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Questions and Answers
Which of the following is NOT one of the six risk categories presented in ERP implementation?
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.
Less than 30% of ERP implementations are considered successful.
True
What is the average implementation time for an ERP system?
What is the average implementation time for an ERP system?
Between 6 months and 2 years
Contractual risk in ERP derives from relations with __________.
Contractual risk in ERP derives from relations with __________.
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Match the following risks with their definitions:
Match the following risks with their definitions:
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What is considered the most important success factor for an ERP project?
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.
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?
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.
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.
