Enterprise Resource Planning Erp Essay

3707 Words Oct 7th, 2012 15 Pages
Merian Gerova

Information Systems in Management
MGT 305
Dr. Mamad Pourhosseini
Is Enterprise Resource Planning (ERP) Valuable System for The Companies
Word Count: 3,311
21 June 2012

I. Abstract
This paper critically analyses Enterprise Resource Planning (ERP) and the various tools and platforms it offers to the enterprises. This report looks at ERP as strategic management tool that ensures competitive advantage ones adopted. This paper will explore scholarly articles underling the implementations and procedures of the system. Together with that, it will evaluate the cost factors, ERP phases, describing ERP in legal and ethical terms, together with evaluation of the right needs for the right size of the business and the
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Some businesses prefer to force all employees to use the new system at the same time. Although this approach may have a beneficial side of implementing it the same time across all departments and locations, it often results in temporary business disruption. On the other hand, phased approach is on the other burden- implementing ERP systems across different departments at different times. In hybrid approach, third party vendor hosts ERP systems. It is considered that phased approach is the most successful and efficient amongst (Panorama Consultancy Report, 2012).
Cost Factors of ERP
The biggest issue with ERP systems is the cost. Although the software is costly, it is important for businesses to understand the financial benefits, to calculate its breakeven point, as well as overall return on investment in order to evaluate the beneficial side of the system (Panorama Consultancy Report, 2012). In addition, ERP provides benefits of improving interaction with customers and suppliers, reduces labour costs and improves lead times (Appendix, Figure 3). Availability of information, faster response time and increase interaction across the organization are also important factors (Pourhosseini, 2012).
Lastly, the case of Panorama evaluates the costs of a business implementing ERP software. Licence, maintenance costs, upgrade and hardware costs are the main costs incurred. However, there is a huge gap between

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