Gaining A Competitive Advantage Through ERP Essay free essay sample

, Research Paper Organizations today confront new markets, new competition and increasing client outlooks. Therefore today # 8217 ; s organisations have to constantly re-engineer their concern patterns and processs to be more and more antiphonal to clients and competition. In the 1990 # 8217 ; s Information engineering and Business Process re-engineering, used in concurrence with each other, have emerged as of import tools which give organisations the taking border. The efficiency of an endeavor depends on the speedy flow of information across the complete supply concatenation i.e. from the client to makers to supplier. ERP ( Enterprise resource planning ) systems, have been a major information engineering that has been used by concerns today, in hopes of deriving a competitory advantage. But this advantage seems merely plausible if the execution is coupled with procedure re-engineering, as good. ERP is an endeavor broad system that integrates primary concern applications, including all countries a nd degrees of an organisation. All the applications in an ERP suite portion a common set of informations that is stored in a cardinal database. It aims to function as a anchor for your whole computer science concern, incorporating cardinal concern and direction procedures to supply a sky-level position of much of what # 8217 ; s traveling on in your organisation. A typical ERP system provides applications for accounting and controlling, production and stuffs direction, quality direction, works care, gross revenues and distribution, human resources, and undertaking management.In the 1990s, most companies have experienced concern procedure re-engineering and enforced ERP or other packaged package. ERP is hard to implement. Often, houses adapt their concern processes to the ERP system, instead than the other manner around. This translates to utilizing concern procedures similar to those of rivals and losing competitory advantage. Furthermore, ERP systems merely address the demands of portion of the endeavor, making islands of mechanization and a demand for integrating that requires considerable attempt. A typical ERP system g ives you an 80 % solution. You must still implement the staying 20 % to suit your endeavor demands. In the terminal, you will pay more for custom-making this last 20 % than for the full ERP application. It is non unusual for companies to pass 1000000s of dollars to implement an ERP system. ERP requires the re-engineering of a company # 8217 ; s procedure and civilization. With solutions like SAP you must alter your operations and procedures to fit the logic of the ERP bundle. ERP must be integrated with the remainder of the IS environment. They must construct the substructure that ties their new ERP bundle with their bing mainframes, DBMSs, information warehouses, Web waiters, and email systems.Thus a proper execution of the system will supply a competitory advantage, based on the company incorporating the system with its ain procedures to do it alone, and the cost and clip put in will be offset by the benefits of the system. The first measure in a successful execution undertaking is deriving a solid apprehension of ERP systems and benefits in relation to your ain concern outlooks. Now it is up to the company to take the execution to the extent of suiting in with their concern procedures. Many rivals will hold an ERP system but it is useless if it is non integrated with the company # 8217 ; s concern procedures. Its like any tool, you must cognize how to use it for it to be an plus, but foremost you must measure the tool to see if it will suit in with your concern, as every concern is alone. Some of import points to be kept in head while measuring an ERP package include: 1 ) Functional tantrum with the Company # 8217 ; s concern processes 2 ) Degree of integrating between the assorted constituents of the ERP system 3 ) Flexibility and scalability 4 ) Complexity ; user friendliness 5 ) Quick execution ; shortened ROI period 6 ) Ability to back up multi-site planning and command 7 ) Technology ; client/server capablenesss, database independency, security 8 ) Handiness of regular ascents 9 ) Sum of customization required 10 ) Local support substructure 11 ) Handiness of mention sites 12 ) Sum costs, including cost of licence, preparation, execution, care, customization and hardware requirements.There are many ways that an ERP system can assist an organisation if used right. First, an organisation # 8217 ; s operating costs can be reduced. An ERP system integrates all parts of an organisation so that it has more control of its operation. Besides, an ERP system increases the organisation # 8217 ; s clip efficiency. Since all the parts are now connected and integrated with each other within an ERP system, people use less clip to execute undertakings. Furthermore, people now have more and faster entree to their information, which improves the clip and resources for determination devising. For now, holding an ERP system means increased information handiness for the organisation that means that the organisation can entree information rapidly and easy. Furthermore, organisations frequently have different types of package integrated within them. An ERP system consolidates all the package into a simple system. Software consolidation is another chief advantage of an ERP system.Not merely does an