Enterprise Resource Planning (ERP) is now being hailed as a foundation for the integration of organization-wide information systems. ERP systems link together entire organization’s operations such as accounting, finance, human resources, manufacturing and distribution, etc. Moreover, they also connect the organization to its customers and suppliers through the different stages of the product or the process life cycle. There are very few studies conducted about the implementation of ERP systems in the construction industry, particularly for the construction contractors. The focus so far has been on client organizations, engineering and design firms. The objective of this paper is to investigate the suitability and the implementation status of ERP systems in contractor firms. The methodology employed is a mix of literature review, market studies and detailed questionnaire survey. It is found that the majority of contractor firms have awareness about the ERP systems but very few organizations have so far implemented such systems. The major reason is that the implementation of any ERP system needs a huge investment in time, money and resources. However, when implemented to solve the right problems, these ERP systems can be a powerful tool for business improvement. The study shed light on the barriers to the implementation of ERP systems in the construction industry and also highlights valuable lessons learned and benefits gained by companies that have such systems in place.
1. To improve responsibilities in relation to customers
2. To strength supply chain partnerships
3. To enhance organizational flexibility
4. To improve decision-making capabilities
5. To reduce project completion time and cost
The following benefits could be gained by implementing the ERP systems: 1. Provide an integrating working environment.
2. Enable automation
3. Availability of information from field level until the management level 4. Integration in applications in any departments
5. Flexibility and facility to standardizing process or to accommodate changes and globalization. 6. Achieve balanced people, process and technology changes across all areas. 7. Apply planning and program management practices throughout the program life cycle of a project. Disadvantages of implementing the ERP systems:
1. High implementation cost. It can range from some hundred thousand dollars in small companies to a billion dollar for large multinational companies (these numbers including training and consulting).
2. Delay on return on investment. The benefits of ERP may not be shown until after companies have had it running for some time (Calogero, 2000).
ERP Systems: Part III: Advantages & Disadvantages & the Future of ERP ________________________________________
Many companies that have yet to employ an enterprise resource planning system may find it very difficult to streamline all their business functions into one cohesive unit. Many difficulties may arise including: product design issues, keeping track of orders from the initial ordering process through delivery, maintaining optimal inventory levels, accounting for all transactions, and etc. ERP consolidates all of these everyday processes into a unified team process, with each function being dependant on the other for information. These systems facilitate this open network, and allow for the free flow of information from one department into the next.
The benefits of ERP implementation can touch a wide spectrum of areas. It can improve financial performance, employee morale, and shareholders' expectations. Below are some of the significant advantages ERP has to offer:
Accessing information that was inputted within a different department than your own was a difficult task before ERP. This process usually involved written requests and approval from department heads, making the process very time consuming. With the implementation of ERP, access to...
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