Delivery in day(s): 4
Enterprise Resource Planning System Proof Reading Service
This report argues about the ERP system and the vendor selection by the organisation. The report starts with the introduction part that provides the definition of ERP and the meaning of vendor selection. The later part of the report discusses about the process that needs to be conducted in order to select the relevant vendor and the ERP system as well as its implementation. It also argues about the issues that have been generated during the process. Some of the recommendations have been given to the organisation that may help them to take effective decisions.
ERP refers to as Enterprise Resource Planning. It is an integrated approach that deals with managing the business processes by making some of the back office operation automated in nature. This creates a link between different functions of the organisation that needs to be integrates and managed simultaneously in order to make the organization function smoothly. This business management is mediated by the software called as ERP software. ERP software includes multiple module software. Each of them concentrates on one of the function of the organization. These modules are purchased on the basis of needs and requirements as well as the technical capabilities of the organisation. (Chakraborty, 2015)
There are different vendors in the market that provide the software to the companies or the organisation according to their needs and requirements. The organisation needs to choose the most suitable vendor with whom the ERP software can be purchased. This process of selection of vendor requires a series of steps to be conducted. Sometimes the company hires some of the consultant firms to provide them assistance in selecting the most relevant vendor for their company. The best approach that has been used by the companies is the best fit approach. This suggests that the company should select the vendor that provides them with the ERP system that is popular in market and satisfying the company’s needs as well. It is not that easy for the organisation to select the vendor as there are several issues that may arise at every step of selection process such as, bidding issues, price issues, technical feasibility etc. (Motiwalla and Thompson, 2009)
ERP system and vendor selection process: and issues:
This is the first and the very important step in implementation of the ERP software in the company. In today’s era, it is very easy for the companies to find out the available vendors in the market with the relevant software by using web search. It also helps in assisting the companies about the information regarding usage of software by the competitors. Another approach that can be used to identify the vendors is to ask the specialists or the department experts that have the knowledge regarding all these vendors and the software they provide. Some of the vendors that are available in the market for the companies are Oracle/PeopleSoft, Lawson, SSA global etc. Oracle is one of the biggest application vendors and provides software to around 98 of the 100 fortune companies. It is the first company that develops the online software for use of organisation to manage their functions. Lawson is the company that provides industry-tailored software while SSA global is the company that focuses on providing the software that is very much effective in achieving goals in shorter period of time. There are many other vendors such as Great Plains, Epicor, Plex Online etc. (Nardini and Breaux, 2013)
Matching requirements with the ERP features:
The next step is to match the user’s requirements with the features of the EPR software available in the market. This is also an important step as it is very essential to implement the software that is relevant to the organization needs and have the capability to fulfill those requirements. There are mainly two approaches to conduct the matching process. The first approach is the traditional one that requires the organisation to identify the requirements by meeting with the departments and the groups that provide and document the requirements according to the currently functionality of the organisation. The second approach is the modern approach that is known as fit/gap approach. This approach is generally conducted after the purchase of the ERP software before the implementation. In this process, the vendor shows the ERP functionality in the organisation. This allows the company to know about the changes that has been required to make before the implementation of the software. Some of the vendors charge for this process while some of the organisation considers this as vendor selection process step to be conducted. This process to be very beneficial for the organization these days as it results in providing information related all the drawbacks that need to be changed in the ERP system according o the requirements of the organisation. (Orougi, 2015)
Requests for bids:
This is the process that is not required in the private firms but is usually conducted by the public forms. This process is time consuming but sometimes proves to be beneficial for the company and the vendor in terms of cost. It creates a competitive environment between the vendors. The request for bid (RFB) is proposed by the company that includes the type of ERP software and the software and hardware infrastructure required by the company. The vendors respond to this request by sending response proposal that involves the training process, infrastructure details and the ERP software details with the cost estimation. Now the company has to decide which proposal is best fit for the company and should be passed. (Niefert, 2009)
The proposals by the vendors need to be evaluated by the company before purchasing the one. This evaluation requires different departments of the organization to play their part. The functional staff of the office needs to check the functional feasibility of the organisation, the IT staff needs to look at the technological feasibility while the accounts staff needs to check the contract and the pricing feasibility. The system that is most feasible should b selected. It should be considered by the management that one vendor cannot fulfill all the requirements so they have to go for the best fit approach as well as they need to select two or three vendors so that negotiation can be done before purchasing the ERP system. (Panda and Maheshwari, 2009)
It is very important to enter into the contract for the company and the vendor for the purchase of ERP system. This is because it can reduce the chances of frauds. It should be ensured by the company and the vendor that the contract must consists of the details of all the deliverables with the delivery date so that there would be no confusion regarding the delivery. The terms and condition should be clearly mentioned in the contract to avoid any inconvenience. The main role in this context is played by the program or the contract manger that monitors all the activities of the contract terms and conditions. He needs to ensure that both the parties are abide by the contract conditions and terms and there should be no breaching of contract by any of the party.
