ERP also has immense potential in bringing down cost of production and keep prices of services or products to minimum. The companies who are able to achieve this remain safely placed in the market and withstand threats of competition and new entrants in a sound manner. Companies using ERP get benefits like keeping their inventory under control and better production planning. With better planning over-purchase of inventory and dead stocks get reduced to increase cash flow. Availability of funds gives lot of freedom to the management in taking decisions. This advantage increases effect of an ERP system on the competitive strategy of the company immensely.

Today’s market is customer-centric, with ERP, any organization can improve its responsiveness and providing better services to the customer. Management can get response and feedback from their customers and can plan new products or can add or enhance certain features to launch better product or services in the market. The accurate and timely information made available to the management is extremely beneficial for making correct decisions to get an edge over the competition.

The flawless management of all the units and departments of the organization is major effect of an ERP system on the competitive strategy of the company. It does not matter if company is working at distant geographical locations in different countries with separate systems of accounting, currency and language. Multi-lingual, multi-accounting and multi-currency features of ERP allow large or medium organizations to expand their business beyond geographical boundaries and still manage entire operations with efficiency and ease. ERP enhances business process efficiency, enables speedier actions between units, allows operational staff to access real time information from anywhere and merges entire supply chain network seamlessly. This advantage too makes effect of an ERP system on the competitive strategy of the company immense.

It’s not that ERP only integrates and enhances functioning of primary and support activities which comprise the value chain model it also harmonizes functioning of modules like HR, administration, procurement processes with primary activities like sales, marketing, production and logistics etc to provide an edge to the company over its competitors.

Read about SAP R/3 Architecture. Also know SAP B1, SAP Business One Implementation.

ERP implementation in large organizations having many offices and work locations at distant geographical locations takes lot of time compared to organization of similar size but confined to a particular region. The reason behind this is that it slows down the process of information gathering and increases volume of customization by many times. Such organizations have different processes and working pattern at different locations, all of these have to be integrated through single software ensuring smooth flow of information and also without disrupting the work flow, this makes task tedious and complex. Such situations make it very difficult to calculate typical implementation timeframe for ERP software.

Role of staff of the organization where ERP is getting implemented is very crucial and highly unpredictable and it can make any general formula providing typical implementation timeframe for ERP software unreal. When ERP is in the process of implementation the new system can create distrust amongst the staff and also insecurity, which most of the times leads to lack of cooperation. When consultants do not get proper response and information from the existing staff the entire implementation process slows down increasing its duration. In some cases lack of computer literate staff delays the implementation as they take lot of time to understand and use the new system.

Under prepared management is another factor which makes almost impossible to work out any typical implementation timeframe for ERP softwares. Purchasing and implementing ERP involves lot of money and also sometimes high risks. In such cases management takes too many precautions and lot of time before making any decision. Delays in decisions slow down implementation as ERP providing company cannot move ahead without receiving an approval from the management. Most of the time suggestions made by the consultants to replace old processes with new ones for better performance and some major changes in working style cause lot of confusion in the minds of people responsible for making decisions on behalf of ERP purchasing company. This happens when management has not done enough research and analysis before going for ERP implementation.

There can be various other issues like technical problems etc which have also been found responsible for delaying the process of implementation in many cases, chances of any of these problem creeping up makes time and cost calculation beforehand for ERP implementation extremely difficult.

Read about ERP Implementation Cost Timeframe. Also know Causes of ERP Failure.