Enterprise Resource Planning Conceptual Model

Summary

The article, A Conceptual Model for Enterprise Resource Planning (ERP), simplifies a complex ERP system to general and project managers in a non-technical manner. According to Marnewick and Labuschagne (2005), many organizations can achieve the benefits of ERP systems; however, they do not realize them because of inherent complexity. Notably, one-quarter of ERP projects fail because of over budget; while, 20 percent are terminated during the implementation. Again, most of the ERP projects fail to achieve the underlying business objectives one year after their implementation. In some cases, their return on investment (ROI) takes six months longer than anticipated.

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Marnewick and Labuschagne (2005) have relied on 4ps (people, product, process, and performance) as the foundation of deriving a simple ERP conceptual model. Their rationale is that many managers are conversant with the 4Ps business model, and thus they can relate to it at ease. Specifically, the 4Ps are congruent with the ERP system’s four elements. In particular, these parts include software, process flow, change management, and customer mindset. Besides, the methodology is included as the fifth element. Notably, the methodology encloses the four elements to make sure that they are assimilated and implemented properly.

The findings of the article demonstrate that ERP systems are not mere software. Thus, unless an apparent knowledge exists regarding different segments of ERP and their respective integration, their related projects will continue to be characterized by failure, termination during implementation, over budget, and delayed ROI (Marnewick & Labuschagne 2005). Mainly, the simplified model helps in the determination of the scope of ERP projects.

Strengths and Weaknesses

Numerous strengths and weaknesses characterize the article. On strengths, the article is informative considering that the model developed by the authors is generic and vendor-independent. In this regard, the model can be applied in a broad range of ERP related projects. Again, the model is useful in determining the scope of ERP projects; hence, it can act as a control in ascertaining the chance of project failure. Besides, the conceptual model simplifies ERP systems to an understandable and manageable levels (Marnewick & Labuschagne 2005). Specifically, the simplified ERP system allows project managers to pay attention to all four elements.

On weaknesses, Marnewick and Labuschagne (2005) model is conceptual in nature in that it only provides a holistic view of the ERP system. Again, the system does not offer a comprehensive and orderly methodology of applying the ERP system. Further, the findings of the article are drawn from the qualitative analysis; that is, from prior studies. Therefore, the application of conclusions may significantly differ from those attained from empirical results.

Article Contribution and Future Work

This article makes significant contributions to numerous fields. Some of these areas include manufacturing resource planning, project management, modeling, finance, human resource, supply chain management, supplier relationship management, business intelligence, and customer relationship management. These contributions are relatively similar to those made by other studies. For instance, Kadir, Ismail, and Tatin (2015) conclude that service quality, which is part of customer relationship management, is among factors that contribute to the effectiveness of the ERP system. Besides, the article has identified ERP limitations that are notable in other studies. Notably, Azevedo, Romao, and Rebelo (2012) attribute the ERP system’s problems in businesses to its inability to automate activities in all departments.

In future work, the article advocates for the need for a proper framework for implementing ERP systems. In this regard, future research on ERP systems should focus on their execution. In particular, future studies should be based on the management of the program and portfolio. In short, future research should align the ERP projects with the strategies used by enterprises.

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Reference List

Azevedo, PS, Romao, M & Rebelo 2012, ‘Advantages, limitations and solutions in the use of ERP systems (enterprise resource planning) – a case study in the hospitality industry’, Procedia Technology, vol. 5, pp. 264-272. Web.

Kadir, RA, Ismail, NA & Yatin, SFM 2015, ‘The benefits of implementing ERP system in telecommunications’, Procedia – Social and Behavioral Sciences, vol. 211, pp. 1216–1222. Web.

Marnewick, C & Labuschagne, L 2005, ‘A Conceptual Model for Enterprise Resource Planning (ERP)’, Information Management & Computer Security, vol. 13, no. 2, pp. 144-155. Web.

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