Today's competitive market is creating the need for integration in all business departments, in addition to a strong communication link between customers and suppliers.
The needs of consumers for better quality products and in the shortest possible time, force producers to improve their manufacturing processes, purchases, supply of inputs and long-term relationships.
To achieve all these objectives and improve efficiency and productivity, companies need efficient planning and control for the synchronization of all corporate processes. Enterprise Resource Planning (ERP), is in our days, a vital and complete tool for the integration of departments in a continuous process with the ability to generate a strong competitive advantage, to survive in today's business world; however, company executives face a difficult question to visualize… Will ERPs determine the success or failure of my company?
Before presenting some of the main reasons that determine the success or failure in the implementation of ERPs, it is necessary to mention certain key points to know the minimum requirements of companies to begin to evaluate the possible implementation of the system:
- It is necessary to clearly define the objective and vision of the business project. It is required to have the necessary equipment for the implementation of the project, as well as to determine the person who will be the leader for the successful achievement of the project. Continuous training on various topics is vital for all personnel involved in the decision. Carry out a well-defined work plan, including the methodology and the estimated time to achieve each of the processes to follow for the correct implementation. Have the support and advice of experts in the field. Follow up on implementation and all processes. And last but not least, the implementation of this type of technology constitutes an important organizational change,so it is important to observe and take into account the type of organizational culture of the company.
After all the above points have been taken into account, the choice and implementation of the system continues, which requires a lot of time and investment and in extreme cases causes the temporary stoppage of some commercial activities due to the new business restructuring. At the end of this long process, the results of the system begin to be observed, which can be positive or negative, they will glimpse the reasons for the success or failure of the implementation.
Reasons for Success in the implementation of the ERP system.
Below are a set of steps to put your ERP implementation on the road to success:
- First define a strategy that allows you to obtain a competitive advantage, analyze your business processes and how they meet organizational objectives, and then select an ERP and implement it.For there to be substantial changes, organizational functions must intersect, information must flow to across the organization The choice of the system should be based on business processes rather than software functionalities Acquire a flexible system so that it can keep up with business changes The project should be led by a senior executive capable making changes while riding. Responsibility for the project is often delegated to the IT or IT department and this is one of the main causes of failure.It is important to emphasize that ERP solutions are tools whose success lies in optimal use by users, that is, depending on the people in contact with technology, it will be the determining factor for the proper functioning and success of the system. In order for ERP implementations to be successful, it is necessary to know how and what people think, in order to achieve the change in their thinking and make them understand that the new technology will help them do their job better.. The reason for this is that the company is made up of different departments and each of these has its own staff with its own priorities and bosses, which means that each of the members have different, and sometimes negative thoughts about the change in organization,since the least that can be expected is that the work processes are carried out in a different way.
As one of the great problems for the implementation of ERP systems is the fear of change on the part of the workers, strategies have been proposed to improve this situation:
- Attitudes of staff and administration (management) towards the new ERP system, Involvement of users throughout the system implementation process, and Constant training of users for the proper use of the system
Another important reason for the success of ERPs is the support provided by senior management to the implementation of the system, many times the fact that a new project is received and promoted by senior positions causes workers to accept the new system as a correct option for your daily tasks.
Finally, the importance of the organization in this type of project should be mentioned, since one of the strong reasons for success is to take into account that the organization must adapt to the new system and not the new system to the organization; This brings new advantages since by adapting the organization to the new system, it is adopting new ways of doing things, putting aside its old processes, which, due to being constantly repeated, made it difficult to observe their errors or failures.
Reasons for failure in the implementation of the ERP system
The ten reasons that appear consistently for ERP failures are:
- • Strategies did not understand business process design • Implementation was slower than expected • Implementation costs were higher than expected (hidden costs) • Pre-implementation activities were deficient • Staff did not was adequately prepared (this includes both users of the organization, as well as the staff of the consultants or the IT provider who sometimes use inexperienced employees and rotate them too frequently) • An excessively ambitious scope was established for the project • There was a lack of methodology in the management of the project. • The input (information inputs) by the users was poor or incomplete. • There was a lack of support from the top management. • Lack of talents in the management of the relationships.
To conclude, it is important to point out that the success of this type of technological tool depends largely on human capital, in addition to the support provided by management, good planning and communication at the various levels of the organization.
On the other hand, ERP systems offer countless advantages, however, in the beginning it will bring some implications such as resistance to change, a new way of doing business, business reengineering, etc. Therefore, when you want to carry out the implementation of an ERP system for the first time, you need a structured methodology and follow in an orderly fashion a series of established steps for the sure success of our system.
Bibliography:
Nora Lency. ERP Success or Failure?
CIO Magazine (2002). Integration Imperative.
Koch, Christopher (2002). The ABCs of ERP.
McClenahen, John S. (2002). The book on the one-day close.
Arturo Venegas Tinoco. Master of Information Technology Administration
Navarro, Eduardo. ERP implementations. How to achieve success?
Ibarra Alonso, Aurelia. "ERP System, a reality for SMEs" Lafarga Mosqueda, Javier. "I challenge you to implement an ERP"
School of Management. "Integrated management systems in organizations"
