The Implementation stages, functions and advantages of ERP

application

Peter M Kamara
(PhD in Management student)
School of Business and Management
Texila American University
e-mail: [email protected]
August 2016

Abstract
Enterprises Resource Planning (ERP) system has become the standard for
organizations to achieve collectiveness and better integration within a business set
units / departments. The ERP system creates the platform for integration of all
business processes that guaranty immediate tracking of the business growth. For
Large organization with multiple office locations, benefited more on ERP platforms
as it’s integrate all their offices business processes on real time that give managers
and top executive an overall performance of the company or a snap shot of the
company activities. It also gives the decision makers quicker analysed information
from their desktop to reach conclusive decision for the smooth running of the
organization (Pienaar et al, 2008). It helps Management to better control and
reposition the organization trend of doing things as its scoop information from
various departments.

Introduction
In the early 1990s, ERP concept was derived from MRP (Material Requirements
Planning and MRP II (Manufacturing Resources Planning II), Chen, (2001). Since
the revaluation of ERP systems in linking all business processes, its benefits
outweighs it disadvantages provided if the ERP platform is effectively
implemented, Chen (2001). Such implementing company would benefited in cost
savings, business 2 business (B2B) interaction and integrates the business
processes for better information analysis. It provides the business enterprises
with effectiveness and promptness in it service delivery (Chen, 2001).

Today global business trend and customer taste and needs have shifted the
business perspective into spending more time on research on Information
Technology (IT) and how to improve their Information System (IS) needs (Addo-
Tenkorang and Helo, 2011). These research have led organization to have a
sound integrated system platforms for there Business Processes (BP), hence,
Enterprises Resources Planning (ERP) system platform become the solution,
which not only integrate the business processes but enhance the effective
delivery of services to customer and guarantee timely information to relevant
authorities within the same organization for prompt decision making.

There are several scholars that have research on various angles and topics of
ERP system, ranging from it usefulness, implementation, adaptation by users, it
cost, benefit and disadvantages and so on (Moon, 2007; Addo-Tenkorang and
Helo, 2011). However, all the researches narrowed to the important of why
businesses should acquire ERP system to be able to compete in the current
global trend of doing business, where there is a cutthroat market (Moon, 2007;
Addo-Tenkorang and Helo, 2011). Thereby, service delivery become key, as its
serves as a game changer to position the business to the apex of the market. ERP
is the integration of business processes such as accounting processes, supply
chain management, investment processes, store management, payroll, etc., and
link all departmental function into one repository. Whereby information are
retrieve from the repository by various departments at any given timeframe,
Uwizeyemungu and Raymond (2005).

The concept of ERP

The concept of ERP came about how business processes can be integrated in
enhancing better service delivery, couple with globalization of business trading,
become an increasing importance factor for researchers to find better solution
for integration. Given the fact that MRP to MRP II before the discovery of ERP in
the 90s pave the way for more scholastic research on it usefulness and how it
should be implemented, Raguz (2010), Moon, (2007) and Botta-Genoulaz et al.
(2005). Even though big firms such as Dell that spent millions of dollars on ERP
failed to implement ERP system (Botta-Genoulaz et al (2005), it is imperative to
note that for a business enterprises to successfully set up an ERP system, must
ensure to review and align its business processes in a way integration of all its
various business processes can be integrated perfectly, (Raguz, 2010)

Since in the 1990s when there is a break through in ERP platform, there are
several scholars researching on ERP implementation and usefulness, ERP
concept and trend, It benefit and disadvantages, its functions, training needs,
deployment etc., can attest to the fact that ERP is not a luxury application but a
necessity for all business operations to have an ERP application in facing the
global challenge. Some artcles have shed light to the fact that ERP help
businesses generate prompt information for their clients and meet their
customers’ needs. ERP can allow business enterprises to integrated all their
offices in respective of where they are located (Moon, 2007).,

According to Botta-Genoulaz et al. (2005) and Raguz (2010), it is evidence that

the ERP is a system platform that help business processes integrated to one data
center, the ERP by itself can not produce productivities but the human using
them can utilize the platform to analyse and redesign ways in the platform to
produce the productivity needed. To have a good and better ERP system
platform, the company business processes must be evaluated and customized in
a way suit the specific company operation. Hence, one company ERP system may
be differed from another, but it all depend to the sector the ERP is been design
for, Botta-Genoulaz et al. (2005) and Raguz, (2010). The diagram below gives a
clear view of how ERP integrate other departmental functions.
 Customers
Relationship Adminstration
Service
Human
Resources
Management & R&D
Payroll

Account and
Legal
finance

Supply Chain ERP Database and

Investment
Management Application

Figure 1 ERP systems integration concept

The ERP Trend
During the 60s, ICP (Inventory Control Packages) systems were used especially
for large industries/manufacturing companies to manage their inventories and
processes, however, this was not enough to meet the growing need of the
manufacturing industries (Rashid et el. 2002). Thereafter, researchers unearth in
the 70s Material Requirements Planning (MRP) system that enable
manufacturing firm to plan their products and parts needed based upon their
production timetable. In the 80s manufacturing resources planning (MRP II) was
developed to enhance the processes of a manufacturing organization. The advent
of both ICP to MRP and MRP to MRP II led to the development of ERP
(Enterprises Resources Planning) software that integrates all business processes
ranging from account, finance, customer relationship services, inventory, human
resources, payroll, etc.,. (Raguz, 2010).

In this modern days there are various types of ERP systems, some, which are off
the shelves but can be tailored to the organization needs and others, are
customized from scratch based on the organization needs. Most of the
organizations used customized ERP, which are designed and developed based on
the company business processes and operational model. In general ERP is a
system that integrate and automate all the business processes in one central
database, which makes the workflow become effective and efficient at all times.

