Integration Between ERP Systems and Supply Chain Management: Studies in Communication and Media June 2023
Integration Between ERP Systems and Supply Chain Management: Studies in Communication and Media June 2023
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Duminda Rajapakse
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Duminda.P.P.K. RAJAPAKSE
University of Kelaniya, Sri Lanka
[email protected]
Abstract
The purpose of this study is to understand the benefit and challenges associated with the
integration between ERP systems and supply chain management. From that, top
management can make clear and accurate decisions when adopting an ERP system. A
fundamental advantage of an ERP is providing access to the appropriate information that
the right people can capture at the right time. The ERP system can consolidate information
into a single integrated system for the organisation instead of multiple subsystems without
integrating each other. This provides more effective internal and external communication
with customers and suppliers. From that, it makes understanding the benefit to the
organisation better and is more valuable to find the challengers while engaging the ERP
system. The successful implementation of an ERP system involves a significant financial
investment, time, and well planning. When examining the challenges of ERP deployment,
it is also essential to learn how to minimize the risks of these challenges to achieve early
benefits. The supply chain leader can study all the benefits, challenges, and strategies to
be successful. Also, they will have the right information to help them decide to adopt an
ERP system and increase the return on investment to their organisation.
Keywords: Supply change management, ERP integration, Challengers of ERP
Implementation and Benefit.
to understand because the ERP may need add resources to help with the transition
to be changed to fit the organisation. period, which is a challenge that must be
Whether or not this is a big challenge addressed in order to make an informed
depends on how much customisation the decision and plan for the additional
organisation needs to do. As the number resource increases.
of customisation increases, so does the The last part of this section is about
complexity of switching to an ERP, which change and training. People who are
causes time and cost to be wasted affected by the new procedures will need
(Moalagh & Ravasan, 2013). However, training, as was stated before in this
(Shiner & DuPriest, 2012) explain that an article. However, even if there are no
ERP will affect each business area process modifications, everyone in the
differently. This means that each area of business who processes system
the organisation needs to understand the transactions will need to be trained on the
challenges in order to know what is new ERP system. Even more challenging
changing and how to do its work in the is that training for new systems is
ERP system. This challenge must also look sometimes required during the time that
at the fact that with an ERP, all functions people are still using their old systems.
are integrated into a single system. This This raises the possibility of problems. In
is essential because the activities of one addition to the need to train employees,
process area affect other process areas what training resources will be required to
within the organisation. This means that conduct the training challenge? This may
each area cannot modify the system need the use of additional infrastructure
without understanding the impact of for training. All of these factors must be
those changes on the downstream areas. taken into account when evaluating
Another challenge with adopting an ERP training requirements since they all come
system is that most organisations are at a cost, which must be understood
considering ERP experts. The smaller before an informed decision can be made.
organisations tend to concentrate on It is a challenge that a company
what makes them successful rather than considering the implementation of an ERP
realising that they need resources who system understands and weighs the risks
are knowledgeable about what it takes to and rewards before making a final
successfully adopt an ERP system decision. There are a variety of challenges
(Hasheela-Mufeti & Smolander, 2017). that need to be considered. As a leader,
Additionally, Frost (2016) points out that you need to know what the consequences
the lack of a project leader is a major will be, but you also need to have a plan
cause of challenges faced by to avoid or mitigate some of these
organisations during the transition to an challenges. This is why these challenges
ERP system. An organisation may need to are being highlighted.
42 2022, Volume 13, Number 2
Supply Chain Management Journal
4.3. 4.3 Strategy for Success ERP systems. When fewer customisation
needs to be made to the ERP, it is easier
Following an ERP system's advantages as
to transfer to an ERP. This suggests that
well as its disadvantages, we can now
making changes to the way things are
look at strategies of reducing the
done before switching to an ERP will make
challenges and increasing the benefits.
the transition easier (Banerjee, 2018).
