Considerations on the implementation of ERP

Gustavo A. Espinheira 1, Antonio L. M. S. Cardoso 1, 2

1
School Administration - Federal University of Bahia (UFBA) 41.100903 - Salvador
- BA - Brazil School of Education - Federal University of Bahia (UFBA) 40.110100
- Salvador - BA - Brazil
gustavo.espinheira @ gmail.com, antoniol@ufba.br
2
Abstract. This article aims to analyze the concept of ERP, highlighting the step
s and costs involved in the deployment process. At the end, tries to weigh the m
ain advantages and disadvantages brought about by the implementation of the syst
em so that it can contribute to understanding of steps to be followed and the ri
sks taken by decidirse deployment of this system. Key words. ERP, Business Plann
ing, Decision Making; Integration.
1. Introduction
According to Erhardt (01/01/2006), or ERP, Enterprise Resourses Planning (Enterp
rise Resource Planning). Technique of modern business management in which all in
formation from all areas of the company are verified, gathered, processed to be
available so efficient decision making. It is a management system that not only
automates tasks to be more accurate and faster (eg the issuing of invoices), all
ows all information is processed and made available administratively. By having
an architecture of information systems with modular database, centralized and in
tegrated, improves the acquisition, control, data flow and providing the organiz
ation. The modules are purchased in the form of commercial software packages in
order to support operations of a business: manufacturing, sales, marketing, HR,
logistics, finance, etc.. Modules can be purchased to meet specific areas until
the entire organization. At the end of the deployment, the procedures will be st
andardized, allowing the exchange of information between different areas of the
organization. ERP operates as follows: Use a Database centralized, enterprise, f
eatures a wide-ranging functional; integrates the various areas of the company;
incorporates case studies and models
standard business processes, allows customization of the interface without inter
ference in the data. That is, the integrated system collects data from key busin
ess processes and stores them in a single comprehensive data file, and can be us
ed by other sectors of the company. The information that was previously fragment
ed across disparate systems, can flow seamlessly across company, so that it can
be shared by other processes of the organization. [Pereira, 17/03/2007] Thus, th
e ERP helps in the process of business planning, as it meets the various busines
s processes of an enterprise architecture in a unique information and integrated
with the centralized database, so the managers have a more systemic and real in
your organization which greatly facilitates the process of business planning. [
Pereira, 14/03/2007a] Furthermore, although ERP do integration of internal syste
ms of the organization it allows for communication with the external environment
but because the systems may include transactions with customers and suppliers,
for example. Based on the information generated internally it goes beyond the or
ganizational boundaries. [Payne, 3.14 / 2007b]
2. Deployment
The implementation is the second stage of the life cycle of ERP systems, althoug
h the term is usually used to represent the entire life cycle. The implementatio
n of an ERP system can be defined as the process by which the system modules are
put into operation within a company. It involves the adaptation of business pro
cesses to the system, the parameterization and possible customization of the sys
tem, loading and conversion of initial data, the configuration of hardware and s
oftware support, training users and administrators and providing support and ass
istance.This step includes tasks ranging from the completion of drafting the imp
lementation plan until the time of initial operation. The implementation phase i
s undoubtedly the most critical of all. The difficulties stem mainly from the fa
ct that it involves organizational changes, which imply changes in tasks and res
ponsibilities of individuals and departments and transformations in the relation
s between the various departments. It is important that these four changes would
lead to global optimization of business processes in contrast to optimize local
ized departmental activities. The size and complexity of this change and it may
cause conflicts among stakeholders, the need for strong participation and commit
ment of senior management this stage of the company and secure communication bet
ween all teams involved. [Moura, 01/05/2007] According to Rego (05/20/2007), to
deploy an ERP in the organization, you must follow certain steps, such as:
Preimplantation: 1 Establishment of a committee to draw up a plan for implementa
tion of ERP systems with the support of senior management. 2 Setting the Vision
and Needs Survey of the organization in March to determine the management model
and performance indicators of economic financial management. 4 Determining inves
tment to be done and what the expected return. 5 Choose a consultant with proven
experience implementing ERP systems and IT. 6 Analysis and assessment of ERP sy
stems on the market. 7 Selection process and choice of ERP vendor. 8 Resources A
ssessment of IT. All sectors of the company must be involved in the stage of map
ping the processes of the organization. Is quite respectable meeting the needs o
f people together who know each process of each area of the company, otherwise i
t has a tool that does not meet the needs of the sector that was out of the proc
ess of implementing ERP. [Ribeiro, 18/04/2007] Certainly the larger the organiza
tion the most useful and important, perhaps more efficient, will be the implemen
tation of ERP, once the ERP is a software architecture that facilitates the flow
of information between all the activities of an enterprise such as manufacturin
g, logistics, finance and human resources. But the quality of implementation wil
