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ERP Systems in Middle East

Обновлено: 14 дек. 2020 г.

For Middle East enterprises, the same rules apply to which they work all over the world. With some lag, we are repeating the path of foreign companies, which realized that effective management of all aspects of activity, which largely depends on information technology, is required for effective operations in the global or domestic market.

Over the past few decades, the world has accumulated quite a lot of experience in the use of information technology in general and ERP systems in particular. Although the term ERP appeared in the early 90s, the history of the development of these systems dates back to the mid 60s, with the appearance of the first planning / accounting systems. This experience shows that with the use of ERP in enterprises, not everything is as unambiguously good as we would like. As a rule, the implementation of a modern ERP system in an enterprise is a process that can take several years. Only in 16% of cases the implementation of information systems is completed on time, within the planned budget, with the implementation of the planned functionality. Almost a third of the projects terminated ahead of schedule, while the rest exceed the deadline / budget or limit the planned functionality.

What explains such a sad statistics? The answer is obvious: the implementation of an ERP system is not just the installation of software at the workplaces of users, but a rather complex process that combines both the refinement of the software and the implementation of some measures to change the main activity aimed at more complete compliance with the logic embedded inside systems. As a rule, when implementing ERP systems, the following main risks can be identified:

· Project management risks. This category includes risks arising from the use of inappropriate project management practices or the complete rejection of project management methodologies.

· Risks associated with insufficient funding. Perhaps this is one of the most common categories of risks, which is almost impossible to avoid. Due to insufficient funding, less qualified specialists are involved in the ERP system implementation project. This leads to an increase in the implementation time or the abandonment of part of the functionality.

· Risk associated with management support. It has already become an elementary truth that an employee who has a certain weight and endowed with great powers should lead the project of implementing an ERP system in an enterprise. As a rule, the powers of the CIO are clearly not enough to carry out such work. The project manager should be from a senior management level.

Another factor that one has to face when introducing ERP solutions in the West is the need to carry out activities that are commonly called "business process reengineering" (BPR). Indeed, any software product developed based on predefined algorithms. In our example, this will be the organization of the main business processes of enterprises: financial management, production, logistics, personnel, etc. To make changes to the ERP system that implements certain algorithms of business processes is often economically impractical. After changing the software product greatly, you will be forced to maintain the system yourself in the future, since the new versions coming from the manufacturer will not take into account the modifications you made.

That is why, before starting the implementation of the ERP system, many enterprises must go through the phase of reorganizing their own activities in accordance with the business logic embedded within the ERP system. However, these changes may be insignificant for Western enterprises, since the basic principles according to which they operate are practically standard. Perhaps that is why there are configurations of ERP systems, delivered in a standard configuration, with a ready-made set of user documentation, almost completely suitable for the specifics of the activities of many Western companies.

However, most often it turns out that the cost of implementing an ERP system is equal to or several times higher than the cost of licenses for the system. And this happens not at all due to the desire of the solution provider to "make money" on implementation, but due to the fact that almost any ERP solution has a fairly large redundancy. This is understandable: the system must be suitable for use at enterprises of various sizes and types of production, with different charts of accounts, etc. And this necessitates the involvement of qualified implementation consultants and carrying out quite serious work on setting up the system. That part of the business that does not fit into the framework of the settings must either be changed, or automated using some other solutions (including the completion of a specific ERP system), or left alone (not automated).

As a rule, the term for the implementation of an ERP solution, which includes the capabilities of financial management, logistics and production, is about a year or even more. This is understandable: it is necessary, without disrupting the current activities, to train in one way or another practically all the personnel of the enterprise, to implement, adhering to some optimal sequence, the system in all departments, to convert the existing data into a new system, and only after the success of the trial operation, proceed to industrial operation.

All this translates into the fact that almost every ERP solution provider has its own implementation methodology, indicating the main steps and their sequence, the implementation of which is likely to increase the success of the entire project. The standard steps required when implementing an ERP system include the following:

· Activities related to identifying business needs and comparing them with the capabilities of a particular solution, finding a compromise between existing business needs and how the ERP system can meet them. As a rule, the system must meet the highest priority business needs. If the standard settings are not enough for this, then to fulfill a specific requirement, it is necessary to refine the custom extension or integrate with third-party products. Less critical business requirements that do not match the capabilities of the chosen solution met by reorganizing activities or by abandoning automation.

· Implementation of a specific solution. This includes all actions related to the software implementation of the solution outlined above, including preparing the necessary technical platform, modifying modules, converting existing data, testing the solution and creating the necessary documentation.

· User training. As a rule, when implementing an ERP solution, the initial training of the project team carried out by the Customer, which will subsequently be involved in the implementation of the system together with the Contractor's personnel. In the future, the members of the project group from the Customer's side will also train the bulk of the enterprise users.