Adaptation Of ERP System In Organisations †Myassignmenthelp.Com

Question: Discuss About the Adaptation of ERP System in Organisations? Answer: Introduction Enterprise Resource planning [ERP] system is an information technology system package which can be configurable within the functions of the organisations incorporating the information based processes and other information (Hallikainen, et al., 2004). These information technological systems can be customised with the particular needs of the large, small and all kinds of small organization. The increasing use of ERP in the world is easing and facilitating flexible approach to operate the business activities. In the current time, ERP system is being implemented by the various industries and sectors irrespective of size of the organisation. Thus, it is becoming one of the most researched topics in the recent times (Miranda, et al., 2016). This research paper is focusing on the concept of Enterprise Resource Planning system and its significance in the present era. Moreover, the best industry which is appropriate for the implementation of ERP system is being explored for the business users significantly. The importance and specific reason behind the integration of ERP system in the organisation is also being investigated in the study. In addition to this, the regulation and rules like Sarbanes-Oxley Act have also been described with the suitable explanation behind its incorporation in the system with some case references. Furthermore, My SAP ERP has been illustrated with its prcised implications in this study. Lastly, the success or failure of the ERP integration in the organisations with the cause behind has also been detailed in the paper. Reasons for Adopting ERP Software In the recent few years, globalisation and liberalisation have changed the industrial scenario immensely (Light, 2004). The use of new technological tools in the organisation is not new now, along with this various methods that are being adopted by the organisations that minimises the manual work and helps the workers to do activities more accurately and promptly. Enterprise resource planning system is an information system package that is configured according to the specific functions and operations of the organisation and based on the information process to articulate the informations precisely. It is a very expensive yet very beneficial tool to handle the business operations and management quite effectively and efficiently (Light, 2004). It has been found in many of the researches that the information technology has benefited the organisations in many sectors but it has a significant effect in each of the business entity for two reasons basically. First, technological reason that emphasis on the maintenance and development of the platform to outsource software. Predominantly, it is used in supporting the traditional or previous versions of any software (Tortorella and Fries, 2015). The vendors can customise ERP software according to their requirement and acquired it for active operations. Moreover, any new development in the software can be integrated quite easily. The technology needs maintenance services time to time which is possible through ERP software. Moreover, one of the most important reasons for the adoption of ERP system is to apply a clean slate approach and improve the all over improvement in the software system. In the organisation, un-customised standards ERP packages are required to be attained. In old systems software, maintenance difficulties and no option further development are being faced by the organisation. Additionally, it facilitates a common platform for software as well as standardisation which is an essential need for the organisations (Tortorella and Fries, 2015). The groups can share the common information tech nology, integration of ERP system can be done with other systems, same network can be used by the groups of the companies, helps in changing the information system of the companies and ERP system is perfect solution of old systems that did not work in the needed manner. Besides that, ERP system is the perfect solution of resolution of the year 2000 issues and problem of euro conversion (Al-Jabri and Roztocki, 2014). ERP systems are preeminent choice to reduce IT costs as it helps in increasing the efficiency, to maintain more capacity with low cost investment and it also ensures support of low maintenance cost. Furthermore, the old IT structure and architecture is replaced with the modern and hi-tech technology, which is a crucial need of organisations to be competitive in the current time. Mainframe computers are old technology with old systems and obsolete technology, thus it needs to change with ERP models. It is a replacement investment as old investment has achieved its finished stage of development lifecycle (Al-Jabri and Roztocki, 2014). Not only this, second point in ERP model is need for the business reasons that entails want to standardized IT and organisational blueprint pressurised by the globalisation in the world. The global operations become easy in the ERP system plus any information can be transferred to any of the outlet/ system in the world in real time. It also enhanced the procurement of unified global system for whole the company and provides standards with suitable policies and practices (Ptak and Schragenheim, 2016). It is enable to satisfy the desires and needs of the group along with the attainment of developed objectives. Apart from this, companies desire for the newness an alternative methods and technology is being addressed by the ERP system. It supports the new processes and enhances the efficiency of embedded old processes (Rajan and Baral, 2015). It also looks out for the upcoming development and variable in business operations. The best part of incorporating the ERP is that it facilitates fast operating services and reliable for the decision makings. It is responsible for