Free CRM And ERP Article Review Sample

1. For CRM to be truly effective, what does an organization have to first understand? (10 points)
In order for CRM to be truly effective, an organization, first of all has to understand who its customers are and what their value is over a lifetime. According to Wailgum, the organization has to determine the needs of its customers and how to better meet those needs (Wailgum, 2007). The organization has to be looking into the different ways the information about customers is stored and how it is used for enhancing the relationship and interaction between the two parts, CRM being the link.
2. Which division of a company should run the CRM project? (10 points)
According to Wailgum (2007), it is best if the business is aligned, not leaving just one division to run the CRM project. Each and every department that is using the CRM system should be taking ownership of the project, with the CIO and IT as their most important advisors in the matter. (Wailgum, 2007)
3. What industries are more active and what industry is less active in implementing CRM? Why? (10 points)
The industries more active in implementing CRM systems are represented by the telecommunication and the financial services ones. Other industries include retailers, consumer goods makers and high tech firms.
The less active in implementing CRM strategies is the heavy manufacturing industry, as to the fact that the further away an industry is from the client, the less important a CRM system is for it.
4. Briefly describe the history of ERP by including MRP and MRPII (10 point)
The ERP began in 1960’s as Material Requirements Planning (MRP) as a method for ordering components and materials through asking the questions „What are we going to make?”, „What does it take to make it” and „What do we have”, in order to deduct the future requirements, through „What do we have to get”. The following stage in the history evolution to ERP is represented by MRP II, which is a direct extension to MRP, involving Simulation, Financial interface and Sales & Operation Planning. The MRP II is able to answer to „what if „questions, being made out of a wider variety of functions than its previous version MRP. (Nmatec.com, 2008)
The latest step in this evolution is represented by the ERP system itself, whose fundamental are the same as with MRP II, but whose business processes are larger in scope and much more effective. Moreover, the supply chain tools that support business across company borders and the financial integration are stronger.
5. What will ERP fix in a company? (10 points)
The ERP system helps the company to address industry-specific customization needs and problems. One of the problems fixed by ERP is represented by the integration of the financial information. ERP creates for the company an only vision of the truth, which everyone in the company will recognize due to the fact that they’re all using the same system. Secondly, the ERP helps the companies integrate customer order information as well as the standardizing and speeding up of the manufacturing process, saving time and increasing the productivity in that manner. ERP systems help the manufacturing process by improving the visibility of the order fulfillment and to reduce inventory. Moreover, and especially for companies that have multiple business units, ERP can standardize the HR information, tracking the time of the employees and facilitating the communication with them.
6. Why does an ERP project usually take longer than what ERP vendors claim? (10 points)
According to Kimberling, there are four reasons to which an ERP project usually takes longer than what ERP vendors claim (Kimberling, 2009). The first and the most common issue is represented by unrealistic expectations, happening due to the underestimation of the time that would take to complete the implementation of an ERP project. The second issue is represented by not adequately accounting for business-oriented activities, failing to predict key activities that are not being directly related to the ERP software. Thirdly, the lack of resources may also delay the implementation of an ERP project. Last, but not least, there is the software customization issue, being of utmost importance to limit the amount of customization in order to better contain time and costs of such activities.
7. Will ERP fit the ways you do business? (10 points)
The question whether ERP will or will not suit the way a company does business is that it completely depends upon that company’s ability to take risks, as well as on its long-term goals. The implementation of an ERP system does not guarantee the success of a firm or a fast return on investment. Whether it will fit or not is a question in terms of hard work and moderation that takes place in the ERP implementation stage. It depends on the company to make the system suitable for that particualar business.
8. Let’s assume that ERP does not fit the ways you do business. According to the article, in such a case, you can do two things. Explain them. (10 points)
Based on the article, in case an ERP system does not fit the way that business is done in a company, there may be two things to be done. First of all, the company could change its business processes in order to accommodate the software, shaking up the people’s roles and responsibilities on the way. The second option would be the modification of the ERP software to fit the business processes, method which is no easier to be done than the first one, due to the implications and requirements of such a change for the ERP system.
9. What does ERP usually cost? What are the hidden costs of ERP? (10 points)
First of all, it should be mentioned that not all the companies require the same things from an ERP system in terms of complexity. Since most of the ERP systems cost in accordance to the level of access the number of the concurrent users will require to the system, there is a cost expectation of $ 4,000 per concurrent user for a complex manufacturing distribution firm and about $ 2,000 per concurrent user for a light distribution company. Additional licenses for users requiring limited access to the system will also cost a few more hundred dollars per name user, according to Greg Kaupp. (Greg Kaupp, 2012)
As the implementation of an ERP system in a company is an expensive process, the company should be taking into consideration the hidden costs of such a maneuver. Beside the costs of the implementation, there are also costs for training the personnel to use the software, the costs of development and customization, maintenance costs, upgrades costs, process redesign costs and support costs.
10. Why do ERP projects fail so often? (10 points)
The ERP systems are actually a set of best practices for performing a variety of activities in a company, including the purchase, finance, sales, warehousing and manufacturing. In order for this implementation to be a success, it is of utmost importance that the people in the company will adopt the working methods outlined in the software; otherwise the ERP project would fail. (Wailgum, 2007)
Also, there is the possibility of failure of an ERP project in the case when the vendor is not capable to understand the business process of the company adopting it, failing to customize the software as needed. Proper decision making management and a good planning of the ERP project would be the best solution for avoiding misunderstandings and the failure of the project.

References

Erpandmore.com,. ERP History - ERP and More!. Retrieved 6 March 2015, from http://www.erpandmore.com/erp-reference/erp-history/
Greg Kaupp, A. (2012). How much does a typical ERP implementation cost?. ERP Software Blog. Retrieved 8 March 2015, from http://www.erpsoftwareblog.com/2012/09/how-much-does-a-typical-erp-implementation-cost/
Kimberling, E. (2009). Four Reasons Why ERP Projects Take Longer Than Expected. It.toolbox.com. Retrieved 7 March 2015, from http://it.toolbox.com/blogs/erp-roi/four-reasons-why-erp-projects-take-longer-than-expected-31967
Nmatec.com,. (2008). What is an ERP system?. Retrieved 7 March 2015, from http://www.nmatec.com/workwise/what
Wailgum, T. (2007). CRM Definition and Solutions. CIO. Retrieved 6 March 2015, from http://www.cio.com/article/2439505/customer-relationship-management/crm-definition-and-solutions.html
Wailgum, T. (2007). ERP Definition and Solutions. CIO. Retrieved 6 March 2015, from http://www.cio.com/article/2439502/enterprise-resource-planning/erp-definition-and-solutions.html