An ERP system
When compared to traditional information systems such as MIS, DSS, TPS, and other information systems, ERP system is unique because it comprises an integrated set of applications that can perform multiple functions (Motiwalla & Thompson, 2013). Organizations can use ERP in collecting, storing, manipulating, retrieving, and interpreting information obtained from virtually all departments in an organization. An ERP system has a database in which all departments in an organization can access according to their respective privileges and roles. Comparatively, the traditional systems comprise a single application and do not allow integration; therefore, they perform limited functions. The existence of database makes an ERP system support all management levels. Fundamentally, each management level can access a centralized database using an ERP system based on customized privileges and roles. The lower management levels have limited access privileges while the upper management levels have unlimited access privileges.
The evolution of Information Systems in an Organization
Information systems evolve as an organization grows and develops in terms of activities and operations. A small organization starts with a basic information system, which enables it to perform limited functions. Basic information systems do not only have limited functions, but they also create silos in an organization. As an organization grows and develops, it requires integration of operations and activities with a view to improve their efficiency and effectiveness. An ERP system is an appropriate information system for organizations because it removes silos and improves efficiency and effectiveness of operations. Motiwalla and Thompson (2013) note that ERP removes functional silos in an organization because it integrates all operations using a database and allows all the departments to access centralized information. In essence, ERP system creates a logical integration because it links every department to a centralized database, unlike the basic information systems that create silos.
The Most Critical Component in the Implementation Process
The ERP system has five components, namely, software, hardware, processes, information, and people. The most critical component of the ERP system during the implementation process is people. Motiwalla and Thompson (2013) identify the users of the ERP system, such as ERP administrators and end-users, as the integral component of the ERP system. People are critical during implementation process because the ERP system is not an automatic system that can function without the input of end-users or ERP administrators. The end-users should understand how to operate the ERP system for it to function optimally. Successful implementation of the ERP is dependent on the extent of adoption and knowledge of end-users. In this view, people must be willing to adopt the ERP system and have the prerequisite knowledge to implement it. Given that the ERP system has technical challenges, ERP administrators should aid in troubleshooting errors and training end-users on how to use the ERP system.
Role of ERP in Organization
Given that the major role of ERP system in an organization is to integrate business processes, it changes the way they happen. Subramoniam, Tounsi, and Krishnankutty (2009) refer BPR as a forerunner of ERP implantation because it changes business process and creates a favorable environment for successful implementation of ERP. Hence, business process reengineering (BPR) happens due to the implement of ERP system. Motiwalla and Thompson (2013) assert that the extent of BPR is dependent on the nature of the ERP system that an organization implements. This assertion means that organization should purchase ERP system that meets the prevailing needs of business processes and yields expected changes in business processes. For example, chocolate implementation of ERP requires minimal changes in the business processes while vanilla implementation requires major changes in business processes.
Examples of ERP Components
Racine Metal Fabrication Limited (RMF Ltd) is an organization that has adopted and implemented ERP system to integrate its business process. The organization uses WorkWise ERP as a type of ERP system, which it obtained from the vendor called WorkWise. According to WorkWise (2015), the vendor helps companies to improve the performance of their business processes.
Hardware: the ERP system requires computers, network, and servers for it to run and perform its functions.
Software: The ERP software that RMFLtd uses is called WorkWise ERP, which acts as an operating system as well as a database system.
People: Managers, engineers, accountants, suppliers, marketers, operators, and system administrators.
Processes: WorkWise ERP has six suites that enable it to perform 45 business processes, which include manufacturing, management, supply chain management, accounting, human resources, and data storage (WorkWise, 2015).
Discussion: ERP Systems
Currently, the ERP market has reached saturation point because many vendors have produced ERP system and dominated the competitive market. Given the saturation level and the high competition, vendors are adding functionalities to the ERP systems to enhance their relevance to modern business, and consequence, boost their competition. Moreover, the vendors are keeping abreast with global technology as they are adopting Service-Oriented Architectures (SOAs) and open-source ERP (OS-ERP) (Ferran & Salim, 2008). Big vendors such as Oracle and SAP have ventured into markets of small businesses to offer customized ERP systems. Hence, shrinking market and high competition drive vendors to adopt SOAs and OS-ERP as well as offer customized ERP to small business.
Case Study: ERP Implementation
The right implementation strategy
RR did select the right implementation strategy, which is vanilla implementation, because the business processes required extensive re-engineering. Henderson (2012) states that vanilla implementation is an appropriate strategy for it transforms business processes. RR recruited competent implementation experts comprising SAP, EDS, and IT teams, which provided adequate resources for the implementation of ERP. The technical teams, business teams, and cultural teams gradually rolled out the ERP system leading to its successful implementation.
Critical Success Factors
The critical success factors are the recruitment of experts, the division of labor, and gradual implementation of the ERP. RR recruited experts from SAP, EDS, and IT teams, who formulated strategies and anticipated problems. The division of labor into the business team, cultural team, and technical team enhanced specialization in the implementation process. Grabot, Mayère, and Bazet (2008) argue that the division of labor optimizes business operations and activities. The roll out of the program occurred gradually in three phases that ensured accuracy in the implementation process.
Advice to technical team
As successful implementation of the ERP is dependent on the business process re-engineering, the technical team should focus on undertaking extensive changes in the business processes by eliminating most of the interfaces of the legacy system. The existence of the interfaces of the legacy system hinders vanilla implementation of the ERP because it requires extensive re-engineering of the business process. Moreover, the technical should clean data that they migrate from the legacy system to avoid redundancies because they take unnecessary space in the database and create errors.
Ferran, C., & Salim, R. (2008). Enterprise resource planning for global economies: Managerial issues and challenges. Hershey: Information Science Reference.
Grabot, B., Mayère, A., & Bazet, I. (2008). ERP systems and organizational change: A socio-technical insight. London: Springer.
Henderson, P. (2012). Systems Engineering for Business Process Change. New York: Springer Science.
Motiwalla, L., & Thompson, J. (2013). Enterprise Systems for Management (2nd ed.). New York: Pearson Education Limited.
Subramoniam, S., Tounsi, M., & Krishnankutty, K. (2009). The role of BPR in the implementation of ERP systems. Business Process Management Journal, 15(5), 653-668.
WorkWise: Racine Metal Fab: Building a Strong Manufacturing Process with WorkWise ERP. (2015). Web.