Introduction
Proper communications, productivity and efficiency in various business organizations has been achieved through implementation of enterprise resource planning (ERP). Several articles addressing the issue of ERP are available, however, different articles have different says about the effect of ERP in the ICT market. Most articles uphold the belief that ERP has resulted in a stiff competition in the ICT sector. Some of the Authors however, differed with the belief and branded the ERP revolution as a mere technology just like the ones experienced in the past. Therefore, this paper will critically look into the pros and cons of the ERP that has led to stiff competitions experienced in the ICT sector.
Analysis
One of the fields that have undergone the greatest revolutions in the twenty-first century is the ICT sector. The richest people in the world are those who handle or process any kind of information. Businesses, on the other hand would always want first-hand information in order to stand competition from other similar sectors (Pamungkas, 2009). Availability and efficient use of such communication is only possible if a company has a better way of communication both to the customers and even the outside market.
Similarly, ICT sectors have tried to establish the best ways of communication with the customers. Thus, the need for a well-established communication system has resulted in the development of ERP that has greatly enabled many companies to ensure that there is an effective communication with the clients. Thus, there is a stiff competition in the ICT sector as many of the sectors struggle to come up with the most appropriate systems. An article, basing its main agendas on ERB in South Africa indicates that there is a great need of a business enterprise to have an accessible communication platform (Pamungkas, 2009). It is thus the reason why most of the companies in the country are adopting ERP.
It is considered imperative for different sections or departments in an organization to establish an effective and reliable communication within its own task force and as well as the clients. However, on a contrary opinion, an article by Pamungkas (2009) states that communication is not a big problem for business enterprises. The article, however views ERP as a challenge posed to a large number of companies. The author states that the stiff competition in the ICT sector cannot be purely described as a result of ERP. However, the article upholds the fact that the stiff competition in the ICT sector can be addressed well by considering an effective communication structure between the business and the clients.
The hardware, software as well as database maintenance requirements makes ERP system an expensive resource. The challenges of obtaining the cheapest resources for the installation of an ERP system is considered as one of the causes of the war by many ICT stakeholders. The high cost of installing and maintaining an ERP system has made most of the companies to shy away from adopting the system (Kenaroğlu, 2009). With such challenges in place, a state of a tough competition amongst different companies have resulted. The company that comes up with the cheapest system will dominate and rule the market. The contentious competition has only one goal; to come up with the cheapest and the most effective system that is affordable to all the business stakeholders.
ERP lacks a quantitative measure on Return on Investment (ROI) and has become another big challenge facing the ERP. Return on investment is a method that can help determine the viability of the methods put in place. With the use of ROI, companies or any other business enterprise has the ability to know the impacts a system made of their performance, effectiveness or even on their productivity (Pamungkas, 2009). Therefore, with the use of ERP, an organization cannot be able to access its viability and the impacts it has made on the market.
With all the facts stated, all ICT market will keep on working on ERP each having an intention of ruling the market.
An organization making use of the ERP system can effectively enhance its workflow. ERP therefore, has the ability and the capacity to trace all the organization’s transactions efficiently without leaving out any transaction. Therefore, as the companies grow from small businesses to bigger enterprises, they develop a need for a system that will track its operations. However, although ERP has been developed to counter such a challenge, many companies do not have full confidence in the survival of the system. Most companies believe that the company might fail and result in a general failure of the company. ICT experts have tried to come up with solutions that can help satisfy such fears (Pamungkas, 2009). Such solutions include development of ERP systems whose functionalities include the ability to backup company documents. The need to develop the best ERP system has put the ICT companies in a tough competition, both in developing the best system as well as finding the most educated individuals to help in the research and development of the best ERP (Magal & Word, 2012). A research work done in South Africa revealed that, all the ICT companies are always at war to identify and hire the best experts. Cases of some companies poaching the best minds from other ICT companies has been rampant in the world of ICT.
However, competition in any business has always resulted in better quality of goods and services. In that case, the stiff competition in the ICT sector has resulted in better services and ICT products, each company struggling to offer better services than the other.
Research has revealed that, most companies have invested a lot of money in adoption of ERP system more than any other system. Thus, ERP from the statistics and research can be considered as a basic need for any business irrespective of its size.
