Answer
Enterprise Resource Planning System is a fully integrated business management system covering functional areas of an enterprise Logistics, Production, Finance, Accounting, Human Resources, etc. It organizes and integrates operation processes and information flows in the organization to make optimum use of resources such as men, material, money and machine. Simply stated, ERP promises one database, one application and one user interface for the entire enterprise. This helps in planning, monitoring and controlling the entire business.
The challenges involved in ERP implementation are:
i. Consultants, vendors and users have to work together to achieve the overall objectives of the organization. The consultants have to clearly understand the user needs and the prevailing business realities and design the business solutions keeping in mind all these factors.
ii. Proper customization/configuration of package to the organization has to be in tune with the users’ needs and business objectives.
iii. Roles and responsibilities of the employees have to be clearly identified, understood and configured in the system.
iv. Acceptance by employees of the new processes and procedures is critical for the success of the package.
v. Package to be implemented in totality to achieve the maximum benefit.
vi. Defining the implementation methodology to be followed – identifying needs, evaluation of the current situation, predicting the future situation, reengineering the business process, selection of correct package.
vii. Installation of Hardware, Software required for the package.
viii. Selection of right kind of consultants.
ix. Preparing the implementation guidelines – training users, effective leadership, adapting the new systems and making changes in the working environment etc.
x. Post implementation monitoring of Key Performance indicators, Critical success factors etc.