Comprehensive Report: ERP Technology and Its Challenges

This report provides a comprehensive overview of Enterprise Resource Planning (ERP) technology, detailing its meaning, advantages, and the challenges associated with its implementation. It explores various aspects, including vendor selection, real-time integration, managing multiple systems, and technical issues such as server compatibility and security concerns. The report also delves into data migration, security vulnerabilities, and the integrity of information within ERP systems. Furthermore, it presents real-world case studies, contrasting the successful implementation by Cadbury with the failure of Hershey's, to illustrate effective strategies for overcoming these challenges. The analysis emphasizes the importance of correct planning, vendor selection, effective communication, and appropriate implementation methodologies, including security controls and monitoring processes. This report aims to provide students with a thorough understanding of ERP technology and its practical implications.

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ERP Technology & its Challenges
10/5/2017

ERP Technology & its Challenges
Table of Contents
Introduction.................................................................................................................................................4
Enterprise Resource Planning (ERP): Meaning & Definition......................................................................4
Need & Advantages of ERP Technology....................................................................................................4
Challenges in ERP Technology...................................................................................................................6
Resolution of the ERP Challenges...............................................................................................................8
ERP Success Story......................................................................................................................................8
ERP Failure Story........................................................................................................................................8
Conclusion...................................................................................................................................................9
References.................................................................................................................................................10
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ERP Technology & its Challenges
Abstract
There are many changes and advancements that are happening in the field of technology. These
changes include the advancement and transformation of the technical concepts. Enterprise
Resource Planning (ERP) is a process that involves the execution and streamlining of the
business activities through an integrated manner. There is a great use of ERP that is being
witnessed in the business organizations. The report includes the meaning and advantages of the
ERP technology along with the challenges involved and their resolution.
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ERP Technology & its Challenges
Introduction
Technology has improved and has enhanced over the period of years. There have been many
automated systems that the business organizations are using in the present scenario so that they
may gain benefits out of the same. These business organizations are now looking for
implementation of the software packages that provide them with an integrated platform for the
execution of the business activities. Enterprise Resource Planning (ERP) packages are an
example of such integrated software packages that being extensively used.
Enterprise Resource Planning (ERP): Meaning & Definition
ERP stands for Enterprise Resource Planning and it is a process that includes the integrated
business mechanisms and activities. There are many significant business tasks that are covered
and are executed by using and ERP package, such as, planning, decision making, inventory,
sales, marketing, finance, human resources, procurement etc (Kilic, Zaim & Delen, 2014).
There are various vendors and service providers that have developed and launched their ERP
packages in the market. Some of the popular vendors include SAP, Oracle and Microsoft.
On the basis of the business needs and requirements, ERP packages can be classified in different
types, such as, industry specific ERP systems, web based ERP, ERP packages for small
businesses and likewise (Sodomka & Klcova, 2016).
Need & Advantages of ERP Technology
The growth and use of ERP in the business organizations is because of the requirements of these
business units and the benefits that are offered by the ERP packages.
 The business firms and organizations that have been successful in the implementation of
the ERP packages have managed to achieve a competitive edge over the others.
 The manual operations that were previously carried out by the resources in the
organizations have now been replaced by their automated versions through ERP
packages. This had led to the enhancement and improvement in the productivity levels of
the employees (Ovidiu, 2010).
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ERP Technology & its Challenges
 Planning is an essential activity in the business organizations. ERP packages have
provided the ability to carry out efficient planning and estimations.
 A strong integration and collaboration is required for the success of the business
organizations. ERP packages have provided the organizations with the ability to have a
string integrated environment.
 Management of the changes in the business organization is made easy with the aid of the
ERP packages. These changes may comprise of the modifications in the business
requirements or specifications along with the number of users or customers. There may
also be changes in the technological concepts and aspects (Matende & Ogao, 2013).
 The overall management of the information is made easy through ERP packages and
software. The information operations and activities, such as, storage, retrieval and
management can be made smoother through these packages (Kocakulah & Willett, 2011)
(Chauhan, Dwivedi & Sherry, 2012).
 The additional and unnecessary infrastructural and operational costs are avoided through
the successful implementation of the ERP packages. This leads to the enhancement of the
overall budget and expenses of the organization.
 ERP systems work on the information sets that are associated with the business
organizations along with the real-time data and information as well. This leads to the
improvement of the customer-centric operations and activities.
 The reporting structure of the organizations is improved with the implementation of ERP
packages which makes it possible for all the resources to have updated information at all
times. The overall communication strategy and architecture also improves.
 ERP packages also assist the organizations in the adherence and compliance to several
legal policies, regulatory frameworks and laws. This reduces the probability of the legal
risks and issues (Hasibuan & Dantes, 2012).
 These systems have an inherent quality of scalability which provides the organizations
with various different capabilities, such as, flexibility and adaptability.
 The relationship and the engagement with the customers also improve with the
implementation of the ERP packages. This is because of the reason that the business
operations are streamlined and the customer preferences and choices are also taken into
consideration for the execution of business tasks and activities (Sadrzadehrafiei, 2013).
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ERP Technology & its Challenges
Challenges in ERP Technology
There can be many challenges that may come up in association with the ERP technology. These
challenges are as listed below.
 There are various factors that are associated with the selection of the suitable ERP
package for an organization. Some of these factors include the size of the software, the
automated systems already in use, the requirements and specifications of the
organization, scope of the system and many more. The selection of the system, therefore,
emerges as one of the major challenges (Babaei, Gholami & Altafi, 2015).