Executives and managers can easily retrieve information and analyse them
quickly to make prompt decision to enhance the efficacy of the business. For any
business to successfully survive in the current globalization trend, should invest
more on to information and communication technology (ICT), especially on
integrating and automating its business processes such as ERP platform to
enhance its business trading and the creation of innovation platform. A case in
hand is that, one of the local council (WARDC) in Sierra Leone, has contracted a
company (CRA) to customize and integrate all their business processes as a
council to effectively manages the overall function of service delivery to the
people they govern. This investment has prove greatly impacting and beneficial
to the council as a whole, as they can now generate their demand notices on time
as oppose to when they where manually writing them which take almost a year
to complete the process of writing and distributing of demand notice. It help
reduces the fraud that use to occur in the days of manual record keeping or
decentralised system.

The current trend of ERP includes cloud storages being included in the
development process of an ERP application. The ERP has become necessity for
business success, the cost of ERP platform become lower that before it advent,
adaption of EPR has become easier than before. There are more and more ad-ons
introduce into the ERP system, which makes it dynamic in designed (Gil et al.
2009 and Clark et al. 2014)

Common Functionalities of ERP application

The common function of ERP is to integrate and automate all business processes
such as the customer relationship management (CRM), Account and Finance,
Human Resources Management (HRM), e-commerce, supply chain management
(SCM), business intelligence (BI), asset management (AM), procurement
processes (PP), monitoring and evaluation (M&E), operations processes,
budgeting and forecasting, knowledge management (KM), store management
(SM), etc., (Gil et al. 2009). According to Uwizeyemungu and Raymond (2005), it
is evidence that ERP hinges on three main dimensions, which are (1) technical,
(2) organisational and (3) informational. These three dimension produce
integration, real time and adaptability of business processes using ERP platform.

The Implementation Stages of ERP in a Firm

In order to successfully implement an ERP system in a firm, the following stages
should be taken into considerations:
 Analysis the requirement needs for such platform: this will help the
principal developer to evaluate the personnel needed to develop the ERP
and the areas to integrate and automate
 The gaps exist: this would enable the ERP developer to evaluate the gaps
within the business structure and process and ensure to provide solution
during the development stage of the ERP platform
 Analysis of the business process: Each business process must be
analysis properly to ensure that the business concept and operation is
translated within the ERP platform. This would ensure better
interrelation between various processes from other departments
 Hold discussion with executives and potential users: This is important
for the developer to have feedback information from the users themselves
as they are going to be the principal executor of the ERP platform, hence
there input in the earlier stage is paramount for the successful
implementation of the ERP application.
 Plan strategically the framework of developing a sound and effective
ERP software: This is key as it gives the developer an edge to conclude
the project in a record time and ensure smooth development of the
system
 Selection of the type of ERP to be used and adopted: The is very
important as wrong selection might lead to lost of investment into such
 project or even not use as intended. It saves a lot of money when the right
ERP application platform are selected
 Training of user to understand how to use and apply themselves in
executing the ERP application: There is great need to train the users of
the ERP so that they can be able to adapt and use the ERP application
smoothly that in turn bring huge benefit to the organization. It will give
confidence to the users as to the use of the application.
 Develop the ERP by integrate and automate the entire business
processes: This is the main objective of the project, hence, integration of
the business processes require logic, and programming in order to be able
to achieve the intended purpose of the project.
 Deploy the ERP system into a central database server: The stage
require the deployment of the database to the server, hence, there is need
to select the right server specification with adequate memory to execute
the command needed on time. Mostly wrong server, can slow than the
execution of the command by user hence, become time wasting for users
which may lead to abandoning the entire platform
 Network the server using LAN or WAN approach which depend to the
company needs and areas of operations
 Test the ERP system after deployment before going live, this is to
ensure completeness of the system and give the users a feel of the
platform
 If the test is successful then deploy the ERP live on the server for user to
use it

The Advantage of having an ERP in a Firm

The benefits of ERP are enormous as it is becoming important for businesses to
have ERP application to be able to compete with the current market trend and
competition. Some of the benefits are: (1) its reduces transaction cost, (2) it
provide real time information, (3) it improve service delivery (4) it give a
company an edge in the market especially with companies without an ERP, (5) it
enhance staff efficiency and effectiveness ratio, (6) it help institution using such
application to maximize profit on a real time basis, (8) it give the customer
advantage to interact with the system during e-transaction and give the comfort
needed to such application. (8) It integrates and automates all business
processes making interaction between departmental possible without movement
of staff from on end to the other. (9) Its ensure completeness and thoroughness
(10) it enhance KM and BI for decision-making (Azevedo et al. 2012). According
to Ziemba and Oblak (2013), elaborated that ERP enhance innovation as
research data and information can be generated from one repository making
analysis easier for business executives. It is lot easier to have knowledge
management information through the ERP application. It also helps businesses
to gather internal and external business intelligent, with the view to over come
the competition pressure in the market place.

Conclusion
It is imperative clearer for businesses to adopt the use of having an ERP that
integrate and automate all their business processes to ensure effectiveness and
efficiency in service delivery. It is becoming increasingly important for
organization to focus more on research and development that lead to innovation
in advancing the research of ERP application. In view of the above one will safely
stated that ERP is the solution for businesses to aspire for innovation as the ERP
repository can be used as a research centre base where information are obtain to
research for innovative products and services. It can also be use to analyse
customers transaction trends and demand curve, which gives institutions edge to
manoeuvre in a competitive market.

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