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assist a potential organization in investigating an
ERP system and the preparation of an organization
for ERP implementation, the appropriate criteria and
a framework covering connectivity issues need to be
developed.
2 SURVEY
In this study, a survey was conducted to determine
ERP driving forces, and current problems associated
with connectivity and to identify the critical factors
of connectivity that an organization should consider
when implementing ERP. The survey is based on in-
depth interview with selected organizations, which
are all current ERP users in the government and
business sectors. Interviews were designed to cover
several sectors of businesses such as banking and
finance, telecommunications, entertainment,
automotive manufacturing, high technology and
electronics, and power and energy. Interviews were
focused on personnel who were responsible for or
involved in ERP implementation projects in
organizations or personnel who are currently
responsible for ERP systems such as an ERP project
manager and IT manager or IS manager.
The interviewees were limited to organizations
in which ERP systems went live and are currently
implementing ERP systems, not including planned
users. With information available from ERP vendors
and ERP consulting firms, some current ERP users
could be identified. The interview was conducted
through twenty two organizations. Organizations
were selected by judgment sampling to make sure
that the organizations contacted were the real users
and the right population.
3 ERP DRIVING AND FORCES
IMPLEMENTAION
The survey results revealed ERP driving forces and
ERP implementation as followed:
3.1 ERP Driving Forces
There is a variety of reasons or driving forces to use
ERP systems, but the most important one is the need
for integration of process and information. The
appeal of an integrated information system resulting
from implementation of an ERP system is clear. For
example, the sales force enters an order on a
computer, the transaction processes through out the
entire company. Inventory lists and parts’ supplies
are updated automatically. Production schedules and
balance sheet reflects changes. By making
organization’s information more readily available
and shortening the business cycle, organization can
get many benefits resulting from increased
competitiveness, reduced inventory, cost reduction
and increased customer services.
For international companies, driving force of
using ERP mostly comes from their headquarters
that pushing ERP system to their branch offices.
This is because of success and benefits of ERP
implementation they have realized from the practice
of headquarters and of other countries’ branch
offices. Besides the standardization of business
practices of all branches is developed, so it is easier
and faster to retrieve information and analyze data
globally.
Other driving forces include:
• Following the trend
• Media influence
• Inefficiency of legacy system
• Pressure from clients and/or suppliers
• Need a software that can fulfill business
functions
3.2 ERP Implementation
Although ERP is evolved from and developed for
manufacturing, it is feasible for service sector to use
ERP, but not all modules that come with ERP
package can be used. Currently, ERP vendors also
provide solution for different industries such as
healthcare, banking, education, and public sector.
It was shown that the basic or fundamental
functional modules that most organizations in
manufacturing industries have implemented are
financial accounting, material management,
production planning, sales and distribution, and
controlling. These modules associate with the core
activities of organization, which are the processes
from manufacturing to distribution and preparing
financial information. Although the nature of service
industry is different from manufacturing some
functional modules still can be used. In any types of
organization the financial module is the first module
to be implemented because it provides the basic
pulse of an organization. It also impacts on all other
modules.
In order to implement an ERP system, business
requirements must be identified and then the
requirements are mapped with ERP package. The
decision about customizing an ERP application to fit
with business’s needs or changing business practice
to suite ERP software must be made. Based on the
study, there were very few cases that organizations
chose these two end approaches. Most organizations
chose the middle way by adapting business process
ICEIS 2004 - DATABASES AND INFORMATION SYSTEMS INTEGRATION
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