For a long time, companies and enterprises have increased and spread out of their operations and functions to be more wide and developed. Therefore, that makes companies hire more employees and pay more costs to control and deal with their functions and processes. In the 1990s, a new system has appeared in the industry as a great system that has emerged to solve many issues and work effectively in companies, so that system is Enterprise Resource Planning (Shields, 2007). ERP systems is designed to organize and integrate different functions and processes of the companies. Also it plays an important role in the expansion of the industry, especially information systems. In addition, ERP software can integrate different functions to be one complete system. The ERP system promotes standardization of a business process with ERP software codes and transactional data. Obviously, the collected information about the companies are used to support business management decisions, and the technology enables the coordination of all internal transaction processing as well.
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Implementation of ERP systems pass multiple phases of the processes that technicians face, and they take a long time to be done with them. Innovative technology is the main concept behind the implementation of the ERP. Scott and Vessey (2002) believe that 90% of ERP projects take time in adapting to the new changes (pg.3). The ERP implementation models and phases suggest that if they are not implemented there will be no uniformity and stable development in the organization (Gunasekaran .A. 2007).
Although there are prominent challenges for some problems that are faced in the ERP system implementations such as system failure, high costs and complexity in the systems, risks of customers and systems, stealing customers’ data and harming the systems, and setting frameworks for customers, technicians should overcome these challenges by applying structured approaches such as tools, layers, and models to set and solve the implementation of ERP system effectively. It is important to examine these problems in the context of the problems with the system and how it can be fixed.
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The first major issue that must be addressed concerning the implementation of ERP systems is that there could be system failures involved with ERP. According to Madni, one of the greatest dangers that is facing the institution of a system like ERP is that integration failures can occur in the translation process (2012, p. 39). Not only can this limit the willingness to implement such a system, but it is dangerous in terms of information security. System failures might lead to damages and risks in company systems when technician integrate information have already been seen. For example, in the case of FoxMeyer Drugs, they ended up using two different companies to migrate to the ERP, and ultimately lost untold amounts of customer data in the process (Gunasekaran, 2007). Depending on the project management in place during the implementation and installation of the system, these failures can take down the entire new system, costing companies millions of dollars in some instances. As a result of the potential costly nature of such systems, it is important that a company have a solution in place for anticipated problems (Wang, 2012).
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Measuring and monitoring the performance of the system workflow is important. The solution that can be offered for system failure problem is to provide more structuring tools and approaches to provide the least amount of risk as possible for the integration of the system. There are six models that also help and improve the performance of implementation of ERP system, which are initiation, adoption, adaptation, acceptance, routinization, and infusion (Gunasekaran, 2007). Also there are some ways that a company can benefit from such acts and planning, which are important factors here, as companies that anticipate errors or issues with the system implementation have an easier time overcoming them. Specifically, by using systems theory as a background, system coordination and control audits can be implemented to reduce the risk of implementation (Wang, 2012, p. 235). These methods can be applied by technicians to end up this technical issue and improve the system workflow.
Another one of the problems that are facing the companies that want to implement the ERP systems is that systems are expensive. Companies pay a lot of money for training, new systems, maintenance, and operation. According to Madni, this problem stems from the fact that the systems have to be considered cost effective in terms of the overhaul that is being offered to the companies (2012, p. 46). In other words, the money that will be spent by the company has to be found to be greater than the initial investment, which leads some companies into the risk of incomplete implementation. Gunasekaran states that the greatest issue that is creating the high costs is that the systems are inherently expensive and require the work of experts in information technology (2007, p. 47). Technology department’s workers in companies have suffered from this issue, and they can apply some solutions worth pursuing to reduce the costs.
