ERP Facts

While ERP is a solution that has a number of potential applications, there are many companies that have failed when trying to implement it. Understanding why these companies failed is an important factor in learning how to use effectively use Enterprise Resource Planning. It should first be noted that a number of ERP failures occured in 1999.

A number of companies tried to use this technology in a way that would allow them to fight Y2K. Many of the companies that are using ERP today have learned from the many failures that were prevalent in the past. Before I proceed further, it is first important to define the meaning of a ERP failure.

It is first important to note that there are certain degrees of failure within Enterprise Resource Planning. One degree of failure is not utilizing the ERP system. Another level of failure is when the ERP system is not properly used. A number of studies have indicated that only 6% out of 500 companies felt that there ERP systems were effective. This is a very dismal number, and this may cause some companies to avoid using the technology altogether. There are a number of things that can cause a company to fail when it is attempting to use Enterprise Resource Planning. The most common causes of failure are problems with external consultants, expectations that are not realistic, too much customization, and complexity of the ERP system.

There can be no doubt that ERP systems are very complex. In addition to their complexity, they are hard to utilize. When this is combined with the costs and the fact that most ERP systems take six months to get off the ground, some companies are discouraged from using them. This form of technology is heavily integrated. In order for it to work properly, it must have the support of the entire organization. A lot of companies will find that drastic changes will have to be made if the system is to be used successfully. A number of studies have demonstrated that the cost of any ERP system can be as large as $500 million. Keep in mind that there is no guarantee that the system will be successfully once a company has paid this amount.

In one prominent case, a well established company lost over $100 million on an ERP project after spending more than two years trying to get it developed. Depending on the assets and revenues of a company, failing to correctly implement this technology may lead to bankruptcy. Another common problem with ERP is external consultant disputes. A number of lawsuits have been filed, and it involves disputes that occured with consultants. One of the best ways to avoid this problem is to get documented information on the experience of consultant before you do business with them. Presenting stipulations to the consultant may be a great to avoid future disputes and legal problems.

Perhaps one of the most common causes of failure is improper training. When you consider the complexity of ERP solutions, it is crucially important to make sure your employees fully understand it. In addition to this, they must accept the system. In order for your employees to get the training they need, you must find skilled instructors who can train them. It is not enough to simply train employees on how to properly use the software. They must also be trained in the new ways of doing business. Remember, the implementation of an ERP system goes beyond technical issues. The business processes must be taken into consideration as well.

One form of risk that you will want to become familiar with is Process Risk. As the name suggests, this is a form of risk that a company will face will they are attempting to make significant changes in the way they carry out various processes and procedures. When a company attempts to implement ERP, they may find that the productivity of their employees will drop. This will be a result of them learning the new technology, and once it happens, revenues will fall. Many companies fail to calculate the difficulties involved with creating a new system, and once these difficulties are realized, the schedules falter and other problems occur.

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Oracle Analytic and Business Intelligence Applications

Oracle offers the industry's most comprehensive, market-leading set of analytic and business intelligence applications. Only Oracle delivers the full spectrum of analytic applications with capabilities such as corporate performance management, interactive dashboarding, and embedded analytic functionality for delivering insight pervasively across your enterprise. Open, pre-built, industry-specific business intelligence applications provide actionable intelligence for each business function and user role. These solutions are hot-pluggable into your existing operational systems.

Oracle is the leader in business analytics and analytic applications

Oracle is the leading business analytics software vendor by revenue 1

• #1 in CRM analytic applications 2
  
• #1 in applications in North America 3
  
• Oracle is the only vendor to offer a truly best-of-breed, end-to-end business intelligence (BI) solution that spans data warehouse, ETL, BI platform, and analytic applications across all functional areas of the enterprise, as well as industry-specific solutions.
  

Oracle Differentiators Enable Customers to Realize Tangible Benefits:

• Only Oracle offers the full spectrum of analytic applications that include corporate performance management, interactive dashboarding, and embedded analytic functionality across your enterprise
  
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CUSTOMER RESULTS

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Author: Jack Doran

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The Advantages and Disadvantages of ERP

There are a number of powerful advantages to Enterprise Resource Planning. It has been used to solve a number of problems that have plagued large organizations in the past. At the same time, it is not without a number of disadvantages. Being able to weigh the two will allow a company to decide if this solution will properly meet their needs.

It should first be noted that companies that fail to utilize systems such as ERP may find themselves using various software packages that may not function well with each other. In the long run, this could make the company less efficient than it should be.

There are a number of processes that a company may need to integrate together. One of these processes is called design engineering. When a company is in the process of designing a product, the process of actually creating it is just as important as the end result. ERP can be useful in helping a company find the best design process. Another area where ERP can be useful is order tracking. When a company receives orders for a product, being able to properly track the orders can allow the company to get detailed information on their customers and marketing strategies. If different software packages are being used, this data may not be consistent.

Perhaps one of the most important advantages of ERP is its accounting applications. It can integrate the cost, profit, and revenue information of sales that are made, and it can be presented in a granular way. Enterprise Resource Planning can also be responsible for altering how a product is manufactured. A dating structure can be set up which can allow the company to be informed of when their product should be updated. This is important, because it will allow the company to keep better track of their products, and it can allow the products themselves to be produced with a higher level of quality. Another area where ERP can be an indispensable tool is the area of security. It can protect a company against crimes such as embezzlement or industrial espionage.

However, with all the advantages that ERP offers, there are a number of disadvantages as well. Perhaps one of the biggest disadvantages to this technology is the cost. At this time, only large corporations can truly take advantage of the benefits that are offered by this technology. This leaves most small and medium sized businesses in the dark. A number of studies have shown that the biggest challenges companies will face when trying to implement ERP deals with investment. The employees must be continually trained on how to use it, and it is also important for companies to make sure the integrity of the data is protected.

ERP has a number of limitations. The success of the system is fully dependent on how the workers utilize it. This means they must be properly trained, and a number of companies have attempted to save money by reducing the cost of training. Even if a company has enough money to implement ERP, they may not be able to successfully use it if they do not have enough money to train their workers on the process of using it. One of the biggest problems with ERP is that it is hard to customize. Very few companies can effectively use ERP right out of the box. It must be modified to suit their needs, and this process can be both expensive and tedious. Even when a company does begin changing the system, they are limited in what they can do.

Most ERP vendors will not allow the structure of the software to be altered. One advantage to ERP is that making the necessary changes to use it may actually make a company less competitive in the market. In addition to the costs involved with implemented ERP and training workers to use it, the ERP vendors may charge additional license fees, putting a strain on companies that do not have enough resources to pay for them. The technical support of ERP departments has been questioned, and a number of problems could arise due to security, since corporate representatives must give sensitive information to the tech.

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