Enterprise Resource Planning: The Journey of ERP in Organizations

This paper explores the journey of ERP in organizations as they try to fit themselves into the system that has no limit on how the organization can change. It discusses the reasons why an ERP systems journey may never end, the possible stages in an ERP systems journey, the potential benefits of each stage, and the drivers and barriers for companies to move from one stage to the next. Real-life cases of ERP implementations are also examined.

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Enterprise Resource Planning
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Table of Contents
Introduction......................................................................................................................................2
ERP..................................................................................................................................................2
Why an ERP systems journey may never end.................................................................................3
Real Life cases of ERP implementations.........................................................................................3
What are the possible stages in an ERP systems journey?..............................................................4
Planning and Design phase..........................................................................................................4
Build up stage and Implementation.............................................................................................4
Stabilization Stage........................................................................................................................4
Continuous Improvement.............................................................................................................5
Transformation Stage...................................................................................................................5
What are the potential benefits of each stage?.................................................................................5
Identify the drivers and barriers for companies to move from one stage to the next......................6
Drivers..........................................................................................................................................6
Barriers.........................................................................................................................................7
In the design stage....................................................................................................................7
In the implementation stage.....................................................................................................7
Stabilization stage.....................................................................................................................8

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Conclusion.......................................................................................................................................8
List of References............................................................................................................................9

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Introduction
An information system refers to the overall process of handling, storing and distributing
information, and currently taking a major place in the business environment. In the current
business world, business software, that entails information management plays a significant role
in supporting and enhancing business operations to achieve efficiency and effectiveness (Jo,
2015). The business organization uses information in their daily operations such as planning,
organizing, and controlling and decision-making process. Different software’s such as ERP has
been incorporated in the business operations majorly on the information and communication that
help in building efficient customer services. This paper thus aims at exploring the journey of
ERP in organizations as they try to fit themselves into the system that has no limit on how the
organization can change (Chondamrongkul, 2018). To extensively explore the “Going live is not
the end of the ERP journey” this paper thus focuses on determine reasons why ERP systems
journey can never end; the possible stages in the ERP systems journey; potential benefits of each
stage; drivers and barriers in each stage; and relevant case studies on ERP systems.
Enterprise Resource Planning
Enterprise Resource planning refers to a cohesive software solution that aids the
combination of all information flowing through an organization ( Rajnoha, Kádárová, Sujová &
Kádár, 2014). In the past decades, organizations thought of implementing information systems to
support the business operations, and currently, most of the information systems are now being
replaced by the ERP systems to improve efficiency. Williams and Pollock, (2012) state that the
software industry is one fast-growing and ever-changing market; thus numerous changes are still
expected to transform the information management systems in an organization. According to

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Johansson, Sudzina and Newman, (2011) must be some years back identified gaps between the
current capabilities and future capabilities of ERP, and this is evidential in the current world.
The interpretation and application of knowledge vary from one organization to another.
Candra, (2012) express that “information is a coordinated and communicated data” while
knowledge “is a complex composition of ideas conveyed in a systematic channel”. Candra,
(2016) further express that both information and knowledge are the sources of productivity
power. The application of ERP in disseminating information thus has a significant role in the
development of and performance or organizations.
Why an ERP systems journey may never end
The journey of ERP is never ending because of the nature of organizations, ever-
changing technological advancement and the suppliers and consumer’s needs. ERP journey is
based on two passes that are: the transition from the old system and the stabilisation of the new
system to conform to the organizational activities and needs (Hustad, Haddara &Kalvenes,2016).
All these passes always take time and last longer than expects since even after the stabilisation,
organization tend to have continuous ramifications to conform to the changing organizational
activists. The impacts during the implementations always come back to bite with a vengeance if
any procedure is missed. For an effective ERP system adoption by an organization, the process
needs to be effective with the participation and commitment of all stakeholders. The employee
needs to be well trained to have the required skills to operate the ERP system; this will help in
reducing any inventory or wrong information sharing.

