Running Head: ERP SYSTEM IMPLEMENTATION DECISION
Case Study 3: ERP System Implementation Decisions at T40 Enterprises
City University of Seattle
BSM 405: Operations Management
Prof. Mehdi Toobaei
Sang Nguyen – 830132283
My Nguyen - 830132262
Nhi Dang - 830132271
Ha Nguyen - 830132193
Trang Nguyen – 830132302
ERP SYSTEM IMPLEMENTATION DECISION
ERP System Implementation Decisions at T40 Enterprises
Enterprise resource planning (ERP) is the most comprehensive of all enterprise-wide
systems a company can implement, and failing to realize all its benefits can be very costly (van
Beijsterveld & van Groenendaal, 2015). All almost the leading enterprises have been applying
ERP software to control and maintain permeate throughout operations in all areas of the firm
from manufacturing to finance to purchasing to human resources, and it definitely plays a
critical role in the success of the business. ERP allows the integration of functions, divisions
of businesses in terms of information exchange and flow, and the integration of business
functions as diverse as accounting, finance, human resources, operations, sales, marketing,
customer information, and even the supply chain (Seng Woo, 2007). In any case, Enterprise
Resource Planning (ERP) system implementation projects are notoriously risky (Xu, Rondeau
& Mahenthiran, 2011).
The Match between T40 and ERP System
Implementing an ERP system can be complicated and costly if the business does not
have a well-executed implementation plan with the correct implementation steps. The early
measurement of the risks that can arise in an ERP implementation should be done as soon as
possible. With that in mind, Bill soon outlined company processes as a preparatory step for the
implementation of an ERP system, otherwise known as the Readiness Process. To specify,
readiness assessment is presented as a separate phase in the ERP project, which should be done
before the implementation phase. It will show the company's ability to implement ERP and
also identify areas that are becoming a company's weakness, and then the company can
improve performance in these areas to achieve availability higher screening (Hidayanto,
Hasibuan, Handayani & Sucahyo, 2013). Besides, organizational readiness is positively and
significantly associated with four critical success factors: project management, business
process re-engineering, training and education, and system integration (Ram, Corkindale &
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Wu, 2015). It means that when performing the readiness process before proceeding with the
ERF, it will be of great help to the project manager, Bill, and his team. To specify, it will
identify the company information flow, which will help the project manager have quality ideas
as well as best suited to the company's capabilities. Instead of waiting to deal with the worstcase scenario of system implementation, it can help change that into the best project preparation
tasks of the project possible. In addition, organizational readiness will help managers as well
as project team members to understand clearly and analyze the company's structure, resources,
and personnel, which will support success in their implement ERF. Besides, this will enable
Bill and his team members to avoid the anxiety of execution, instead of readiness. Knowing
what information will be exchanged with which process and between which functions will help
Bill improve the system to make it most effective for the T40 company.
The project Bill has to face two selections between implementing T40's internal
processes to the ERP system or adjusting the ERP system to the business processes. About the
first decision, if Bill re-configures the existing business processes to fit the requirements of the
ERP system, he enables get experiences similar benefits but limited from implementing ERP
systems regarding the quality and availability of information. T40's enterprise is small-sized
and medium-sized enterprises, to save financial resources and a lack of qualified IS/IT experts,
so the most common ROLLOUT approach employed is the "big bang" approach
(Katerattanakul and Hong, 2014). However, although the company is continuous constantly
adapted its organizational structure to fit the EPR software, the most important factor the leader
can not ignore is that maintain uniqueness or (in other words) competitive advantage in the
market, otherwise, these enable the fatal for the enterprise. Notwithstanding, this gap between
the organizational needs and the extent to which an ‘off-the-shelf ERP system can meet these
is called a misfit, and implementations are often unsuccessful because of misfits (van
Beijsterveld & van Groenendaal, 2015). There exist both pros and cons even with each
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selection. For the second decision, if Bill customizes the ERP system to the business processes,
it has its advantages and disadvantages. For SMEs like T40's enterprise, it seems not feasible,
as van Beijsterveld & van Groenendaal (2015) pointed out that many studies (mostly on large
organizations) advocate adjusting the processes because customization is risky, costly, and
reduces maintainability. In fact, companies have even had to close because of vast ERP
investments that did not go live, an example being the FoxMeyer Drug Company that went
into bankruptcy (Seng Woo, 2007). To adjust the ERP selection approach, the enterprise
requires to suffer from a heavy and very large financial burden, it is totally not suitable for
T40's enterprise because SMEs have the intention to choose simple and single ERP software.
Thus, it is more feasible for large enterprises to adopt several different ERP packages that best
meet their business requirements and then integrate these packages together while in contrast,
for small businesses and medium enterprises, this approach is less feasible because of their lack
of IS/IT expertise; thus, it is more reasonable for small businesses and medium enterprises to
adopt a single ERP package and avoid the integration challenges of implementing several
different ERP packages (Katerattanakul and Hong, 2014). Nonetheless, customizing the ERP
system to the enterprise perceives significantly higher benefits as the large manufacturing
enterprise can compatible its logistics chain integration with the features and the intrinsic
characteristics.
The ERP System Vendor
According to Techopedia, A best-of-breed system is the best system in its referenced
niche or category. Although it performs specialized functions better than an integrated system,
this type of system is limited by its specialty area. To fulfill varying requirements,
organizations often use best-of-breed systems from separate vendors. However, maintaining
multiple systems provides little cross connectivity, which creates maintenance and integration
challenges. There are some shortcomings that the “best-of-breed” has not been able to
ERP SYSTEM IMPLEMENTATION DECISION
overcome. In terms of complexity, the finest approach implies expansive businesses may need
to handle different frameworks, databases, and merchants. This will contribute to a few
complexities in end-user preparing, organize coordination, and investigating, among other
integration issues. Besides, getting into IT third-party tools can be an overwhelming and timeconsuming task, especially for small organizations that need specialized know-how, labor, or
background Khalifa, N. (2015). Data overload is also one of the typical downsides.