many beneficial improvements such as customer services, process control, project control, data visibility and managerial account reporting. Furthermore, it augments the reliability and credibility of the information plus the amount of information also increased through ERP models. Although it is an expensive affair yet it is conscientious for the information flow within the organisation and supports the operations of sales and marketing (Rajan and Baral, 2015). It helps in improving the incorporation of customer relationship m anagement and integration. ERP system is utilised by every sector and every industry as it enhances the operations and supports the functions of the organisation, while specifically there are many industries for business users integrating the ERP system gives the best results (Kapp, et al., 2016). The best industries that are suitable for adaptation of ERP system are manufacturing industry, consultancy industry, service industries, wholesale industry, retailing and logistics industry. Furthermore, the ERP system is very convenient for the large group of companies that worked for the same brand or managed by a single management team (Kapp, et al., 2016). Multinational and national chain stores/ companies are also requires these kind of ERP acquisition for comprehensive and easy operations management. Sarbanes-Oxley Act Business management includes the financial accounting and management accounting which is very essential part of the business (Badnaaz, 2003). Financial accounting is for external stakeholders, while management accounting is useful of the internal stakeholders of the organisation. Financial accounting is compulsory for the organisations as it has some statutory needs and over all reporting related to investments and financial activities of the organisation for the investors are being provided. My SAP is an ERP system that helps in effective and prompt operations of financial as well as management accounting of the organisations. However, in recent past years many irregularities and scandals have been revealed regarding the financial and managerial accounting that leads to imposing the Sarbanes-Oxley Act 2002 which is also known as SOX for comprehensive reforms of business activities (Badnaaz, 2003). It enables the organisations to implement a standard format and procedure for the reco rding of financial and managerial recording. The act also included mangers in the act and as they responsible for any irregularities which are being made in financial reporting. The Enron scandal which is an American company that deals in oil and gas products was the ultimate force for the government to pass this act for the financial management with certain policies and standards. The company had expanded its operations oil refineries, power plants, gas, electricity and community, pulp and papers and became one of the biggest and most financially sound company in America (Ferran and Carlos, 2008). Until it bankrupted in 2001, reason was cheating and fraudulent actions in the financial reporting when the government made the de-regularisation in the oil and gas industry. Several financial crimes and misdeeds were revealed in 2001 and the main reason behind that was misrepresentation and financial illegal manipulation of corporate funds in the energy market (Green, 2004). In the end c ompany suffered substantial losses and failed to operate further in the U.S. market. The above case of misleading information and fraud directed Michael Oxley and Paul Sarbanes to create a law called as Sarbanes-Oxley Act to protect the external stakeholders and improve the corporate disclosure by facilitating accurate and credible financial reporting (Green, 2004). It mainly helped in finishing the drawbacks in previous accounting practices and improves the corporate government rules and regulations. Furthermore, it ensured the credibility and reliability in the accounts disclosure with corporate accountants and executives (Panorama Consulting Solutions, 2015). The act has facilitated transparency in the accounts and declaration made in the financial transaction and shareholders reporting. All of these implications are also complied with the My SAP ERP system as well. It also helped the organisations and external stakeholders to supervise and monitor the corporate behaviour and accounting practices of public companies related to the financial accosting recoding and transactions (Panorama Consulting Solutions, 2015). My SAP enables an organisation with strong cash management and integration of good practices regarding tax regulations and SOX rules. It provides immense precision in good-in-transit orders plus quality control and assurance. My SAP ERP system embraces customised information technology system used for both financial and managerial accounting which maintains make-to-order processing easy and incorporates the retail module in the organisation. Lastly, it also helps in innovative functionality in the development and creation of products (Panorama Consulting Solutions, 2015). Success and failure of ERP implementations and reasons ERP system is the central backbone for the organisation in the information management that provide its support in all the operations and functions (Al-Mudimigh and Aldammas, 2011). It has been critically researched in the past cases that the failure and success of the company is depending on the information technology or software which is used by the organisation. On the other hand, the main reason of success and failure lies with the effective and poor implementation of the software in the integration of the management of the organization (Rodriguez, et al., 2014). There are various companies in the history that has proved the ERP system as successful investment in the management operations and decision making such as Daimler Chrysler, Colgate-palm Company, the first capital financial company, Germany BASF Company and the Aluminium