Comprehensive Report on Enterprise Resource Planning (ERP) Systems

This report provides a comprehensive overview of Enterprise Resource Planning (ERP) systems. It begins with an introduction to ERP, highlighting its increasing adoption by businesses to improve performance and streamline operations. The discussion section delves into the core functionalities of ERP, including accounting, project management, and supply chain management, and explores the differences between two-tiered and three-tiered systems. The report examines the benefits of ERP, such as competitive advantage, improved efficiency, accurate forecasting, and cost savings. It also identifies key success factors for ERP implementation, including project startup, scope, team, customization, management commitment, and budget. Furthermore, the report analyzes real-world failures of ERP implementation, using case studies to illustrate common pitfalls, such as the Nike ERP failure. Finally, the report proposes preventive measures to mitigate risks and ensure successful ERP implementation in future projects. The report concludes by summarizing the main points and reinforcing the importance of strategic planning and careful execution in ERP projects.

Running head: ENTERPRISE RESOURCE PLANNING
Enterprise Resource Planning
Name of the student:
Name of the university:
Author note:

1ENTERPRISE RESOURCE PLANNING
Table of Contents
Introduction:....................................................................................................................................3
Discussion:.......................................................................................................................................4
Benefits of ERP system:..............................................................................................................6
Key success factors:.....................................................................................................................8
3 known failures of ERP implementation:.................................................................................10
Measures to prevent the occurrence of the kind of failure:.......................................................11
Conclusion:....................................................................................................................................12
References:....................................................................................................................................14

2ENTERPRISE RESOURCE PLANNING
Introduction:
In today’s commercial situation, the use of Enterprise Resource Planning software has
increased in a huge rate as many firms are adopting it into their business system to improve their
performance (Harwood 2017). The core concept of generating a successful business performance
can be operationalized with increased financial gains along with improvement in the operational
process. Beside these benefits, firms invest on modern ERP system while replacing their old
legacy system for business improvement. Replacement of legacy system is an important
approach that is adopted by modern business firms of all size in order to implement ERP system
properly. ERP systems implanted in busines environment provide a security for tested system by
maintaining the security standards within the overall business environment. ERP systems are
usually implemented on the basis of business projects and involve the internal as well as external
consultants in order to be successful in their project. Ensuring a good implementation partner in
installing ERP system is considered s one of the chief factors for fruitful ERP application while
removing the complexity of the projects. ERP application is a tough process and is usually
adopted by big firms as it requires a lot of budget which becomes unbearable for small firms.
The field of ERP implementation is gradually changing and in the last couple of years, it has
come up with new technological trends shifting its implementing area. The different types of
ERP software that are impacting the growth of enterprise include the Mobile ERP system, Social
ERP system, Cloud ERP system and many more. Depending on the size of the organization
enterprise resource planning software is implemented accordingly while choosing its vendor
from large enterprises and different ERP markets. In this report a detailed study of the ERP
system is done and the different ways by which a successful ERP structure can be applied is
reflected in the following sections. The part of the report also discuss about the major failures in
real world that have taken place due to lack in strategy and based on the case studies, some
preventive measures are hence reflected so as to overcome the failure in future implementation
projects.
Discussion:
Enterprise Resource Planning or ERP is referred to as software that is castoff within
organizations so as to manage the business activities in a day to day basis. The activities that are
managed under Enterprise Resource Planning include accounting, project management, risk and
compliance management, procurement as well as managing the operations of the supply chain. A
modern ERP system uses the latest technologies including machine learning and Artificial
Intelligence within their system so as to provide efficient visibility to each and every aspects of a
business. The systems of Enterprise Resource Planning are intended to utilize the data contained
within them as well as utilizing all the applications stored within them. ERP systems can be two
tired as well as three tired. The two tired ERP systems have two parts-the corporate and division.
These two different ERP systems operate separately within this two tired ERP system. The three
tired ERP systems are meant for utilization purpose of the clients. The entire ERP system
consists of different levels of access. One level differs in the access method from another level
and comprises of the entire ERP architecture.

