VIEWPOINT

ERP Process Integration

Enterprise Resource Planning (ERP) is well-known as an important information technology infrastructure of modern organizations. Its implementation can affect almost all employees in an organization and the way they work. Hence, an effective ERP implementation strategy for new integration projects is critical for the organization.

An ERP system implementation leads an organization towards full process integration and prevents dispersion of information. Nevertheless, in case of tight process integration, operational issues are involved and they should be managed carefully. A centrally-coordinated support system is needed to enable ERP users and administrators to locate problems, perform validation and verification tasks and ensure process integration of ERP with significant consistency.

By implementing ERP systems, an organization can operate on a single application and database for all its important business functions. This attribute of ERP is highly beneficial for the organization since all applications are integrated, a change in an activity in one department of the organization percolates through the ERP system to all affected departments so that they can react accordingly. However, even a well-implemented ERP project may not generate full benefits.

After implementing the ERP system, the organization should be prepared for the costs due to differentiation among departments. When the ERP system is implemented across different departments, some may witness decreased operational performance. This may be due to adjustment problems as ERP is not customized for each department’s requirements. Four types of ERP operational issues should be considered while successfully implementing ERP systems. They are regular training, quality of data, propagation costs and internal control. These operational issues reiterate the need for effectively supporting ERP operations.

A fully-integrated ERP system involves process chains, each of which represents a sequence of unit operations within a functional department.
A common set of challenges facing ERP process integration includes lack of standards, ‘Silos’ of information, poor quality and gaps in data, lack of experienced people to interpret data and overall a lack of common integration framework. While the challenges to successful ERP process integration are both technical and cultural in nature, organizations can tackle cultural issues successfully by establishing cross-functional teams under the guidance of the top management.

- Vivek Gupta