ERP Implementation: Benefits, Challenges and Case Study

This report delves into the realm of Enterprise Resource Planning (ERP) systems, particularly focusing on SAP implementation within organizations. It highlights the crucial role of change management in successful ERP integration, emphasizing both the benefits and challenges faced by businesses and educational institutions. The report explores the installation and configuration of ERP systems, potential obstacles, and a case study of ERP implementation at the Massachusetts Institute of Technology (MIT), including the reasons behind its implementation failures. It covers the benefits of ERP, factors influencing benefit realization, and barriers to successful implementation. The report also provides an overview of the advantages of ERP systems, such as improved decision-making, streamlined processes, and enhanced data management. It also discusses various models and strategies for ERP implementation, including the Cranfield and Active models, and concludes with a comprehensive analysis of ERP's impact on business performance and the importance of adapting to change management.

Running head: ERP
ERP
Name of the Student
Name of the University
Author’s note

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Executive summary
All the companies have started to implement the ERP system in their office premises and this
ERP system is known as SAP. The change management plays a vital role in the
implementation of ERP in both institutes and business organisations. The impact of change
management has been showcased in this report. The report highlighted all the aspects of ERP
installation and configuration of ERP, the challenges that the business organisations and
corporate enterprise can face have been showcased in details. The reasons why MIT failed to
implement ERP have been grandstand as well. The reasons why it is difficult to implement
ERP in the educational institutes have been highlighted in details.

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Table of Contents
1. Introduction............................................................................................................................1
3. Benefits of implementation of ERP.......................................................................................4
4. Factors Influencing ERP systems Benefit Realization...........................................................5
4.1. Expected versus actual ERP implementation Benefits...................................................6
4.2. ERP benefits realization barriers and challenges............................................................7
5. Case study of ERP systems in Massachusetts Institute of Technology.................................8
5.1. Process of ERP Implementation in the Institute.............................................................9
6. Conclusion............................................................................................................................10
7. References............................................................................................................................12

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1. Introduction
The organisations made heavy investments on the ERP based systems for their
betterment. Some organisations have realised the power of the ERP while some others
completely failed to understand the potential use of the software ERP. ERP method can be
enhanced with the help of package customisation and only then the potential benefits of ERP
can be understood or better say the realisation of benefits of ERP can be understood (Al-
Mashari 2013). The customisation technique is another necessary aspect that affects the
realisation of benefits of ERP. Strategies should be made to acquire more benefits from the
realisation of benefits associated with ERP. However, few pieces of research have been made
on the topic. This report will highlight the ERP projects customisation procedures to detect
the benefit of realisation. This report will highlight case studies as well (Al-Sehali 2012).
There are several aspects which affect an enterprise’s performance while an enterprise adopts
the ERP systems and this report those aspects elaborately.
All the companies have started to implement the ERP system in their office premises
and this ERP system is known as SAP. These organisations work similar to the organisations
that have adopted the ERP systems. The organisations adopting ERP can enjoy both the
benefits and the adverse effects of ERP. This report will showcase the important
characteristics of ERP along with the benefits it offers that can embellish the realisation of
benefit. This report will compare and contrast on several aspects of ERP and will also show
lights on some case studied based on ERP model.
2. Implementing ERP in businesses
There are numerous advantages that are residing within ERP systems and the
organisations are implementing ERP in their office premises to mitigate the issue, one of that
issue is Y2K. However, by enhancing the design of the system by reducing the inventories,

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reducing the deadline, cutting the heavy expenses and strengthening the management the
business operations can be embellished (Bajwa 2014). These organisations have migrated to
more complex methods that can give the more optimised computerised solutions. The
installation and configuration of ERP based system have failed due to the variation of the
expected benefits and the acquired benefits. The issues associated with people also affect the
benefit of realisation. The problems correlated with hardware and software and problems
associated with the configuration and integration of both hardware and software are of little
significance compared to the effect of the people (Al-Sehali 2012). The other factors that
must be considered are in the disciplinary act, lack of expertise and the poor performance as a
team. The organisations have faced numerous challenges but still, that affect them most is the
change management.
ERP should be properly used to gain the positive impact. Therefore, ERP can be
implemented in business organisations to improve the decision-making process, it also assists
in planning for future, it minimises the duplication of the records. ERP systems work as per
organisations' choice (Bajwa 2014). They prepare an ERP model and based on that model
they have to work upon. The company management team should implement the ERP model
based on the benefits it can bring in the company premises. ERP gives better control and it
also helps in case of traceability. ERP cut down the barriers thus embellish the internal
communication. It also helps to automatize the vital tasks. It provides profitable and services
along with competitive exposure (Al-Sehali 2012). It also helps to improve the performance
and return on investment on long term basis. ERP also helps to retrieve the user information
from the database in agile and effective manner, also helps in gaining consistency, it also
helps in avoiding the data redundancy, ERP also helps in reducing the cost of the products,
also offers better adaptability and scalability. ERP also keep the information system well

