Dissertation: Enterprise Resource Planning

By | April 28, 2011

Dissertation

1.1 Introduction

Enterprise Resource Planning software or simply ERP have brought in new meaning to how work is conducted within enterprises. An ERP is an integrated system which makes it possible for various departments within an organization to connect to each other, making it possible for information and data of the entire organization to be accessible from anywhere in the organization. ERP also enables the integration of data for separate applications into a single database which makes it easier for administrator to synchronize, maintain and control the access across the organization while also significantly reducing the IT infrastructure cost.

Though the benefits of ERPs have been reaped by large organizations for years now, the advances in research and technology and reduction overall development cost has allowed Small and Medium Enterprises (SMEs) to gain access to ERPs as well. Hence, the SMEs who have successfully automated their processes through ERPs have seen a quantum leap in their progress.

Some of the key consideration while evaluating and selecting the ERP software are scalability, vendor management, functionality offered by the ERP, service reliability and support. However, it is equally important to consider technical aspects of ERPs as well and how they will affect the organization as consideration of such aspects would prevent the cost of ownership from spiralling (Anderson, Nilson and Rhodes 2009).

1.2 The need for Customizability in ERPs

Businesses make substantial investment to acquire and implement ERP systems. However, even when an ERP system is up and running, the cost of the system continues to grow. This is because of the fact that processes and components of a business do not remain the same with time. Businesses grow and change through diversifying or consolidating their operations. They can acquire new businesses and divest themselves of others. Furthermore, reporting requirements can also changes as result of regulatory requirement change or as the businesses cross border.  In a research carried out by CFO Research Services, 80% of the executives of medium enterprises which had implemented ERP reported that they had customized their ERP system either moderately or extensively in order to keep their system up to data with their business requirements. These customization included addition of functionality or modules, integration or consolidation of different systems and application and even total rewrite of existing ERP applications. One third of the respondent even reported that their companies have re-configured their entire ERP system, which entailed system-wide modifications while 17% said that they had to re-implement their existing ERP as the changes required were so large that the modification could not be done without a reinstallation (CFO Research Services, 2009).

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