week6 ppt

Enterprise Resource Planning (ERP) Systems

Dinesh Nallapareddy

Wilmington University

Enterprise Resource Planning (ERP) Systems

Enterprise Resource Planning (ERP) has become one of the main components of most companies today (Bradford, Earp & Grabski, 2014). The significance of ERP to various organizations outweighs its implementation problems because it can be used to support the effective operations of most enterprises. It is vital to ensure that the ERP implementation is successful so that it does not fail in the process of mitigating risks within the organization. However, organizations must note that ERP implementation is always a massive undertaking because of its magnitude. Because of its magnitude, companies must ensure that they proactively identify the risks that may hinder the implantation process. Nonetheless, with successful implementation, enterprises have greater chances of ensuring that they mitigate further risks that may hinder the operation of organizations. It will also help in ensuring that firms make informed decision and effectively manage their operations. This paper explains how Enterprise Resource Planning (ERP) Systems help in mitigation of risks and assisting in organizational decision making.  It will further explain why mitigating risk and making better decisions remains a cornerstone to operational efficiency of most organizations.

ERP Systems in Mitigating Risks & assisting in Organizational Decision Making

It is noteworthy that ERP systems are always designed to incorporate both internal and external information aimed at enhancing the flow of communication and the process of making decisions across the organization. They are also designed to ensure that they focus of enhancing business processes and functions within an enterprise. However, ERP amalgamates a wider range of business automation tasks, which include sales order processing, inventory management, supply chain management, financial accounting, production scheduling and material planning (Davenport, 2000). These are systems that usually create data sources that help by providing essential information to meet the needs of a firm’s knowledge requirement and business intelligence. Since this process helps in sharing access to complete and accurate data that is usually tracked down to organizations’ functional duties and improve risk management capabilities.

Some of the most notable strategic risks that many organizations are likely to face are selection of business partners, technological innovation, competitive positioning and determining future product versions. These are some of the areas where ERP systems become very essential in ensuring that organizations meet their operational problems. ERP frameworks are intended to incorporate inside and outside data that improves the stream of correspondence and basic leadership over an undertaking, and concentrates on business procedures and capacities. Because of the tremendous idea of the ERP execution process, the related dangers are proportionate with the size of the ERP framework extends. Numerous organizations inconceivably disparage the multifaceted nature and assets important to actualize a viable ERP framework. Hence, they neglect to sufficiently get ready for unusual possibilities that push back calendars and expectations. This is exacerbated by the interdependencies related with ERP. That is, as one territory of the ERP execution process encounters a misfortune alternate ranges are additionally influenced and the issue is aggravated (Bradford, Earp & Grabski, 2014).

Accordingly, this is one of the high hazard ranges that influence center key targets. Olson & Wu (2008) propose one approach to adequately alleviate these dangers is to set up turning points that each venture group can create designs around. In any case, many come from the way that organizations endeavor to actualize an Enterprise Resource management (ERM) framework with as meager customization as could be expected under the circumstances. Despite the fact that there is a longing for more institutionalization, customization of an ERP framework is unavoidable. Directors will hesitate modifying the framework until the point that it pushes back timetables and expands expenses of execution. Lu, Jain and Zhang, (2012) recommend that customization ought to be lined up with the framework improvement life cycle to balance this hazard. Drawing in upper administration in the ERP execution process is basic for chance relief. That is on the grounds that administration would more be able to satisfactorily distinguish, evaluate, and screen dangers. As administration works with the ERP extend group, extend chance evaluations are better lined up with ERP execution developments and in this manner more powerful as to gauging the progress of the project.

When it comes to decision making processes within organizations, ERP remains essential in ensuring that operational processes are without any hitches. ERP provides knowledge essential for making decisions within the organization with the aim of achieving mitigation benefits. In this process, organization uses utilization of information from ERP to offer a view of organizational performance as indicated via the cascades of balanced scorecards.

A standout amongst the most basic parts of administration is making decisions. Settling on auspicious and all around educated choices is the most ideal approach to be more aggressive and enhance a business' main objective. That being stated, with regards to basic leadership, numerous supervisors are stuck scrambling through old messages, archives, and depending on their memory to blend up a gut-intuition choice on the spot. Basic leadership is astoundingly troublesome in ventures where administration is frequently in the field –, for example, development and real estate – in light of the fact that in these situations individuals are less inclined to have every one of the information required to settle on an well-informed choice (Xu & Quaddus, 2013).

Significance of Mitigating Risk and Making Better Decisions

Luckily, a great ERP (Enterprise Resource Planning) System is an extraordinary approach to connect this crevice between the workplace and the field, giving one place to all information, measurements, booking, and more to be kept for moment access. Here are the best three ways an ERP System can enable administration to decide:

• One can lead a cost/advantage examination on the spot: When it comes to settling on cool headed choices, it's about the overall revenues, consumer loyalty, and situating your business for future triumphs. An ERP System will give you access to every single budgetary detail, from seller quotes to extend costs and past, so you will have the capacity to unequivocally measure the expenses to the anticipated benefits whether money related, goodwill, or many other.

• One can investigate elective choices: When fast choices should be made, it's simple for even the most experienced supervisors to seize up and overlook elective choices to the proposed arrangement. An ERP System will permit directors a place to investigate elective alternatives since it stores all data from past choices which may blend up different arrangements that are more financially savvy or better when all is said in done.

• One can assemble all important data rapidly: From offers to easily overlooked details like locations and telephone numbers, an ERP System will store all data fundamental for guessing about results of going somehow with a choice – helping you settle on the most ideal choice.

Above all, it is essential to note that when an organization alleviates risks and makes decisions in an informed manner, it will achieve numerous organizational objectives. Some of them include uplifting sales, managing business operations, improves the visibility of organization’s financial prospects, improves product delivery, minimizes the cost of labor, as well as improving control and organizational planning.

Conclusion

ERP has turned out to be one of the primary segments of most organizations today. The essentialness of ERP to different associations exceeds its execution issues since it can be utilized to help the compelling operations of generally undertakings. Ensure that the ERP usage is fruitful so it doesn't flop during the time spent alleviating risks within the association. Regardless, with fruitful execution, ventures have more prominent odds of guaranteeing that they alleviate additionally chances that may ruin the operation of associations. It will likewise help in guaranteeing that organizations settle on educated choice and adequately deal with their operations.

References

Bradford, M., Earp, J.B. & Grabski, S. (2014). Centralized end-to-end identity and access management and ERP systems: A multi-case analysis using the Technology Organization Environment framework. International Journal of Accounting Information Systems 15(2): 149-165.

Cao, J., Nicolaou, I.A. & Bhattacharya, S. (2013). A longitudinal examination of enterprise resource planning system post-implementation enhancements. Journal of Information Systems (Spring): 13-39.

Davenport, T.H. (2000). “The Future of Enterprise System-Enabled Organizations,” Information Systems Frontiers, vol. 2, pp. 163-180.

Lu, J., Jain, L. C., & Zhang, G. (2012). Handbook on decision making: Vol 2. (Handbook on decision making.) Heidelberg: Springer.

Olson, D. L., & Wu, D. D. (2008). Enterprise risk management. Singapore: World Scientific.

Xu, J., & Quaddus, M. A. (2013). Managing information systems: Ten essential topics. Amsterdam: Atlantis Press.