Bastian Steppin March 24th 2013
The world’s economy moves fast, indeed it moves so fast that businesses need to be ready to change their strategies and market scope in the blink of an eye. To catch up with the rest of the world companies need to transform their whole resource management system away from old fashioned management consultants up to ERP systems, which operate faster, more effective and more precise.
The key to run a business with success is to be innovative and use resources as efficient as possible. Many players on the competitive market make big mistakes on calculating their revenue and ...view middle of the document...
ERP’s “are the largest, most complex and most demanding information systems implanted by firms” (Grabski, Severin V.; Leech, Stewart A.; Schmidt, Pamela J. Journal of Information Systems. Spring2011). The software is adaptable to any company and considers the number of employees, the firm capital and the market sector itself to ensure the best results. These modern ERP methods can also save the company money by getting rid of an expensive management consultant. However, there are not only benefits in ERP. One of the major disadvantages is definitely the time factor. It takes a while to get the whole system running and teach everyone how to use the ERP system. The training process then costs money and can also become a stress factor for the employees who rather like to stay with old fashioned methods. Some of them may even fear a lack of skill and worry about their future with in the company. Another aspect is that data, that may is handwritten right now has to be digitalized and analyzed by the software. Another big factor is security. Information on computer can become victim of cybercrime and confidential information can find a way to public and similar industries within the same market sector.
Leading a company throughout the implementation period of an ERP system is a very difficult task and requires precise planning not only by the firm management, but also by the company’s leader. First of all, all the employees need to be informed about the upcoming change and get the chance to questioning the situation. The idea behind this first step is to avoid stress factors like surprise which can negatively affect the moral of the employees. Giving employees the chance to adapt and to questioning the procedure does not only ensure a calmer accepting, but also gives them the feeling that their personal opinion is desireable. Such a fake democracy where employees become partially involved in the process of decision making without having the right to stop the process increases the level of acceptance without having time consuming discussions and meetings as it would be in a real democratic model.
ERP systems work perfectly for companies with repetitive productions cycles like automotive parts, consumer packaged food, smartphones, chemicals, and commercial pharmaceutical products. (Turner, Greg. Apr 2006).
Samsung for example pulls out new TV’s and smartphones almost every 10 weeks and has a relatively consistent inflow and outflow of money. This system works so well that if one product fails, than there...