ERP Implementation Of People’s Project
Task: Conduct a critical analysis on the ERP implementation of People’s project using case studies examples.
The current discussion revolves around the concept of ERP implementation. ERP systems called “Enterprise resource planning ” is a “business process management software” which allows the enterprise or the organisation to make utilization of the system with integrated applications for managing the business as well as automating various back-office works including functions related to technology, Human resources and services. The ERP software at a very basic level integrates different operational functions in to one complete system for streamlining the process as well as information across the whole organisation. The central feature for the ERP system is to enable a shared database which supports various functions utilised by different business units. In the research, ERP system defined as “People’s project” faces various issues related to business management, adequate training, employee retention, skilled resources and others. Thus these issues are well clarified using specific journals, detailed explanation. For solving these issues recommendations are also provided that will help an organisation to throw cast and positive impact after ERP implementation.
ERP is called “people’s project”. Explain with Justification
ERP projects are defined as people's project because for any organisation it the people who take responsibilities of roles and different responsibilities, tasks and decisions.
ERP projects involve true teams where everyone's actions and responsibilities do affect the ERP implementation. For any organisation, ERP project manager is the main focused part and it ultimately responsible for success and failure of ERP implementation (Chofreh et al. 2018). The team which will be centred on superior project management, accounting expertise, executive sponsorship and employee ability will help to build in the whole ERP implementation. For teams, superlative communication will be important which will provide a clear voice for conflicts, negotiations and discussion where needed. Not only that people' discipline will be maintained when focused comes to handling tasks, agreeing on strict presence and balancing the openness towards change with proper resistance when needed for.
Thus for ERP a team of people including stakeholders, ERP professionals IT team, executives, Project manager, HR and employees will be comprised of flexible and supportive implementation of ERP process. Thus, for this reason, It is called the people's Project (Jayawickrama et al. 2016).
The benefit of using ERP systems in an organisation
Eliminating duplicate data and providing data with integrity, Today ERP systems are quite critical and beneficial in managing hundreds of business, both medium and large sizes and all industries.
- It provides real-time data and information- With the implementation of ERP systems, systematic as well as the uniform flow of information and data across various departments is possible within an organisation (Mukti & Rawani 2016). With the involvement of real-time data, it allows an organisation to make better business and also ensures decisions taken are correct and complete.
- It improves collaboration- ERP systems increases organisational collaboration and also provides employees with an ability to create a big picture for industries.
- It increases the productivity for the organisation - ERP helps to eliminate the business process repetition and also reduces tedious task and makes effort for improving the implementation process towards depth.
- It provides a 360-degree view for any organisation- With the implementation of ERP system; employees don't have to stress client changes because it provides a 360-degree view about your business starting from sales, service planning, accounting, customer experience and Distribution.
- It provides simple estimation and quoting - With ERP system, quoting and reporting is done much easier and is made much customizable (Hadidi et al. 2017). With improved capabilities for reporting company can respond easily to complex data and can run their impact easily without replying to any assistance from IT.
- Improves the customer services - ERP system improves CRM application along with financials and sales and also front office duties. The CRM function is extremely important for keeping the business competitive as well as returning a good customer profitability result.
Issues related to ERP implementation within the organisation
Even though compiled with various benefits like improvement of collaboration, improving productivity and customer services, ERP system also comes with various issues and challenges that affect business to some extent - the first issue of ERP is to try working with systems and processes that are already existing and would be benefited from the integration of ERP (Meyer et al. 2017). in the organisation, ERP system is not always flexible; the company has to adapt various other processes to suit the ERP functionality. Despite having benefits, ERP Systems are not always accepted by employees and they resist change and delay the work of the team. ERP system has hug maintenance cost as well as implementation cost (Jinno et al. 2017). Thus it can be concluded that even though having many benefits, ERP system-induced issues in flexibility, integration and makes it difficult for employees to adhere to the new system.
Lack of adequate training affects ERP implementation
In Today's business Era, great potential is usually envisaged in building ERP systems for medium and small-sized enterprises. ERP system is associated with proper implementation and employee training for its crucial and successful performance.
With cloud ERP successful in the operating best solution for small business without huge investments and management cost, traditional ERP systems are associated with various challenges and make SMEs face various challenges on their adoption. As mentioned by Venkatraman & Fahd 2016, the author states various barriers are there that stops proper implementation of ERP systems in SMEs. The article mentions that “Inadequate End-user training” is another cause for unsuccessful ERP implementation where with insufficient training about ERP system can cause staff members to indulge in lack of proper understanding, and avoid resistance to change for new ERP system exiting within business processes.
Mentioned by Madanhire & Mbohwa 2016, it talks about ERP system in improving the operational efficiency. Adequate training is also a part with which employees understand the correct implementation of ERP within the business and thus promotes proper operational analysis of business and increases profits. On the other hand, there are certain issues associated with lack of adequate training. If employees will not understand how ERP system works, it will face difficulty in execution which will decrease employee productivity. Thus all are interlinked. It will affect risk management because if employees are not trained consistency will be lacked within organisation subjecting it to risk.
