Management Age of IT: ERP

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//ERP implementation has been one of the most important parts of an organization in this competitive scenario for the achievement of competitive advantage over others. There are enormous benefits of implementing ERP system. But, at the same time, there are certain disadvantages as well. The following series discusses about the payoffs in the implementation of an ERP system and also includes a brief discussion on the various effects that such implementation has on the various departments of the organization. It also includes a brief description about a company, which has recently implemented an ERP system//.

Although the implementation of ERP system brings in lots of advantages for the organization implementing it, there are various things that the organization has to forgo for such implementation. One of the major payoffs in the implementation of ERP system is that the organization needs to incur huge cost for such implementation. In addition to this, it is time consuming as well (Vaman, 2007).The major expenses that the organization needs to incur in such implementation is on the hardware and implementation of consulting services. The expenses on hardware, training and implementation services amount to 300 to 500 percent of the amount that the company spends on the software. In addition to this, the implementation process has become a challenging task for the companies as there are various obstacles that the company needs to undergo during such process of ERP implementation. These challenges include scheduling, training, system utilization, budget and change resistance from the employees of the organization. All these challenges in the implementation of ERP system, makes the process a cumbersome task for the organization implementing it (Inka, 2008).

The implementation of ERP system in an organization requires integration of all the departments and functions into a single computer system so that the particular needs of different departments can be served in an effective manner (Pour, 2006). The various departments that are affected by the implementation of ERP system include manufacturing, logistics, warehousing, information technology, accounting, marketing, human resources and strategic department. The implementation process has its effect on all such departments of the organization. The typical time frame required for the implementation of ERP system depends upon the number of ERP modules to be implemented and also on the number of different organizational locations where such system needs to be implemented. However, the time frame for such implementation should range from one to four years (Reynolds, 2009).

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