ERP (Enterprise Resource Planning)
The emergence of the Internet, the evolution of customer requirements, the pressure to accelerate business processes, And the need to build more collaborative relationships with key suppliers and business partners are driving all organizations toward ERP solutions. So, what is ERP?
Enterprise resource planning (ERP) is defined as an “information system package that integrates the information-based process of working within and within an organization”
Traditional stand-alone applications for specific users. Developed, with limited functionality, and isolated from other applications. In contrast, ERP is a business tool that aggregates all the applications required by an organization and connects that organization to other businesses in the form of a network. It usually deals with multiple modules such as financial modules, distribution module, or production module. Today, ERP has added new functions such as product data management, supply chain management, warehouse management, and electronic commerce. Thus, Enterprise Resource Planning opens a window of opportunity for businesses to compete globally, respond to competitive pressures, and increase revenue.
ERP features and core operations:
ERP facilitates an integrated information system across the company covering all functional areas such as manufacturing, sales, and distribution, payments, receipt publishing, inventory, accounts, human resources, purchases.
– ERP performs core business activities and enhances customer service satisfaction.
– ERP facilitates the flow of information across different parts or departments of the organization.
– ERP bridges the gap between business partners so that collaboration continues.
– ERP is an excellent solution for better project management.
– ERP is built as an open system architecture, meaning it allows the automatic introduction of the latest technologies like Electronic Data Interchange, Electronic Funds Transfer, Internet, Intranet, Video Conferencing, e-commerce, etc.
– ERP not only meets the company’s current needs but also provides an opportunity to improve and enhance the business process continuously.
– ERP provides business intelligence tools such as Dixon Support Systems (DSS), Executive Information Systems (EIS), Data Mining, Reporting, and Early Warning Systems (Robots) to enable people to make better decisions. And thus improve your business process.
– The ERP traces a wide range of events in an organization and plans future activities based on those events.
ERP driving forces
1. The need to increase the efficiency of the supply chain.
2. The need to increase consumer access to products or services.
3- Need to reduce operation costs.
4. Need to respond faster and flexibly to a change and manage the market place.
Global Enterprise Resource Planning implementation:
Historically, most national and international companies have managed their systems on a regional basis, as there was no solution that was universally acceptable.
In today’s dynamic business environment, organizations need to be globally competitive. The key to success is through customer satisfaction, understanding customer needs, and providing quality goods and services in the shortest possible time. To support global Outlook, many firms implement or implement Enterprise Resource Planning (ERP) systems to improve the level of coordination between the same firm’s national institutions and business partners. I am, However, to achieve this level of synergy, a global market strategy, a common IT infrastructure, and business processes must be in place.
An analysis of past global ERP projects highlights the importance of aligning organizational structures with business processes and business strategies to compete in the international market. ‘Threads’ is a great example of an international company that changed its legacy system from ERP. Threads had a national organizational structure that was country-by-country.
In order to achieve global ‘threads,’ it has been decided that it is time to change the company from a local to international. Therefore, make Europe a market for your business and ensure competitiveness by focusing on quality, price, and customer service. The structure and support of the organization are shown in the global ERP .
Traditional ERP systems require infrastructure computers such as modern and expensive information technology. Nowadays, with the development of IT and reduction in computers’ cost, it is possible to think of an ERP system for SMEs. Besides, the power of three-tier client-server architecture and the scalable relational database management has made it easy to deploy ERP systems in multiple locations.
Implementation of ERP
Implementing an ERP project is a process that involves many steps. By following, a step-by-step approach will simplify the process and is more likely to yield better results. The following are common steps involved in implementing the ERP:
o Project planning
O Commercial and operational analysis including gap analysis
O Renew the business process.
O Installation and configuration
o Project team training
o Mapping business requirements
O Module configuration
A system interface
O Data change
O Customs documents
o End-user training
O acceptance test
O Implementation/audit support
in short. , The implementation of ERP can change the way an organization does business. It helps the enterprise connect to its resources, use and allocate them promptly and control them on a real-time basis. For example, in ‘threads,’ the transition from the Larasi system to the ERP system has resulted in data inefficiencies, reduced overheads, increased customer response across the firm, and increased customer service levels. It has been facilitated by implementing a common global ERP system throughout its European operations.
Key factors for ERP success
The successful implementation of the ERP project requires management to plan carefully and requires human and financial resources in place. Below is a list of the most important factors for the success of ERP.
1- Top management support:
The important factors for the ERP project’s success are the high commitment and commitment of the management. Top management roles include developing an understanding of the proposed system’s capabilities and limitations, setting goals, and communicating corporate IT strategy to all employees .
2- Project Management:
An important factor in the success of ERP is to start the project life cycle to the closing stage. The Project Manager (Prime Minister) has full responsibility and authority to plan and control the scope of the project to meet the provision within the stipulated time and budget.
3- Selection of suitable package:
Choosing the right package is an important management decision. Analyzing and evaluating the organization’s needs and processes helps to make the right choice that best suits the business environment. Careful selection of the right package results in minimal modification and successful implementation and use. On the other hand, choosing the wrong software can mean a commitment to architecture and application that is not fit for strategic organizational purpose or business operation .
4- User training and education:
Standard enforcement can be derailed by poorly trained employees who do not know how to operate the ERP system properly. The transfer of knowledge to employees is more important than the quality of the system. For this reason, companies should use consultants to conduct training sessions.
5- Business process reengineering:
Business process reengineering is a prerequisite for moving forward with the implementation of the ERP system. An in-depth study of BPR is required before taking ERP. Reengineering the business process eliminates the shortcomings of the existing system and seeks to maximize productivity through reorganization and reorganization of the organization’s human resources as well as divisions and departments.
6- Dedicated resources:
ERP is the determination of the human and financial resources required to implement the system. Failure to commit to the required resources often results in compensation in the schedule and prices.
7- Project Team Qualifications:
Another important factor in the success or failure of ERP is the skills, knowledge, and experience of the project manager and team members. The project team must work in a coordinated manner to achieve a goal. Therefore, team members need to acquire technical and business skills to complete their work.
8- Clear goals and objectives:
Setting clear goals and identifying the goals of the ERP project is the third key to success. The initial phase of any project should start with the concept of goals and possible ways to achieve them. It is important to set goals for the project before seeking top management support .
9- Ongoing Vendor Support:
Ongoing vendor support represents an important element with any software package. ERP systems need the help of an ongoing vendor to keep up to date with the latest modules and versions. In addition, vendor support provides technical support and maintenance.
10- Communication between lines:
Good communication is key to ERP’s success. Therefore, it is important to communicate effectively between the team members and the rest of the organization so that everything can be done properly.
To conclude, the implementation of ERP can be a complex and risky process if not properly managed. Organizations need to identify key issues that affect the implementation process, such as: choosing the right software package, gaining commitment and support from top management, collaborating with business partners, having the right information among team members, training employees, and informing them. All of these issues can reduce the failure of the ERP project and maximize the success of ERP implementation.