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Erp Failure in Pakistan

Essay by   •  March 30, 2012  •  Research Paper  •  964 Words (4 Pages)  •  1,758 Views

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Enterprise Resource Planning (ERP) is the newest version of Material Resource Planning (MRP). "In the 1960′s MRP was used for managing demand and ordering". In the early 1990's ERP was introduced. MRP-II is extensive to cover different areas of an organization like Finance, Human Resources planning, product Life Cycle, and Customer Resource Planning. ERP is business management software offered by different vendors, ERP system is an integrated system solution that automate all departments of an organization, ERP consist of multiple modules use by different departments according to their needs and requirement , ERP system having centralized database that help to increase data automation, seamless process, reduce cost , increase speed, minimize data redundancy that help to control updating anomalies (problems that occurs due to data redundancy in updating, inserting and deleting of data). Some disadvantages of ERP systems such as: too much expensive, is ERP system packages are offering standard process so companies have to customize according to their needs, involve cost and time duration too, implementation is a long-lasting process may require major changes in the company and process, needs ERP expertise to support the system after implementation.

Parr & Shanks (2000) identified some abnormal failure rate for ERP implementation and as further Martin (1998) stated that 90% ERP implementation projects are moreover late or over budget. The success of ERP implementation is supposed to be measure by different variables such as time, budget, specifications and penalty of project on organization; this would lead to a failure rate of 90% for all ERP Implementations stated by Whyte & Fortune (2003). These fact and figures may seem depressed, but the standard process of ERP implementation approximately the authentic implementation of a standard system and customize process should have to fit the processes maintain by the standard system. In detail Procaccino et al (2002) position that 85% IT related projects fail and high failure rate increase the variety of complexity, a success rate for complex IT related projects is 10% such as ERP implementation.

The phenomena of ERP implementation is much higher globally in IT market, according to Yen, Chou & Chang (2002), greater than 1000 of fortune companies have moved towards ERP implementation. ERP Implementations are unique from "legacy" systems analysis and design project (Davenport, 2000). The difference between both ERP and old or legacy system are the work frame, project duration, and complexity, direct impact on business and total cost of ERP project and resulting business impact if the projects fail. While old system project impact on specific business area, project does not affect the over all organization. Additionally ERP system is always connected with the business process reengineering. For Achieving success mostly organization adopt "best industry practices" inbuilt in the selected ERP solution relatively than changing the ERP solution to fit current business practices.

Jiang and Klein (1999) observe threat when it linked to several dimensions idea of in order

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