Historically, companies have created islands of information, various systems that operate or manage different segments of the business. Sometimes these different systems are integrated with each other and sometimes they are not. Sometimes they are tightly linked and at other times they don't have strong leagues. All of these systems, which are mostly independent, require maintenance; the operational and administrative cost of doing so, most of the time in a redundant way, is greater than that of implementing another new system. Most companies fail to implement ERP systems because they expect different financial benefits than the package itself offers, at other times they go with industry trends and try to implement systems that although they seem very innovative do not meet the profile of your needs.
Key Words: ERP, productivity, integration, Business Intelligence, Planning, Information Systems.
1. Introduction
ERP, Enterprise Resource Planning, integrates all the relevant processes of a company with the modules and methodologies with the best business management system. All transactions are recorded from their origin in a single database, where all relevant information to manage the business can be consulted online. Among the main benefits that can be achieved with the implementation of an ERP system are: Operation control, administrative efficiency, productivity, customer service, savings in operating costs, visibility of operations, support for decision-making, preparation for e -business, differentiation
An ERP system is a comprehensive information system that supports the processes and resource management of an organization. The system consists of several applications whose integration supports supply chain management and day-to-day operations.
2. Preparations for Implementation.
An ERP system implementation project is usually long and complex since it involves the implementation of a new information system, along with the redesign of the work schemes. In most cases it is the largest and most important information technology project ever implemented in the organization. The project is by definition high risk, since it involves complexity, size, high costs, a considerable development team and a reduced schedule of time. In this project, a mutual coupling of both the system to the organization and the organization to the system is essential. A study in Israel found that different manufacturing companies also earned different benefits from other companies in implementing the same ERP system.Most of the implementations were additions to the current system or expansions to current modules to support other functions or tasks that were unique to that company.
An organization that can use a well-structured and defined methodology for the implementation of an ERP system, progressing from the selection stage to the operation stage, can reduce the degree of risk and improve the probability that said implementation will be a success.
3. Features of an implementation development
Some of the characteristics that are visible in the organization when an ERP is going to be implemented methodically are:
- Complexity. The simplest of the systems includes an application that can be operated independently from the other organizational applications or that has a highly user-friendly interface. A highly complex system includes many applications that are internally linked and in turn linked to other systems in the organization. Usually the difficulty in those systems is maintaining the integrity of those links. An ERP system is one of the most complex systems today within the category of information systems. It includes a wide range of applications that serve different organizational processes. The degree of differentiation between these applications is high and the degree of difficulty in implementing and maintaining each of them is different. Complexity carries with it high risk. Because of this,one of the most important tasks at the beginning of the project is to define the borders and scope of the system, in order to make the entire implementation revolve around these previously defined limits.Flexibility. It is particularly important to the system strategy because the organization is interested (to the greatest extent possible) in the tailored implementation of the business in order to take advantage and create competitive advantages. Scope of the application. In the implementation of a new system that aims to offer an unique solution that includes all areas of the company, it is required that senior management is 100% involved, since there are very common problems that may arise. Technological infrastructure. An ERP system is based on advanced technology. In most companies, moving to the new system requires replacing the existing infrastructure. This activity increases the risk of the project to a considerable degree since it involves an important injection of additional capital, specialization skills and in some cases the possibility of temporarily stopping the business for implementation. Therefore, this possibility must be considered at the very beginning of the project. Changes in organizational processes. The implementation of ERP implies a massive change in work processes and information flows. By nature, introducing changes is a politically difficult process that can trigger resistance from conservative groups or individuals, therefore, once the implementation decision is made, an advertising campaign should be included to publicize and "promote" the system to the length and breadth of the company. Intensity of the relationship with the system provider. Which can vary depending on the size of the system that is being implemented. But either way, given the importance of the successful implementation of the system for the company, the relationship with the package designer becomes very intense. The success of the project is highly dependent on this being a good relationship. Another factor that comes up during implementation is the provider's degree of experience with similar companies. Having a high degree of dependency on a software provider can increase the risk; An important factor then becomes that we deal with a financially stable company. User involvement. There are studies that show that the involvement of end users and developers is very important, and that the degree of user skills is a key factor for the success of the system.
4. Cost - benefit
The successful implementation of an ERP system in the company is not the final stage of the process of this business decision support system. The long-term success of the project rests on the successful implementation of a quality assurance plan, or a post-implementation optimization plan.
For full benefits, operational synergy and optimal return on investment for the system, the organization must look beyond system utilization and focus on improving performance. Incremental performance is of particular importance in today's economy. Optimization is the next step after a successful implementation, carefully measuring the return on investment and accelerating the learning curve. Optimization brings new ideas that were not considered during the implementation of the project or were out of reach, such as expansion of the implemented software, hardware to streamline existing processes, etc.
Optimization should be planned and executed with the same care with which the processes of the implementation itself were executed. As a rule, we must follow a documented methodology, which has details of the project, as well as commitment dates and task owners.
Optimization objectives must first be established. For this, the current state of the system already implemented, functionality and the impact on the current business processes must also be evaluated.
The optimization process is a tool to show the benefits of implementing the ERP system and achieving the expected organizational efficiency. But at the end of the day, the success of the system implementation is defined by the company's ability to integrate and consolidate the ERP system's own functionality. Optimizing is not a synonym for failure of the current system, it should only be seen as part of the continuous improvement process.
The decision to invest a considerable amount of capital in an ERP system implementation process reflects management's willingness to change the traditional way in which the company operates. Organizations that can adopt and adapt to a comprehensive ERP system and successfully implement all of the investment associated with it can further take advantage of the advantages and place themselves ahead of the others, creating a competitive advantage.
5. Conclusions
The implementation procedure has 6 stages which are: definition, training, modeling, configuration, live set-up and refining. In the definition, tasks such as analysis of requirements and initial scope, contract signing and project strategy are carried out. The training stage includes the training of project leaders for functional applications and software techniques. The modeling stage analysis of the current situation of the company and the definition of the new stage of work. The configuration is in charge of installing the software according to the working model and carrying out tests. The live setting is in charge of the revision of the final environment and loading of the initial information. Finally, refining is in charge of continuous process improvement and periodic training for end users.
ERP systems are a fundamental part of today's large companies. Usually the biggest problem is that major companies have been growing over the years, they have been acquiring diverse companies that manage small transactional systems linked by another ERP, in many cases specially designed to the needs of each company or in many others acquired as a commercial product.
The first crucial step in the implementation of an ERP system is to choose what the company should use, based on its needs, that is, we can fall into the error of wanting to use a very sophisticated system to a small business that won't even recoup the investment; or on the other hand, we may fall into the error of not having adequately dimensioned the systems of our company, choosing a system that falls short of our needs and that later it is necessary to grow or modify and in the worst case eliminate from our company to implement a new one.
The name of the game is called cost benefit. Systems themselves do not serve a purpose, and enterprise resource planning is no exception. If the system we want to implement does not have a justification for a considerable return on investment, it will hardly be accepted by senior management.
That is why this topic was selected, because the implementation of ERP systems is one of the most interesting challenges of a company; which well managed and implemented can mean total success in it.
6. References
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