1.1 OVERVIEW OF ERP AND BPR The economic globalization has formulated new conditions in the market place. These conditions have given rise to instability and intensive competition in the business environment. There are various factors with respect to which competition in the market has an incremental growth and these factors include price, quality and selection, service and promptness of delivery. The competition has intensified more by the increasing cooperation between various countries world-wide, removal of the barriers and technological innovations. The need for organizational transformations has resulted from these changes, which further leads to the change of the entire processes and organization climate and organization structure. Such a change is characterised by an emerging Information technology, Enterprise Resource Planning (ERP). ERP system are responsible for integrating the business processes of an organization, and helps them to obtain the competitive advantages which may include enhancing productivity, customer demands satisfaction, increasing the rapid response capabilities of the customers, reduction of the cycle time, enhancing flow efficiency, and rapid generation of financial information [2]. ERP systems help in enabling the managers to control the whole business and accelerate decision making. In what way, does the top management find the need of ERP implementation and whether the top management takes ERP implementation as simple automation of the existing system or something else are the major issues with regard to ERP implementation. The implementation of ERP is not simply considered the automation of existing business processes, as it requires various changes in these business processes of the enterprise to implement the best practices possible [4]. But there are some challenges that ERP implementations have to face such as the ERP system implentations are very complex in nature, moreover, they incur very high costs and problems during and post implementation are not rare in ERPs. So, these issues force a number of organizations in the industry to reconsider their new plans in relation to this enterprise system and ERP implementation. In ERP implementation, the systems are developed and designed so that they can be used to support the organization’s business processes, thus ERP implementation and business process should have close connections. Business Process Reengineering (BPR) is a process that involves the adoption of process perspectives on a business, and represents a fundamental rethinking of organizations. BPR can be well defined as the fundamental rethinking as well as radical redesign of the business processes with the aim to achieve the an outstanding refinement of measures of performance, such as cost, quality, flexibility, accuracy, service and speed [5].
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When an ERP is done correctly, the company can enhance flexibility, profit and productivity, while eliminating cost and inefficiencies. However, not all ERP systems are
Technology is amazing. Some people might argue technology is bad, some might argue that technology is good, but no one can deny that technological achievements of modern age are awe inspiring. It is a fact, however, that society as a whole relies heavily on technology. Everyone uses technology in their everyday lives such as cell phones, laptops, the Internet and so on. It might be said that technology is the one of the reasons people living today enjoy a higher level of comfort and higher standard of living than people living hundred years ago. However, even today, with so many technological advances, it is still possible for technology to fail. Approximately 77% of businesses rely on information systems for their success today, and when an information system fails, it causes a significant problem for that company. There are many famous information system failures throughout history such as Snap-On’s order-entry system failure which caused company to lose $50 million in the first half of 1998, or FoxMeyer’s failed implementation of ERP which drove the company into the bankruptcy. The information systems failure that is going to be focus of this paper, is the Hershey Foods Corporation’s failure at implementing Enterprise Resources Planning (ERP) in 1999, causing problems with order management and fulfillment, rendering Hershey Foods Corporation unable to fulfill many orders, which dropped company’s revenues by 12% compared to the previous year. This essay is going to look at what Enterprise Resource Planning is, how and why the implementation at Hershey Foods Corporation failed (compared to some other companies...
The ERP systems put a pressure on the whole organization. Although the modular system, they are complex enough for making major changes, so the basic functions should be adapted in a way that ERP systems require. Whole culture has to be changed because now the mid-managers tasks’ are performed by the software. This also changes the organization which used to more centralized and vertical. Every sub-department can reach the information, hence, decide more autonomously. However, on the basis of information, the ERP systems may create a more command and control style organization. Because after the implementation of ERP systems, there is a clear and stricter way to carry out the function, the way ERP software requires. In the light of those changes, the strategy should be reviewed and changed.
With development of the information system management, ERP system has been familiar with more and more people. What is the ERP? ERP is short for Enterprise resource planning; generally speaking, it is an Integrated Information System. From the definition of Wikipedia, ERP is business management software—usually a suite of integrated applications, that a company can use to store and manage data from every stage of business, usually it includes several components, such as forecast and planning, manufacturing, marketing and sales, inventory management, etc. This paper gives you a whole idea of what ERP system is, with states its benefits and importance, and also, using Colgate as an example, to analyst its SAP system.
The enterprise resource planning (ERP) system is the main contributor of fundamental decision-making process. A greater efficiency will be created by storing our business’s critical knowledge that determines the decisions that drive performance in one accessible location. Using the ERP system will create a collaboration between department; therefore, removing the independent department decision-making process that can cause issues when one department does not communicate with another department.
“An Enterprise resource planning (ERP) systems are software systems for business management, supporting areas such as planning, manufacturing, sales, marketing, distribution, accounting, finance, human resource management, project management, inventory management, service and maintenance, transportation, and e-business”.( Haag, Cummings, Phillips, S, M, A (2007). Mangement Information Systems. New Yory, NY: The McGraw-Hill Company Inc..)
ERP systems give E-business by utilizing the web reconciliation ability it encourages get closer to clients. It gives advantage to business to business intelligent client administration, for instance through client coordinates criticism it can enhance item plan, and in particular give continuous and dependable information enquiries. Likewise with the coordinated and standard application structural planning in ERP system it give foundation support business adaptability to future changes by reaction to interior and outer changes and give scope of choices in respond, reduced IT costs and ‘expanded ability for brisk and monetary usage of new applications.
Implementation of ERP systems can provide many advantages including eliminating expensive , flexible legacy systems provide better access to data to make operations and create oppurtinity desicion to upgrade technology infrastructure . Some of the disadvantages associated with ERP systems is that it is time consuming, difficult , and expensive to implement.
20th century is a competitive, fast growing and continually changing era. Many new business departments evolved out of which supply chain management becomes one of the major and core function of modern business. According to the entrepreneurs the mantra of success depends on the integration among various business departments. i.e. ( Hrm, Marketing, Finance and Scm ).
Hammer(1990) came up with the term Business Process Reengineering in his article, “Reengineering Work: Don’t automate, elaborate”. Hammer (1990) outlined that Business Process Reengineering was a business management strategy. He focuses on the designs of business processes within an organisation. His main aim is for companies implementing his strategies to become world-class competitors. The concept of BPR has developed over time with the advancement in technology.
As all the information flows within the ERP systems so it is easy for a company to plan for the future based on its current performance. These systems enable the decision makers to make quick decisions based on accurate information as the whole information from various departments lie within the same
Business Process Management (BPM) is considered as the umbrella of our research. This chapter introduces an overview of BPM which offers a set of diversity values for organizations. Figure 2.1 represents the different areas that we covered in this chapter.
The concepts of Business Process Reengineering (BPR) was introduced by Professor Michael Hammer (Grover and Markus, 2008, Gunasekaran and Kobu, 2002, O’Neill and Sohal,1999), in the early to mid-1980s. There were many other authors who have subsequently published their own variant of BPR, authors such as Davenport/Short published their work shortly after Hammer.
Analysis of ERP implementation reveals the fact that not only installing the ERP softwares wil start giving benefits to the companies.But there is a need to consider certain facts such as sustained management support,user involvement,trust between implementation partners,ERP implementation strategy and proper planning etc. Lastly,it is strongly recommended that the management and the users should work together to get the maximum benefits.