This website uses cookies to ensure you have the best experience. Learn more

Benefits And Downfalls Of Enterprise Resource Planning

1415 words - 6 pages

Enterprise Resource Planning (ERP) system cost:
Enterprise Resource Planning (ERP) systems is framed for companies to make more efficient decision by improving data access. Unfortunately sometimes due to wrong decision of company about the maintenance cost of ERP leads them to huge financial loss (Fryling, & Adviser-Richardson 2010). ERP is an ongoing process so proper estimation is required for its implementation cost as well as recurring maintenance cost.
According to a research the success rate of implementing ERP is thirty three percent and it is also researched that around ninety percent of ERP implementation are over-budget (Martin, 1998). Apart from all this it is also marked ...view middle of the document...

So it also means that to meet that 30 percent requirement the companies may have to customize the software which in turn incurs cost. Higher the changes in software higher will be cost of implantation.

• Hardware: In some ERP projects it necessary to invest in like disk storage system, routers, network switches, security firewalls and etc. Companies have to be very careful while buying all necessary hardware because even if a single piece is missed, it may give birth to weak system and company may have to face failure (Anderson, 2011).

• Data Cleansing: Cleaning junk data from ERP system is important part of process as this in turn helps company to maintain quality data and increase the speed of system too. According to the study (Ferriss, 1998) “Canadian automotive insurers cheated the market with the help of bad data in company’s database. The study marked that in 1 such case many insurance companies lost $56000000. So from this case study we can conclude that how important it is to maintain quality of data.

• Training and Change Management: It is also seen that improper training to employees may lead to failure of ERP implementation. (Fryling, & Adviser-Richardson 2010). Educating the users regularly with the system updates again adds expenses to the ERP implementation process.

Case Study to understand ERP Implementation cost:

In many of the cases we have seen that ERP implementation has been big failure. Avis Europe Ltd is one of failure, where they implemented ERP project in the year of 2014 and the expense on implementation was $54.5 million and the very well known case of ERP failure relates to the collapse of US $5 billion(Maguire, Ojiako and Said, 2010). Whereas there many companies which earned lots of profit with ERP implementation, such as 7-Eleven Stores Pty Ltd, Coca Cola Bottling Co. And many more. So this section will be highlighting a case study of company named Omantel to understand the different element of ERP implementation cost and its positive and negative effects on company.

Oman Telecommunication (Omantel): It is a fixed line telephony company and has monopoly in Public switched telephone network. Omanantel is an old company and also has subsidiary company of mobile service. The approximate number of employees working in Omantel and its subsidiary company is 2600(Maguire, Ojiako and Said, 2010). While coming to profit part this company did well and so in the year 2006 its profit is of 80 Omani Rial (Omantel Financial Statements, 2006).

The company wanted adopt higher technology to have proper control over whole work flow(Al Wohaibi, 2006) and they also wanted to fulfil the requirements of national development which was identified in United Nations (ESCWA, 2003). Later in the year 2005 February Omantel and Oracle signed the project and which had to be completed within twelve months . But the ERP implementation process took 6 months more than it was decided. In the June 2006, this process was completed and it...

Find Another Essay On Benefits and Downfalls of Enterprise Resource Planning

High Performance Computing and Enterprise Resource Planning

1247 words - 5 pages BusinessObjects Web intelligence. The issue always comes about when planning, costs, ROI, what is needed, what is not needed, when to roll it out, and training staff. The information systems department took lead and met with executives to produce a list of existing reports, and to measure the practicality of each. Another challenge was to wait until HPC was skilled and qualified with the ERP software , and its data attributes. Setting a time line

The Success of Enterprise Resource Planning

2053 words - 9 pages 2.2.1 Project Management An excellent project management includes a clear classification of goals, development of resource and work plan, and prudent tracking of project progress (Davis & Wilder, 1998; Laughlin, 1999). According to Reimers (2003), Shanks et al. (2000), & Zhang et al. (2003) all of the researches that have been conducted in China indicated that PM has a significant relationship with an ERP implementation success. Furthermore it

Project: Enterprise Resource Planning System

1718 words - 7 pages between countries , government laws and regulations. Legal risks are factors which are in relation to weak law enforcement and can lead to the loss of personal or important business information as well as piracy issues and law infringement. Conclusion The decision to implement an enterprise resource planning system (ERP) is a very beneficial decision which will solve their current systems issues and benefit IRCL in terms of product planning and

Enterprise Resource Planning and its Impact on Business Management

707 words - 3 pages Enterprise Resource Planning (ERP) has transformed how businesses around the world operate, communicate, and produce. The purpose of this paper is to explore what ERP is and how it has impacted businesses. The software can be custom fit to meet the individual needs of every type of company. It integrates business functions into a unified business process with more speed and accuracy. Management structures and corporate cultures have also

“What is an Enterprise Resource Planning System and How Does it Affect Businesses?”

