Enterprise Resource Planning refers to an approach or process implemented with a prime objective of merging all the departments and business functions within an organization into a single integrated computer system that meets the information units of every business unit within the organization (Alexis, 2007). The outcome of Enterprise Architecture for ERP systems is a convergence of organizational workforce, computer hardware, and software that fosters an efficient production process and delivery in order to increase revenue for the organization. EA a way to ERP systems has a positive impact on the execution of organizational processes and functions because it enhances information flow among the various business units inside and outside the organization (O’Leary, 2000).
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The History of Enterprise Architecture for Enterprise Resource Planning Enterprise
Resource Planning is a concept that was first embraced during the early 80s; it was used to merge the functions of Finance, Manufacturing and business logistics. It was primarily implemented with a sole objective of facilitating the execution of business level strategies such as purchasing, production, and sales (O’Leary, 2000). Thus, business enterprises made use of the opportunity to upgrade their systems. EA a way to ERP systems were originally implemented to automate functions that were related to back office that had a direct effect on the clientele. Front office functions were later merged into ERP such as Customer Relationship management and Supplier Relationship Management. ERP II was adopted during the early 2000s and primarily focused on web-based application that facilitated real time access of the systems by the employees of an organization and external entities such as suppliers, stakeholders and customers (O’Leary, 2000).
The Components of an EA through Enterprise Resource Planning system
Business Intelligence Systems:
- External Access platforms using technology such as web-based applications
- Management of documents
- Reporting platforms that can be customized
- Management portal and management of organizational workflow
Implementation of EA to ERP systems in an Organization
- Process Preparation: The implementation of an ERP system needs an overhaul of the current business processes. It is vital that business enterprise conduct an analysis of the current business processes before implementing an ERP system in order to identify the opportunities that can be posed by modernization of the business process (Alexis, 2007).
- Configuration: involves matching the needs of the organization and the design of the ERP system.
- Customization: it is important that ERP systems can be customized in accordance with the changing needs of the organization. Despite the fact that the customization will affect the implementation time of the ERP system, it is important in establishing the frameworks through which the organization can achieve competitive advantage.
- Data migration: refers to the transferring of data from the current system into the Enterprise Resource Planning system. Data migration is a vital process and requires adequate attention by identifying the data that is to be migrated to the new EA to ERP system, determining the time of data migration, generation of templates for the data, freezing of the data sets and archiving of the data (O’Leary, 2000).
The role of EA for ERP in the current management approaches.
- Impacts of the ERP on the on the way organizations are managed.
- ERP and its contribution to e-commerce.
ERP Risk Assessment
Some factors have influenced the rate at which Enterprise Resource Planning projects fail, in 1996, a foremost drug firm by name Formeyer International went into bankruptcy after they abandoned a fifty-five million dollars ERP project. HP Company also had a similar problem when an ERP project embarked upon in 2004 was abandoned; the project was worth one hundred and fifty million dollars. Likewise Avis PLC in 2004 dis-continued the ERP system projects are spending fifty million dollars (Neil & Daniel, 2006). The rate of failure has been estimated to be 87% and this contributes to the wastage of dollars. In this paper, we will examine five factors:
Assumptions of a solution strategy
Most organizations formulate patterns that are too risky and make such patterns a benchmark for future projects. There are areas that need more attention and that are the fiscal planning and implementation. For example, United States Military had to cancel one of its ERP projects, which was worth billions of dollars twelve years after its conception due to poor planning.
The need to understand the ERP process poses a huge challenge in project implementation. A proper documentation of the possible challenges and risks would reduce the high failure rate of ERP projects.
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The dependence on existing implementation strategy has affected the success of ERP projects. Proposed models for ERP projects are not well planned and this accounts for most failures.
Inadequate management plans
The key to a successful project can be attributed to a good maintenance policy. When this factor is not well structured, it would result in a breakdown of the organizational framework.
The competence of any policy can be seen even from the beginning. When such projects lack the necessary capability to push through under a period of 2 years, its chances of survival are slim.
The state of any firm can be described by its Enterprise Architecture. It is worthy to note that the success of Enterprise Architecture lies solely on proper timing. For example, when an ERP system project is implemented and the desired goals are not seen after a year, it can be adequately changed with a model in the EA and this will reduce the risk of failure. The objective of Enterprise Architecture is to reduce the high failure rate of ERP systems (Gordon, 2010). Enterprise Architecture would be beneficial to organizations that adopt the pattern because it would:
- Facilitate innovations at all levels of the project
- Help to lower service charge and maintenance
- Influence and reduce the risks of failure.
Finally, EA to ERP is an integral element of organizational management and processes that business enterprises should not overlook. The basic implication is that ERP results in increased revenue and competitive advantage.
Alexis, L. (2007). Enterprise Resource Planning. New Delhi: Tata McGraw-HillEducation.
Gordon,B. (2010). Key Issues in ERP Systems Implementation. Web.
O’Leary, E. (2000). Enterprise resource planning systems: systems, life cycle, electronic commerce, and risk. Cambridge: Cambridge University Press.
Neil,R & Daniel,P. (2006). Enterprise Architecture: The Value Proposition. Web.