What are the major challenges in successful implementation of enterprise resource planning (ERP) system in an organization? Describe in brief.

A Management Information System ICT Revision Questions and Answers

The main challenges in successful implementation of enterprise resource planning (ERP) system in an organization can be outlined as follows:

i. Awareness – the users are generally not aware of the functionality and features of the ERP system. Extensive training and user participation is needed to minimize this problem. Moreover, most employees do not know about the benefits of using a comprehensive ERP solution and they tend to stick to the same old ways of doing things as they are more comfortable doing that.

ii. Resistance to change – as described above, especially long-term employees doing same kind of job for years using the traditional method have little liking for the ERP system which is likely to change everything. Moreover, there is a high level of resistance against putting personal effort in learning new technologies and facilities provided by packages such as the ERP.

iii. Business process re-engineering – an effective implementation of ERP requires through re- engineering and re-modeling of major aspects of business process such as sales, inventory, accounting, human resource management, procurement, customer relationships management, financial management etc. For organizations with long history of operations with traditional and non-ERP based methods, this re-engineering process is the most challenging and time- consuming process of implementing a full-fledged ERP system. This involves restructuring the way different things are done, probable change in organization structure, re-training and orientation of the manpower for different tasks as per the norms of the new system etc.

iv. Integration – integration with other critical business applications such as billing, CRM, accounting, supply chain management, MIS, OSS etc of the ERP system for exchange of relevant data and information is another major challenge. Problems such as incompatibility, non-standard interfaces, data model differences etc can be encountered during this activity.

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