646 words - 3 pages An Enterprise Resource Planning System or “ERP” is a system that synchronizes all resources of a company such as procurement, production, sales, marketing, human resources, inventory control, finance, and distribution. (Katica Simunovic, 2013) This Synchronization of resources allows companies to access one software system for all aspects of the company. The Enterprise Resource Planning software constitutes a multi- billion dollar industry that

A successful Enterprise Resource Planning (ERP) system implementation requires integration of technology with business strategy and assessing the impact of the system on all aspects of the business;

9755 words - 39 pages aspects, which are of lot of interest to many researchers. The lack of research on few aspects of successful Enterprise Resource Planning (ERP) system implementation therefore warrants that the system be comprehended and studied to weigh the influence of the system on various aspects of the business of an enterprise including distribution, manufacturing, financials, and HR, and evolve appropriate solutions that may come up as a result of


2515 words - 11 pages organization to keep an eye on its vendor’s activities. It helps managers to check that either vendor is performing their activities as per agreement such as it provides information regarding delivery, quality and quantity of products. ADVANTAGES/BENEFITS OF ENTERPRISE RESOURCE PLANNING IN SUPPLY CHAIN MANAGEMENT: As ERP is a tailor made software so to gain maximum benefits from ERP, organizations must clearly understand how various departments are

The Benefits of Private Enterprise

1452 words - 6 pages opportunities, and high productivity. Large figures of money always follow a responsible corporation. Private enterprise is the healthiest economic system because of its exact representation of the public's interests. Every individual, whether an employee, business owner, or a consumer, is keenly interested in and benefits from private enterprise. Private enterprise is of the people, by the people, and for the people (Lubell). Works Cited

The Downfalls of Egalitarianism and Television

1078 words - 4 pages equality (Themes and Cons.). George asserts that “if people start cheating laws [taking handicaps off] then the society will turn back into the dark ages” (6). Ironically, no one benefits from these misguided attempts to enforce equality (Themes and Cons.). In the story, the Handicap General, Diane Moon fires two shots at Harrison and aims the shotgun at the crowd of dancer shouting, “you [the dancers] have ten seconds to put you handicaps back on or

Comprehensive Structure and Process of Human Resource Planning

4217 words - 17 pages comprehensive structure and process of human resource planning to Widgets Unlimited's Director, which the content of this report will include the section of employing new staffs, and the section of developing original staffs. This report is provided by the senior manager of human resource management department to the managing director of Widgets Unlimited, which to provide new human resource strategy for the incoming year. This report includes academic

The Benefits and Limitations of Strategic Planning for Organizations

2411 words - 10 pages The Benefits and Limitations of Strategic Planning for Organizations "It was August of 1914 and Germany had committed virtually its entire army to the invasion of Belgium and France. Few German troops remained to defend East Prussia against the invasion of two huge Russian armies. Despite the numerical inferiority, Colonel Hoffmann, chief of the German Eighth Army staff, created an audacious strategy to surround and

Similar Essays

Enterprise Resource Planning Essay

1372 words - 6 pages 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

Enterprise Resource Planning Essay

2322 words - 10 pages While it is difficult for many firms to attain, a comprehensive understanding of all implementation components and how the firm can leverage those components is critical to successful Enterprise Resource Planning (ERP) system management. ERP enables a firm to incorporate every major business process to augment efficiency and sustain a competitive advantage; however, these benefits will not be reaped if an ineffective implementation is performed

Enterprise Resource Planning Essay

1776 words - 7 pages Enterprise Resource Planning (ERP) has become one of the information system (IS) that most organisations globally have operating within them. The discourse delivered by Damien Sullivan have highly associated his experience with ERP alongside with how the involvement of people – highlighting on the term of leadership, have steered and given impact towards the implementation of ERP within organisation. ERP have become so prevalent because it

Enterprise Resource Planning Essay

1878 words - 8 pages Enterprise Resource Planning Enterprise Resource Planning (ERP) systems integrate (or attempt to integrate) all data and processes of an organization into a unified system Definitions Rosemann (1999) described the ERP system as packaged (but customisable) software applications, which manage data from various organizational activities and provide a fully integrated solution to major organizational data management problems. They provide for