Factors that Impact on the Acceptance and Performance of ERP System
The current trend in globalisation makes it harder for products and services of various companies to compete. Due to the integration of economies in the world an organisation must provide the best services, at the same time reduce the costs of operations and degree of inventory in order to gain competitive advantage against its competitor. ERP Systems or the Enterprise Resource Planning Systems is application software that incorporates all processes and data of a company into a uniform system (2005). Over the past years with the rapid changes in technology a number of organisations have utilised information technology in order to make the tasks easier. According to (2002) a number of firms around the world have purchased application software such as the ERP Systems and managers regard the system as the most strategic platform in computing and integrating the data of the company, however ERP and the process adaptation are only efficient when the organisational fit of ERP is relatively low. In addition, in the study of (2005) discussed that ERP Systems have its significant benefits such as enhanced customer service, reduced cost of manufacturing, and better production scheduling, but the success in implementing it in China is extremely low.
For successful implementation of ERP Systems in China (2006) determined that an organisation must strategically plan its information technology capabilities, support by the management and leaders of the company, have the appropriate skills on the information technology section of the organisation, enhance the abilities of business processing and learning abilities and transform the capabilities of management.
Moreover, (2004) discussed that culture is also considered one of the most important factors in the success of the ERP systems and suggests that the national culture has an impact on the ERP system usually in developed nations and focuses on the stage of implementation.
In the implementation of the ERP system in an organisation there are 11 critical success factors and these are:
- The support of the top management- the support of the management plays an important role in the success of the ERP system if the commitment is positive as well as enthusiasm on the project most likely the workers will be motivated to do their job well.
- External expertise: the help pf the external consultants also contribute to the success of the program.
- Balanced project team: the team must include business people as well as individuals who have knowledge on information technology.
- Data accuracy: the existing systems must have an accurate data loaded and must be of high quality.
- Clear goals: the project must have clearly defined goals.
- Project management: there must be clearly defined goals.
- Change management: organisations and management must be careful in change management because the implementation of ERP involves business process changes.
- Education and training: the business and IT people involved in the project must have the technical knowledge in the ERP systems in order to ensure the success of the project.
- Presence of a champion: the project must have an individual if not a manager that advocates the benefits of the ERP systems on the company.
- Minimal customisation: customising ERP to fit the organisation must only be minimal as well as the scope of implementation of the ERP system.
- Best people full-time: the members of the project team must be focused only on the implementation of the ERP project and must be released from the other duties within the organisation.
In addition, (2002) discussed that the continuous development of the ERP Systems is regarded by a number of researchers and IT practitioners as one of the major innovation in the sector of information technology, the ERP systems integrates and streamlines the processes of the business and the associated work flows and information, it also increases the capability to incorporate with the most advanced technologies on commerce and electronics.
In the study of (2005) it revealed that ERP systems have improved the profitability of the corporations however not in the return of the stocks and the early adopters of the ERP systems have stronger improvements on profitability than others.
ERP system is an application that is beneficial to a number of firms around the world. According to (2005) the perceived benefits and gains from ERP system could be measured in two levels and these are in the enterprise level and the specific Information Technology module level.
Credit:ivythesis.typepad.com
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