The implementation of the ERP is challenging for any organization disregarding whether the ‘big bang’ or phased approach is used. The ‘big bang’ approach suggests that the company will shift from the old ERP to the new one at a single point in time. The advantage of such a method is that the company can reduce costs and time during the implementation (Trunina et al., 2018). Nonetheless, the risk level and the number of mistakes may disrupt the transition from one ERP to another, which is highly hazardous for large enterprises.
In this case, the phased approach is used. It encompasses the step-by-step change when the company integrates a new ERP department by department or module by module. The advantage of such an approach is that data consistency is preserved, and security issues are avoided (Yildirim & Kuşakcı, 2018). On the contrary, the compatibility of ERP can mitigate any benefit, as well as the low efficiency of departments, where new ERP is introduced.
Issues with ERP
The three common issues with ERP implementation are software compatibility, communication, and lack of skills to manage the ERP. The software compatibility threatens companies, which decided to use specific ERP modules or shift from old versions to newer ones. Besides, the compatibility also triggers communication issues, as departments with different ERPs cannot proceed, transfer, and store data correctly, making any inquiry highly corrupted or inconsistent (Ranjan et al., 2016). As a result, the third problem arrives, as ERP management requires qualified technical specialists, who can easily navigate the system and assist employees in solving their issues and inquiries.
Advantages of ERP
The four advantages of ERP implementation for the multinational organization are data consistency, unified standards and procedures, data access, and efficient communication between divisions and subsidiaries. On the contrary, the ERP can cause issues related to data storage, as data packages can overwhelm the system (Yildirim & Kuşakcı, 2018). Moreover, the multinational company may face problems with compatibility in different departments. Other disadvantages are costs and schedules, as multinational corporations will require substantial investments and time frames to ensure the ERP change.
The selection of specific modules can be motivated by the scope and type of services, which the company desires to conduct through ERP. Further, separate modules may be cheaper than the entire ERP, as well as have a higher compatibility mode with the company’s software and hardware (Ranjan et al., 2016). As a result, the integration of specific modules allows the company to manage the process and ensure the quality and efficiency of its operations without overbudgeting or significant delays.
Trunina, I., Vartanova, O., Sushchenko, O., & Onyshchenko, O. (2018). Introducing ERP System as a Condition of Information Security and Accounting System Transformation. International Journal of Engineering & Technology, 7(4.3), 530-536.
Yildirim, V., & Kuşakcı, A. O. (2018). The Critical Success Factors of ERP Selection and Implementation: A Case Study in Logistics Sector. Journal of International Trade, Logistics and Law, 4(1), 138-146.
Ranjan, S., Jha, V. K., & Pal, P. (2016). Literature review on ERP implementation challenges. International Journal of Business Information Systems, 21(3), 388-402.