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Issue of October 2003 

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Can you handle change?

In the mid-90s many large enterprises deployed ERP solutions or extended their MRP II applications. But the focus was too much on technology and integration issues. That was the mistake these enterprises made, and that is why ERP was a failure for many of them. On the other hand, many companies had successfully implemented ERP and are still enjoying the benefits.

The companies that enjoy ERP success will tell you that the key to success is how you handle the changes introduced by ERP in your organization. You also have to be willing to fine-tune your business processes for ERP.

An ERP implementation impacts people, systems, and the organization as a whole. Hence barriers are expected from these areas since work processes are expected to alter. Business processes, roles, and responsibilities would also undergo change.

And when these happen, the organization will encounter a sticky issue called 'resistance to change.' Since ERP introduces transparency in operations and brings about more discipline, the people who are empowered are bound to oppose it.

People who are so used to a particular system or a certain set of processes, won't accept an alternative like ERP so easily, and won't adapt to the new system. Besides employees, people from the extended enterprise will also protest. Vendors for instance, may not take to the idea of updating data in the ERP system through a Web interface.

Change is welcome only if it reduces workload or performs the job faster. But ERP does not offer exactly that.

ERP consultants say that the resistance to change can be minimized through initiatives like change management, periodic training, 'hand-holding,' organization preparedness, and of course, management support.

The cover story on ERP Implementation has three angles, and hence three stories. In the first story we analyze why ERP has been a failure for some organizations. Then we offer advice on what you should avoid (and do) to ensure that your ERP implementation is successful.

In the second story we explain why organizations are unable to realize ROI on ERP. Then we list what organizations should do to achieve ROI. The main thing to understand is that ROI comes from the process improvements ERP supports—not from ERP software alone.

And in the third story, we go back to the past to understand how ERP has evolved. We then move forward to explain where ERP is heading. Organizations that have successfully implemented ERP are now planning to build other applications like CRM, SCM and BI, on top of it. But the integration for this could be tricky.

Our encounter with ERP continues elsewhere in this issue. We bring you a case study of an ERP implementation in the electronics industry. TEI Technologies implemented Baan in a record 70 days. It now has better control over its inventory and is able to meet customer expectations.

Now whoever said, "ERP is dead" could do well by taking back these words.

— Brian Pereira (Assist. Editor)

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