Detailed Analysis of ERP Systems Implementation for Atrion Corporation

This report analyzes the potential implementation of Enterprise Resource Planning (ERP) systems for Atrion Corporation, a medical equipment supplier. The analysis begins by outlining the company's need for ERP to overcome issues with its non-integrated information systems, such as data duplicati...Read More

ERP Systems
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Running head: ERP SYSTEMS

ERP SYSTEMS
Atrion Corporation is one of the growing business suppliers of medical equipment’s in niche
segments of heath care sector in USA and their product portfolio ranges from cardiovascular
equipment’s to ophthalmology products and devices that are marketed to end users, vendors
and other producers. As Atrion Corp’s mission is to emerge at forefront of technology and
manufacturing in medical sector to fulfil needs of targeted segments so they have decided to
implement ERP system solutions to integrate and optimize their current non-integrated
information systems.
Atrion Corp aims to utilize the information as an input to maximize their productivity gains
and overcome the issues of integration of information systems primarily because there are
many ideal components in their non -integrated information system environment which in
most cases results to duplication of information and to different outcomes. Due to these
problems of fragmentation of information Atrion Corp faces difficulty in getting consolidated
information as there are inconsistent redundant data stored in their systems. Hence, to
overcome these problems Atrion Corp should implement ERP solution as it will solve issues
arising from non-integrated IS by aggregating functions, business process and data in one
integrated system to support their needs of business. ERP systems acts as management
solution systems that permits administration of resources in a firm in an integrated way
through automation of departments or functions, thus making information available in real
time. Also, ERP systems help firms in making effective decisions by allowing decision
makers get real time overview of different organizational situations and problems as per
functionality of every department and along value chain including internal and external
process so as to support decision making needs accurately. ERP software systems
standardizes, streamlines and compiles business process through entire functions such as
human resource, procurement, distribution, finance and other department by operating under
integrated software platform which helps to use common data thus making firms operations
function through single database for optimization.
The main positive features of ERP system are:
Enterprise wide integration: business functions get integrated end to end across departments
and business units through ERP. For instance, any new order can be initiated automatically
for credit verification, query checks for product availability and updates for procurement and
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distribution department to schedule order through ERP systems. Once the orders are shipped,
the invoice can be generated and delivered.
Real time functions: as stated by Fu & Mittnight (2015) ERP systems offer real time
processing of information, hence issues can be detected rapidly in any business process thus
providing real time solution to problems. Example, business process integrated with ERP
systems initiate order and checks instantly within few seconds of order receipt, thus allowing
sellers more time to identify issues if any and giving time to resolve the situation.
Common database: the most significant feature of ERP is benefit of common database which
allows data to be defined only once for the enterprise and each department can utilize same
definition of data under single platform. This allows departments adhere to approved data
standards and regulations which helps to boost performance.
Consistent interface: ERP software systems allows consistent user interface making the
process look professional with common look and feel which helps to improve speed of
interface. Also common interface helps to save training cost as employees of each department
can be trained to use a common user interface.
Improved efficiency and decision making: ERP systems helps firms minimize time needed in
business process and even facilitates coordination through shared data that is organized
around shared data definitions. This helps to discard wastage of time arguing on data quality
and allows departments to contribute time for evaluation of data, draw inferences and initiate
better decision making. Further efficacious decision making balances command and control
with full autonomy under enterprise wide collaboration to improve agility and potential.
Improved security: centralized database under ERP can be secured easily in comparison to
systems where data is scattered under different servers, which helps to maintain better
security.
The main negatives or limitations of ERP are:
Difficulty in implementation planning: as opined by Ram, Corkindale & Ming-Lu (2015) the
entire setup for ERP planning is vast and expensive and needs lot of time as well as adequate
employee training at both managerial and technical levels. Also new work flow procedure
and entire changeover of fundamental policies makes implementation of ERP slow and
tedious process.
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Improper training: the success of integration of ERP system in a firm depends on different
elements such as skills and expertise of workforce, optimum use of resources and appropriate
planning. Hence, adequate training in ERP is very essential to make the system operate
properly. As several firms save expenses by not training their workforce on ERP so it leads to
inappropriate cognizance of ERP systems as it may result to improper handling of technology
by employees which can lead to loss of valuable information.
Level of customization: ERP system setups have limited customization and its flexibility
heavily relies on brand of software used as some brands allow provision of customization.
Often due to limited customization and flexibility the scope of execution of ERP becomes
difficult and rigid which disturbs work flow of business.
Pros and Cons of functional areas of ERP
Marketing/ Sales: sales departments monitor customer experience starting from pre-sale to
post sale activities which initiates with order receiving. An ERP system automates and
improves sales function through giving better insights on customer visits, spending,
invoicing, forecasting and competition analysis. Further, orders can be tracked to monitor
goals which can help marketing managers and employees control, collate and analyze
decision and objectives. However, biggest cons is customization of aspects of marketing
function through ERP as it takes lot of time, expertise, effort and expenses and can lead to
poor practices built into ERP systems which can make it more complex.
Supply chain management: ERP systems support Supply chain functions with features for
purchase, product configuration, scheduling of vendors, accurate verification, claim
processing etc which helps to administer effective processing and distribution activities
(Stevens & Johnson 2016). However one of cons is complexity as ERP systems offer
enormous capabilities along with complexity in absence of proper plan for implementation
which can complicate function resulting into poor outcomes.
Finance: ERP systems automate and streamline activities of accounting function related to
budgeting, cost and cash management etc. and offers real time activity based data and
insights to accounting departments which helps to improve performance and even helps to
ensure adherence to relevant regulations. However, biggest cons is ERP needs significant
investment, manpower and time for successful implementation along with training and
maintenance fee to support ERP.
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References
Fu, Z., & Mittnight, E. H. (2015). Critical success factors for continually monitoring,
evaluating and assessing management of enterprise IT. COBIT Focus, 1-5.
Ram, J., Corkindale, D., & Ming-Lu, W. (2015). Examining the role of organizational
readiness in ERP project delivery. Journal of Computer Information Systems, 55(2), 29-
39
Stevens, G. C., & Johnson, M. (2016). Integrating the supply chain … 25 years on.
International Journal of Physical Distribution & Logistics Management, 46(1), 19-
42. doi:http://dx.doi.org/10.1108/IJPDLM-07-2015-0175
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