Organizations that select to utilize numerous computer program arrangements may have
trouble sharing and coordinating information. For illustration, the utilize of distinctive
frameworks can lead to information keenness compromised, manual information section, and
excess capacity. Businesses may too get to pay for costly warehousing arrangements to get to
and manage a company, representative, and client information. Big speculation: In case the
finest arrangements aren't well overseen, the fetched of proprietorship can be considerable particularly for little and medium businesses. Not to say, overseeing different permitting
understandings and provider connections can require considerable speculation of time.
Regarding form inconsistency, some large businesses prefer that all applications and systems
employees use must have a consistent interface. Although best seed applications are often more
modern than suite solutions, design consistency may not be possible with the best breed
approach.
According to research from Seddon, P. B. (2000), there are many advantages and
disadvantages of contracting with a large and old ERP system vendor. In terms of advantages,
when contracting with a large and long-standing ERP system vendor, the supplier's capabilities
have been assessed according to their performance. Therefore, businesses can rest assured
when having problems, suppliers can promptly fix and resolve problems as quickly as possible.
Moreover, technology orientation is the top criterion when ranking ERP software vendors.
Technological factor refers to the ability to integrate ERP with 3rd party systems or other
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intelligent solutions. This is a trend that becomes more and more common as the business
nature tends to become more complex. Technology orientation is a criterion to help businesses
reduce wasted time as well as the cost of investing in new technology solutions. Long-standing
and large enterprises will have stable and better technology as they have been researched. save
and develop for a long time. Choose a business with good technology will reduce unnecessary
things. Besides, the large and long-standing business will have reasonable support policies for
the business. The level and commitment of support are some of the criteria that businesses
should consider when choosing an ERP software vendor. Support policies should be ensured
during and after project implementation. Finally, let's consider these costs and risks. When
deploying ERP software, businesses should understand the costs they need to pay, including
software costs, implementation costs, annual support costs. Comes with costs are many
potential risks. It is important to carefully evaluate this factor, do not rush to implement if the
cost will exceed the maximum budget already stated. In addition, before signing a contract,
businesses should also negotiate carefully about implementation time, implementation, and
require suppliers to commit to a certain deadline with clear goals. It is a professional way of
working and also shows a high sense of responsibility of the supplier. Contrary to the
advantages, the long-established and large suppliers also have disadvantages when choosing.
First, the cost of cooperating with big suppliers will be higher than those of small companies
that do not have a good reputation in the market. Coupled with their reputation and brand name,
major suppliers will require cost at the expense of their brands built over the years. Second,
large and long-term suppliers will have a lot of partners. So they have to pay attention to their
major partners. This can lead to small companies signing up will not be taken care of.
ERP SYSTEM IMPLEMENTATION DECISION
References
Beijsterveld, J., & van Groenendaal, W. (2015). Solving misfits in ERP implementations by
SMEs. Information Systems Journal, 26(4), 369-393. doi: 10.1111/isj.12090
Elghany, M., Elghany, M., & Khalifa, N. (2015). Best-of-Breed of ERP Systems: Pros and
Cons. International Journal Of Computer And Information Technology (ISSN: 2279 –
0764), 04(04).
Hidayanto, A., Hasibuan, M., Handayani, P., & Sucahyo, Y. (2013). Framework for
Measuring ERP Implementation Readiness in Small and Medium Enterprise (SME): A
Case Study in Software Developer Company. Journal Of Computers, 8(7). doi:
10.4304/jcp.8.7.1777-1782
Katerattanakul, P., Lee, J. J., & Hong, S. (2014). Effect of business characteristics and ERP
implementation on business outcomes: An exploratory study of Korean manufacturing
firms. Management Research Review, 37(2), 186-206.
http://dx.doi.org.proxy.cityu.edu/10.1108/MRR-10-2012-0218
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Ram, J., Corkindale, D., & Wu, M. (2015). Examining the Role of Organizational Readiness
in Erp Project Delivery. Journal Of Computer Information Systems, 55(2), 29-39. doi:
10.1080/08874417.2015.11645754
Shang, S., & Seddon, P. B. (2000). A comprehensive framework for classifying the benefits
of ERP systems. AMCIS 2000 proceedings, 39. Retrieved from:
https://aisel.aisnet.org/cgi/viewcontent.cgi?article=1452&context=amcis2000
Seng Woo, H. (2007). Critical success factors for implementing ERP: the case of a Chinese
electronics manufacturer. Journal Of Manufacturing Technology Management, 18(4),
431-442. doi: 10.1108/17410380710743798
What is a Best of Breed System? - Definition from Techopedia. Retrieved from
https://www.techopedia.com/definition/23200/best-of-breedsystem#:~:text=A%20best%20of%20breed%20system%20is%20the%20best%20system
%20in,breed%20systems%20from%20separate%20vendors.
Xu, H., Rondeau, P., & Mahenthiran, S. (2011). The Challenge of Implementing an ERP
System in a Small and Medium Enterprise – A Teaching Case of ERP Project
Management. Journal Of Information Systems Education, 22(4), 291-296. Retrieved from
https://aisel.aisnet.org/jise/vol22/iss4/1
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