What Difficulties Do Organizations Face for Implementing an Enterprise Resource

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The Answer is Enterprise resource planning (ERP) packages are quite complex.Because they are not tailored to the needs of specific clients,they often require adjustment and fine-tuning for specific organizations.Therefore,their installation and testing involve experts who are usually employees of the software vendor or professionals who are certified for such work by the vendor.
Even with adjustments-often called "tweaking"-potential adopters must remember that the system was designed for an entire industry,not for the way an individual organization does business.If the organization has a competitive advantage thanks to a unique set of business processes,this advantage may diminish or disappear when the system is installed,because to a large degree the system dictates how business processes should be conducted.The system requirements are quite rigid,and therefore customization of ERP systems is limited.
ERP applications are expensive;modules cost millions of dollars.Buyers usually must allocate several more million dollars to pay for installation and modifications.Installation often takes many months to complete,and budget and time overruns are common.
Implementation of ERP systems can fail because of formidable challenges: the gap between system capabilities and business needs,lack of expertise on the consultant's part,and mismanagement of the implementation project.The business research firm Standish Group found that only 10 percent of ERP implementation projects are completed as planned,on time,and within budget.Fifty-five percent are completed late or over budget (which usually means loss of business and revenue),and the other 35 percent of such projects are canceled because of difficulties.At HewlettPackard,one of the world's largest computer and IT equipment makers,a $400 million loss in the third quarter of 2004 was blamed on poorly managed migration to a new ERP system.

What Difficulties Do Organizations Face for Implementing an Enterprise Resource

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What Difficulties Do Organizations Face for Implementing an Enterprise Resource

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