In a rapidly
changing business environment, ERP
(Enterprise Resource Planning) puts
the systems in place and allows
you to accordingly react to these
quicksilver changes. It has an all-encompassing
scope in industry whether it is
in financial, production, outsourcing,
logistics, etc. As a concept, it
has become a buzzword and has picked
momentum for the last few yeas.
But every successful concept has
its initial teething problems and
ERP is no exception to this fact.
A recently held seminar at NITIE
dwelt on the issues that affect
ERP implementation and the strategies
to overcome these drawbacks.
The issue that
all unanimously felt topped the
list was the lack of top management
commitment. Ever decision taken
requires total top management involvement
without which ERP implementation
efforts come to naught. But top
management will be totally involved
in ERP only when it feels that the
company will be ultimate beneficiary.
Says Satish Pendse, GM, Information
Systems, Marico, "The strategy
lies in not asking for organizational
commitment, but in aligning organizational
strategies with IT strategies and
ERP."
Each and every
issue that concerns ERP is inevitably
linked with people and their expectations.
While speaking about expectation
management, which is another vital
element in ERP implementation, Girish
Gala, Advisory Project Manager,
IBM, says, "People expect ERP
to deliver everything under the
Sun. They feel that if you press
a button you will get anything.
They ought to realise that a company's
turnover will not double automatically."
This issue of people's
fear of ERP - that is may effect
them adversely, is addressed under
Change Management People consider
ERP to be a threat as they feel
that their traditional function
of doling out information will now
become redundant in view of the
fact that machines will perform
this function and thy will no longer
be called upon. This fear of redundancy
or loss of power needs to be addressed
and they need to be assured that
people do not lose jobs due to ERP.
People may also not adapt to the
new system due to the failure of
proper training. The fear of failure
too can bring about resistance since
every error in this system is blown
out of proportion. With regards
to resistance to ERP, Prashant Karkhanis,
Head, Business Consulting, Mahindra
Consulting Ltd., says, "When
companies switch to ERP, the performance
measurement bar goes up. But for
every action there is an equal and
opposite reaction. Similarly there
is resistance to the new technology
and to the inherent changes."
To combat these negative ERP after-effects,
proactive measures in terms of incentives
are required to link the benefits
of the company to that of the individual.
VS Harish, Dy. GM. SISL suggest
that career planning should address
the vital question, 'What's in it
for me?' He says. "To increase
involvement, a thorough knowledge
of the benefits accruing to people
is essential. If they feel their
interests are taken care of, they
will willingly accept. Also one
the system has been implemented,
people should be assured that they
will not be jobless." A classic
method of generating pull rather
than push (to increase involvement
in ERP) is based on the concept
of a power user i.e., the use of
an IT-savvy person who is respected
and who needs to be trained. On
learning that he will be responsible
for training others, he (the power
user) will willingly undergo rigorous
practice in order to be proficient
in that field and to train other
efficiently. This also gives the
person intellectual satisfaction
and he goes on to influence others.
This is a softer way to manage change."
The lack of planning
too can undermine implementation
and regarding the selection of the
right team, Pradeep Erinjery Director,
Thirdware Solution Limited, goes
to say, "A good project manager
is essential. He need not necessarily
be a bright Techie but he should
know to manage people and the changes
involved in the implementation process."
Before the actual implementation,
a lot of groundwork is required
and this evaluation reduces implementation
time. V S Harish says, "Vendor
selection and selection of a proper
package are vital. Evaluation regarding
the ERP vendor should be based on
the fact that he should be financially
sound to ensure its survival and
the organization and vendor should
have synergies and have a common
roadmap or vision. In the case of
the ERP package, in many cases after
implementing it half way through
companies realise that the package
is not suitable and then abandons
it. This is a costly exercise."
The main thrust now and in the future
lies in creating industry-specific
ERP. Many companies apart from manufacturing
units are getting into publications.
We also now speak in terms of ERP
II with additional functionalities,
additional modules and additional
products like Data Warehousing,
Supply Chain Management and Customer
Relationship Management. To sum
up, Satish Pendse succinctly put
it as "ERP" is a journey
not a destination."
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