Implementation Decisions for Enterprise Systems (Term Paper Sample)

Implementation Decisions for ERPs
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Introduction
Traditional enterprise resource planning (ERP) systems usually had the platform off-site, but the software applications were installed on end-users clients. However, recent developments in cloud technology have seen the distribution of ERP in the cloud where it is accessed by web browsers. Initially, cloud-based software platforms were considered quick fixes to technical glitches of companies’ software platforms, but they have gained a reputation among top performing companies as a sure method of increasing performance. (Thomas & Chirania, 2005). Application service providers (ASPs) provide these cloud-based ERPs to their client companies. The use of cloud-based ERPs over traditional in-house and hosted ERPs elicits much debate. The debate is between the intricacies of in-house software management against the risks of the exposure of strategic information about a company when it outsources its software platform. The following are the advantages and limitations of cloud-based ERPs.
Benefits
Rapid deployment of the ERP is possible. In-house ERPs warrant a large upfront investment for a transition. The company will need many people, processes, and tools. This is because a new ERP system will need customization and configuration to match a company’s legacy system, which forms the foundation of the company’s specific practices and processes. Ongoing support will need expenditure on the peak for patches, upgrades, enhancements, turnover, and training. Cloud-based ERPs, on the other hand, offer a reversal in the procedure of integrating legacy systems to new platforms.
There is reduced total cost of ownership. ERP costs are inclusive of the software, hosting charges, and support fees, but they are generally lower in terms of initial deployment when compared to in-house implementation. In fact, studies affirm that cloud-based ERPs have 50 to 60 percent less costs than traditional ERPs (Utzig, et al., 2013). Moreover, the company will cut costs involved in instilling the required IT skills set to employees in addition to conditioning them to acclimatize to the new technology and atmosphere. The client company will also have an effective cushion against effects of rapidly changing technologies as these can be addressed by the deployment of more functionalities and modules.
ERPs increase the performance of the client company in its core business. The outsourcing to an ASP transfers all the day-to-day operations and training regarding a software’s maintenance duration to the vendors. Therefore, outsourcing offers the client firm strategic advantages as it will concentrate on its core business since most resources and personnel in the firm do not engage in handling the complex and time-consuming ERP requirements.
There is increased flexibility and scalability of a company’s operation. Many ASPs offer customized applications on demand basis, which enables client companies to bypass and circumvent the cumbersome software delivery processes. Therefore, mid-sized companies that are fast evolving are sure that their IT needs are adequately met without needing huge capital overlays for changing their systems to match up industry competitive standards.
Drawbacks
There is restricted functionality and availability. Most of the ASPs offer core ERP modules like general accounting, purchasing, inventories, and sales in standard modules so that serving many clients becomes cost effective. However, other modules or functionalities have not met the complex functionalities present in on-site or hosted ERP systems. Therefore, ASP provided ERPs might not satisfy customized needs of highly complex organizations that have unique softw...