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

Questions?Questions?