Critically analyse the human, system and organizational issues that may be faced implementing an AIS such as ERP.
Enterprise Resources Planning, which is evolved from its previous level, general Information System aims to integrate a set of business processes which together serves common business functions, such as accounting, inventory control and business projecting, etc (Charalambos & Sylvia, 2004). ERP system has its primary objective to improve the decision-making process and organisation performance by providing appropriate and accurate real-time data in a timely basis with economic, efficient and effective coordination of available internal and external information (Charalambos & Sylvia, 2004; David, 2011). It has emerged as a common and necessary platform among enterprises not only to remain competitive in the global business scenario but also to streamline their own internal processes to collaborate with their foreign partners in their supply chain which has been growingly important to enterprise development (Rana et. al., 2012). Having understood its importance, this report is going to address some issues that might arise to a business or an organisation when a (new) ERP is implemented specifically from the aspects of system level, human level and organisational level.
System, Human and Organisational Problems
ERP, in short, is a pre-authorised computerised system designed by human (either inside or outside the user company) to achieve certain organisational goals. So effect from any of the system, human and organisation as a whole can be an obstacle when executing ERP. Needless to say, these three aspects are also interrelated.
ERP is often a computer information system created by IT professionals. So there are often some defects in the system itself or information collected in and for the system.
According to Stefanou’s finding (2002), cited by (Charalambos & Sylvia, 2004), without development/acquisition methodology in installing or updating the ERP system, misspecification of requirements and ineffective, inefficient and inflexible AIS may occur. ERP systems built on new technologies may usually require a very different skill sets than legacy systems (Jim, 2010). It requires a manager without IT background to learn new standards and different processing methods in order to constantly manage the technological complexity. Besides, information generated by one ERP system may only serve the primary purpose but not secondary purposes (David, 2010). That means no single system can serve all purposes.
Integration of processes is the key in ERP implementation. “ERP creates many interconnections among various business processes and data flows to ensure that any other unit of the organisation can obtain information in one part of the business” (Jim, 2010). “Information that was previously maintained by different departments must be integrated and made available to the company as a whole” (Jim, 2010). This will always happen in a form of change and possesses challenges to organisation which involves tighter business processes integration, jobs redefinition and new procedures creation throughout the company (Jim, 2010). And the consistency in procedures and policies are usually a problem which varies the quality of information especially for organisations having decentralized systems structure (Xu et al., 2003).
Problems of functionality and flexibility of ERP system should also be noticed (cited by Charalambos & Sylvia, 2004). Whether the functions of ERP system is adaptable to the change made inside and outside the organisation and changes are easy to be made can greatly affect the usefulness of the ERP system. However, ERP may not necessarily match all environments and modification may be needed (Jim, 2010). Noticing the huge difficulties of self-modification, companies are advised by system creators to live with