company. The success factors that are explored in implementation success stories of these companies include emphasis on the process and requirement of th e business. Moreover, a healthy ERP system with the higher return on investment and which can be further developed or improved should be focused to attain. ERP system also needs to be addressed with fully committed resources and strong project management (Al-Mudimigh and Aldammas, 2011). Besides the top management and company executive commitment is also needed for the effective implementation of ERP system. The internal environment should be comprised with flexible and expedient change management plus adequate ERP training should be provided to the employees. On the contrary, there are several cases of failure in the implementation of the ERP systems that has devastating results in the growth of the organisations such as New York City, Hudson Bay, Hewlett Packard Co., Nike Co., Waste Management Co., and Saudi Telecom Company (Rodriguez, et al., 2014). The basic reasons behind the failure in its implementation are lack of support from the top level management, ineffective measures and inadequacy in the companys culture. Furthermore, ample of customisation in the system or software also leads to complexities and ultimately outcomes in failure. The relationship between the organisation and consulting partners are also a reason for the unsuccessful ERP implementation (Whanga, et al., 2003). It also directed because of poor consultant effectiveness and poor quality of business processes that does not fit in the ERP system. The poor management of projects also causes the implementation process of ERP unproductive. Additionally, skipping the imp ortant steps of implementation may also lead to the ERP system ineffectiveness which are documentation, redefining and integration stages. Sometime, company choose unusual ERP systems and does not consider vendors recommendation seriously which obscure the process and operation of the organisation. The seeded configurations also has a difference in the implementation of AS IS and TO BE requirements of the business (Whanga, et al., 2003). In the end, budget is another major concern while implementing ERP systems that facilitates the key performance indicators and implementation of healthy return on investment. Conclusion From the above discussion, it can be inferred that the Enterprise resources planning is implementation of information technology in the operation of the organisation to make the functions more versatile and uncomplicated. The main reason for the adoption of the information technology is divided into two area that is technological and business reasons. The need for fast and speedy transaction and process information in the real time is the main motive of ERP system. However, there were some frauds and misrepresentation of financial accounting cases that lead to implement the Sarbanes-Oxley Act to protect the investors. In addition to this, My SAP is an ERP system that helps the organisation in implementing the rules and effective management in the organisation. Lastly these are various cases that provide the factors which direct an organisation in the success and failure in implementation of the ERP system. References Al-Jabri, I. M., and Roztocki, N. 2014. Adoption of ERP Systems: Does Information Transparency Matter? Telematics and Informatics 32(2), pp. 300-310. Al-Mudimigh, A. S., and Aldammas, A. 2011. Critical success and failure factors of ERP Implementations: two cases from kingdom of Saudi Arabia. Journal of Theoretical and Applied Information Technology 28(2), pp. 73-82. Badnaaz, A. 2003. Vendors hawk Sarbanes-Oxley wares. Network World Magazine 20(45), pp. 12. Ferran and Carlos. 2008. Enterprise Resource Planning for Global Economies: Managerial Issues and Challenges: Managerial Issues and Challenges. IGI Global. Green, S. 2004. A Look at the Causes, Impact and Future of the Sarbanes-Oxley Act. Journal of International Business and Law 3(1), pp. 33-52. Hallikainen, P., et al. 2004. Reasons for ERP Acquisition. [Online] Available at: https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.90.367rep=rep1type=pdf [Accessed at: 26 April 2017]. Kapp, K. M., et al. 2016. Integrated Learning for ERP Success: A Learning Requirements Planning Approach. CRC Press. Light, B. 2004. Reasons behind ERP package adoption: A diffusion of innovations perspective. [Online] Available at: https://usir.salford.ac.uk/17281/1/20040095.pdf [Accessed at: 26 April 2017]. Miranda, M. Q., et al. 2016. Technology adoption in diffusion of innovations perspective: introduction of an ERP system in a non-profit organization. Revista de Administrao e Inovao 13(1), pp. 4857. Panorama Consulting Solutions. 2015. Clash of the Titans 2016: An Independent Comparison of SAP, Oracle, Microsoft Dynamic s and in for. [Online] Available at: https://go.panorama-consulting.com/rs/603-UJX-107/images/Clash-of-the-Titans-2016.pdf?mkt_tok=3RkMMJWWfF9wsRoluKrLZKXonjHpfsX57OwsWqO%2BlMI%2F0ER3fOvrPUfGjI4CS8ZiI%2BSLDwEYGJlv6SgFTLDGMbVqwrgMWxY%3D [Accessed at: 26 April 2017]. Ptak, C. A., and Schragenheim, E. 2016. ERP: Tools, Techniques, and Applications for Integrating the Supply Chain. 2nd ed. CRC Press. Rajan, C. A., and Baral, R. 2015. Adoption of ERP system: An empirical study of factors influencing the usage of ERP and its impact on end user. IIMB Management Review 27(2), pp. 105117. Rodriguez, E., et al. 2014. ICAS2014-International Conference on Analytics Driven Solutions: ICAS2014. Academic Conferences Limited. Tortorella, G. L., and Fries, C. E. 2015. Reasons for adopting an ERP system in a public University in Southern Brazil. Proceedings of the 2015 International Conference on Operations Excellence and Service Engineering Orlando, Florida, USA. Whanga, J., et al. 2003. A Case Study on the Successful Upgrade of ERP System. 7th Pacific Asia Conference on Information Systems, Adelaide, South Australia.