5B EFS 7

Dayma Mayur

To what extent Enterprise Resource Planning (ERP) Systems has to be improved?

In order to generate revenue from business, each business needs to manage all its transactions properly and with real time compatibility. This task can be done by humans as per traditional method of record keeping in the book. However, it is too complex and more time consuming, which results in loss of business very often. Therefore, most businessmen choose Enterprise Resource Planning System (known as ERP System) to manage all business processes and transactions. ERP System is beneficial for business in many ways such as, reliable information access, redundancy avoidance in data and operation, reduction in delivery and cycle time and reduction in cost (Hossain, Patrick, Rashid, 2002). It includes easy adaptability, improved scalability and maintenance, global outreach and E-commerce (Hossain, Patrick, Rashid, 2002). Many businessmen say that an ERP system is very beneficial for their business. It is undoubtedly true that some businessmen prefer to use ERP System, where as the host of others arguably says that it contains many drawbacks also. However, it has many sensitive problems regarding its security and its cost, which need improvement. This essay will attempt to define some problems of ERP Systems with some solutions to improve it.

According to Leon ERP is an abbreviation for Enterprise Resource Planning and means, the techniques and concepts for integrated management of business as whole from the viewpoint of the effective use of management resources to improve the efficiency of enterprise management. In simple language ERP System is software package, which manage all departments of company into one common database including finance, sales and marketing, manufacturing and human resource management departments. Multi-national company can be defined as a company which has its branches in many different countries. Return on investment (ROI) is a term, which defines the profit on the amount of money invested. Implementation of ERP System means the process of getting

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information and requirement of client, make changes in the ready software of the company, integrate it to the client side and make it live for all users to perform business transactions.

ERP System is less preferred by many businessmen because of its one of the major problem high implementation and maintenance cost. According to Rashid, Hossain and Patrick there are many disadvantages of ERP system such as, it consume more time, it is expensive, conformity of modules and vender dependency. They added that extended capability, features, complexity, scalability and global outreach are also notable problems of ERP System. There are plenty of ERP System drawbacks and number of solution providers in market such as SAP, ORACLE, and Microsoft Dynamics. SAP is the most famous ERP System provider, around the world. Nowadays, ERP System provider keeps the cost of system implementation very confidential. The cost of only SAP implementation is around $1,318,122 (2001, Khosrowpour). The annual value of SAP licence per user is $64,213 for usage and maintenance only (2001, Khosrowpour). Observing these data one can say that the initial cost of ERP implementation is around $1,810,412 and after one year it is around $64,213 for maintenance. After 2001, ERP System providers had stopped to reveal information about the cost of implementation. They deal with the customers only. Customer also can not disclose prise to any other without written perdition of ERP System provider. From the statistics of 2001 by Khosrowpour one can imagine that how the cost of implementation might increase up to today. So the cost is one of the most effective drawbacks of ERP System. However many businessmen whose business is huge and running with high level of profit, they manage with this system.

The other drawback of ERP System is lack of security which may be resulted in legal problems for the company or may increase the competition in the industry. Owner of a business never purchase the system which is not secure and reliable. They need strong security in order to keep their private data to be secure and confidential. The ERP System is not much secure. If any one of employee is corrupted then he or she can do lots of damage to huge organization. For example American computer scientist and employee of CIA and contractor of National Security Agency (NSA) who disclosed

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several top-secret United States classified details and mass surveillance programs of British government to the press (Kendall, Nissenbaum, 2013). By this kind of activity in a company, it has chance of being exposed and reveals its privacy. The other outcome of less security is it increases competition to the industry. For instance take a company which is well known for its food and test of its product. If one group of person think something different and decide to hack all the data of product making procedure. Then they can get it very easily and the list of all customers and vendors as well. Finally from this information and investing some money they can be a strong competitor of that company later on. For example Sankalp is a very famous company which has its many branches in major cities of India. It is very famous for South-Indian food. Now as per the same procedure of above examination Pakvan is also become the strong competition of Sankalp.

The problems of ERP system can be solved by smart selection of ERP Solution provider and implementing high security peripheral devices in the ERP System. As mentioned before, there are many ERP Solution providers in the market. To be in budget of the business, enterprenear should chose the right ERP Solution provider. They need to be focused on the industry in which they deal with. They need to be clear that what they want from the ERP System. They also need to be specific that what they are expecting from the ERP Solution. These all thing should be decided before they look for the ERP Solution provided. What happen at real time, first they chose ERP System provider then provider make them clear that what they want from the software. The solution of the other problem is a huge organisation which has implemented ERP System, they should install more peripheral devices with ERP login and access system. The such as figure print lock and retina lock can also be used. If the data is very confidential then they can use breath lock also. Apart from these devicesthe ERP Solution provide also need to be improve the security of the system. They should use eathical encryption for the flowchart of login process as well as it the access of product procedure, vendors list and customers list. However many businessmen says that if any one decide to steel the data then he will steel it at any cost. But with the good hope if one implement these solution then it will be very beneficial for the business.

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Dayma Mayur

The aim of this essay was to evaluate the problems of ERP System and try to give possible solutions for it. In the final analysis of the topic it is wise to state that both the respective problem of ERP might face certain number of arguments and their possible damage to industry. Having focused on much brighter side of the issue, one can say that the solutions provided for the problem are essential to overcome from critical situation of risk. But they need to be implemented strictly and followed in each implementation. Though it is an individual opinion, it may vary from person to person and situation to situation in different ways.

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Reference
Hossain, L., Patrick, J. D., & Rashid, M. A. (2002). Enterprise Resource Planning: Global Opportunities & Challenges. Hershey PA: Idea Group Publication, 5-7.

Kendall, B. & Nissenbaum, D., (2013) The wall street Journak