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maintained and provide the facility to update the database and provide the security as well
(Ash and Burn 2013).
Fig 1: Model of Benefits Realisation
(Source: Stewart et al 2015, pp. 966-971)
3. Benefits of implementation of ERP
ERP offers a competitive edge over rivals, ERP focus on providing effective services,
it offers scalable operations, it offers integrity, ERP, as mentioned, offers profitable services.
The other benefits that offer are mobility that the applications of ERP can be accessed from
anywhere anytime (Al-Mashari 2013). Their applications are easy to use, it also provides
agile and effective business solutions along with that enhanced security solutions and
excellent security solutions. ERP applications have the capability to secure systems from
virus threats and the intruders’ attacks (Ash and Burn 2013). It also provides excellent
customer service. An ERP solution removes the duplication of processes, ERP also reduces

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the manual work as ERP works automatically without the intervention of manual needs. Thus
one can get error free service, in case of manual entry, there are chances of errors, where as in
case of ERP there are no chances of errors. Also one can get agile effective service, but I case
of manual entry, there is no chance one can get fast service. The ERP tools give the
administers or the managers to forecast on the vital aspects of the industry like share market
and also help to showcase their company market size and position. The departments located
in dispersed regions can collaborate and connect with each other with the help of ERP and
thus can share business activities among themselves (Al-Mashari 2013). ERP also helps in
scalability, structured ERP helps in when any business organisations want to grow and
prosper. ERP facilitates the growth. ERP offers cost effective profitable service, it prevents
any disruptions inside. ERP can help to communicate with the clients, the clients' history can
be accessed with the help of ERP, thus sales people can communicate with the clients faster,
this improves the relationship between the clients' and the company's representatives. ERP is
famous for providing security, accuracy and consistency of information via built-in hardware
and software resources along with the firewall. The managers can restrict data flow thus can
assure the security of the enterprise. ERP is now available in the form of Cloud ERP (Ash
and Burn 2013). The tech giants Amazon and Microsoft offer cloud hosting like Amazon
AWS Cloud platform and Microsoft Azure platform respectively. The organisations deploy
Cloud ERP apps on these cloud platforms. Thus it maximises the productivity of any
company.
4. Factors Influencing ERP systems Benefit Realization
Though the beneficial aspects of ERP have been discussed it can be stated that the
installation and configuration of ERP cannot be beneficial at all. There are factors which can
restrict the use of ERP (Balderston 2015). The employees of the organisations can offer
resistance due to some issues. Also, the installation and configuration of ERP take a hell lot

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of time, and also a load of money that needs to be addressed, due to this there can be a delay
in installation. Other than the workers even the top management team can offer resistance,
this kind of misunderstanding can be fatal as the whole system can fail.
The organisations need to clarify all the details before proceeding further, they should
consider the skills, expertise, the ERP software design and workings. Based on these factors
the organisations must have the mitigation procedures to counter attack the issues related to
ERP (Beheshti 2016). The primary issues must be analysed and should be detected at first
and then the deep analysis should be made on the case study (Balderston 2015). Several
initiatives and approach must be made to make valid and strong proposals otherwise the
project will fail miserably causing a negative impact on the benefit of realisation.
The ERP industry is divided into three categories the organisations that offer the ERP
application program, the professional who is expert in installing and configuring the software.
The third ones are the customers of the organisations (Beheshti 2016). A huge amount of
money investment is required to install the ERP and to get the benefits.
There are several procedures and methods that can facilitate the ERP model, and one
such procedure is the Benefits realisation from the Cranfield procedures, and the others are an
active model (Bingi and Godla 2013). Though there are various tools however despite all
these tools, the organisations fail to deliver the full potency to their respective organisation
premises. The best application of the software is that it actually helps to manage the
advantages of IS and IT. Realisation benefits become the gap between the theories and the
practices.
Cranfield model is used to identify the benefits. The model is designed to find the
objective of the investment and the benefits associated with it under ERP (Birnbaum and
Edelson 2012). There are numerous restrictions associated and they can be obtained by the

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Benefits Management model. The restrictions are-change management, poor reporting, lack
of expertise, poor prioritization, inadequate support, poor performance as a team,
malfunctioning of software, poor management of the applications and the modifications
performed in a poor manner (Bingi and Godla 2013).
4.1. Expected versus actual ERP implementation Benefits
The companies who have installed and configured ERP can acquire arrange of
tangible and non-tangible benefits (Birnbaum and Edelson 2012). The companies expect to
achieve the benefit is by the method of lessening in finance cycle closure. The discrepancies
are showing clearly in between the companies that want to acquire something from the ERP
and the companies which are receiving benefits from the ERP (Bruce 2016). The enterprises
have identified multiple benefits associated that are correlated with performance.
Fig 2: SAP R/3 benefits
(Source: Kalling 2013, pp-46-67)
4.2. ERP benefits realization barriers and challenges
The restrictions or the barriers faced include the malfunctioning of software.
However, the issues addressed are somewhat related to people in any way. Change
management is the most critical barrier to Benefit Realisation that needs to be addressed and