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Even though these aspects of using an ERP system, there is one of many ways that they can still be properly implemented to reduce the cost, which is Extensible Markup Language, also known as XML. It facilities and help the communication between different systems. In addition, it is one of the most important factors in ERP system in reducing the cost of business and leading companies to automate the daily transactions (Gunasekaran, 2007). Moreover, there are many tangible benefits of using the XML such as having a much less complex language, but still retains the ability to reflect graphic information. This could be the solution to the issue of the ERP system is that the XML language has many more experts that will be able to use the system while lowering the price of adding it into the business model (Madni, 2012, p. 48). Using this particular technical tool, it helps companies to save money.
There is another final hurdle that the EPR system must be overcome if it is to assume a place in the business world. Two of the most concern aspects of ERP system are risk and safety. Because of huge data that are collected from different systems to be in ERP system, companies face challenges of protecting their customers and enhancing their trust. Hackers have significant resources that can break into the mainframe of systems like this in order to get to sensitive information. Moreover, as the system is complex, there can be damage to one part of the system that then extends to other parts of the system, causing malfunctions (Gunasekaran, 2007). This is the inherent vulnerability of the system, and it leads to the ability to hack into EPRs and steal customer information has already been seen in the case of FoxMeyer, where it is being blamed for the bankruptcy of the entire business (Scott, 2008). It is been recognized that the fact that these data systems are not only of information for hackers, but that they also represent very tempting targets that might be subject to corporate a spy. Technicians should think about this issue carefully to prevent any attack and damage on the systems.
Setting guidelines and frameworks for protection for an ERP system is key to ensuring that security breaches don’t occur. In particular, there are frameworks that are designed to offer protection to the company’s data infrastructure. One of the suggestions for a safety framework is to limit the interoperability of the data systems so that it cannot be accessed on multiple platforms at the same time. In addition, using guidelines can guard against intrusions into the system and help to avoid damage to the overall system, as well as components of it (Madni, 2012, p. 46). This framework can be achieved with the aid of control integration of the system, allowing for segmentation of the overall bulk of the information that is to be analyzed to remain in a given location (Wang, 2012). A complete risk assessment can be ran on the system software before the migration is made, reducing the risk of data loss and providing a better risk evaluation. If technicians apply these good policies and solutions of security, they will enhance company’s security and increase safety levels to be more protected and secured of attacking.
The purpose of the ERP system is to organize and integrate different functions and process of the companies. This is done through the consolidation of numerous other subsystems which are present in the organization. The advantages that it promised to the organizations is that there will be a stable development since uniformity within the same will be imposed. Organizations were attracted to this technological innovation since it sought to provide more efficiency and cost-cutting solutions for their problems. The shift of the organization towards the implementation of information systems in their activities made ERP ideal. This ought to provide them competitive advantage in the industries or sectors that they are in. However, there were problems which turned around the reputation of the ERP systems among the organizations. In addition, those which implemented this system struggled adapting to the new technology. Not only did the flaws on the system exposed them to financial losses, it also damaged the reputation of the company.
The reason why EPR systems can be considered controversial was due to the fact that they need to be carefully monitored to ensure that the system is secure. This contravenes the very purpose of cost-efficient advantages that it should provide for the company. The reality is that, more individuals are required by the system to carefully monitor it from time to time in order to prevent any lapses in the system. It is important to note that this can be taken care of with the help of an information technology specialist and a systems manager, both of which could make the process simpler and better for the company. This way, the problems on the system will be prevented most especially during the tumultuous period of change and adaptation of the organization to the new systems. As time goes by, the usage of the ERP system will be very fluid that the aid of the IT professionals may be minimally required if not totally unnecessary.
Large amounts of data within a company are needed to be successfully analyzed. Today, the ERP system serves a vital role on the fluidity of the process of the organizations most especially on businesses which generate profit. Cost-efficiency has been the major advantage that the ERP system provides to the organizations which enable the latter to utilize their resources to the other aspects of business. To continue this trend and to prevent any problems on the ERP system, the organizations should invest heavily on employing an excellent IT specialist who will maintain the system in order to ascertain that everything is in place. Further, the developers of the system should derive experiences from the past problems that the problem encountered in an organizational context for the purpose of preventing its recurrence.