CH12HW 1. What trade-offs are involved in the decision to purchase an ERP softwa
ID: 355284 • Letter: C
Question
CH12HW
1. What trade-offs are involved in the decision to purchase an ERP software package?
2. Who in the organization needs to be involved in designing and implementing MRP II? Who needs to be involved in the decision to purchase an ERP system? Who needs to be trained to use ERP?
3. To what extent has technology such as ERP software improved the ability to manage a business organization? How important are each of the following considerations?
a. Ease of use
b. Complete integration
c. Reliability
Explanation / Answer
An ERP software package offers the advantage of providing greater and real time visibility of processes across the organization, thereby enabing the decision making and reporting processes more effective and efficient. The uniformity of system eliminates needs to purchase department wise softwares and gaps between them. The ERP enables coherence between different functions of the organization, enabling seamless transitions, saving time and cost. As it is a modular system, organization can choose between different modules according to its need. It offers greater security of data and other vital information. Being a centralised system, it helps to locate the faults and shortcomings easily. ERP enables the organization to conduct e business, by integrating the teams and business units spread across the globe.
However, ERP has its own disadvantages in terms of high cost, time of implementation, difficulty in managing the change process to name a few. The cost of ERP is high, and bigger businesses only can justify it. It would not be feasible for smaller businesses to afford the cost of ERP. Anothe factor is the commitment of users and enablers to the ERP, which is essential for its success. Coosing the right ERP is also crucial, because needs of every organization is different from the others. A wrong product may play havoc withe the business. If a system does not suit the business, migration to the other may prove to be costly and difficult affair.
2. MRP II system can be purchased and implemented after consultation with user departments like production, supply partners, finance, transportation and logistics and warehousing.
ERP needs to involve supply chain partners, production, finance. HR, sales, distribution, IT and Operations ( Warehiusing and logistics) people to select a system that meets their needs.
Users like front and back office staff, sales people, HR executives, Warehouse incharge, materials manager, supply chain managers and executives, finance managers and staff need to be trained in their repective domains, while managers working in cross functional roles need to be expert in different modules.
3. Ease of use is esential because most of the users are not technically qualified. Easy to operate system is likely to ease their work and increase their efficiency without risk of committing mistakes.
Integration is the essential requirement of ERP. This is why this system is needed. seamless integration ensures that the real purpose of installing the ERP is met. It provides visibility across the departments of organisation, makes transitions easier, reduces communication gaps and makes processes more efficient and on time.
ERP should be bankable so that it can be used to find out areas of concern, supports complex business processes, thereby making the outcome reliable. A strong and reliable system provides assurance against data breach, process failures and ambiguous situations where process visibility is important.