This study will be done what other
Changing the process in advance to align
findings during ERP implementation. The
it with the ERP's end state makes it more
objective is to develop a method or
than just a new system to operate.
strategy that a leader can employ to
Instead of having to learn a new system
ensure a smooth transition to the ERP
and process, this is significantly easier for
system they select.
the company. It's therefore
The first step is identifying and
recommended that leaders modify
understanding the current processes
procedures whenever possible and only
before selecting the ERP system. The
customise ERPs when the processes
organisation should self-evaluate its
cannot be changed.
current processes to determine which
When moving to an ERP system, the next
areas require modification. This is
step is to find a project leader who knows
essential information when determining
how everything needs to fit together for
which ERP system is the greatest fit for
the project to succeed. The leader of this
the organisation out of multiple options
type of project should be able to evaluate
(Banerjee, 2018). Furthermore, Potts
the needs of various functions but will
(2019) emphasised multiple ways to
ultimately make the best decision for the
manage a business, and selecting the
overall organisation. There is a good
appropriate ERP system for the situation
chance that the person chosen will be in
can make a move more successful. With
a position where they can make decisions
an understanding of the business's
about the corporation as a whole rather
current processes and information flow,
than simply on a specific area (Jennifer
various ERP systems may be evaluated to
Miller, 2019). However, lower-level
determine the best fit for the
leaders will still need to be active in some
organisation. This would help to eliminate
aspects of the transition, as all sectors will
the need to adjust current processes or
be changing to some degree. Some of the
ERP customizations.
difficulties connected with an ERP
With a proper understanding of the
transition can be alleviated by having a
current processes of the busses, the next
competent project leader who has the
strategy is to identify the required
authority to make decisions that benefit
process changes and optimise the
the organisation. To preparation for the
information flows before implanting the
ERP transfer, the project manager and
2022, Volume 13, Number 2 43
Supply Chain Management Journal
their team can help drive process implemented in the presence of a detailed
changes. understanding of the current state of
The development of a training program is business operations and information
another part of the ERP transition that a flows. With the right leadership in place,
project leader and their team may drive. an ERP transition can be planned and
Developing an ERP training programme implemented in an efficient and effective
requires comparing present procedures manner by a team that understands the
and information flow to those that will present processes and information flows
exist once the ERP system has been of the organisation. It would then be
implemented. According to Banta and possible for the project team to create an
Boldeanu (2019), language barriers educational programme and identify the
between trainers and trainees should also tools required to put it into action. As a
be considered, which could necessitate result, the project team can educate
the use of translators in addition to those who may be affected by the ERP
trainers. Also, Hasheela-Mufeti and system change, which should alleviate
Smolander (2017), a successful ERP some of the worries that people have.
transition depends on bringing in
employees with the appropriate skill sets
5. 5. Conclusion
to teach the new way of doing things.
Another essential part of a successful
Many factors must be considered when
training strategy is ensuring that those
deciding whether or not to implement an
who require training have the time to use
ERP system. While there are a number of
it. The establishment of a management
advantages to an ERP system, there are
team and a training programme will assist
also a number of challenges that must be
the company in demonstrating the
comprehended to determine whether or
alterations the company will undertake.
not the ERP is best for the organisation.
There should be a discussion with those
With the ERP, more accurate real-time
who will be affected by the changes so
information can be shared internally, with
they may better prepare for what's to
customers, and with other suppliers in the
come. As a result, the project's leadership
supply chain. Data and transactions are
team should work with those who will be
linked to one system, which means that
affected to explain why and how the
essential information is passed when
changes will benefit them.
events occur immediately, allowing for
Even though implementing an ERP
faster response times. More correct
system is fraught with challenges,
judgments can be made sooner in the
following the strategies outlined here can
organisation as a result. The ERP system's
help alleviate some of those challenges to
challenges are the changes that must be
some extent. An ERP can only be
44 2022, Volume 13, Number 2
Supply Chain Management Journal
made in order for the ERP to be exceed the benefits of ERP for an
functional. This may require a change in organisation that has limited resources.
present procedures and information flows Expanding one's workers is more
before moving to an ERP. A further challenging in a small organisation since
challenge is determining how much it lacks larger organisations' resources.
money will be needed to implement the Because of this, the suggestion to shift to
policy change. There could be a high an ERP system was made for mid to large
resource need for a successful ERP oraganisaion because they have greater
transformation, which means that there flexibility to overcome the challenges to
will be a high cost. Additional resources enjoy the benefits of an ERP system.
always have associated costs that need to
be understood. Knowing these costs
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