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The management is expected to be proactive and committed to elaborate on various areas
that might bring confusion during the implementation. This helps the company to avoid
disastrous post-go-live as the issues are immediately aligned with the organizations’ activities.
According to Numazaki, (2012) it is challenging to maintain a complete ERP implementation
event after the stabilizing of the ERP in the organization since there will always be continuous
corrections to eradicate complexity with the system and update the system with the constant
technological growth.
Real Life cases of ERP implementations
There are numerous real-life cases of ERP implementation among many companies
across the world and its effects on the performance of the organizations while some
organizations also failed during the implementation (Kiran, 2012). This portion thus focuses on
some of such examples some of the companies that had a successful implementation of ERP as
well as those that had botched ERP.
The first company to successfully implement ERP into its organizational operations is
Wal-Mart that was funded in 1962 by Sam Walton to sell anything and everything to the
potential customers. Wal-Mart used ERP system in various departments and operations activities
such as Retail Information system and satellite Network that was installed in 1987 enhanced the
communication among the Wal-Mart stores, the distribution centres and the suppliers. Later Wal-
Mart adopted data warehouse tool to enhance real-time inventory data of all the stores through a
centralised computer-based system. This allowed daily sales data management from a single
source(Kumar & Gupta, 2012). Additionally, the application of Vendor Managed Inventory and
Electronic Data Interchange enabled Wal-mat to reduce transaction cost among the suppliers

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successfully; control ordering and receiving of products in a more scheduled and organised
manner as well as faster delivery of products.
On the other hand, companies that unsuccessfully implemented ERP into their
organizational system include FoxMeyer Drugs. Accruing to the case study by Anon, (2019)
FoxMeyer invested around $ 5 billion to adopt an ERP system with the focus of improving the
productivity and efficiency of the business operations. However, the whole process failed. The
failure is attributed to the over expectation of the management that was overseeing the
transformation into the desired change. The management’s expectations were so high and were
unrealistic that failed into four major scopes: customer satisfaction, environment, execution and
implementation. The large amount that was paid to transform FoxMeyer organization into the
ERP system led to the bankruptcy of the organization. Other companies that experienced ERP
implementation failure include: Nike’s supply chain and ERP implementation led to lots of
ghastly 20% of the stock, 100 dollars revenue since they rolled out into the new system without
putting it into the test. The US Navy also committed a blunder by investing 1 billion dollars into
four different ERP pilot systems that were not compatible with the requirements thus led to the
failure.
What are the possible stages in an ERP systems journey?
Generally, there are two broad phases in the ERP systems journey into the organization.
The first broad phase is the transition that happens when an organization moves from the old to
the new systems (ERP). The transition phase is further divided into the design and
implementation stages. On the other hand, the second broad phase entails the stabilisation of the
system to fully operate with varies operations activities without any hiccup for improved

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performance. The second broad phase thus is subdivided into stabilisation, continuous
improvement and transformation (Anikin, 2013). Therefore, the five stages involved in the ERO
journey: design, implementation, stabilisation, continuous improvement and transformation
stages.
Planning and Design phase
Planning and Design phase entails situations when decisions are being made by various
top managers of an organization to either introduce or not to introduce ERP system in the
organization’s operations. During the stage, special attention is focused on various factors such
as customer relationship management, suppliers, the end user of products and employees
capability (Rouhani & Mehri, 2018). Numerous decisions such as rolling out a tender for ERP
suppliers and trainers are made during this stage.
Build upstage and Implementation
Build up stage is a situation when the installation of the ERP system is done into the
organization’s hardware by adhering to the specific implementation procedures to ensure that the
ERP can effectively operate (Tripiawan & Govindaraju, 2018). Prior to the implementation, the
system is first tested to ensure that it has the capability of providing the desired information by
the client; this will help any failure of the process just like Nike’s supply chain case, that adopted
the system without ensuring that the system was matching the supply chain demand (Yuing,
2018) . During this stage, the ERP developer has to focus more on the organization’ and its
stakeholder's needs and these may include technical documents, workflow process, data sharing
procedure and data migration technique.