l depend on whether the requirements of the organization are being met with new
systems based on ERP. [Santos, 2005 / 07/2007]
2.1 Exploration Costs
For Santos (08/04/2007), the main costs of implementing an ERP system involves t
he purchase of hardware, software, professionals, services (training and outside
consultants) and internal cost adjustments at physical facilities, software ins
tallation, maintenance, upgrading and optimization software. Although different
companies choose different ways of implementation and levels of budgets for proj
ects, according to surveys, many costs can not be well estimated, including: a)
COSTS OF TRAINING: is the item more unique with respect to the costs involved in
deploying an ERP system because its initial budget is always below the actual e
xpectations. The training costs are high because the
human resources involved need to learn a new set of cases, beyond the new softwa
re interface. b) THE COST OF TESTING AND INTEGRATION BETWEEN ERP PACKAGE INSTALL
ED AND EXISTING CORPORATE OTHER SOFTWARE COMPANY: This solution can be based on
customization of ERP, causing costs not estimated in the initial budget. c) COST
S OF DATA CONVERSIONS: are related to corporate information, such as records of
suppliers and customers, products, and other movements open to migrate existing
systems to the new system because they generally problems occur in the process o
f adaptation to the needs and models required by the ERP.d) COSTS OF HOURS ADVIC
E: if not designed by users, tornamse extremely difficult to estimate. e) STAFF
COSTS: we know that the success of implementing an ERP system depends on the peo
ple involved, to be the best, with deep knowledge business, and the brightest, w
ith knowledge of information technology. The software is too complex and changes
in business are drastic, and often the company chose to replace much of its sta
ff generating costs not measured. Unfortunately, companies do not plan the activ
ities of these human resources in the period pósimplantação, and end up havin
g to hire new employees soon after the start of operation of the ERP. F) RETURN
ON INVESTMENT (ROI Return of Investment): One of the big mistakes that managemen
t can make is to expect the company to recover the amounts spent on the implemen
tation of the ERP system once the application is installed and operated. Most co
mpanies do not get return on investment until they run the solution for some tim
e, including improvements in business processes that were affected by the system
.
3. Benefits of ERP for companies
Among the most evident changes that an ERP system provides to a corporation, no
doubt, is the most reliable data now monitored in real time and reducing rework.
When disposing of the complexity of monitoring the entire production process, s
ales and revenues, the company has more grants to plan, reduce spending and reth
ink the production chain. A good example of how the ERP is that revolutionizes a
company with better management of production, investment, as a new logistics in
frastructure, can be redesigned or simply abandoned. In this case, to monitor an
d better understand all the steps that lead to a final product, the company can
reach the point of producing so
smarter, faster and better, which, in other words, reduces the time that the pro
duct is still in stock. Decision making also gains a different dynamics, all per
formed in much less time than would be possible without the system. The modules
(systems) of the ERP are standardized to facilitate their operation by the emplo
yees. [Moses, 17.05.2007 ] Thus, summarizes Modesto (03/22/2007) The main tangib
le and intangible benefits are accelerating the flow of data across the enterpri
se, integrating real-time, minimize the response time to customers and suppliers
; delegates decisions on levels convenient, keeping control of appropriate manag
ement, ensure availability of information to support decision making, facilitate
s the process of business planning.
4. Disadvantages that companies may face when deploying ERP
Although it offers many strategic advantages to simplify the system for transact
ions of a company, the ERP is very time consuming, and implementation is complex
and costly. In some cases fazemse required radical changes in how the company o
perates, to comply with the procedures work (best practices) supported by ERP. [
Oliveira, 05.28.2007] M (04/25/2007), says that some of the drawbacks in impleme
nting an ERP in a company are: The use of ERP alone is not makes a company truly
integrated; High costs often do not prove the money; dependency package vendor;
Adoption of best practices increases the degree of limitation and standardizati
on between companies in a segment; staff cuts, which generates social problem ;
Become modules dependent on each other, because each department depends on infor
mation from the previous module, for example. Therefore, the information must be
continuously updated, since the information is real time (online)€causing grea
ter work; too much control over people, which increases the resistance to change
and can generate motivation from staff.
5. Key players
Terena (01/01/2006) lists some of the major suppliers (players) ERP operating in
Brazil: Baan; Datasul; Microsiga; mkgroup (Computer Associates), Peoplesoft / O
racle; MRI systems.
6. Conclusion
The ERP is a system that can act as an important tool and a competitive company
with respect to control and organizational planning. The integration of the modu
les and the numerous possibilities of information that can be drawn through the
intersection of this information can leverage any company.
However, it is very beneficial as we have seen the company to engage in the proc
ess of implementing the system, performing all stages of preimplantation. Thus,
the organization will avoid or minimize possible disadvantages brought about by
the implementation of the system.
References
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