ERP Implementation: Risky move?
Lately our class readings were based on the different IT systems a company can implement in order to support its business processes. Among these applications, I was fascinated by the Enterprise Resource Planning (ERP). As the CIO’s magazine perfectly defined it, an “ERP system attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different departments’ particular needs”. The goal of the ERP system is to increase the efficiency of the business and save costs. This quality of the ERP system should make its attractive to companies, but yet some businesses are skeptical about its implementation. According to Gartner, 75% of all ERP projects fail. The implementation of ERP project represents a real dilemma for business’ executives. They are many confusions surrounding the configuration of the ERP system which lead to the failure of the project. Those confusions included the choice of the vendor, deciding whether you should buy the application and customize it, or worse, changing your business process to adjust it to the new system. Also, the implementation of ERP system involves the risk of running over budget, lack of transparency in the process, and employees might not be able to adapt to the new system in a timely manner. The problem with ERP is that there is no uniform business rules or global best practices that company can use to guide them in their endeavor. Executives have to make the right strategic decisions with less clarity regarding the outcome, otherwise the cost saving project can quickly turn to a cost center.