When any new ERP system is implemented, the first difficulty occurs is resistance to change, employees already working with old system feels fear or difficulty to change or adapt to the new system. Thus for them, proper adequate training sessions are required for making staff people understand its features and functionality which is essential. Every staff member should learn sufficiently about ERP systems to interact well with business processes. Thus lack of this training will affect business. Staff members without training lack in understanding risk and fails to avoid issues of delayed adoption, breakdowns, bugs and roadblocks (Jinno et al. 2017). Without training proper ERP aspects are not covered which are required for end-users and as a result, clear understanding lacks. It will lead to failure of ERP implementation and operational work will lack behind, thus organisational performance will be hampered. Oracle Australia implements an ERP system named as NetSuite for streamlining its employees, office functions, CRM and E-Commerce.
Thus adequate training is an important aspect for ERP implementation and mainly for people because when any new system is initiated, training improves people’s understanding of that system and helps in better execution. Lack of adequate training will prevail in issues like mismanagement, improper working, resistance to change and decrease in employee productivity.
Employee retention affects ERP implementation
The success and implementation of ERP system do lies in organisation people who are employees, theory acceptance and integration of ERP in their daily work roles within an organisation.
As employee retention is an important aspect for ERP implementation success, it also acts as an issue for the organisation in the case when employees can't accept their charging system or changing work management. From the perspective of every employee, their control over a changing situation feels weakened and diminished when management is changing, their work gets changed and every it understand becomes unfamiliar. Then it leads to destabilized morale as well as lack of employee enthusiasm within work. Employee engagement decreases which lead to poor productivity and improper implementation of ERP system (Egdair et al. 2015). This acts as a major disadvantage because when employees get disconnected mentally from their work, that behaviour towards organisational changes. This creates distrust in their work, feeling of doing less and often come across different issues and problems with peers in their workplace. Their failure to understand the new system, understand how to use its features and result in decreased sales effort and customer service. PipeCo Australia implements ERP and derives benefit from ERP developments.
Employees get indulged in poor communication, lack of collaboration and lack sense of their work stability and even job stability with new ERP implementation. Therefore they either decide to change jobs or leave their work position which causes employee turnover to increase. Thus ERP issues are related to employee retention. Disengaged employees cost during ERP implementation is much more than the cost of the system and other fees accompany. Thus employee loss and employee turnover can be direct result and consequences (Al-Hadi & Al-Shaibany 2017). When employee hesitates to adapt to a new ERP system, it hinders overall business. A partially engaged employee is considered an unofficial leader amongst organisational position. Therefore ERP system implementation affects employee retention. When an employee has not committed 100 per cent to a new ERP system, it causes employees to get disengaged and lack working interest, cause employee turnover and loss. Thus this can turn into a major issue for ERP implementation within the organisation when it comes to employee retention.
How improper project management affects ERP implementation?
An ERP system easily facilitates the information flow within the business units. ERP system allows seamless system integration and creates a proper view for the enterprise to support organisational decision making. Thus when an ERP project fails to work properly, it not affects the ERP implementation but also stops organisation from growth and survival.
As mentioned by Venkatraman & Fahd 2016, it states various challenges and success factors that are faced by Australian AMEs while implementation of ERP systems. In the implementation of traditional ERP systems, organisation do face challenges like lack of organisational leadership, lack of skilled resources, reduction of flexibility and also a competitive advantage, ineffective communication, rise of cost and also employee turnover increase. The employee is resistance to change due to various factors like stressful work, lack of communication, lack of adaptability and motivation, lack of commitment from top management and also improper project management which causes the process to get redundant and thus increases issues.
Similarly as opined by Gupta et al. 2017 it states identification of the various challenges and also their ranking within the implementation of Cloud ERP. The paper identifies critical challenges while the implementation of an ERP system within an organisation. The challenges are identified as organisational change, customisation, monitoring, business complexity legal issues, loss of technology competencies, monitoring and other issues.
There are various risks associated with ERP projects that directly or indirectly affect the organisation and also the ERP implementation. Many organisations underestimate the magnitude of the ERP project. Often during the project, IT is given ownership without being armed with capabilities or resources for execution of the project. This affects ERP implementation. Not only that project faces unexpected gaps, inadequate training and members are resistance to change that directly affect ERP implementation. Project politics like stakeholder involvement and alignment also affects the procedure (Al-Hadi & Al-Shaibany 2017). EnviCo Australian associated with contractor specialist engaged in the design, commissioning and construction facilities for private and government in Australia engages and also implements ERP system thus gets benefited from it.
Thus proper management of the project is quite required so that better implementation is done because, with poor project management, it retards ERP initiation and organisational success.
