ERP Systems: Advantages ERP Systems: Advantages vs. Disadvantages and How vs. Disadvantages and How
to Implementto Implement
BAA 607: Management Info SystemsBAA 607: Management Info SystemsProfessor: Dr. Arthur RutledgeProfessor: Dr. Arthur Rutledge
Temeka NanceTemeka Nance
What is ERP?What is ERP?
Enterprise Resource Planning is an Enterprise Resource Planning is an integrated Information System used by integrated Information System used by companies to streamline and incorporate companies to streamline and incorporate business units across the organization:business units across the organization:
• SalesSales• FinanceFinance• ProductionProduction• Customer Relationship ManagementCustomer Relationship Management• Human ResourcesHuman Resources
ERP TimelineERP Timeline
Artificial Intelligence
Database
Fuzzy Logic
Unit / division level
Company level
Inter-company level
MRPMRP II
ERP
Technology level
Utilization level
ERP system development
ERP II
>1970>1980
>1990>2000
ERP AdvantagesERP Advantages
Enhanced communicationEnhanced communication Improved accuracy of financials and Improved accuracy of financials and
forecasting modelsforecasting models Enables exchange of information Enables exchange of information
throughout Supply chainthroughout Supply chain Reduces cost of operationsReduces cost of operations Enables better decision makingEnables better decision making
ERP DisadvantagesERP Disadvantages
Large financial investment for setup, Large financial investment for setup, implementation, and maintenanceimplementation, and maintenance
Lengthy and time consuming Lengthy and time consuming implementationimplementation
High level of expertise needed for High level of expertise needed for implementationimplementation
How to Implement an ERPHow to Implement an ERP
Senior management must have a plan Senior management must have a plan Decide organizational goalsDecide organizational goals Hire an ERP ConsultantHire an ERP Consultant IT InfrastructureIT Infrastructure Update business processesUpdate business processes GO LIVE and continue testing/debuggingGO LIVE and continue testing/debugging
Characteristics of a Successful ERPCharacteristics of a Successful ERP
Factors that determine ERP system effectiveness:• Technology level• Process design• Users’ acceptance
ConclusionsConclusions
ERP systems gives firms a strategic ERP systems gives firms a strategic advantage and improves decision advantage and improves decision making making
Management must set realistic goalsManagement must set realistic goals Find people who understand the Find people who understand the
business processes and its business processes and its technologytechnology
Make sure adequate IT architecture Make sure adequate IT architecture and software platforms are usedand software platforms are used