As the amount of information a company uses grows exponentially, ERP systems will continue to grow in popularity and prestige in the business world. The need to operate more efficiently than the competition will continue to drive the development of ERP systems and ERP software for years to come.
.
ERP Vendor Selection.
The challenges that companies are facing when implementing enterprise resource planning systems are why it is crucial that the organization understand the long-term implications. In the 1990s, companies began restructuring their supply chain by purchasing a system that would limit the massive amounts of information, create a single unit managing system, and in return provide immediate benefits within the organization. However, companies didn't understand that implementing the ERP system would involve considerable amounts of time and additional upfront costs. In fact, the allocation of employee resources that involved high travel expenses needed to meet with potential vendors, and analyzing the data to identify the benefits and possible weaknesses of the software accounted for nearly 20-30 percent of the overall costs of the system. This led many companies to not visibly see immediate cost benefits and the majority of tangible results with the ERP system could have been resolved through normal organizational changes. .
"80 percent of the benefit that we get from our ERP system comes from changes, such as inventory optimization, which we could have achieved without making the IT investment." (McKinsey Quarterly, Dorien James, consultant and Malcolm Wolf, principal in London office).
The data suggests that enterprise resource planning still offers companies value added features to their businesses. The major benefit is its integration capabilities. The system can adapt and accommodate to changes in e-commerce and future developments within the organization. The organization must be willing to adapt to changes within its current operational procedures.