ERP aid organisations to pull off their undertakings more expeditiously, it besides provides advantages to some specific industries. For the fabrication industry, an ERP system provides better bringing service for the organisation. Besides, an ERP system shortens the entire throughput clip for the organisation to make undertakings in procedure of operation. For distribution industry, workers can now maintain path of stock list and online trailing system is used to take attention of all those everyday work that organisation used to make. For the transit industry, an ERP system allows them to make online despatch system. Besides, directors can maintain path of their truck drivers and cognize whether or non their employees are making their occupations. They have something called a GPS- Global Positioning System to indicate out all the places of the employees in transit industries. Besides, one more industry which additions specific advantages from utilizing ERP systems is the undertaking services industry. An ERP system helps these companies to automatize many services and cut down the clip to do studies since more information is rapidly available through the ERP system.The benefits accruing to any concern endeavor on history of implementing are limitless. Harmonizing to the companies like NIKE, DHL, Tektronix, Fujitsu, Millipore, Sun Microsystems, following are some of the benefits they achieved by implementing ERP bundles: ? Gives Accounts Collectible forces increased control of invoicing and payment processing and thereby hiking their productiveness and extinguishing their trust on computing machine forces for these operations. ? Reduce paper paperss by supplying online formats for rapidly come ining and recovering information. ? Improves seasonableness of information by allowing, posting day-to-day alternatively of monthly. ? Greater truth of information with elaborate content, better presentation, to the full satisfactory for the Auditors. ? Improved Cost Control ? Faster response and follow up on clients ? More efficient hard currency aggregation, say, material decrease in hold in payments by clients. ? Better monitoring and quicker declaration of questions. ? Enables speedy response to alter in concern operations and market conditions. ? Helps to accomplish competitory advantage by bettering its concern procedure. ? Improves supply-demand linkage with distant locations and subdivisions in different states. ? Provides a incorporate client database useable by all applications. ? Improves International operations by supp orting a assortment of revenue enhancement constructions, invoicing strategies, multiple currencies, multiple period accounting and linguistic communications. ? Improves information entree and direction throughout the endeavor. ? Provides solution for jobs like Y2K and Single Monitory Unit ( SMU ) or Euro Currency. Although there are many advantages of an ERP system, there are still some disadvantages among these systems. For illustration, cost is a really of import issue for an organisation to see when implementing an ERP system. The high costs of puting up an ERP system are so prehibitive that it would be out of range for some many little concerns. Besides, another disadvantage would be the privateness within an ERP system? That is, who has the entree to the system and who can alter the information within the system. These are many of the inquiries asked about for the affair of privateness of an ERP system. Furthermore, for a concern, clip is besides a valuable resource. Since an ERP system does non take a short clip to implement in an organisation, it may decelerate down the everyday operating plants within organisations. Finally, there may besides be a mirror disadvantage for employees, since an ERP sys tem automates many everyday undertakings that use to be taken by people. Now, there may be a job for those who have non been trained to hold the accomplishments to make certain undertakings with the ERP system. This is a job which affects an organisation as a whole and can be addressed by implementing employee retraining programs.ERP systems don # 8217 ; t merely give you a competitory advantage. Alternatively you must incorporate the system to run into your demands. To vie efficaciously, you must make made-to-order systems, with your concern procedures. Nevertheless, implementing an ERP system does take a batch of attempt and resources in order to accomplish success. In fact, the advantages certain do get the better of its disadvantages. In the hereafter, more and more concern will be utilizing ERP system to assist them pull off of import parts of their concern. ERP package is complex and expensive. Companies must give important human resources to ERP undertakings and frequently h ire advisers or systems planimeters to assist implement the systems. As a consequence, the company can pass 1000000s of dollars and several old ages on ERP projects.ERP systems are great for automatizing well-understood maps and procedures. An ERP system helps you offload the development and care of the more mundane IS maps. In theory, this gives you more clip to concentrate on the cutting-edge, bet-your-company applications. It forms the critical anchor of E-commerce, but companies must look beyond implementing an ERP solution if they truly want to construct value and prolong their competitory advantage. Although implementing ERP suites can better and update corporate