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Stabilisation Stage
Stabilisation stage is the post-implementation and refers to the phase when the
organization starts to integrate the ERP system along the daily activities of the organization.
During the stage, all the stakeholders tend to familiarise themselves with the ERP. During this
stage, employees are trained on the usability of the system, and afterwards, the user starts using
the system. This stage is also significant to different customers as they start adapting to the
changes in the organization.
Continuous Improvement
Continuous improvement stage entails the phase where is countless minor-upgrade to
ensure that the system conforms to the organization's operations and objectives.
Transformation Stage
Transformation stages happen when an organization fully moves from the old system to
the new system (ERP system). During this stage, all the aspect of the old system are fully
eradicated, and the new system adopted

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What are the potential benefits of each stage?
The different stages in the ERP system journey are interconnected and depend on one
another. Failure of one stage disallows the implementation and success of the next stage. The
first stage which is design has numerous benefits such as providing the organization’s
management with an opportunity to explore the pros and cons of adopting the ERP over the old
system. The decisions made at the initial stage ensure proper adoption of the system through the
stage, since it the stage where the best vendor of the ERP system is chosen and tender awarded
(Eid & Abbas, 2017). In the full implementation of the ERP, the management of the organization
tends to have efficient decision-making process than the traditional system since the system will
have the ability to provide improved operative data that are used to make informed decisions.
The second stage; implementation has benefits since it determines the effectiveness of the
system to improve the organization’s performance. During the implantation stage, some of the
old organization's systems start to fade thus improving the productivity (Rouhani &Mehri, 2018).
At this stage, the organization revenue collection starts rising, communication with suppliers,
consumers and employees tend to be easy and seamless as all database is centralised and shared
in a systematic manner.
In the continuous improvement stage, the system is customised and corrected in various
aspects to conform to the client’s needs. During this stage, organization benefits from a more
seamless integration and alignment between the ERP system and the organization’s activities
thus accrue various more benefits such as: increased productivity, decrease delivery time,
improved employee satisfaction among many others (Ravasan & Rouhani, 2014). Additionally,
the continuous stage also ensures the optimization of the resources to ensure a maximum return
to the organization.

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At the last stage which is the closing or the transformation, has benefits to the
organization. At this stage, the organization now fully enjoys maximum operations that are rapid,
speed and efficient. The production cost is at the lowest level since most of the operations are
automated, and profit return tends to be high.
Identify the drivers and barriers for companies to move from one stage to the next
Numerous drivers push organizations to transform from the old operations to the new
system of operations (Aini, 2018).
Drivers
a) Increased need for real time data to ensure proper and accurate operation of activities to
attain maximum performance.
b) Need for effective and efficient Information generation or decision making process
c) Need to reduce the cost of operations through automation of the activities. A lot of time
and resources are always wasted during the manual operations thus leading to a great loss
to numerous organizations.
d) Need to increase sales, and revenue collection to enhance the financial position of the
company.
e) Need to have a better competitive advantage in the market, thus requires the company to
sustain all its operations to a manageable level. ERP can provide efficient operations of
organizations.

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f) Need to have efficient and effective stock exchange requirements through a cordial and
effectively linking with the external aspect of the organization such as suppliers and
customers.
Barriers
Even though no organization wishes to face any challenge during their ERP system
journey, the reality is that some EPR adoption and implementation always faces difficulties.
According to Khaparde, (2017) about55% to 75% of the ERP system adoption and
implementation always fail as a result of the challenges met that range from technical to
logistics. Some of these challenges are:
In the design stage
a) Blinding workforce-The most common challenge faced during the designing is the
companies eager to adopt ERP before the evaluating organization’s readiness. This
always makes the employee be in blindfold thus might not understand the decisions made
by the leadership.
b) Poor decision-making process- poor decision-making process by the management might
hinder the adoption of the ERP system. Poor decision-making processes brought about by
lack of collaboration among the top managers, and poor organizational structure tends to
slow down the process or might result into poor choices of vendors that at the end ruin
the whole process.
c) Unavailability of the correct vendor- this might occur when the correct vendor with the
correct software is difficult to get or has a high cost of implementation. The wrong choice
of vendor will not effectively install the system to align and conform to the client’s

