MIS2101 Section 702 – Amy Lavin – Spring 2014

Midsize Insider: ERP Software Implemenation is Growing More Difficult

This article discusses a survey conducted by Panorama Consulting about companies with more than an annual revenue of $25 million about its use and experience of its ERP systems over the time period of January 2013 to February 2014  (Drew. 2014).  The article states that the companies’ expectations did not fully exceed their desired benefits, and that the increase in costs and scheduling concerns also contributed to the companies not fully utilizing or experiencing all that the ERPs had to offer (Drew, 2014).

1.  One issue that the article brought up is employee cooperation in utilizing the ERP, and how this can be a challenge for midsize businesses.  Do you think the benefits of using an ERP outweigh the costs and time of training employees to use these systems, particularly in a midsize business?

2.  The article discusses the level of dissatisfaction that companies may have with their ERP system, particularly by going over budget on projects.  What do you think the companies should do to ensure this kind of issue with budgeting does not occur when utilizing the ERP project, or do you think that this is the nature of the software?

3.  The article does state “that this survey was conducted by an ERP consulting company, which stands to benefit if ERP software implementation is considered too difficult for IT to handle,” while acknowledging that ERP implementation can be challenging.  Based on what you read in the chapter and any real life experience, do you believe that ERP systems may be too challenging for a business, or is it a matter of proper training and budgeting?

Link to article:  http://midsizeinsider.com/en-us/article/erp-software-implementation-is-growing-m

7 Responses to Midsize Insider: ERP Software Implemenation is Growing More Difficult

  • The benefits of using ERP can be good or not so good depending how you look at it. It is a good thing to integrate a database that is centralized to use company-wide instead of various stand-alone systems. However, it’s not so good if it seems too big, costly, time consuming, and their IT is unable to handle it, then midsize companies may have to turn to other alternatives.
    To ensure that implementing their ERP project does not go over budget a research of the cost of other companies that utilize it. It has to be a well thought out project that should be researched and tested and include problems that may occur and projections on how much it would cost to fix. They also need to make sure that they set out to include all aspects of what the system needs to do. This is where including employees that use these systems and performs the tasks come in. Most of these decisions come from CEOs that normally do not use such systems on a daily basis. Also, as I mentioned regarding the article about CIOs, they should definitely be included on these decisions.

    I do not think that using ERP systems are too challenging for a business, it is just a matter of proper training and budgeting.

  • 1. One issue that the article brought up is employee cooperation in utilizing the ERP, and how this can be a challenge for midsize businesses. Do you think the benefits of using an ERP outweigh the costs and time of training employees to use these systems, particularly in a midsize business?
    A lot of people don’t do well with big changes in a short amount of time. Since midsized companies need to learn and change to ERP all at one time maybe some pre-training and meetings to review would help. It is important to keep the employees comfortable before just introducing a system that might over whelm them.

    2. The article discusses the level of dissatisfaction that companies may have with their ERP system, particularly by going over budget on projects. What do you think the companies should do to ensure this kind of issue with budgeting does not occur when utilizing the ERP project, or do you think that this is the nature of the software?
    I think that budget is very important when implementing change in a company. Some companies might decline the cost because of limited funds. It is important to know how much they will have to produce in order to run smoothly. My opinion is that it is always better to over budget than under budget.

    3. The article does state “that this survey was conducted by an ERP consulting company, which stands to benefit if ERP software implementation is considered too difficult for IT to handle,” while acknowledging that ERP implementation can be challenging. Based on what you read in the chapter and any real life experience, do you believe that ERP systems may be too challenging for a business, or is it a matter of proper training and budgeting.
    I think it depends on the company but I would say it is a combination of everything. If you have enough money to do extensive training it would be extremely beneficial. You also need knowledgeable people with in the company who might be able to help with the technology transition.

  • I believe that the benefits of using an ERP outweigh the costs and time of training employees even for midsize companies. There are not many companies out there that would not benefit from better analyzed data. These mid sized companies may not need the most elaborate or expensive ERP system, but could definitely benefit from using the system.