3ENTERPRISE RESOURCE PLANNING
ERP systems can be divided into two diverse categories such as monolithic and postmodern
systems consisting of several characteristics. The features of Monolithic ERP system are as
follows:
 It is developed with a single stack technology with a single vendor.
 This type of system is not flexible enough to the gradual changes that occur in business.
 This type of ERP systems needs immediate up gradation in order to improve their
performance.
Postmodern system: These are the most user oriented and simple ERP systems. The features
of the Postmodern ERP system include the following:
 The system is user centric
 This kind of ERP scheme is mainly driven by the information gathered from social
media or cloud environment.
The segmental design of ERP systems joins various different commercial models which can
be integrated with other modules so as to afford a unified flow of statistics throughout the ERP
system. This provides functioning transparency within various modules with real time activity
and processing capabilities (Chang 2016). Having a communal consolidated catalogue board
system is another feature that makes the ERP systems more efficient. This feature of the ERP
system stores all the data that are entered within the process only once and then makes those data
usable to other departments and modules simultaneously during their work process (Conteh and
Akhtar 2015). This piece of the ERP system aids in eliminating the inherent flaws that are
associated while using the distributed database of the ERP system. However, with the
advancement technology, the modern ERP systems that are coming up are widely user-centric
and are simple to use. These systems are agile and hence are much simplified enough.
Eventually the customization and implementation of Enterprise Resource Planning software
has become a business of its own and is adopted by almost all firms be it small or large (Sun, Ni
and Lam 2015). Different modeling methods or architecture tools have become common among
the business firms in order to help them to reduce the cost of implementing software and also
increasing the acceptance rate of users to the suitable ERP system (Panayiotou et al. 2015).
Several models or approaches can be adopted in terms of implementing ERP solution in business
which are mentioned as follows:
 Reducing the necessary effort for creating the targeted platforms by using the best
practices and the knowledge available within the reference model (Al-Sabri, Al-Mashari
and Chikh 2018).
 Creating necessary requirements while using the model techniques to describe the
detailed feature of the ERP system.
 Documenting the requirements of the scheme by defining them through conceptual
modeling approach to make business logics understandable.
Direct application of modeling tools and the conceptual models is one of the implementation
strategy that is taken up by organization before implanting ERP system within organization.

4ENTERPRISE RESOURCE PLANNING
Benefits of ERP system:
The entire process of ERP operation is broken up into three different phases which
includes the discovery phase, implementation phase and finally the result phase (Jagoda and
Samaranayake 2017). The benefit that comes up with the successful application of ERP system
includes the following:
1. Competitive advantage: Implementing ERP software requires a major investment in business
firms but it benefits in gaining competitive advantage in business processes.
2. Improved efficiency in process: Implementing an ERP in business process helps in eliminating
the repetitive process within business while reducing the need to enter information manually. It
helps in streamlining business process making it much easier and efficient to collect data on the
various working department.
3. Accurate Forecasting: Successful ERP implementation within business provides users the tool
to create more accurate forecasts on the estimates of the business (Nwankpa 2015).
4. Scalable resources: ERP systems are scalable enough and allow addition of new users and
functions that are needed for the growth of business. More number of resources can be added
within the ERP systems according to business needs in order to facilitate growth.
5. Collaboration of department: Collaboration between departments of the business is an
important feature that is provided by the ERP system. With this feature, the data that is added
within the ERP system can be utilized within all departments and thus initiating a collaborative
and interdepartmental environment within the business.
6. Integrated Information: With the application of ERP system, all the data that are spread across
different databases within the business can be housed under a single location. This feature is
provided by well-known ERP platforms known as CRM software that helps in keeping data
consistent and accurate throughout the business activity.
7. Cost Savings: Implementing ERP within business solution also reduces the operational and
administrative costs. It allows real time managing of operations effectively preventing delays and
disruption within the business process. This feature benefits the users in making decisions more
quickly and right for the business.
8. Streamlined process: In business, operations become very complex to manage if done
manually. Implementing ERP within business process helps in providing accurate, real time
utilization of data. It initiates streamlined processing of information while increasing efficiency
and productivity of the entire business process.
9. Mobility: One of the main advantages of using ERP within business process iis that it allows
centralized access to database systems within the working environment.
10. Increased Productivity: Enterprise Resource Planning systems has another important benefit
that is it helps in increasing the overall productivity of the business by initiating the process
related to the project automatically.

