Enterprise Resource Planning or ERP Systems are used to integrate all departments and functions of an organization into a single network of computer system that can answer the demand of each department. This means that departments of the organization are connected with each other, but they function in separate and particular ways (Parthasarthy 2007). As a result, it is easier for various departments to share information and communicate with one another. Simply, ERP streamlines the management of the business to pack them up in a single network for the effective, efficient, and improved use of management resources.
Even if ERP improves the way the organization reacts or responds to different activities and functions of departments, there are still issues and problems that employees face. These issues hinder the employees from effective use of the ERP system, thereby affecting their performance and quality of work. When these issues are left unattended or unaddressed, these become the Waterloo of the company to effectively use the ERP system. At the earliest possible, it is very important for employees' issues to be resolved.
ERP Issues
Foremost, it should be understood that the implementation of the ERP system relies on how well the manager can communicate with employees by following standards and rules for the high success rate of the ERP system. The resistance of employees becomes a problem only when managers don't have the knowledge and the appeal to communicate the changes that should be implemented in the organization's system to improve its performance. It is necessary for managers to translate the objectives and values of using ERP to avoid mix ups and resistance to change of most employees. Employees should be convinced and should fully understand the importance of using the ERP for the organization's improvement and better performance quality. It is impossible to implement a system that the people inside the organization don't want to adopt to or to accept.
If the organization really pushes for the implementation of an ERP system, rather than on fostering representation, this fosters rebellion among employees. They are not yet ready to work with a new and advanced system and the support of the management for their side is lacking. When rebellion happens, the performance of the organization plunges deep because company's success centers on the ability of the people to deliver the best service and performance.
It must be noted that in most developing countries, employees are not adept or accustomed to using advanced information technology-based systems and software to streamline the activity of the organization. In fact, this can be considered one of the reasons why employees are hesitant or adamant to accept change of the organization's departments and functions. This said, it is necessary for the organization to look at the demography of employees within the organization. Can old employees who don't have ICT training adopt to the change? Or is it necessary for the organization to hire employees for the proper implementation of the ERP system? Organizations do not just implement ERP without considering stakeholders of their actions. It is necessary for stakeholders to properly understand their roles and their responsibilities, as well as the new demand of the system.
This problem springs up from the issue of budget. According to Glenn (2008), employees should know how the ERP software or system works, otherwise they will be left out and they won't know what to do with the system. In this regard, the organization has to train employees. Without proper training and knowledge on how the ERP system is implemented, employees are left on their own trying to figure out things, wasting their time, and producing nothing in particular. This issue can be easily resolved with budget allocation for training and educational seminars on how to use the ERP system. However, for organizations that have budget constraints, trainings are costly and the organization cannot afford spending for that. In the end, employees become the collateral damage. While the management expects them to produce more than their previous results and performance, employees are pressured and stressed to learn the system so they can meet the expectation of the management.
On the other hand, if the organization can pay for the cost of training, consultants may bypass the training and just proceed to implementation. Instead of teaching employees how to implement and use the system, the training may just assume that employees already learned the process. Yet, in whatever case, the real issue is the training of the employees on how to implement and effectively use the ERP system. For employees who have fine experience in using advanced technologies, the training can help them to get in touch with the demand of the ERP system. But for those who don't have any knowledge or training on advanced technologies, the ERP system seems to be a strange one that they have to get intensive education and training.
According to Jain (2008), when employees get frustrated for not being able to use the ERP system effectively and with the pressure of meeting demands of the management, they would resort of using shadow systems. These shadow systems can replicate either in full or in part the capability of the ERP system, but this results to cost redundancies, issues on data integrity, and the value of the ERP. Instead of saving much through the ERP system that streamlines activities, the lack of training of employees yield to the usage of shadow systems that add burden to the financial expenses of the organization. Although there is not much evidence of this particular activity being done by employees, according to Jain, much literature points to this fact of shadow systems that would render the legitimate system of the company useless and just a waste of time.
Earlier I mentioned of the need to evaluate the demography of the organization's current employees. It is necessary for the organization to relocate employees so they will be able to continue serving the company in full potential even in the middle of the ERP system. This would result to re-training of employees so they will be able to work on new tasks or continue with the current tasks as an adaptation to the implementation of the ERP system. This means that the staffing task will be restarted again to ensure that all aspects of the organization are taken into account and not a single department is left out without capability to use the ERP system. The HR department cannot just place people who don't have the knowledge on how to use this system in positions that are crucial to the company. But this attitude or action springs up another problem. How about those who are already in high positions and don't have training on the ERP system? Will be the company terminate or demote them? This becomes a problem of the HR department that is beyond the streamlining capability and potential of the ERP system.
In essence of this implementation of ERP, employees fear termination. With the automation of the organization's processes and activities, there is no need for a large number of employees. ERP streamlines activities and processes of the organization, thus cutting the need for more employees. Organizations use ERP as a cost-saving strategy; this lead to termination of some employees because they are not anymore needed in the organization. This is why employees unions don't want to apply ERP systems into the organization to avoid retrenchment of employees. The work flow system of the organization is already affected and altered that it is necessary for the organization to act on it. This is a normal direction of an organization that implements an ERP system.
Another issue that employees face with ERP systems is the reduction of interaction between departments. Because there is no need for a department to coordinate with another, there seems to be a barrier between them. They are isolated from each other, instead of building connections between them to build a good organizational culture. As ERP streamlines activities, there is no need for the people in the accounting department to talk to the supply chain to ensure that financial value of distribution of supplies are addressed properly (Phillips, 2007). This results to lack of information sharing through personal and face-to-face collaboration. Even if employees are working in the same building or for the same company, they are not aware of what's happening with each other because they rely much on the virtual pathway of communication and information.
Lastly, employees also have a technical problem with the system. What if the ERP system breaks down for a particular department? (It must be understood that a single action of a department affects the entire organization or all departments.) As such, when the ERP system breaks down in the middle of the organization's operation, the question is how can non-technical or end-users respond to these emergencies? The lack of fine technical knowledge on ERP system results to massive loss to the company. Yet, with an in-house ERP technician and consultant, any failure can be easily resolved to avoid large damages to the operations of the company.
ERP systems are effective and useful tools that can be used by companies to ensure high-level performance of the company. ERP streamlines activities of the organization for a better response time and better coordination between departments and key people of the organization. However, with the problems of resistance, lack of knowledge, low support of the management, and HR-related cases, ERP becomes a problematic system. By addressing these issues properly, the company can take advantage of the ERP system for its benefits and results.
References:
Glenn, G. (2008). ERP 100 Success Secrets: Enterprise Resource Planning 100 Success Secrets--100 Most Asked Questions : the Missing ERP Software, Systems, Solutions, Applications and Implementations Guide. Lulu.com.
Jain, V. (2008). A Framework for Sustainable ERP Value. ProQuest.
Jozic, D. (2010). Erp As an Enabler for Economic Growth in Developing Countries. GRIN Verlag.
Parthasarthy, S. (2007). Enterprise Resource Planning : A Managerial & Technical Perspective. New Age International.
Phillips, J. (2007).Managing Now! Cengage Learning.
