To Adopt or Adapt an ERP?

In today’s fast changing and competitive business environment many companies have opted to implement an ERP (Enterprise Resource Planning) system. By definition “an ERP is an enterprise-wide information system designed to coordinate all the resources, information, and activities needed to complete business processes ”1 . Basically what the system does is integrate all the accessibility of information (within a company) into one efficient system. The benefits of such a system can be divided into two folds: 1) Core business management software: (Manages the core business functions of an organization) 2) Back-end management software: (Financial Accounting management software, HR & Payroll management software). While the system (depending on its size) is also expensive, companies such as Oracle, Microsoft, and even consultants have highly praised its cost cutting abilities. This can be done through the coordination of information and work automation (basically replacing technology with people).

Not to over simplify, but a lot of the success of an ERP system is in the implementation state. For the sake of this blog however, I would like to address the question at hand; Should companies adapt to ERP’s or visa versa. The first question any corporation must address is whether the ERP is the right solution/choice for their business. The size and timing of the business is also crucial. Many large successful companies (with a lot of cash and a drive for efficiency) usually opt to adopt such a system. The suggestion usually comes from the Chief Information Office. The unresistable benefits to a company make it hard most CEO´s to refuse. If a manager is travelling on business in China and needs to check inventory procurement levels at his USA office, all he needs to do is login and have the data at hand. Information that typically would of taken 24 hours to retain (time difference, etc etc.) has suddenly became instant. Thus, if a company is already successful, implementing such a system for convenience and efficiency, then the ERP must adapt to the companies normal business processes.

On the other hand, if the company (large or medium) is not doing well, as exhibited for example by declining revenues, etc. etc. then it’s reasons for implementing an ERP system are different. The management realizes a need for change and implements the ERP system on that basis. In this case, the company needs to re-adjust and must adapt to the ERP system. Choosing the right ERP system for your company is another story, however by picking the right system and properly implementing it, the benefits can be huge.