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Ecommerce InformationCauses of ERP Failures
by:
Bruce Zhang
ERP is the form of Enterprise Resource Planning ( http://www.sysoptima.com/erp/erp_definition.php ). Multi-module ERP software system integrates business activities across various functional departments, from product planning, parts purchasing, inventory control, product distribution, to order tracking. ERP has changed
the way multi-billion dollar corporations conduct their businesses. Booming implementation of ERP systems could save tens of millions of dollars and increase worker
satisfactions, client satisfactions and sustain competitive advantages in every-changing marketplace. Corporate executives are often at a loss by the stories that how esteemed corporations (Hershey Foods, etc.) have failing miserably and lost ten of millions of dollars in their ERP endures.
The failures of ERP projects are preventable if we can identify the common causes of the failures regardless the companies and industries that implement them.
An ERP system is the combination of ERP software, the business processes that the ERP transforms, the users of the ERP system, and the computer systems that run the ERP applications. The failures of a ERP project is often the result of the failures in one or more of those four components. The failures in computer systems (hardware and operational systems) are more easier to identify and to fix, so we'll examine the failures in software system implementation, business process and user acceptance.
Failure of ERP Software system Implementation
Module-based ERP software system ( http://www.sysoptima.com/erp/erp_modules.php ) is the core of ERP systems. Most ERP projects involve significant figure of customizations. Prepackaged ERP software system modules have build-in practicality
that activity in a standard and simplified enterprise environment. However, every organization is unique in data requirements and business processes. It is the customizations that transform prepackaged ERP software system into ERP software system that meets organizations' individual business processes and operations. Long and big-ticket customization efforts often result the pass of release point and budget overrun. Customizations may do the software system more fragile and harder to maintain once
it finally goes to production. Major changes may be required in the later stage of the implementation as a result of incomplete requirements and power struggles inside
organizations
The integration of ERP systems with the IT infrastructures besides challenges ERP project teams. The use of appropriate implementation methodologies can often do or break a ERP project.
Failure of Accommodating Evolution of Business Processes
According to Anthony, R. A, business processes fall into three levels - strategic planning, management control and operational control. Organizations endlessly realine their business processes of all levels in response to the ever-changing market environment. Galore ERP systems aren't flexible enough to accommodate evolution of business processes. galore ERP system need a major overhaul in every a couple of years.
Failure of User Acceptance
The users of ERP systems are employees of the organizations at all levels. ERP projects normally modify the company's business processes which create extra employment for employees who use them initially. They may not think that the work flow embedded in the software system are better than the ones they presently
use. In progress end-user involvement and training may ease the difficult in organization's adaptation of new systems and new business processes.
Just about the author:
Bruce Zhang has over 10 years experiences in developing and implementing ecommerce and ebusiness systems in various industries. He has created a news collector http://www.sysoptima.com/newsbot/erp.phpthat mechanically
extracts ERP news and new articles from over 50 sources daily to help corporate executives, IT professionals and consultants to support up with the latest development in enterprise software system market. The website offers a cognition base http://www.sysoptima.com/erp/for understanding ERP software system from a systems perspective.
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