By Mary Sumner.
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Extra resources for Enterprise resource planning
Some organizations decide to maintain their legacy systems and add ERP modules to support specific functions, such as Financial Accounting and Customer Relationship Management (CRM). Though this approach is cost-effective compared with a full-scale ERP implementation, it deprives the organization of the benefits of an integrated ERP that supports multiple business functions, and it leads to the maintenance of legacy and ERP systems. The one advantage of this approach is that it disrupts the organization less because users do not need to accept changes in business procedures.
One of the fundamental design decisions in implementing an ERP package is whether to re-engineer the organization’s business processes to fit the software or to customize the software to fit the organization’s business practices. PLANNING: MAKING THE BUSINESS CASE FOR ERP The business justifications for ERP include tangible and intangible benefits, including inventory reduction, operating cost reductions, overdue accounts collection, process improvement, and reduction in cycle times (Ross, Vitale, and Willcocks, 2003).
One risk assessment model proposes that at the beginning of each phase of the project, project managers should conduct a risk analysis to determine what might go wrong and what strategies will be used if problems occur. Having a plan of action and external resources available at the outset of the each project phase can minimize the implementation risk. ◆ SUMMARY In ERP systems development, the project team specifies the functions to be supported by the ERP package and has the choice of re-designing the organization’s business processes to fit the software or customizing the software.