In order to survive in this competitive business world, every business must produce or provide not only a better product or service, they must also provide better customer service, minimize their production costs and overhead costs, have a more efficient management system, a highly reliable infrastructure…the list is endless. Many of these can be achieved through a customized enterprise resource planning system (ERP). ERPs serve as “one comprehensive database to house all of [the company’s] corporate information” so that “when you enter new information in one place, the system automatically updates related information.” However, if these systems are not implemented correctly with the necessary change in management of people and technology it can result in failure….. An example of a company that failed with their ERP system is PowerIT Ltd., an autonomous company of about 200 employees whose job is to produce and repair power conversion supplies. The mid-size company decided to replace their existing materials resource planning(MRPII) legacy system with an enterprise resource planning(ERP) system to “modernize practices and provide an integrated software solution” to match the growth of their customer base. Like many other companies, PowerIT chose to purchase an ERP package from a 3rd party vendor and have it modified to fit their company. The advantage of this option over an in-house developed system is that it does not require high knowledgeable IT team, a requirement in developing the high-scale software and application domain expertise. The disadvantage, however, is that internally developed systems are custom-built for the company by an IT team that has high company knowledge. Whereas, a cheaper, mass produced off-the-shelf solution is built to fit the industry standard and is not tailored for a specific company. As a result, it is difficult to gain a competitive advantage. A modified off-the-shelf solution is slightly better in that it can be customized to...
Cited: Edwards, Helen M, and Lynne P Humphries. Change Management of People & Technology in an ERP Implementation. Ed. Khosrow-Pour Mehdi. Journal of Cases on Information Technology 4. Hershey: Idea Group Inc., 2005.
Thomas H. Davenport, “Putting the Enterprise into the Enterprise System,” Harvard Business Review 76.4 (1998): 121-31
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