Enterprise Resource Planning Flashcards
What are ERP Systems?
Commercial software packages that integrate all the information throughout an organisation (Graph in Word Sheet)
How is ERP different from standalone applications?
o ERP is a packaged system
- Vendors have to satisfy a many different customer needs & requirements to justify their investment
- Developers are separated from the users
o Disconnect between organisation’s info & process requirements & the solution offered by ERP package
- Standalone applications are developed to fit the process of the organisation
o Large scale of ERP
- With ERP the logic of the application may conflict with the logic of the organisation
What are the problems associated with standalone systems and how do ERP systems resolve these issues?
o Standalone systems can lead to a fragmented business bc of fragmented systems
- Disruption of the flow of information
- Conversion between different applications
ERP: -> integrates data & applications by replacing old, fragmented legacy systems
What is the impact of ERP systems on the economic performance of adopters?
o late-stage adopters experienced lower financial performance leading up to the time of their adoption -> late-adopters performed worse compared to early-adopters before the implementation
o provides empirical evidence to support the argument that early-stage adopters of technologies do so in an effort to gain or maintain competitive advantage through innovation, whereas late-stage adopters tend to be under-performers who are susceptible to institutional pressures
o it provides evidence that late-stage adopters may benefit more from ERP systems than early-stage adopters
What are ‘islands’ of automation? Which problems are associated with these standalone systems?
o Islands of automation is an automated subsystem not integrated with other systems/subsystems with which it interacts
- Lack of transparency
- Lack of connection
- Increased chance of errors
- Time-consuming
- Delayed service -> unsatisfied customers
How do ERP systems solve the problems of standalone systems?
- avoid duplication of information
- minimize the errors by avoiding manual entry
- helps the employees develop their efficiency and skill as they learn only one application thoroughly instead of many.
- increase productivity
- help to get complete and accurate reports quickly and easily
- save time
Why are ERP systems so difficult to implement?
- Complexity -> enormous technical challenge
- Data migration/scale
- Large investment of time, money & expertise
- Needs strong change management
- Business process re-engineering might be necessary
How can you assess whether it’s worthwhile to invest in ERP technology?
- How might enterprise systems strengthen our competitive advantage?
- How might ES erode our competitive advantage?
- What will ES’ effect be on the organisation & culture?
- Do we need to extend the system across all functions or are certain modules enough?
- Would it be better to roll out the system globally or restrict it to certain regions?
- Are there other better-suited alternatives?
Should companies aim for early adoption of ERP or is this an investment than can be postponed?
- Depends on their position in the market -> as a market leader and with the right implementation capabilities it might be a wise investment -> shouldn’t be a rash decision
- Urgin, Morris, & Ott show that for low performance firms, it might be better to wait with the implementation
- Not likely to have the necessary capabilities
- Able to reap late-mover advantages of lower risk & successful examples
What are problems of ERP implementation?
o Packacked software:
- ERP software is developed for a market, not an organization
o Complexity:
- ERP implementation requires the integration of data, progresses and operations throughout the enterprise
o System Adaption:
- ERP systems need to be changed to fit existing or reengineered business processes
- Organization Adaption:
- Organization needs to be changed to fit the ERP system
What are the customization choices?
o Technical customization:
- Module Selection
- Table Configuration
- Code Modification
o Process customization:
- No change
- Incremental change
- Radical change
