Problems faced when there is no ERP in an organizations

Though I talked about all risks, disadvantages of ERP in my presentation about "overview of an ERP" in last class, I have my personal experiences at my company which has got no ERP.

I worked for a small company for six months and I know almost all in and out processes of the company.They dont have a common database and they dont have a chat system so that all the departments interact and coordinate with each other. Its not necessary for them to buy an ERP from a vendor. But, I hope its always better to have a software something similar to ERP which has common database.Here are some reasons that support the previous statement.

We have mail ids of around 40,000 data and the data is updated daily as there will be many walkins to various offices located at different places across India. This data is always submitted to E-services department and we always collect data from that department whenever necessary.I generally used to maintain backup of the entire data.Instead, I always feel that its better to have online access to the data for all the employees depending on the authorizations so that they can use it whenever necessary.It facilitates daily activities, reduces operating costs and time consumption for every request asking the E-services department to send the data is reduced.It gives a strategic planning to the business organization, better coordination with all the departments,provides useful interface for the employees.

ERP has many advantages and also many disadvantages.No doubt, big organizations should go for ERP.But, they should take proper decisions at every step in the process of maintaining an ERP considering the negative effects of it. I feel moderation in ERP is better for smaller organizations.

Posted by Asha on 11:54 AM

10 comments:

Jack G. Zheng said...

Maybe an ERP is not needed; but centralized data should be there. For SMBs, I think more problems come from the data integration side, as their data are usually application dependent. Eventhough they all use the same database, tables are not designed in a way to minimize redundancy. I see a lot of databases even don't have properly design primary keys and foreign keys. Database is a great way to separate the data layer and provides easy ways for integration. But that does not automatically lead to data integration. Anyone shares the same experience?

Sangeetha Ramamurthy said...

I used to work for a telecom company and we were into providing mobile solutions to mobile service providers. Often there used to be times when we had to link up third party applications and our own to enable development of "Value-added Services." And with more and more applications being promised to be offered by mobile phones the data integration part only got tougher. Invaribly we would have to employ a middleware that could convert from one form say XML requests to another form say TCAP(a perticular mobile communication protcol)messages. Other performance issues had to be taken into account while employing a middleware, such as number of calls handled per second etc. There always seemed to be a trade-off between having a shared database and having it perform excellently.

MO BLOGGER said...

Actually both of the companies that I have worked for have had ERP systems the first had between 25-35K workers and the second one has 80K+. What is interesting about the current company that I work for is that they have multiple ERP solutions, which was due to acquisitions/mergers. It is quite interesting when you have such a scenario because the choices we face are to:

1. Choose one, eliminate the other and either migrate all of the data to one or get rid of the data.
2. Choose both and either semi-integrate or have no integration at all (although this probably would be the one that cost the most). If this option was chosen there probably would be some type of integration between the two.
3. Get rid of both systems and select a completely different ERP solution and either migrate data or get rid of it.

The challenge is that both ERP solutions have been around for quite a while so they serve the customer base well that they were initially implemented for. I think as Sangeetha stated…it is a trade-off because integrating the solutions can provide a lot of cost benefits and may even improve the efficiency in some areas; however it is not guaranteed that one solution will be able to address all of the needs and requirements of that customer base.

Asha said...
This comment has been removed by the author.
Asha said...

@ Dr.Jack & Sangeetha...

Even I feel all the problems come while integrating data.. and also the database design should be very very strong(which includes selection of actors,no of tables in the DB,fields,keys etc) in order to avoid one of the problems of data integration.

@ MO BLOGGER
its interesting and new for me about company adapting many ERP solutions.. Thanks for providing info about how these ERPS go together in the organisation and their problems....

I dont have work experience.So I am happy to hear if anybody discusses/shares any other problems of integration in an ERP and also ways implemented in your organization to overcome these problems.

Michael Morgan said...

A small company can rarely afford a very expensive ERP system. Those things cost a ton, usually in the $millions! Dr. Zheng is right that the data should be centralized, for the sake of both security and data integrity.

Asha, I find that through the course of my master's studies, a lot of professors are showing ERP as "the" solution to a lot of company's problems, but certain prerequisites must be met before an ERP is even considered. A company should not commit to technology it cannot afford, and it should not commit to an ERP until it is ready to take that next big step into the ultimate of centralization. It should be prepared for the huge risks and costs involved in case the ERP implementation fails.

An example would be a law firm I IT contracted for that just had 6 people working for it. Some idiot vendor went in there and sold them an exchange server, a data server, and some application server. Can you imagine a company of 6 people paying tens of thousands of dollars up front, plus maintenance fees, just to support 3 people?? They needed one server for data, and they needed their mail hosted somewhere else, and they didn't need an app server at all.

In other words, companies recognize the importance of IT, but they need to buy what they need and what suits their business, no more and no less.

That's it for my rant, great post Asha!

Asha said...

Ya Michael, sounds sensible whatever you said ....that ERP should be adapted based on their requirements.Thanks for your detail explanation....

Mike said...

Great Post! A company should not commit to technology it cannot afford, and it should not commit to an ERP until it is ready to take that next big step into the ultimate of centralization.
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