Answer to Question #215944 in Economics for qianhe

Question

In today company’s management meeting, your boss is discussing of changing company’s accounting system to ERP system. He pointed out companies of all sizes are investing in ERP systems to help improve processes. However, he knew that implementation of ERP is not always simple and can potentially create a lot of challenges depending on the way it managed. You are the accountant of this company, an SME. You are being assigned to handle this project.

What are the factors you need to consider prior to implementing an ERP system. 

Answer 1

The most important question that arises on the eve of the introduction of any software system is "where to start"? If you know how and where to start implementation, and you start working correctly, most likely, the process will pass without unnecessary complications, alterations and conflicts. And the result will meet the expectations of the business.

There are several approaches to the implementation of ERP systems that I saw in someone else's performance and / or I myself applied in practice. Each of them has its own pros and cons, some "pitfalls" and advantages.

In principle, all approaches to ERP implementation are also relevant for any complex systems, for example, 1C SCP, 1C ERP, SAP Bussines ONE, ODOO, etc.

An ERP system is a very technological product. Therefore, both developers and businessmen are very often tempted to plan the implementation to the maximum even before the start of work. It would seem that everything is logical. With this approach, it is assumed that the technological software system should be maximally algorithmic. And the implementation process can and should be approached from the point of view of algorithms and a mathematical model.

How it is implemented:

A voluminous technical task is created, in which all processes, including the smallest ones, are thought out and described to the maximum.

A work schedule is created for the terms of reference.

It can take months to draw up such a technical assignment. This approach benefits primarily the developers:

The Terms of Reference document will be expensive. A lot of work is being done, taking a significant amount of time. And customers usually agree with the high price of the terms of reference without any questions.

Developers receive detailed instructions on the basis of which work can be done. And in case of unsuccessful decisions, available in the signed TK, alterations will be paid separately.

The disadvantage of this approach is its volume and complexity. It is impossible to create comprehensive terms of reference, which will include all modules, documents, all the nuances of future work. The system is multifunctional, and any changes in one module may entail the need to make changes in another.

Likewise, with errors in the preparation of technical specifications: any wrong decisions in one module can lead to many changes in others. For example, some business processes could be misunderstood, and then during implementation, it turns out that some of the documentation and reference books are not needed, but completely different ones are required. Too much information, too high complexity of the system - as a result, it turns out to be impossible to lay down all the nuances from the beginning and foresee all possible errors.