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appropriate steps must be taken to mitigate and control it (Chaudhuri & Ganti 2015).
Appropriate information systems must be implemented and must be used to get successful
results and all the enterprises must be aware of this fact. That is why the enterprises are more
focused on the methodologies associated with change management and correct usage of the
information systems. The vital aspect of any enterprise is to consider the strategy associated
with the change management is the cultural change and that must be considered by all the
organisations (Dillard and Yuthas 2016). The procedures of ASAP implementation of SAP
are mainly focussed on the methodologies associated with change management and the
inclusion of numerous resources supporting the procedures (AMR Research. 2012). The
advanced research is required for any complex issues that may arise correlated with the
change management and if any modification is required, that change must be done for the
betterment.
5. Case study of ERP systems in Massachusetts Institute of Technology
The Massachusetts Institute of technology in the 20th century had initially about 8000
faculties and about 10000 students (Brynjolfsson 2013). The students had to face immense
pressure from the outsiders and the Institute had to face a critical challenge associated with
the budget. The federal growth and the expenditure of the US seriously affect the Institute
(Carlino 2014). The budget for the research significantly got lowered and suffered severely.
On the other hand, the tuition fee of the students significantly got aroused. Many students
faced difficulties as they could not get admission to one of the most prestigious institutes of
the world (Davenport 2013). These problems ultimately made the increment gap and
eventually, MIT faced hurdles to attract the then stakeholders.
That is why MIT decided to convert their prevalent financial system into main-time
financial information (Davenport 2016). MIT thus considered two approaches –the first

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strategy is to develop a single improved system for the institute while the other approach is to
purchase a similar system for the Institute. MIT decided to buy an ERP system for their
institute as there are multiple complications regarding the building of such ERP systems from
scratch and MIT was not ready to handle those complications (Deloitte Consulting 2015).
The ERP which was purchased simply works on the practices carried out in the industry.
The profit for the institute can only come following certain strategies (Gartner 2014).
The research showed that the organisations that have performed well over the years have
effectively used their own strategies and own data mining procedures. A review was made of
1500 chief information officers and there they said that the business intelligence is the
business solution for the business organisations that follow the methodologies of ERP design
model or the ERP framework (Gefen and Ridings 2012). While about 142 organisations were
reviewed, about 70% of the respondents of those organisations were found to utilise the
activities associated with Business Intelligence.
5.1. Process of ERP Implementation in the Institute
MIT started the installation and configuration of ERP system called SAP and they
started it in the year 1995. The primary objective was to correlate SAP central finances with
the estate management at the MIT premise (Kalling 2013). The second approach was to
enhance the DLCS all over the institute and then the application of ERP system over there
step by step. Inside MIT there is a professional skilled IT team and this team is developed by
MIT and their duty was to measure the ERP system inside the organisation and predict the
best product for MIT among all the products available in the market for sale (O’Leary 2012).
After all the discussions MIT finally came to the conclusion that the Oracle and SAP
were two best solutions for the ERP systems, they found that these were the two vendors MIT
could rely upon to mitigate and solve the issues they were undergoing (Olson 2014). MIT

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already grabbed a large amount of market share, MIT also had expertise on SAP and was
ready to adopt with the new features and was ready to learn new things related to SAP
(Rayner and Woods 2014). Therefore, they choose SAP more precisely SAP R/3 after
considering all the reviews applicable among all the vendors chosen with respect to
installation and configuration of ERP system.
Many organisation shaves faced several issues related to ERP system while installing
and configuring the ERP system at their premises and some of the organisations have
successfully implemented the ERP system at their premises to enhance their financial
activities (Sarkis and Sundarraj 2013). MIT inspired by the success of the ERP system
implemented the same in their premises too. They too had an urge to adopt corporate culture
within their premises and they want to embellish the operational efficiency by cutting down
the heavy expenses. Hence they took the decision to adopt the ERP system for their premises
as this could assist them to face and overcome the financial crisis. Massachusetts Institute of
Technology has taken the significant approach to enhance the business activities within the
institute (Stewart et al 2015). They have invested a lot of money; they invested around $5
billion for the ERP system. They tried to overcome the financial crisis they were facing (Weil
2015).
According to the modern trends and keeping in mind the modern demand of the
market the ERP vendors are taking initiatives to increase their market share, SAP and Oracle
being the dominant market shareholder. However, despite their best efforts Massachusetts
Institute of Technology could not apply the software successfully in their premises, about 60
to 80 % educational institutes failed to execute the application and Massachusetts Institute of
Technology was no exception (Wilderman 2014). ERP was built keeping in mind the
business organisation and for the success of their organisations. ERP has the capabilities to
offer varied customisation solutions, however, these customisation options are responsible for