5ENTERPRISE RESOURCE PLANNING
Key success factors:
The key accomplishment factors of ERP execution refers to desired outcome that are
needed on successful employment of ERP in business systems (Abu-Shanab, Abu-Shehab and
Khairallah 2015). The key features that define the success of the ERP implementation are as
follows:
1. Project Startup: This factor helps the project to get initiated with diligence while keeping the
entire project on the right track.
2. Project Scope: Developing a project scope is a part of developing a right ERP strategy in
order to comprehend the required components of the ERP scheme within corporate (Snyder
2015).
3. Project Team: For every project an efficient project team is the ultimate requirement that
needs to be fulfilled in order to implement an ERP successfully (Nandi and Kumar 2016). An
efficient identifies the set of resources that are needed for the implementation of ERP while
maintain a cohesive relationship with the ERP consultants.
4. Customization: Implementing an ERP needs the feature of customization to be available
within the organization (Kapp, Latham and Ford-Latham 2016). An organization need to have a
control over the customization feature in order to understand the features that are needed for each
application for better result while meeting the project scope and budget.
5. Management Commitment: ERP implantation affects the way by which a company operates
specially in case of business process and transaction system. In this regard, the commitment is
very much needed from the manager level to give the project a proper visibility across the entire
organization.
6. Change Management: Implementation of Enterprise Resource Planning not only brings in
changes in the system but it also impacts on the organizational changes (Al-Sabaawi 2015). Thus
a change management team needs to be formed to deal with the impact.
7. Budget: In order to implement ERP systems effectively within organization, developing a
realistic budget is an utmost requirement and is the main key factor for success. A good
estimation needs to be dii nein this regard to meet the implementation cost and also to control the
cost throughout the project.
8. Project Closure: The last but the most important key success factor for the implementation of
Enterprise Resource Planning within business system is the project closure. The project closure
needs to be initiated within the project in order to identify the areas where the newly
implemented system is going live or where the system is being decommissioned.
3 known failures of ERP implementation:
Enactment of ERP is a quite expensive procedure and not all companies can afford it.
However a successful ERP implementation in a business offers huge benefits to companies.
Some of the known failure case studies where the companies failed to implement Enterprise
Resource Planning system within their business process are discussed as below:
1. The case study of the failure of ERP application at Nike:

