Case studies reveal impact of ERP

THERE are enough studies on the impact of ERP. Majority of these studies are research reports, case studies or collections of case studies and industry surveys. Most of these studies reported substantial performance improvement in several areas as a result of their ERP implementation, including their ability to provide information to customers, cycle times and on-time completion rates.

The earlier studies carried out on the impact of ERP systems covering both adopters as well as non-adopters of ERP systems. The study reveals that ERP adopters are consistently higher in performance across a wide variety of productivity measures such as sales per employee, profit margins, return on assets, inventory turnover, asset utilization and accounts receivable turnover than non-adopters.

The study results suggest that most of the gains occur during the implementation period, although there is some evidence of a reduction in business performance and productivity shortly after the implementation is complete. However, the financial market consistently rewards the adopters with higher market valuation both during and after the adoption, consistent with the presence of both short-term and long-term benefits.

A well-performed ERP system can be maintained till about 15-20 years. In the later stages the package will have old architecture. It will become very difficult to make changes in the program code without inflicting hazardous damage to the system's stability. It is possible to give older systems a 'facelift' with modern tools. Though those 'facelift' can extend the life cycle of the package for some years, they will certainly speed up the appearance of the useless codes.

It is very important while selection of new ERP packages to suit the organization's needs. Ideal ERP packages be selected from a wide range of packages available in the market today. Organizations must take extra care that the remaining life for the package is satisfactory and most of the bugs are gone. The appearance of new system design and technology often means that new things can be done that would give users many advantages. There is no easy way to include new technology in older systems.

Organizations must recognize the three most important aspect of ERP implementation. Project Management, Change Management and IT Management. An executive committee and steering committee were set up for the effective project management.

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