 ERP systems and packages have experienced many changes and transformations in the
recent years. In the past, these packages were mostly batch processed and integrated.
However, these systems have now shifted towards the real-time based integration. The
transition process from batch integration to real-time integration is a major challenge
(Momoh, Roy & Shehab, 2010).
 Initially, organizations tend to implement the basic ERP packages that have limited
requirements and specifications involved. There are a few operations covered by these
systems and once the organization expands, the needs of these organizations also rise.
This often leads to the presence of multiple ERP packages to support and maintain which
becomes troublesome at times (Singla, 2009).
 There are several technical issues that may come up in association with the ERP
technology and packages:
o There are a number of existing servers and workstations that are installed in the
organization. With the implementation and deployment of the ERP technology,
there are many modifications that need to be done to these servers and
workstations.
o The speed and bandwidth of the internet servers and the network connections
shall also be considered and shall be enhanced as per the requirements of the ERP
system. This may have an impact on the existing systems and operations being
carried out in the organization (Nordin & Adegoke, 2015).
o Compatibility and integration of the ERP package with the rest of the software
and hardware installed in the organization can come up as a challenge.
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ERP Technology & its Challenges
 In the first attempt of the ERP implementation in the business organization, it would be
necessary to migrate and move the existing and legacy data sets to the new platform.
There may be issues in the data quality and consistency in the process of migration.
 Security may be one of the major challenges that may come up with the deployment and
implementation of the ERP technology and package in the organization. Some of these
security issues that may crop up are as listed below.
o There are a lot many ERP packages and software that may go unpatched. It
becomes required to install updates and patches in the ERP packages and the
failure to do so may lead to the enhancement of the complexity.
o Poor configuration of the ERP packages and systems may lead to the increased
probability of the backdoor access for the attackers. This may lead to the
enhancement of the security vulnerabilities as well (Zafeiropoulos, Metaxiotis &
Askounis, 2005).
o Outdates web interfaces used in the ERP technology may lead to the occurrence
of the security attacks such as SQL injection and web based security risks and
attacks.
o There are a lot many access points that are present in the ERP package which
leads to the issues associated with the violation of the access control and
authentication. This may lead to breaching and leakage of information.
o There may be availability attacks that may come up with the occurrence and
execution of flooding attacks such as denial of service and distributed denial of
service attacks. The availability of the services, information and operations may
be impacted as a result of these attacks on security (Acharya, Jethava & Patel,
2013).
o There can also be issues with the integrity of the information associated with the
ERP packages. There are vast data sets that are involved in ERP packages that
may be exposed to the risks such as alteration of the contents without adequate
permission to do so.
o Malware attacks are also common in case of the automated systems and
applications that may be witnessed in case of ERP packages as well.
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ERP Technology & its Challenges
Resolution of the ERP Challenges
The challenges that have been illustrated above can be further understood with the case studies
associated with the implementation of the ERP packages in the organizations. There have been
many success and failure stories in the past. The success stories have been described below to
describe the challenges and the reasons of success or failure of the ERP packages and system.
ERP Success Story
Cadbury is an organization that is one of the world’s largest manufacturers of chocolates and is
based out of Birmingham, United Kingdom. The ERP technology was successfully implemented
in the organization with the adherence to the following points.
 The strongest point involved in the successful implementation of ERP in Cadbury was
the correct planning and estimation activities that were involved.
 The choice of the vendor was done according to the requirements of the ERP package in
the organization and the analysis involved was also extensive.
 Effective communication channel was developed with the ERP vendor with the
development of a portal called vendor connect for this purpose (Singh, 2017).
 Implementation methodology that was used by the organization was also apt. Cross-
functional implementation was done so that the series of phases were involved rather than
implanting all the functionalities all at once.
 The management also made sure that the monitoring tasks were adequately carried out so
that the team members were aware of all the deviations and errors.
ERP Failure Story
There was another organization called Hershey’s that attempted the implementation of ERP but
failed in its attempt to do so. There were many challenges that came up for the organization
which gradually led to failure.
 The schedule that was estimated by the vendor and the team of analysts was 48 months.
However, the organizational leadership forced the vendor and the project team to
implement and complete the project in a period of 30 months only. The incorrect
schedule design was a major challenge that led to the failure of the project.
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ERP Technology & its Challenges
 Because of the incorrect schedule design and estimation, there were many critical tasks
and activities that were missed out during the implementation. One such activity was
testing of the critical features that led to the presence of many bugs in the final delivery
of the project (Gross, 2011).
 The implementation methodology that was selected by the management was also not
correct. The selected methodology included Big Bang implementation of the ERP
technology which led to the failure of the project.
There are two scenarios that have been described above which include the success and the failure
of the ERP technology in the organizations. The challenges associated with the ERP technology
can be overcome by using and adhering to the points listed under the approach followed by
Cadbury. Also, there shall be used and implementation of the security controls and mechanisms
to avoid the security risks and attacks. There shall also be advanced use of monitoring and
control processes by the management and leadership covering the adequate selection of the
vendor, methodology, estimations etc. The processes must be validated and verified at every step
so that the end result that is achieved is positive.
Conclusion
Enterprise Resource Planning a process that includes the integrated business mechanisms and
activities. There are many significant business tasks that are covered and are executed by using
and ERP package, such as, planning, decision making, inventory, sales, marketing, finance,
human resources, procurement etc. ERP offers many benefits to the organizations in which it is
implemented. Some of these benefits include streamlining of operations, enhanced productivity
and accuracy, integration of the business operations, reduced legal risks and increased customer
engagement and satisfaction levels. There can also be certain challenges that may be observed in
association with the ERP technology. These challenges may include technical issues such as
compatibility, integration and installation issues or data quality and consistency issues. There
may also be a number of security issues that may be observed in association with the ERP
packages. It shall be ensured that adequate planning and control is involved in the selection,
development and deployment of the ERP technology in the organization.
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ERP Technology & its Challenges
References
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