Question

1. Bella Bakery Bhd (Bella Bakery) is a listed company, and its Chief Executive Officer is Ms Bella Chum. The bakery supplies freshly made pieces of bread to 11 different franchised companies in Kuala Lumpur daily. Ms Bella Chum would like to implement a cloud platform incorporated with an Enterprise Resource Planning (ERP) system which integrates its business processes such as sales, purchasing, production, inventory management, and payroll. The ERP system also allows accounting data processing and storage in the cloud. There are many benefits that Bella Bakery can gain from the implementation of an ERP system. These include improved data accuracy, better inventory management, better controls and monitoring, a greater understanding of the financial conditions of the company, and many more. However, Ms Bella Chum is not experienced in implementing an ERP system although she has heard of traditional and cloud-based ERP systems. You are the consultant hired to provide professional advice on the implementation of the ERP system.

Required:

(a) Drawing from the literature, discuss the potential issues and challenges that businesses might face in implementing a traditional ERP system and a cloud-based ERP system. \(\quad[30\) marks \(]\)

(b) Despite the benefits of the ERP system, there is still a possibility that such a system might fail. Discuss the potential factors that might hinder the successful implementation of the ERP system. [Total 50 marks]

Answer 1

Ans-(a)

Potential Issues and challenges in Implementation:

• Selcting the right ERP : There are many ERPs available in the market.All have their strength and weaknesses.In addition some are more suitable for a particular business / industry.Thus this is a vital challenge. Cost another aspect that could pose threat as sophisticated ERPs are expensive and it could be a deterrent.
• Right Partner : This is the second important aspect.You might have purchased the best ERP but of an incompetent implementation partner is selected then the whole project gets in jeopardy.
• User Expectation Management : With any ERP getting implemented the expectations are skyhigh and to some extent the ERP companies marketing is responsible as they promise the client stars.When the real activities of configurations and process mappings get started these false promises get busted but by that time it is too late.This leads to constant tussle between the implementation team and the customer and there are good chances of the project landing in cold storage because of these expectation gaps.
• On Premise vs Cloud: With the advent of cloud technology this conflict too now comes into play.Whereas cloud has its inherent advantage of lower maintenace and infra cost more conservative management would still feel that putting whole data out there somewhere is risky.

Ans-(b)

An ERP implemented is not a guarantee of the battle been won.In reality the real battle starts after implementation.There are host of factors that need to be addressed or else the ERP could be a huge failure.Some the factors are listed hereunder :

• Adpatability : With any ERP there is change in ways of working.If the Organization is not adaptive to these changes then the ERP is bound to fail to deliver the desired reults.
• Training: The users must have a knack for IT and be well trained in their respective processes.if this is missing then also the ERP would result in chaos and loss of value.
• Over Customization: More the alignment to standard processes better are the chances of the ERP getting successful.If there are over customizations and developments then also ERP is bound to collapse.
• Product Support: If the product company doesnot have a strong support system the ERP would fail.The product issues should be addressed also tiem to time upgrades to ensure alignment to changing business and regulatory enviornment need to be provided by the product company.If this is not provided then the ERP which is relevant today may turn out to be a dud tomorrow when any new regulation or Compliance requirement is stipulated.