Intergretion Of Erp Systems With Other Systems

Published Date: 02 Nov 2017

Abstract

Organizations look to enterprise resource planning (ERP) as a significant strategic tool of competition. ERP plays an important role in today’s enterprise management and is beginning to be the backbone of organizations. Although ERP has been recognized as a useful tool, in practice, there are many difficulties in compelling people to implement it effectively. In this case, how to help ERP’s future effective implementation has already attracted some researchers’ attention. There are a number of reasons that contribute in the success or failure of an ERP system implementation. Enterprise resource planning systems inherently present unique risks due to tightly linked interdependencies of business processes and relational databases. Knowledge of such risks is important for the implementation as they contribute to success of overall system.

In this study, various risk factors are identified based on relevant literature and a survey of risk factors was conducted in Mauritian Enterprises. The risk factors are valued in terms of impact and probability of occurrence and respondents value each risk factor from highest to lowest. Data analysis shows that understanding and managing of ERP Risk Factors is vital to ERP implementation. Among the top ranked risks factors critical for the success on an ERP implementation are Top Management support and commitment and integration issues with other systems. Results show that use of a proper risk management framework at each stage of an ERP project is important. Based on the ranked list of risk factors, various recommendations have been put forward to suggest a strategy so as to mitigate and manage such risks.

From Chapter 5 of this report, it can be concluded that a priority list of risks should be drawn up to better manage each risk factor in terms of impact and probability of concurrence. Further to the Top 5 risks discussed in Section 5. A list of Risk Management strategies will be proposed and discussed below. The full table of ERP Risks and Risk Mitigation/Management strategies is given in Appendix 3.

6.1.1Risk Management Plan/Framework

From the analysis in section 5, it could be understood that many companies do not have and use a proper risk management framework and face various difficulties in the implementation of an ERP system. The only solution to this problem is that enterprises should plan for it and tries to mitigate them as early as possible. Risk identification and mitigation thereof is done iteratively, and never at a single point in time throughout the life cycle of ERP implementation. Even organisations that use a Risk Management framework, they use it at the implementation phase mostly, and the post-implementation phase is often neglected.

6.1.2-Intergretion of ERP Systems with other systems

With ERP being the talk of the day from small to large organization, system integration with other interfaces is inevitable. To reduce the problem of integration, organization should analyze their existing IT infrastructure in place before choosing their ERP software. The need to integrate ERP applications into an enterprise existing architecture is so fundamental that many vendors of software development and deployment environments have added ERP connectors or adapters to their products. The choice of an ERP system would therefore depend on the number of connectors needed for the system to work properly.

Another strategy to cater for the problem of integration would be to use in-house technicians instead of outsourcing. Organizations should train internal technical staff as they are more in a position to better understand the existing architecture of the organization than external people.

6.1.3-Lack of Top Management Support and Commitment

It is clear from this study that ERP system associates together an organization strategy, structure and culture. Senior managers are main stakeholders in any ERP implementation project; engaging and communicating with these key stakeholders is vital to the success of the project. Actual feedback mechanisms need to be in place to channel any concerns they may have and to take any relevant actions to address issues that surface – this can be achieved using techniques such as regular stakeholder interviews and surveys.

Committing the planned resources (in terms of financing and human resources) available for the ERP project is also one of the ways to show the top management support and commitment, which would help the ERP project implementation to be successful.

A committee to deal with unexpected difficulties, usually via a regular steering team meeting should be put in place.

6.1.4-Migration from legacy Systems

Data migration is the most significant activity determining the success of an ERP implementation. Effectively migrated data is a demonstration to the stakeholders that the ERP system is an accurate reflection of their current organization.

To avoid problems in data migration the following procedure may be followed.

Data Cleansing: Data errors and redundancies usually introduce risks of operational and reporting problems and these must be eliminated.

Data Conversion: Data has to be formatted to meet the standards of the new system. Conversion can be done manually or by an automated program.

Data Migration: This is the process whereby the data will be transferred form the legacy system the new system. A late migration is preferred as it helps ensure that the new system includes the most up-to-date data.

6.1.5-Security Issues

Due to the inherent complexity of an ERP system, security risks are of high impact to the whole organizations. Various strategies at various levels have to be put in place to have a secure system. The ERP system is becoming the system with high vulnerability and high confidentiality in which the security is critical for it to operate. Even if ERP vendors have already integrated their security solution, we need new technical approaches to secure an ERP system. The below strategies could be used by enterprises.

Security policy/rules

ERP experts have to provide such a way that explicit and well defined security policies can be easily defined and maintained. The security policies will offer the rules for the access of subject to object, and these are the constraints put on the administrators when they are granting/denying permissions to the users.

User authentication and Authorization

These are used to verify whether the user is the same person as he claims and whether the user has access to the relevant resources

Separation of duties

Tasks must be classified such that certain tasks can only be performed by certain users or roles.

Audit trail

The logging and tracing of relevant events has to be done with preventing the log files from breach.

Database security

Access to the database should be restricted to administrators and encryption of financial data and passwords is suggested.

6.2-Conclusion

ERP projects have often been found to be more risky to implement in business enterprises than traditional IT Projects with an impact on the whole organisation. The organizational relevance and inherent risk in ERP projects make it important for organizations to focus on ways to make ERP implementation successful by analyzing each risk factor and its relevance during each of the stages of the ERP project life cycle. 

Section 6.1 above discusses the various risk management strategies that organisations could use to reduce the risk of an ERP failure.