EnterpriseResource Planning (ERP) is organizational software that bring intoconsideration integrated applications, which an organization may useto collect, manage, store and interpret data from differentindustries. A single ERP system may be used for marketing and sales,inventory management, manufacturing service and accounting. Inselling the ERP system, vendors play an important role. The aim ofthis paper is to discuss the contribution and criticism of vendors inimplementation of ERP system, and the extent in which vendorscontribute to use of ERP system within an organization.
VendorsKnow About Implementation of ERP Systems
Vendorsunderstand ERP systems are important for any organization because itbrings into consideration numerous benefits to the organization. Someof the benefits that vendors sell include improvement of efficiencyand quality. Vendors state that ERP leads to better outputs, whichare important to the success of an organization (Compare BusinessProducts, 2011). In addition, the vendors say that ERP system bringstogether different information from different departments within anorganization, and making strategic decisions is easier. Moreover,vendors argue that ERP systems develop an agile organization that caneasily adapt to change (Johansson & Newman, 2009). It meansorganization operates in a flexible manner and hence, the differentcomponents within an organization operate cohesively, enhancing theorganization operations both externally and internally (Rabaai,2009). Finally, vendors argue, the use of ERP systems increasecollaboration. Data that takes the form of emails, video, audio,forms, files and documents can be shared easily. Therefore, the useof ERP provides a platform of collaboration and sharing of thecontent rather than understanding the communication curve.
Vendorsdo not know About Implementing ERP Systems
Vendorsdo not understand some of the important concerns that involveimplementing ERP. Implementation of ERP requires vast resources,which requires huge financial budgeting and years to implementeffectively (Rabaai, 2009). Even though there are numerous importantcomponents associated with implementation of ERP, vendors do notunderstand that top management is important in the implementation ofERP (Compare Business Products, 2011). ERP systems vendors may assumeimplementation of ERP is setting appropriate resources rather thesevendors should understand introduction of ERP is transforming andrepositioning of the business practices and company (Johansson &Newman, 2009). Vendor should understand the purpose of the ERPrelative to the goals and expectations of the organization.Therefore, the ERP systems and its implementation should revolve onthe requirements of top management and any relevant strategicexpectations.
Inaddition, vendors should understand implementation of an ERP systemintroduces reengineering of business processes. In the implementationof ERP, vendors should understand implementation of ERP shouldconform to normal business processes of the organization (Johansson &Newman, 2009). Some organizational businesses may be unique, and itis important to bring together important business process. Forexample in 1994, Hydro Agri North America implemented SAP R/3 butbecause the business process did not conform to the businessprocesses, Agri North was forced to modify the ERP system (Rabaai,2009). Therefore, if the ERP system cannot adapt to theorganizational business processes, the organization would be forcedto adopt an ERP system. In the organization adopting the ERP systemmeans that the business process is changed and may affect the way thebusiness operates.
Moreover,many ERP vendors make their products and systems as a single solutionfor all organization requirements. In addition, the organizationsbelief having a single vendor is crucial since it brings a “commonview” of ease of maintaining and serving customers efficiently(Compare Business Products, 2011). The assumption of most vendors isthat, their system is important because it is a blanket solution onERP based services (Johansson & Newman, 2009). However, ERPshould be customized along the homegrown systems. It is important forthe vendors to involve the organization and understand the systemswithin the organization before implementing an ERP system (Rabaai,2009). However, the vendors do not factor this information intoconsideration and rather aim to make more sales.
Vendor’sInfluence in an Organization’s ERP Decision
Vendorsshould have minimal influence in the organization’s ERP decisionmaking. It is important for an organization to understand itsbusiness processes and utilize the information to rate the differenttypes of ERP system that exist (Johansson & Newman, 2009).Vendors should only sell their respective ERP system highlighting thebenefits associated with the system and how the organization cancustomize the system to fulfill the requirements of an organization(Compare Business Products, 2011). Nevertheless, the vendor shouldalso play an important role during customization and additionalsupport when the system is utilized. It is important to frequentlyupdate the system and other ERP system processes to fulfill therequirements of changing environmental factors e.g. legal andpolitical (Rabaai, 2009). Therefore, it is crucial for anorganization to define the limits of vendors and how the vendors areinvolved in ensuring the ERP system operates effectively.
Inconclusion, ERP system is crucial in improving efficiency and qualityof services that are offered to consumers. Vendors sell the ERPsystems to organizations and the vendor communicates to theorganizations on the benefits associated with the ERP system.Nevertheless, the same vendors may assume and not factor intoconsideration some limits of their contribution. For example, vendorsmay not understand top management, integration and reengineeringfactors in fulfilling the requirements of ERP system and theexpectations of the organization. In addition, vendors should play alimited role after commissioning of ERP because of internal policiessuch security measures.
CompareBusiness Products. (2011). Top10 (ERP) vendors.Retrieved fromhttp://enterpriseinnovation.net/files/whitepapers/top_10_erp_vendors.pdf
Johansson,B., & Newman, M. (2009). Competitive advantage in the ERPsystem’s value-chain and its influence on future development.EnterpriseInformation Systems,1-15. Retrieved fromhttp://3gerp.iwvi.uni-koblenz.de/docs/Johansson_Newman_IJEIS_paper.pdf
Rabaai,A. (2009). Theimpact of organizational culture on ERP systems implementation:Lessons from Jordan.Retrieved fromhttp://eprints.qut.edu.au/29838/1/THE_IMPACT_OF_ORGANISATIONAL_CULTURE_ON_ERP_SYSTEMS_IMPLEMENTATION.pdf