6ENTERPRISE RESOURCE PLANNING
In the year 2000, the company of the well-known brand Nike decided to upgrade their
ERP system and invested about $400million into the newly developed software known as i2. The
initial goal of the software was to manage the supply chain of the business and to forecast the
demand of the demand in products efficiently (Ranjan, Jha and Pal 2016). The entire plan turned
out to be a disaster when the company faced a major sale loss of $100 million and a 20%
decrease in the stock price. The reason for such failure was identified and found the presence of a
major software glitch which led to stores unable to fill up orders.
2. The second case study where the failure of ERP implementation was noted is in the case of
Hershey and a Halloween Disaster.
In the year 1999 the ERP system that was launched within the company proved to be a
complete disaster (Chakravorty, Dulaney and Franza 2016). The company invested a total sum of
$112 million to create a newly integrated ERP system but the decision led to the problem within
the company and suffered loss of $100 million while failing to deliver candies for Halloween.
3. The third case of ERP failure was reflected in the company of Hewlett Packard:
In the year 2014, the company of HP decided to implement ERP system in instruction to
reduce their rate and shortening the delivery time (Saeed et al. 2017). But the entire system led to
the failure of about $160 million where the company faced 20% loss in orders due to the old ERP
system.
Measures to prevent the occurrence of the kind of failure:
Based on the above case studies, the preventive measures that needs to be taken so that to
avoid the kind of failures in future includes the following-
1. In order to avoid the mistake as done in case of Nike, it is important to set up realistic goals to
implement the ERP systems effectively (Nagpal, Khatri and Kumar 2015). It is also necessary
that the Enterprise Resource Planning systems should be tested in order to be sure about its
implementation in the business process.
2. The mistake that is identified with the case study of Hershey Company can be mitigated by
making sure that the ERP implementation is going on smoothly (Ali and Miller 2017). It is also
important that the employees should be properly trained on the new features of the ERP
software.
3. The measure that needs to be adopted before implementing Enterprise Resource Planning
software within the business process of a company in order to prevent the failure as faced in the
company of Hewlett Packard is by planning an efficient internal implementation plan by taking
care of the process efficiently till the end.
Besides all the above mentioned preventive measures, some of the few things that need to be
taken care if before effecting an efficient ERP system are as follows:
 Check references: It is recommended that before employing an ERP system into a
business, the commerce should reach out to their customers in order to understand the
effectiveness that could be achieved with the vendor customer services and to initiate

7ENTERPRISE RESOURCE PLANNING
immediate response to the customers with their ERP system (Zouaghi and Laghouag
2016).
 Remain goal oriented: Implementing ERP within business should align with the
objectives or goals of the business (Malinowska and Rzeczycki 2017). So it is important
that the business goals should be mapped out wisely before implementing the ERP
software with business.
 Change in the business process to fit in the software: The main purpose of instigating
Enterprise Resource Planning is to uncover the new opportunities that can come up with
the implementation of the new method (Hustad, Haddara and Kalvenes 2016).
Employees within the business must try to operate with the new system prior to its
installation to get habituated with the new functionalities.
Conclusion:
Thus from the above report it can be concluded that the execution of ERP is always a
limiting factor and brings enterprises of all sizes under one big circle. The implementation of
ERP is necessary for small enterprises as well, but the requirements that are needed in that case
are different from that of big enterprises. The tier two ERP systems that is described in the report
is not just used within large organizations but it is also used in broader business communities.
The growing trend of Enterprise Resource Planning users is becoming so much diverse that the
new market of business will continue to support the implementation of ERP in businesses. SAP
has the largest market share among all the ERP applications and helps suppliers to get advantage
out of businesses. Estimating the market share of ERP application is a quite tough one as large
enterprises often use mid-market products and hence plays a big role in the enterprise market.
The utilization of the process of Enterprise Resource Planning implementation permits
enterprises to cut the timeframe it receipts to pay its goods or facilities after a definite sale.
Implementing Enterprise Resource Planning software within the business process helps in
increasing the overall money flow. The integrated nature of ERP system architecture helps in
eliminating the need for different systems that can be used inside the business while
consolidating the same scheme across different multiple geographical areas. The data that is
stored within the ERP system can be utilized regardless of its physical geographical presence as
it effectively eliminates the redundant nature of the data while storing them in different location.
Implementing an Enterprise Resource Planning system also removes the need for space to upload
data to the central data storage site. ERP systems increase the productivity of the entire business
enterprise to where it is implemented by integrating the data as well as the procedures across
multiple departments allowing businesses to move their product faster and to process orders
more quickly, initiating invoice reply to customers and reconciling the shipments sooner. With
the continuous flow of information, across organizations, the urge to implement ERP within their
system has become a must need necessity for all enterprises as a result of which the ERP systems
are tending to have more access through companywide. As ERP systems come from one source
it makes use of different reporting tool to generate sensitive information of the company while
updating the information faster and in an user-friendly way.

