Article: https://digitalcommons.butler.edu/cgi/viewcontent.cgi?article=1213&context=cob_papers
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1. Was the CFO's justification for the need for a new ERP system sound?
If yes, state specifically why. If not, state why not, making sure to highlight the flaws in his justification. Highlight the role accounting must play for an ERP systems implementation project to be successful.
2. Assume that the CES board of directors has asked you to examine the ERP system implementation process. Please identify:
- Business issues related to ERP system implementation; and
- Organizational issues related to ERP system implementation.
What would be the best practices for handling these issues?
3. Assume that the CES board of directors has stated that it will setup a project management office (PMO). From the issues related to project management process with the ECS division ERP implementation, specify actions that should be taken related to project management process to ensure the success of the EME division's ERP implementation.
4. Knowing what you know now about innovation, international management of IT, diffusion, IT governance, etc., what would YOU advise the executive(s) in this case to do differently?
Answer & Explanation
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1.
The CFO's justification for the need for a new ERP system is sound due to the following reasons:
The need for a new ERP system is clear. The problems have been expressly specified--the product and service costs can no longer be controlled, the accuracy of data and reporting was questionable, inventory inaccuracies make it hard for production jobs to be controlled, and job progress was unclear--which an ERP system can solve all.
The new ERP system will be for CES' largest division. The Electromechanical Motors & Equipment (EME) division represents approximately 75% of the entire company's sales revenues, so an ERP system will be of significant help when it comes to streamlining value chain, sales tracking, job flow, forecasting, and implementing new initiatives such as web store.
For an ERP system implementation to be successful, accounting plays a major role.
Accounting helps solve ERP issues which also aids organizations in making better decisions when allocating resources
Reports and database management and other technical financial aspects help organizations make decisions during critical stages of ERP implementation
2.
BUSINESS ISSUES RELATED TO ERP IMPLEMENTATION BEST PRACTICES FOR HANDLING THESE ISSUES
High cost of implementation
To easily quantify the cost and benefits associated with ERP system, sales and adequate marketing modules should be developed and implemented first (Malhotra & Temponi, 2010).
Any customization should be minimized to decrease costs; adapt to the ERP'S built-in best practices as much as possible
Business processes should be aligned with the company's own practices. The criteria for measuring performance provided by the system should be the same indicators that the company uses
Acquire an ERP package with easy-to-use interface to minimize training and support costs
Reengineering. All company processes should match the processes of the ERP model. The more the customization, the greater the implementation costs (Bingi, et al., 1999). Companies should leave the system as it is as much as possible to reduce implementation and customization costs, as well as future maintenance and upgrade expenses (Bingi, et al., 1999).
ERP implementation takes a long time
Purchase industry-specific applications from ERP vendors to cut the implementation time down (Bingi, et al., 1999).
ORGANIZATIONAL ISSUES RELATED TO ERP IMPLEMENTATION BEST PRACTICES FOR HANDLING THESE ISSUES
Company structure. A small company usually has limited personnel and other financial and technical resources (Malhotra & Temponi, 2010). Team structure should be HEAVYWEIGHT. A HEAVYWEIGHT structure is the most suitable for small companies for it provides the highest chance of ERP implementation success. It does not require the dedication of a full-time team (Bingi, et al., 1999).
Some companies give sole responsibility of implementation to the IT department. This is dangerous since it risks the entire company's survival (Bingi, et al., 1999). The upper management must be involved in every step of the ERP implementation.
3.
These are the actions that should be taken:
To resolve the issue of training, installation, and data conversion time, an ERP transition technique should be implemented. The PHASED approach (Anderegg, 2000) is the most suitable for small businesses. In this approach, the internal team members will gain proficiency in using the ERP system while supply chain partners address interface programs (Koh & Simpson, 2007).
Assign a project champion, consider insights of everyone involved-- such as the IT department and middle managers--to aid the decision-making process. This will settle the issues of ECS having no project manager and task specification and address.
Project champions, who perform some crucial functions such as transformational leadership, facilitation, and marketing, are often the reason behind a successful ERP implementation. They should have a keen understanding on technology and business and organizational context (Somers & Nelson, 2001). They have the direct responsibility for the project outcome, meaning, most of the time, they are painfully held accountable. The heavyweight project manager has the ability to play the role of project champion.
To easily quantify the cost and benefits associated with ERP system, sales and adequate marketing modules should be developed and implemented first (Malhotra & Temponi, 2010).
- Knowing what you know now about innovation, international management of IT, diffusion, IT governance, etc., what would YOU advise the executive(s) in this case to do differently?
IT employees working on an ERP implementation project work very long hours. Although this has a significant contribution to their career growth, they could still experience stress and burnout and decrease morale in the long run. Upper management should step up and improve its employees' morale by supporting and caring. It is also important that they listen to the insights, suggestions, and comments of the team members to aid the decision-making process.
Step-by-step explanation
References:
Question 1:
https://www.toolbox.com/tech/erp/blogs/is-erp-good-for-small-business-040517/
Bae, B. B., & Ashcroft, P. (2004). Implementation of ERP systems: accounting and auditing implications. Information Systems Control Journal, 5, 43-48. (For additional information)
Jean-Baptiste, R. (2009). Can accountants bring a positive contribution to ERP implementation?. International Management Review, 5(2).
Question 2:
Malhotra, R., & Temponi, C. (2010). Critical decisions for ERP integration: Small business issues. International Journal of Information Management, 30(1), 28-37. doi:10.1016/j.ijinfomgt.2009.03.001
Bingi, P., Sharma, M. K., & Godla, J. K. (1999). Critical Issues Affecting an ERP Implementation. Information Systems Management, 16(3), 7-14. doi:10.1201/1078/43197.16.3.19990601/31310.2
Question 3:
Malhotra, R., & Temponi, C. (2010). Critical decisions for ERP integration: Small business issues. International Journal of Information Management, 30(1), 28-37. doi:10.1016/j.ijinfomgt.2009.03.001
Question 4:
Bingi, P., Sharma, M. K., & Godla, J. K. (1999). Critical Issues Affecting an ERP Implementation. Information Systems Management, 16(3), 7-14. doi:10.1201/1078/43197.16.3.19990601/31310.2
