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Erp System Is Still Relevant to Today's Organizations

Essay by   •  October 16, 2018  •  Article Review  •  580 Words (3 Pages)  •  110 Views

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Yes, I think ERP system is still relevant to today's organizations.

According to Gartner technology investment priorities survey (2017), it shows that ERP is in the fourth place in the global rank. It resulted that more and more CIOs in ANZ consider implementing ERP into their business nowadays.

There are several reasons that why ERP system is still beneficial to today's organizations.

Because of the increasing trend of globalization, organizations want to be agile and flexible and will require their information systems to have integrated data, applications, and resources from across the organization. In the meanwhile, the main benefit of ERP is to maintain a centralized database by integrating various functional aspects of the organization. Second, ERP improves business performance. For example, inventory level can be reduced as real-time data will be shared with production planner and decrease safety stock level. Customers will receive products much faster as ERP make order fulfilment process faster. In addition, in current organizations, employees work at a much faster pace compared to before. ERP system can help to make employees job easier and more efficient as it simplifies many working processes. Furthermore, today's organizations normally have many suppliers to keep a lower cost and better quality. Implementing ERP system help them to maintain better supplier relations by integrating with partners and suppliers.

Besides the benefits of traditional ERP, there are more types of ERP system are launched in the new century in order to meet today's organization's requirements. First of all, on-cloud ERP system is designed for the organizations that would like to access ERP from anywhere through the internet which is suitable for today’s businessman and sales. It also saves huge initial investment cost and saves time to implement in the current competitive market. Moreover, Postmodern ERP has raised by Gartner in 2014. With Postmodern ERP strategy, it solved one of the problems in ERP that the relative inflexibility of an integrated suite. With the postmodern strategy, you can easily replace or upgrade only the specific applications affected by the change (Hedges 2017).

On the other hand, although ERP system benefits to today's organizations, it still has many challenges to implement. First, retraining of all employees with the new system can be costly and time consuming. Some employees are not technology savvy, it will be difficult to train them on ERP and make negative pressures on them which leads to a decrease in efficiency. Second, standardized business process may reduce the flexibility of an organization’s process. For example, picking lists can be created only after warehouse transferred products to a specific plant in ERP system. For on-cloud ERP, the security level is a major concern. As a result, it is important for today’s organization to evaluate if they can implement ERP and select the ‘right’ ERP. First, organizations will have to assess its economic feasibility, technical feasibility and schedule feasibility. In terms of system perspective, organizations need to know what characteristics of the ERP system they want. For example, on-premise or on-cloud? In terms of vendor perspective, they will consider choosing among tier1, tier 2 or tier 3 ERP. Services provided by venders will be considered too.

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