8ENTERPRISE RESOURCE PLANNING
References:
Abu-Shanab, E., Abu-Shehab, R. and Khairallah, M., 2015. Critical success factors for ERP
implementation: The case of Jordan. The International Arab Journal of e-Technology, 4(1), pp.1-
7.
Ali, M. and Miller, L., 2017. ERP system implementation in large enterprises–a systematic
literature review. Journal of Enterprise Information Management, 30(4), pp.666-692.
Al-Sabaawi, M.Y.M., 2015. Critical success factors for enterprise resource planning
implementation success. International Journal of Advances in Engineering & Technology, 8(4),
p.496.
Al-Sabri, H.M., Al-Mashari, M. and Chikh, A., 2018. A comparative study and evaluation of
ERP reference models in the context of ERP IT-driven implementation: SAP ERP as a case
study. Business Process Management Journal, 24(4), pp.943-964.
Chakravorty, S.S., Dulaney, R.E. and Franza, R.M., 2016. ERP implementation failures: a case
study and analysis. International Journal of Business Information Systems, 21(4), pp.462-476.
Chang, J.F., 2016. Business process management systems: strategy and implementation.
Auerbach Publications.
Conteh, N.Y. and Akhtar, M.J., 2015. Implementation challenges of an enterprise system and its
advantages over legacy systems. International Journal on Computer Science and
Engineering, 7(11), p.120.
Harwood, S., 2017. ERP: The implementation cycle. Routledge.
Hustad, E., Haddara, M. and Kalvenes, B., 2016. ERP and organizational misfits: An ERP
customization journey. Procedia Computer Science, 100, pp.429-439.
Jagoda, K. and Samaranayake, P., 2017. An integrated framework for ERP system
Implementation. International Journal of Accounting & Information Management, 25(1), pp.91-
109.
Kapp, K.M., Latham, W.F. and Ford-Latham, H., 2016. Integrated learning for ERP success: A
learning requirements planning approach. CRC press.
Malinowska, M. and Rzeczycki, A., 2017. Implementation of The Enterprise Resource Planning
Systems: Case Studies of Failures and Their Impact on The Enterprise Operation. Value of
Failure: The Spectrum of Challenges for the Economy, p.75.
Nagpal, S., Khatri, S.K. and Kumar, A., 2015, May. Comparative study of ERP implementation
strategies. In 2015 Long Island Systems, Applications and Technology (pp. 1-9). IEEE.
Nandi, M.L. and Kumar, A., 2016. Centralization and the success of ERP
implementation. Journal of Enterprise Information Management, 29(5), pp.728-750.

9ENTERPRISE RESOURCE PLANNING
Nwankpa, J.K., 2015. ERP system usage and benefit: A model of antecedents and
outcomes. Computers in Human Behavior, 45, pp.335-344.
Panayiotou, N.A., Gayialis, S.P., Evangelopoulos, N.P. and Katimertzoglou, P.K., 2015. A
business process modeling-enabled requirements engineering framework for ERP
implementation. Business Process Management Journal, 21(3), pp.628-664.
Ranjan, S., Jha, V.K. and Pal, P., 2016. Literature review on ERP implementation
challenges. International Journal of Business Information Systems, 21(3), pp.388-402.
Saeed, S., Shaikh, A., Memon, M.A., Memon, M.H., Abassi, F.A. and Naqvi, S.M.R., 2017.
Implementation of Failure Enterprise Systems in Organizational Perspective
Framework. International journal of advanced computer science and applications, 8(5), pp.54-
63.
Snyder, R., 2015. ERP success factors. ASBBS Proceedings, 22(1), p.425.
Sun, H., Ni, W. and Lam, R., 2015. A step-by-step performance assessment and improvement
method for ERP implementation: Action case studies in Chinese companies. Computers in
Industry, 68, pp.40-52.
Zouaghi, I. and Laghouag, A., 2016. Aligning key success factors to ERP implementation
strategy: learning from a case study. International Journal of Business Information
Systems, 22(1), pp.100-115.