Erp Systems

Topics: Enterprise resource planning, Management, Strategic management Pages: 16 (5946 words) Published: March 17, 2013
1. Overlooking the purpose of the ERP system.
2. Lack of commitment from top management.
3. Poor ERP system selection.
4. Poor project management.
5. Inaccurate data.
6. Ignoring user reluctance for new applications.
7. IT staff implementation issues.
8. Unrealistic expectations.

The CEO must be the custodian of ERP
debate over who should serve as guardian over an organisation's ERP can be settled with one answer - the Chief Executive Officer. My ERP is not integrated and I do not have an end-to-end view of the business I regularly encounter executives and managers who complain that their ERP is not properly integrated or that they do not have an end-to-end view of products, costs, inventory, etc. The implication is that the ERP is defective or that the wrong ERP was purchased. But this is not accurate. Such problems are indicative of a poorly configured ERP which has not been implemented with end- to-end strategic information objectives in mind. The most significant reason for this problem is inappropriate governance of the ERP project during the implementation - and the key issue here is that the only person who can provide this governance is the CEO and the CEO is seldom the custodian of the ERP implementation project, or, for that matter, the operation of the ERP. The worst big brand ERP implementation I ever saw reported to the Legal Affairs executive - they had an amazing contract but the rest of the implementation was a mess and the contract was worthless. ERP under finance - a historical disservice to business

Historically ERP has mostly resided under finance. The result is that finance irritates other functions by forcing cooperation and, more seriously, the ERP implementation ends up as a finance implementation with the other operational elements tacked on as an afterthought. The worst example I ever encountered was a big brand ERP with a domineering Chief Financial Officer who forced everything from people, to plant to projects into the General Ledger - and then verbally abused anyone who suggested that the solution was technically fundamentally unsound. The organisation could not get the plant maintenance module to work because most of the information was in the General Ledger and not in the operational modules of the ERP. Many organisations resolve this problem by having financial (or commercial) systems reporting in to finance and operational systems reporting into manufacturing, production, mining, etc because they cannot get end-to-end cooperation in the business. These silos feed on themselves creating more and more problems because the two camps cannot collaborate in a constructive manner. Only the CEO can resolve these problems.

The CEO is the custodian of the integrated view of the business and hence the ERP Fundamentally the CEO is the custodian of the integrated view of the business. It is one of the principal functions of the CEO - to get all the divisions and functions of the business to pull together coherently. Inherently, therefore, only the CEO can be the custodian of the ERP, or the data warehouse and business intelligence systems. There is no practical alternative.

I have repeatedly seen sub-optimal ERP implementations (and I have seen dozens) where the lack of CEO custody is a significant and frequently dominant factor in an unsatisfactory situation. Frequently the viability of the business is placed at risk.

Only the CEO has the authority to get all functions and divisions to collaborate as peers without bias and domination Getting an ERP properly configured and operating effectively requires that all business units and functions operate collaboratively in the best interests of the collective whole that is the entire enterprise. This requires that all disparate business elements work together collectively and harmoniously for the good of the whole. This requires trade-off, strong leadership and guidance.

Firm discipline may be required if one or more...
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