and guidance to the project”
are the main factors when ERP implementation fails.
Thus, effective project management should define clear
project objectives, develop a work and resource plan, and
carefully track the project’s progress.
Type, size, and scope
• Say a company has decided for many reasons
to launch a managerial information system
• The very first question that managers will face
is what type, size, and scope of the future
system they actually require and how to
choose the most suitable solution among the
hundreds offered on the market.
• Another set of implementation issues is related to the
technical part of the project, and covers the servers and
workstations to be revised and probably the new and
modern ones to be ordered, purchased, and replaced.
• The internal network also has to be analyzed and
modernized if required; the speed and bandwidth of the
existing Internet access should be taken into consideration.
• If these questions are underestimated, they can
dramatically impact the overall result of the project and
easily poison the first few weeks or even months of using a
new system with slow performance, resulting in a
slackening of the existing pace of business.
Data quality issues
• Basically, the problem is that old data that
have been used and stored for years can for
many reasons appear incorrect in the new ERP
Psychological issues-Accepting the change
.ERP implementation may cause changes that lead to resistance among
Due to a limited knowledge of formalized business processes and ERP
systems, as well as work overload during the implementation process, users
were resistant to change.
Lack of Training
Lack of end-user training increases risks by creating confusion
and inaccuracy, thereby decreasing user satisfaction and the
credibility of the system.
Due to the complexity of the integrated ERP system, end user
training is essential for a robust understanding of how the
system works and how to use it.
Risk is associated with people
• If the company’s IT professionals are familiar
with the application-specific ERP
modules, then the probability of successful
implementation is enhanced. Insufficient
training and re-skilling of the staff and failure
to efficiently mix internal and external
expertise raise the risks of project failure.
Poor Quality of testing
• Due to the over-tight(too-tight) project
schedule and insufficient knowledge in testing
ERP systems, the test is conducted in a rush
and is of low quality.