Enterprise Resource Planning: Journal Analysis

Introduction

Enterprise Resource Planning (ERP) is an integral part of every organization, especially top management. ERP model integrates all separate department functions into a single software. Many project managers and general managers use the ERP model because it makes it easier to track all workflow across all departments. However, ERP complexity makes it challenging to use, especially for junior management and other staff.

Due to its complexity and cost implications, ERP implementation is rare. A majority of medium-sized and small-sized organizations do not use ERP. Moreover, most of the organizations use the software as the only component of the ERP model leaving out other components. This paper gives a summary of the journal A Conceptual Model for Enterprise Resource Planning, by Marnewick and Labuschagne highlighting its strengths, weaknesses, its contributions to business and technology, and possible future work.

Summary

The journal, A Conceptual Model for Enterprise Resource Planning, simplifies the complexity of the EPR system and presents it less technically. It also highlights the methodology used in the implementation of the EPR model from its starting point. Project and general managers can relate to the journal with ease due to prior knowledge of the EPR model. EPR system is widely used in many organizations but the most emphasized component of the system is software. However, Marnewick and Labuschagne (2005) analyze the other components of the EPR model that managers and project managers can use to their advantage. Moreover, the authors provide simplified and clear definitions of the technical terms.

According to Marnewick and Labuschagne (2005), the main EPR system components are process flow, software, customer mindset, and change management. The software component consists of finance, human resource, supply chain management, supplier relationship management, customer relationship, and business intelligence. Sometimes customer relationship is also referred to as the backbone of the ERP models, hence, it is mostly used by many organizations.

The process flow is another vital component of the ERP model. It illustrates how information flows among different segments of a system. Implementation of process flow becomes easier if there is well-established coordination of activities. The customer mindset is the third component of the system. This component should allow customers to give suggestions on different aspects of the business. Piazolo and Felderer (2016) agree with Marnewick and Labuschagne (2005) that paradigm change in the customer mindset should be accommodated to yield positive results. Customer mindset exists in three levels that is, user influence, team influence, and organizational influence (Valverde, 2012).

The last component of the ERP system is change management, which as Bradford (2015) also confirms, exists on several levels. Change management plays a central role in the successful implementation of the ERP model. Some of the levels at which ‘change needs’ are managed include user attitude, project changes, business process changes, and system changes.

Strengths of ERP Models

ERP systems simplify all important processes across all departments. Therefore, senior management can have a complete overview of all departments. The second advantage of ERP is that it unifies the single reporting system and presents the required statistics in real-time across all departments. Moreover, since the same software is used across all departments, individual departments do not need to acquire other software, making ERP cost-effective. Additionally, the business intelligence level in ERP aids top management to identify potential gaps in the business. This then leads to a timely improvement of the business model. ERP conceptual model is all-inclusive and can accommodate any number of modules (Piazolo & Felderer, 2013).

It is also important to note that ERP systems ensure zero cases of duplication of data since all information is centralized. The system also ensures easier retrieval of the information, on the same note, ERP systems allow for easier tracking of any type of business transactions. The availability of information also enables sales forecasting (Samara, 2015).

Weaknesses of ERP Models

The biggest weakness of the ERP systems is the associated high costs of planning, configuration, and implementation. The high costs of implementing the ERP models makes it less of a priority for small and medium-sized companies. Secondly, ERP allows for minimal customization which may lead to less integration of systems within the confines of a business. Clients have to pay more to get a comprehensive system. However, too much customization will hinder the upgrading of the model.

The payback period after implementation of the ERP systems cannot be identified by an organization or it may take a long period. The complexity of the system discourages the user from learning how to implement them. As a result of this, there is little user participation, which is very vital for successful model implementation. Lastly, the ERP system requires a prior evaluation, which if not carried out effectively, will lead to system failure.

Contributions

ERP systems have a positive implication on organizations that use them. One of the reasons this is so is that the system streamlines the organizational structure easily and efficiently. The models in ERP are also applicable to all types of organizational structures. Moreover, the methodology of implementation is clear and simple. If all organizations follow the outlined method keenly, the ERP conceptual models will bear positive fruits. ERP systems increase the effectiveness of the business in a variety of ways. For instance, the system ensures there is easy retrieval of all information and no duplication of the information or data across all departments.

Future Work on ERP Systems

Much research done in the recent past does not take into account fully-functioning ERP models. Therefore, future research should take into account the developed ERP models. The journal, for instance, lacks in-depth analysis. Future research should focus on coming up with a linkage between the ERP modules and components, and organizational strategies. Moreover, future researchers should devise an implementation framework of ERP systems using a portfolio.

In addition to the state, future research should take into account drastic changes in technology about ERP systems. Some of the focus should be on new computing and accounting software emerging. New inventions will ensure flexibility in ERP systems to accommodate users’ needs. Indeed, due to the importance and significance of the system, there is a need for researchers to carry out more studies on ERP systems.

Conclusion

The journal, A Conceptual Model for Enterprise Resource Planning, by Marnewick and Labuschagne, provides detailed information on ERP systems that most organizations have adopted. The strengths of the systems overshadow their weaknesses. The journal summary also provides a clear picture of the ERP systems components. The implementation methodology in the journal is clear and simplified well enough for an average reader. Despite all the research that has been done on ERP so far, there is still a great need for future research on the systems. This is due to the paradigm shift in the software industry. The invention should also take a central part in future research as well as the designing of an implementation framework.

References

Bradford, M. (2015). Modern ERP: Select, implement, and use today’s advanced business systems. Raleigh, NC: Lulu.

Marnewick, C., & Labuschagne, L. (2005). A conceptual model for enterprise resource planning. Information, Management and Computer Security, 13(2), 144.

Piazolo, F., & Felderer, M. (2016). Multidimensional views on enterprise information systems: Proceedings of ERP future 2014. New York, NY: Springer.

Piazolo, F., & Felderer, M. (2013). Innovation and future of Enterprise Information Systems: ERP future 2012 conference Salzburg, Austria, November 2012, revised papers. New York, NY: Springer.

Samara, T. (2015). ERP and information systems: Integration or disintegration. New York, NY: Wiley.

Valverde, R. (2012). Information systems reengineering for modern business systems: ERP, supply chain and e-commerce management solutions. Hershey, PA: IGI Global.