Implications for management:
Management plays a very important role in implementation of the ERP system in the organisation. It is very much essential for the management to take required and enough time to evaluate the ERP systems available in front of them before their implementation and purchase. Management should take intelligent decisions over matching the requirements to the features of the ERP systems. The management needs to communicate with the vendors regarding the current working of the system, the future requirements and the changes that needs to be implemented in ERP already installed in the organisation. It is best for the management to select multiple vendors so that the company has the chance to negotiate. Although it is very much time consuming to negotiate with multiple vendors but it may results in better price deal with the vendors. (Tullous and Utecht, 2011)
Issues in the process:
There are many issues that rise in the process of implementation of the ERP system by the organisation. The first issue that needs to be resolves is the resource issue. It is very much essential for the organisation to determine the resources that are required in the whole process of implementation of ERP in the organisation. Another issue that needs to be considered by the organisation is the change management and the reengineering of the existing functions. It is very necessary to management the change and to reengineer the current functions of type organisation to implement the new ERP system. Next is the training issue. It is very essential for the organisation to provide training to the employees in order to implement the new ERP system to the organisation. This is because the functional staff of the organisation is the one who will be using or dealing with the software. How the training is to be provides and who will provide the training should be the decision taken by the management. Selection the final vendor out of multiple choices is gain an issue for the organisation. It is very difficult to select a single vendor out of the best choices. These issues need to be resolved by the companies in order to make an effective decision making over purchase of the ERP system as well as its implementation. (Zaveri, 2009)
There are some of the recommendations made in order to resolve the issues discussed above as well as to make an intelligent decision over ERP system implementation and purchase. The first recommendation is that the organisation should make the clear requirement list before identifying the vendors for the ERP purchase. After selecting the vendor, the organisation needs to discuss with the top management as well as the staff about the processes and the functions. This helps in determining the resources that are required in implementing the ERP system. Preparing the employees for the change is another recommendation for the organizations having new ERP implementation. The management should ensure the ERP vendor should provide proper training to their employees about the functioning of the ERP system newly installed. Otherwise, there will be no sense implementing to in the organisation if the employees do not know how to use that. (Orougi, 2015) Another step that needs to be taken by the organisation is to ask the vendors about the references. The organisation should ask for at least 3 references from the vendors that are already using the ERP system and then should verify it with the customers about the pros and cons of the implementation of ERP system and the post purchase services of the vendor. Appointing the product manager is the best way to look after all the activities conducted with regard to the process of ERP implementation. Product manager would be responsible for taking care of all the legal aspects as well as the feasibility aspect of the ETP system. He would be one responsible for panning and organizing the whole process so that the management or the other staff of the organisation needs not to spend extra time in monitoring the process of ERP implementation.
Installation of ERP system is very important for the organisation in order to integrate all the functions of the same. There are different vendors in the market that provide the software to the companies or the organisation according to their needs and requirements. The organisation needs to choose the most suitable vendor with whom the ERP software can be purchased. There is a systematic process to select the vendor and to implement the ERP system in the organisation. It starts with researching about the vendors and follows with the identification and, matching of requirements with the features along with bidding process and final implementation of the ETP system that has been purchased after evaluation of bidding. The process is not that easy and has some of the issues that are generated. These issues are related to the decision over the resources required, the change that needs to be managed, the training of the employees etc. these issues need to be resolves by the companies by taking several steps like checking the feasibility,, appointing the product manager, providing training to the employees etc.
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Chakraborty, S. (2015). Reduction Supplier Tale through Systematic Vendor Management: A Study on Purchase and Vendor Management. Journal of Supply Chain Management Systems, 4(4).
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Tullous, R. and Utecht, R. (2011). A Decision Support System For Integration Of Vendor Selection Task. Journal of Applied Business Research (JABR), 10(1), p.132.