Proper management of ERP issues for positive impact on implementation
Proper management is necessary for accomplishing the end results of ERP. There are some common employee concerns which need to be addressed before the implementation of the system. Improper training of employees can lead to a humongous waste of time and efforts. For instance, Barclays Bank had arranged training for its employees due to the new ERP system installed. The bank made a major mistake in the planning of the training activities. Employees were provided with unnecessary training which did not match their job roles. Revlon the cosmetic giant faced similar issues by implementing ERP without providing adequate training to the sales department. In haste to integrate with there was no effective control resulting in millions of dollars lost in the sales process. A similar situation was faced by Vodafone where customers were not able to receive the credits for the payments made by them (Nwankpa 2019). While the integration process is dependent on proper training there also needs to be a more flexible approach to absorb any changes in the business process of the company smoothly. To mitigate and control such situations the companies before implementation need to execute basic assessments. Employee engagement is a critical step to ascertain the success of an ERP system (Gupta et al. 2018). There must be stronger group interactions and robust team connections. The team to be trained must be actively addressed to capture the mental stigma which is preventing them from wholeheartedly adopting the process of ERP implementation. There must be effective communication at all levels to ensure that employees are easy and enthusiastic with respect to the changes in the system. Strategic planning needs to be designed in order to link the job roles of the employees with that of the training being provided to them.
The impacts of the new system need to be clearly explained to affirm the participation of employees. The manner in which the new system will affect the current responsibilities should be clearly outlined by the company. Rather than emphasize the benefits of the new system the drawbacks of the preceding systems must be communicated to employees. The succinct flow of information and the reduced efforts to derive comprehensive reports from the system must be elucidated for deeper participation. Apart from the training provided to employees, there must be rewards and incentives to make them feel inspired to perform better in the next level of integration. One on one sessions or focus group meetings must be held at regular intervals to assure that employees are not facing any difficulties regarding the execution of daily activities. HR can use the ERP tools to determine and track the progress made by the employees (Al-Sabri, Al-Mashari & Chikh 2019). The desired outcomes must be defined in the initial planning stages to eliminate ambiguity. There must be incremental and perpetual training sessions to assure that employees are able to absorb the training and apply it in their daily activities.
How lack of skilled resources affect ERP
Enterprise Resource Planning system is implemented to boost the strategic, organisational, technological, infrastructural or managerial aspect of the firm. To do so there is a need to have improved and integrated skilled resources which enables to forecast the predicting positive changes as determined by the organisation.
Skilled resources include trained peoples with competent capacities, field experience and vision to work to reform the developmental paradigms of the organisation. ERP systems must align with updated technological embedment, issue-resolution strategies and effective human resource planning. The goal of ERP is to maintain the value of the company by integrating improved communication and efficacy by the introduction of standardised IT operations and software that modulate the chain of processes within an enterprise. According to researchers, it has been found that employees who do not have any prior knowledge or experience regarding the objectives of a project seem to hamper the overall outcome which affects the ERP system to incline (Haleem & Kevin 2018). Training enables the employee to acquire appropriate potentials for withstanding the demands of the organisation which is linked with the successful ERP implementation. An employee with deeply committed personal and professional goals, mutual cooperativeness and sense of achievement positively influences the ERP system. For effective functioning of the ERP system, there is a requirement of human skills and resources which consists of soft skills, technical skills, business skills, team skills and conceptual skills. Key factors like analytic thinking, creative exploration, decision making, communication, criticism tolerance and reasoning skills help to integrate a person with his profession. Poor knowledge and inhibitory personality lead to risks associated with poor management. Several investigations and researchers have focused on the skill sets of the employee which specifically determines the successful ERP implementation (Umar et al. 2016). It can be witnessed in studies and articles that evaluate the key skills like soft skills, communication skills, positive attitude, flexibility and team spiritedness which highlight the successfulness of an ERP system. Whenever a firm undergoes ERP implementation there are issues which actively outgrows which are unavoidable and evident. Projects that add values seem to have complex and intricate mechanisms of change management that seem to affect the normal functioning. A poor skill set of the employee not only effects the department but rather disturbs the internal environmental culture of the organisation which in turn affects the equilibrium and human resources protocols (Umar et al. 2016). The Hershey’s Company has recently faced with a failed technological shatter with the ERP system that had resulted in an inability to deliver 100 million dollars worth of products. Lack of effective strategic plans and management proves into failed ventures. To mitigate the issues of poor leadership and employee retention there is a need to activate human resources management, CRM (Customer relationship management) and change management. Qualities which attract sales must be welcomed for better opportunities and challenges which ultimately help to improve the standard of the organisation.
Several factors influence the proper modulation of the ERP system and ERP implementation which require continuous supervision and evaluation by the managers to ensure productivity and sales.
Therefore it can be concluded that the ERP system helps an organisation to provide visibility in their core business and also optimizes the systems via superior resource reporting and tracking, database management as well as overall improved IT systems. It helps business to expand without any IT interactions and staffing cost. It helps businesses to make smarter choices, serve their customers best and work very efficiently for the overall automating process as well as workflows. In this research, issues have been identified as people's issues like business management, employee retention issues, lack of skilled resources and acceptance fear of the new system. Recommendations are also provided to these issues which can help to create a positive impact on ERP implementation.
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