Questions and Answers
Which of the following is NOT one of the six risk categories presented in ERP implementation?
Less than 30% of ERP implementations are considered successful.
True
What is the average implementation time for an ERP system?
Between 6 months and 2 years
Contractual risk in ERP derives from relations with __________.
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Match the following risks with their definitions:
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What is considered the most important success factor for an ERP project?
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Personnel are inherently supportive of any changes brought about by ERP implementation.
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What should the approach be towards business processes when acquiring an ERP system?
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The biggest investments in an ERP project should be directed at __________ and __________ Management.
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Study Notes
Types of Risks in ERP Implementation
- Organizational Risk: Arises from the environment of system adoption; can enhance information processing efficiency, customer relations, and decision-making.
- Business-Related Risk: Originates from internal post-implementation models and processes; impacts consistency with operational goals.
- Technological Risk: Involves risks associated with the necessary information processing technologies (e.g., operating system, database management).
- Entrepreneurial/Managerial Risk: Linked to the attitudes and actions of the owner-manager or management team during implementation.
- Contractual Risk: Stemming from partnerships; can affect agreements and cooperation dynamics.
- Financial Risk: Relates to cash flow challenges hindering payments for licensing fees or upgrades.
ERP Implementation Success Statistics
- Less than 30% of ERP implementations are completed successfully, meaning they finish on time and within budget, with all planned features.
- Average implementation time ranges from 6 months to 2 years.
- Average costs for implementation can vary widely, ranging from approximately 1.3millionto1.3 million to 1.3millionto70 million.
Key Factors Influencing ERP Success
- Top Management Support: Essential for driving the project forward and ensuring commitment throughout the organization.
- Project Management: A competent project manager is critical to oversee the implementation process effectively.
- Change Management: Employees must be engaged and prepared for changes in processes to maximize the software’s potential.
- Communication and Training: Underestimating the need for effective communication can lead to challenges, including misunderstandings and a lack of employee buy-in.
Challenges during ERP Implementation
- Concurrent implementation with daily business activities can disrupt normal operations.
- Poorly specified requirements and insufficient documentation can lead to issues during the configuration phase.
- Essential personnel from the ERP vendor may shift to other projects, impacting ongoing support and development.
- Employees may resist changes, perceiving no direct benefits from the new system, leading to lack of commitment.
Recommended Approaches for Effective ERP Implementation
- Business Process Alignment: Adjust existing processes to integrate with the ERP system with minimal customization to avoid complexities.
- Detailed Communication Plan: Outline target groups, methods, and timing for effective stakeholder communication to manage expectations and address concerns proactively.
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Description
This quiz explores the various risks associated with the implementation of Enterprise Resource Planning (ERP) systems. It covers topics such as organizational risk, business-related risk, and the factors influencing the success of ERP systems in enterprises.
