This is a reflection after listening to the Unit 3 – Lecture 2 Video, titled “Enterprise Resource Planning Systems”.
The topics which made me reflect most those related with challenges in implementing ERP systems and whether ERP is a Universal Solution? Having been working in China since several years I agree with the lecture content that most popular ERP solutions like SAP & Oracle are developed with a bias for western world style of business and processes. The best practices are not true in every situation particularly when many businesses still need to cater to society and culture of a specific place.
Things are further complicated when the functional analysts and consultants engaged for an implementation also come with a bias or have a lack of knowledge about policies, process and method of business in east. This is a reason why many customers want to move away from ERP solutions and are looking to avoid or find another solution. We are witnessing a growing demand for SaaS based collaborative ERP, integrated with multiple different localized solutions replacing popular one-for-all ERP packages.
Question: Why do so many large-scale ERP implementations escalate in budget and time and a significant proportion end in failure?
Some of the reasons which I could think of are:
- Many organizations are not sure of the objectives behind their ERP implementations. They want to automate their processes but they are not sure of the system functionalities, limitations and complications in fitting the processes to the system functionalities. This results in endless customizations or severe impact to business processes.
- Some organizations are driven into a solution by pure sales talk from consulting companies who try to implement a ERP system without understanding the business properly.
- Several organizations once they decide to implement an ERP system, try to merge every process into it, or try to merge every line of business into a common process. This sometimes results in failures.