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Chapter 14 Enterprise resource planning (ERP) 415
faster access to more (and more accurate) information
from across their enterprise, resulting in improved
operational efficiency and effectiveness’, he added.
Satyam is also an Indian company, although it has
operations world-wide, so it fully understands the
operating and implementation environment. At the
same time it is a global information technology
company, with experience of ERP and other systems
implementations in many industries. ‘We selected Satyam
for their unrivaled SAP credentials, their strong domain
knowledge, and their ability to deliver a cost-effective
solution in less time. Satyam also demonstrated excellent
partnership abilities [it] means lower risk and faster
deployment’ (Manish Mehta).
Supply chain ERP
The step beyond integrating internal ERP systems with immediate customers and suppliers
is to integrate all the ERP and similar systems along a supply chain. Of course, this can never
be straightforward and is often exceptionally complicated. Not only do different ERP systems
have to communicate together, they have to integrate with other types of system. For example,
sales and marketing functions often use systems such as customer relationship management
(CRM, see Chapter 13) that manage the complexities of customer requirements, promises
and transactions. Getting ERP and CRM systems to work together is itself often difficult.
Sometimes the information from ERP systems has to be translated into a form that CRM and
other e-commerce applications are able to understand. Nevertheless, such web-integrated
ERP or c-commerce (collaborative commerce) applications are emerging and starting to
make an impact on the way companies do business. Although a formidable task, the benefits
are potentially great. The costs of communicating between supply chain partners could be
dramatically reduced and the potential for avoiding errors as information and products move
between partners in the supply chain are significant. Yet, as a final warning note, it is well to
remember that although integration can bring all the benefits of increased transparency in a
supply chain, it may also transmit systems failure. If the ERP system of one operation within
a supply chain fails for some reason, it may block the effective operation of the whole integrated
information system throughout the chain.
Implementation of ERP systems
By their nature, ERP systems are designed to address problems of information fragmentation.
Therefore any ERP system will be complex and difficult to get right. Implementing this type
of system will necessarily involve crossing organizational boundaries and integrating internal
processes that cover many, if not all, functional areas of a business. Building a single system
that simultaneously satisfies the requirements of operations managers, marketing and sales
managers, finance managers and everyone else in the organization is never going to be easy.
It is likely that each function will have its own set of processes and a well-understood system
that has been designed for its specific needs. Moving everyone onto a single, integrated system
that runs off a single database is going to be potentially very unpopular. Furthermore, few
people like to change, and ERP asks almost everyone to change how they do their jobs. If ERP
implementation were not difficult there would not be so many reports of the failure of
ERP implementations, or even the complete abandonment of systems.
One of the key issues in ERP implementation is what critical success factors (CSFs) should
be managed to increase the chances of a successful implementation. In this case, CSFs are those
things that the organization must ‘get right’ in order for the ERP system to work effectively.
Much of the research in this area has been summarized by Finney and Corbett 7 who distinguish
between the broad, organization-wide or strategic factors, and the more project specific, or
tactical, factors. These are shown in Table 14.2.