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needs; thus the information and communication analysis needs will not be realised.
Generally, the operations will be poorer than the old system due to the high rate of
confusion in the system.
In the implementation stage
a) Employee resistance- ERP system transformation is part of the organizational change.
Organizational change in many cases is not always welcomed by the stakeholders
majorly the employees, who always have a negative perception of the proposed change.
Some of these systems tend to render some employee jobless or reduce their
responsibility due to the capability of the technology to multitask and operate more
efficiently and effectively (Andreas & Natariasari, 2019). These fears of unknown always
make the employee oppose such challenges thus making them a too loose commitment to
the organization. This makes the implementation of the system difficult.
b) Inadequate knowledge among the employee- for full success implementation of the
system, the employee needs to have proper knowledge of how to use the system.
Otherwise, they might end up causing technical breakdown at every stage, or results in
wrong data analysis. The FoxMeyer ERP system implementation failed during the
implementation stage since most of the employees lacked the desired skills to ensure the
success of the system. The employee was largely relying on the Andersen Consulting
Firm that had more than 50 consultants to implement the R/3 to integrate the warehouse
activities with the ERP, but all of them lacked proper knowledge of integrating the two.
c) Poor training approach- training is one of the effective ways of engaging the user and
the ERP system. Thus when desired technical goals on each employee are not well

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analysed and taken into account, the whole process might fail ( Baykasoğlu & Gölcük,
2017). This is evidential when the FoxMeyer employee got disgruntled, destroyed
inventories, filled inventory wrongly and led to the accumulation of inventory
transactions more than $34 million were eventually lost. Training thus should entail a
variety of methods tailored to the audience to enhance the acceptance of the system such
as classroom-based training, e-learning, guidance materials and on-job training.
d) Management commitment- every organizational change depend on the commitment of
the leaders in ensuring the implementation of the desired change (Maas & Soeters, 2014).
When the management is not committed to the goal just as in the FoxMeyer drugs, the
whole process thus is destined to fail. The senior management of FoxMeyer felt that the
introduction of the ERP system was an overhaul and introduced the Delta III project to
avoid a bad reputation.
Stabilisation stage
Reputation –at the stabilization stage where the company tries to stabilize itself between
the old systems to the new system, might be faced with challenges of keeping the reputation
intact. Given the complexity of the ERP and the time frame and overspending regarding the
budget, employees and customers might get bored and discouraged on the way as they get tired
of the stabilizes. In many cases, the change team faces different questions that they are unable to
answer due to the challenges that were caused in the initial stages. However, the best way to get
out of this and maintain the reputation is to continue advocating for change and doing the most
necessary things to align the system with the organization’s needs. This is evidential with

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FoxMeyer’s customers who were not committed thus stop shopping from the store, led to the
reduction of revenue collection. Consequently, the employee morale dropped and was
disgruntled destroying inventory thus led to high employee turnover which eventually led to the
closure of three warehouses.
Conclusion
In conclusion, the current business environment needs integrated information
management technology and process that will ensure efficient production, communication and
performance of the organization to sustain the stiff competition. ERP system forms one of the
tools used in the current business world and possesses numerous benefits when effectively
implemented leading to the success of an organization such as Wal-Mart. However; the
implementation process is always faced with different challenges such as employee resistance,
lack of manager’s commitment; that might lead to failure of the business such as FoxMeyer Drug
store. From effective adoption and implementation of the ERP system from the old system,
specific stages have to be followed since they depend on each other and determine the success of
the nest phase.

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