Assessing ERP Software
Supply chain planning vendors lost a lot of market share both due to the decrease in the market size with the economic downturn and the increase in ERP software share in the market.
For instance, SAP had given high importance on developing and improving the supply chain modules developed for different industries.
The most important development in SAP is the NetWeaver which is an integration platform that enables the integration and coordination of both SAP and non-SAP applications.
Most of the ERP vendors have still have weaknesses in some types of applications or integration and in order to deal with this problem they have established partnerships with other companies that provide these services to the customers.
ERP is a kind of software which enables the integration and collection of data within the enterprise in a single database.
Since ERP systems are very complex, they have some shortcomings. One of the most important drawbacks is that when a company decides on passing to ERP, all of the duplicated and misaligned data will also go with it. Moreover, ERP systems do not provide analysis on data by itself, so the main thing is to be able to use that organized and single data in management analysis efficiently. The most critical point is also the difficulty in converting the legacy paper-based system into a single program.
ERP implementation cost depends on the size of the organization, the number of users and its database. An implementation trick if possible could be going generic and using the out of box version because when the vendors come with an upgrade, it is very easy to upgrade. However, in case of customization firms should spend time in checking the suitability with their system.
ERP Purchase Decision: Influential Business and IT Factors
· Four business factors that are influential in deciding on ERP purchase are data integration, new ways of doing business, global capabilities and flexibility.
· Four IT factors on deciding ERP purchase are IT purchasing, IT cost reduction, IT expertise and IT architecture.
· IS professionals are now more reluctant to develop and maintain customized frameworks for single entities. So, they have started to implement ERP systems which are more large-scale, cross-functionally integrated, packaged systems.
· ERP implementation and consultancy costs are very expensive so vendors have some solutions to make their products easier and less costly for mid and small sized firms.
· Current view is matching the business with the software rather than vise versa so ERP will enable to reengineer the business processes. Moreover, ERP systems have best practices in mind which will be beneficial for designing business processes. In addition to these features, ERP businesses supply one single enterprise data for the enterprise since it uses a single database for all of the data.
Decision Making in the Evaluation, Selection and Implementation of ERP Systems
ERP implementation projects are strategic ones so the result of the strategy is very important for the company. The main reason is that ERP projects are very expensive and time consuming and they may lead to changes in the efficiency of the business processes.
They are expensive but the decisions on these projects are not purely financial because it affects the way the business done.
The market for ERP business is growing very rapidly and one of the triggers is the growing electronic commerce business.
There are 6 different types of decision making models which are classical, administrative, incremental, adoptive, irrational and political models. In classical model, decision markers are seeking for the best alternative that is achievable. Administrative model is looking for the alternatives that meet minimum standards. Incremental model is used for complex and uncertain problems. For irrational model, decisions are a product of organizational events. In the case of political model, politics are more important than the organizational goals.