resource direction, directors must besides be cognizant of the challenges involved in an ERP undertaking. Even little ERP undertakings can be 1000000s of dollars. However, the payback is high: ERP systems can supply companies the dependable, integrated informations substructure they need to more easy entree corporate informations and, accordingly, pull off their concern more efficaciously. Companies must be after their ERP executions carefully and give equal resources to the undertakings to derive the most benefits from their investings and guarantee the systems are installed within their planned agenda and budgetThe thought behind ERP is that the package needs to pass on across all parts of the concern. With an ERP system, the fiscal package can cut an histories collectible cheque every bit shortly as the lading dock clerk confirms that the goods have been received in stock list. Similarly the histories receivable faculty can bring forth an bill every bit shortly as the transportation clerk says the finished goods are on the truck to the client. All this is done with a lower limit of human intercession and paperwork. ERP aims to retroflex concern procedures ( how do we enter a sale, how do we verify hourly workers # 8217 ; payroll checks ) in package, steer the employees responsible for those services processes through them step by measure and automate as many processs as desired. Sounds great. Is there a downside? Merely if you consider multimillion-dollar undertaking failures a downside.The promise of ERP is great but so is the disbursal in footings of clip, attempt and money. Implementing the package in a company normally involves altering concern procedures, that is, the manner people do their occupations. So employee opposition to these alterations can be a major irritant in a company # 8217 ; s side and normally requires that executives hone their alteration direction accomplishments. With careful planning and tonss of elbow lubricating oil, though, ERP can work and do many an endeavor work better. The success of an ERP solution besides depends on how speedy the benefits can be reaped from it. This necessitates rapid executions which lead to shortened ROI periods.It # 8217 ; s critical for companies to calculate out if their ways of making concern will suit withi n a standard ERP bundle before the cheques are signed and the execution begins. The most common ground that companies walk off from multimillion dollar ERP undertakings is that they discover that the package does non back up one of their of import concern procedures. At that point there are two things they can make: They can alter the concern procedure to suit the package, which will intend deep alterations in long-established ways of making concern ( that frequently provide competitory advantage ) and agitate up of import peoples # 8217 ; functions and duties ( something that few companies have the tummy for ) . Or they can modify the package to suit the procedure, which will decelerate down the undertaking, introduce unsafe bugs into the system and do upgrading the package to the ERP seller # 8217 ; s following release agonizingly hard, because the customizations will necessitate to be lacerate apart and rewritten to suit with the new version.ERP users can derive competitory adv antage from the manner they implement the systems and work the ensuing informations. Besides, users say the systems can do them more agile in the market place than companies with hard-to-change usage plans. ERP systems are concern tools, said Jim Shepherd, an analyst at Advanced Manufacturing Research, Inc. , in Boston. # 8220 ; They are enormously advantageous in the custodies of person who knows what to make with them, but they can be unsafe in the custodies of person who doesn # 8217 ; t. # 8221 ; Users find that the biggest addition from ERP bundles is that they force a company to establish a proved set of concern procedures, instead than reinvent the wheel. # 8220 ; One of the large advantages of packaged applications is that as the province of the art moves, you move with it, # 8221 ; said Martin Richie, manager of the ERP competency centre at Boeing Commercial Airplane Group, in Seattle. ERP systems besides allow users to turn on and off functionality as needed to accomm odate rapidly to alterations in their concern, where a customized application has to be rebuilt. What these applications do is capture informations about historical activity, current operations and future programs, and form that in a manner people can utilize. When you look at the flexibleness in large ERP systems, one time implemented, they can look wholly different from one organisation to another, a set of edifice blocks, and it # 8217 ; s how you put those edifice blocks together that gives you an advantage.Referenceshttp: //www.expressindia.com/newads/bsl/advant.htm hypertext transfer protocol: //www.cio.com/forums/erp/index_content.html hypertext transfer protocol: //www.india-today.com/btoday/20000207/cover.html hypertext transfer protocol: //www.btimes.co.za/99/0606/survey/survey19.htm hypertext transfer protocol: //info.cwru.edu/erp/ hypertext transfer protocol: //www.informationweek.com/728/28iuerp.htm hypertext transfer protocol: //ils.unc.edu/~bergm/explore1.html hypertext transfer protocol: //mgmt.bus.okstate.edu/faculty/sharda/mgmt5553/fall98/ppt/week14_4/ hypertext transfer protocol: //www.eandpnet.com/ep/previous/0100/technology.htm