    I think that as a general rule, CEO’s and CIO’s will be overly optimistic when establishing a time frame and budget for rolling out an ERP system because it is difficult to foresee what issues employees will have with the system. Theoretically the system may be the best option for the company and the CEO and CIO may fully understand the system. However, if the employees have trouble adapting to the new system it will cause delays and extra training expenses will accumulate.

    From personal experience, I have worked for a major pharmaceutical company that had a large percentage of employees who could not use the SAP system. There were a select few employees in each department that were known as “power users” who had extensive training with the system, where as, some employees had very basic knowledge that limited their productivity.

  • 1. Overtime the benefits do outweigh the costs and time but only if the business has the money to make the change. Changes such as these can exceed the budget pretty quickly like the chapter indicated.

    2. It is the nature of the software since it’s made in a basic form to be attractive to many different companies. Businesses really need to start investigating how much companies usually go over budget and then pad it more.
    3. It’s all a matter of proper training and budgeting. Most companies still neglect to give proper training to front line workers. This can cause budgets to be blown when mistakes are made. They also forget to get the input of the front line sooner than later, which can raise costs when changes to the design have to be made.

  • I think the benefits of using an ERP will normally outweigh the costs. This is true for a business regardless of its size, a midsized business can use them to ramp up production, increase efficiency, and compete against their larger counterparts, taking advantage of their smaller size to remain more nimble and faster at adapting to changes in the business environment.
    I think one of the biggest issues companies run into is that they ignore how an ERP will impact every facet of the business. They tend to focus on the areas that it’s intended to improve the business, without realizing it will impact other areas of the company, which slows down implementation, and increases costs.
    I think the primary issues with ERPs are related to training. I think far too often a company will implement a new system and just give the staff a cursory training program, then they are surprised that the staff is having issues using the new system.

  • Great article, Anne! It concisely outlines some of the major issues that can occur with an ERP implementation. This quote is really good: ” Expectations have to be managed at the beginning of any software adoption and can be the most difficult issue to get under control. ” This is absolutely the case during an implementation. If you are thinking about the benefits – think about having one single view of the customer – what if Amazon did not have one single view of the customer or real time integration? Do you think you’d have a much different experience?

    Also – here’s a link to a site with a few charts and graphs you may like to see. It is related to the same article! http://www.zdnet.com/2013-erp-research-compelling-advice-for-the-cfo-7000011619/

  • 1. One issue that the article brought up is employee cooperation in utilizing the ERP, and how this can be a challenge for midsize businesses. Do you think the benefits of using an ERP outweigh the costs and time of training employees to use these systems, particularly in a midsize business?

    I think the benefits of using an ERP system do not outweigh the costs. The primary reason the article states for an ERP systems failure is the employees willingness to adapt and use them properly. In my opinion, older generation employees tend to seek out mid-sized businesses for various reasons irrelevant to the question at hand. However, these older generation employees are no doubt, less likely to properly adapt to and utilize these enhanced software systems and therefore, it ends up inflating estimates and costing the business money.

    2. The article discusses the level of dissatisfaction that companies may have with their ERP system, particularly by going over budget on projects. What do you think the companies should do to ensure this kind of issue with budgeting does not occur when utilizing the ERP project, or do you think that this is the nature of the software?

    When estimating the profitability of ERP systems I think companies should take into consideration the age gaps and technological experience of their companies, as well as budgeting for necessary training time and resources. It seems to be that the failure in budgeting is the adaptability of a companies employees who do not fully utilize the system.

    3. The article does state “that this survey was conducted by an ERP consulting company, which stands to benefit if ERP software implementation is considered too difficult for IT to handle,” while acknowledging that ERP implementation can be challenging. Based on what you read in the chapter and any real life experience, do you believe that ERP systems may be too challenging for a business, or is it a matter of proper training and budgeting?

    Haha its amazing how we came to the same conclusion, I honestly did not read this question before answering the others. But as I previously stated, I agree proper training and time allotments for transitioning need to be budgeted for and that’s because of rapidly increasing technology in a workforce which is only getting older.

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