Introduction• Enterprise resource planning (ERP) Enterprise

Resource Planning (ERP) is a software solution that integrates business functions and data into a single system to be shared within a company.

• ERP has expanded its scope in the functions such as human resources, finance and production planning .

• Moreover, in recent years ERP has incorporated other business extensions such as supply chain management and customer relationship management to become more competitive

• ERP allows different departments with diverse needs to communicate with each other by sharing the same information in a single system. ERP thus increases cooperation and interaction between all business units in an organization on this basis.

• Many companies are using information technology solutions, such as ERP systems, to manage their business processes and to integrate all the different operations in order to enhance information flow within the company as well as collaboration with partners, suppliers and customers.

How Information Flow ?• ERP uses Internet technologies to integrate

the flow of information from internal business functions as well as information from customers and suppliers.

• The key principle behind the system involves entering the data from a series of modular applications only once.

• Once stored, the data automatically triggers the update of all related information within the system.

Steps to choose a right ERP Software for your organization

Step 1-Select an experienced ERP Team

• Designate your ERP project lead, evaluation team and key stakeholders.

• The management should be fully involved in the decision as the ERP system involves nearly all the departments of the organization.

• The top management should participate in the selection of the vendor and other activities.

Step 2 – Review Your ERP Objectives

• How well defined and documented are your current and future business and application requirements?

• Do you have a documented IT Strategy and a solution architecture vision in mind?

Step 3 – Define Your Business Needs

• Your business needs should align with your corporate strategy, goals, current state, and desired future state vision.

• It is also important to define or perhaps refine your business capability requirements.

Step 4 – Qualify ERP Software Products

• Define your high-level application requirements.

• Don’t forget to research and evaluate ERP products against your software selection criteria. In addition you need to prepare for and review product demonstration(s) to assess which product(s) best meet your needs

Step 5 – Qualify ERP Implementation Service Providers

• It is important to understand and evaluate the providers’ planning, implementation and support approach and capabilities.

• This process includes checking references and finally assessing which providers you want to do business with.

Step 6 – Select Your ERP Solution Provider

• Choose the ERP solution that best meets your current and expected future needs.

Step 7 – Launch your new ERP project

• While going through the ERP software selection, the management team should keep the time frame required for implementation, cost of the implementation and customization in mind.

• The implementation requires a lot of time, money and effort, so the management team should know how to select an ERP system correctly.

• If the ERP system is a good match for your organization, it can provide many benefits, such as helping to increase the overall productivity of your organization.

Biggest Challenges/Difficulties When Implementing ERP

• Most multinational firms are using ERP and more small and midsize companies have begun to adopt ERP. Despite ERP’s promises to benefit companies and a substantial capital investment, not all ERP implementations have successful outcomes.

• The literature indicates that ERP implementations have sometimes failed to achieve the organization’s targets and desired outcomes. Much of the research reported that the failure of ERP implementations was not caused by the ERP software itself, but rather by a high degree of complexity from the massive changes ERP causes in organizations

• The major problems of ERP implementation are not technologically related issues such as technological complexity, compatibility, standardization, etc. but mostly (about) organization and human related issues like resistance to change, organizational culture, incompatible business processes, project mismanagement, top management commitment.

• Since ERP implementation inevitably causes organizational changes, it requires the engagement of senior management from across the organization who is able to resolve conflicts. Without the commitment of senior management, ERP implementation has a high risk of failure.

Top management commitment and support

• The composition of team members plays a crucial role in ERP implementation.

• If a project team does not clearly understand the changes in its organizational structure, strategies, and processes from ERP implementation, it will not be in a position to benefit from ERP’s competitive advantage.

• In order to best implement ERP, project team members should be selected with a balance between members with business experience within the organization and external experts with specialties in ERP.

• “a lack of proper understanding of the project needs and the inability to provide leadership and guidance to the project” are the main factors when ERP implementation fails. Thus, effective project management should define clear project objectives, develop a work and resource plan, and carefully track the project’s progress.

Project management

Type, size, and scope

• Say a company has decided for many reasons to launch a managerial information system implementation project.

• The very first question that managers will face is what type, size, and scope of the future system they actually require and how to choose the most suitable solution among the hundreds offered on the market.

Technical issues

• Another set of implementation issues is related to the technical part of the project, and covers the servers and workstations to be revised and probably the new and modern ones to be ordered, purchased, and replaced.

• The internal network also has to be analyzed and modernized if required; the speed and bandwidth of the existing Internet access should be taken into consideration.

• If these questions are underestimated, they can dramatically impact the overall result of the project and easily poison the first few weeks or even months of using a new system with slow performance, resulting in a slackening of the existing pace of business.

Data quality issues

• Basically, the problem is that old data that have been used and stored for years can for many reasons appear incorrect in the new ERP reality.

Psychological issues-Accepting the change.ERP implementation may cause changes that lead to resistance among employees. Due to a limited knowledge of formalized business processes and ERP systems, as well as work overload during the implementation process, users were resistant to change.

Lack of Training Lack of end-user training increases risks by creating confusion and inaccuracy, thereby decreasing user satisfaction and the credibility of the system. Due to the complexity of the integrated ERP system, end user training is essential for a robust understanding of how the system works and how to use it.

Risk is associated with people resources

• If the company’s IT professionals are familiar with the application-specific ERP modules, then the probability of successful implementation is enhanced. Insufficient training and re-skilling of the staff and failure to efficiently mix internal and external expertise raise the risks of project failure.

Poor Quality of testing

• Due to the over-tight(too-tight) project schedule and insufficient knowledge in testing ERP systems, the test is conducted in a rush and is of low quality.