Companies that have already adopted the ERP systems, however, feel that the system is not fully satisfying. They feel that more has to be done to deal with the flaws in the system. However, despite that some companies lost their competitive advantage even after employing the system, it turned out that they did not lose their trust in the system. The unwavering faith in the system by most companies have resulted in a stiff competition to develop an effective ERP system that will completely satisfy the needs of the business enterprises (Pamungkas, 2009). In South Africa, a research work shows that most of the companies were appreciating the need for the system and some even had already reaped the fruits of the system.
An article by Pamungkas (2009), noted that the idea of carrying out data backup of an organization in a general database was risky. The risk of the company`s information getting exposed was high due to ineffective data privacy protection policies in place. Thus, this rendered the improvements attempted by some of the experts in ICT as useless due to the effect of data insecurity (Paper, Tingey & Mok, 2003). However, the problem of data security has been addressed by putting in place some useful initiatives. Most of the ERP manages have put into the place data management strategy to help curb the menace of data insecurity.
Developments of the best methods to guard the data has become a challenge for the ICT sector and has placed them on a task to solving the challenge. Data security is a priority for almost all the companies in all the sectors (Grabot, Mayère & Bazet, 2008). Before a company adopts and install a system, the system should have the capabilities to ensure a guaranteed data security functionality within it. It is not yet clear if the developments by some ICT organizations regarding the data security have been proved to fully guard the data from the wrong people.
One of the major abilities of an ERP system is its capability to accept different modules at the same time. Such an ability is one of the reasons most companies have not yet lost their faith in the system despite any of its failures (Grabot, Mayère & Bazet, 2008). However, the capability faces a big challenge from the limited memory available in the database. Therefore, installing and managing a larger database result in high charge that most companies will not be able to afford.
Wu (2011) in their study realized that most of the companies are working on a stiffer budget to maintain ERP. The increase in the budget will, therefore, mean that the companies will suffer even longer. In an article by Pamungkas (2009), however, does not go well with that of Wu (2011). According to (Pamungkas, 2009), a company should not struggle in chasing what it cannot achieve. The ICT market in that case should also not feel the heat of offering cheaper services in the place they cannot afford to do so. Pamungkas (2009) , noted that this is not a factor that should lead to a competition in the market.
A dilemma normally results in effectively choosing the most appropriate ERP system to implement, when and even how to implement in order to result in the most efficient competition in the ICT market. Furthermore, the decision making on selection, purchase or implementation of an ERP system is considered as a difficult undertaking for any business organization.
There is a great dilemma in choosing the most effective ERP system for implementation. The how and when to implement the system is a difficult process for any business enterprise (Pamungkas, 2009). Reviewing, comparison and contrasting of different articles will be carried out in order to meet the required goal of the project. Several research work done in this field will be used to form the foundation as well as provision of facts of the argument. For purposes of satisfying the international markets, the research will be based on all the continents rather than a single continent. However, research work done in a particular country will be used as a representative of the ICT market in that particular continent.
Findings
The cost of installing and maintaining an ERP system has been a major challenge in the in the sector (Musaji, 2002). This means that the main reason as to why most of the companies cannot adopt the ERP system is not because the system does not satisfy them, rather, it is because of the kind of expense incurred in implementing such a system (Shields, 2001).
It was also found that one of the main focus of many ICT companies is the need to develop a cheap system that most if not all companies can afford. This has been the main reason for the stiff competition within the ICT sector (Agrawal, Deepashri, Timm, Lydia, Viola, Filipa, Debener, Stefan, Büchner, Andreas, Dengler, Reinhard, & Wittfoth, Matthias, 2012).
Some studies about the ERP systems revealed that, some cheaper systems have been developed by some ICT companies, however, such companies have not fully satisfied the companies needs and thus, are not fully accepted (Srivastava & Batra, 2010).
Some other research work also indicated that a large percentage of companies currently in the world are investing huge amount of capital of ERP and the general ICT market. Most of the companies believe that, the installation and use of ERP systems ensures is the key to their success (Srivastava & Batra, 2010). Despite some indicated failures in the current ERP systems in that market, the hope of development of the more efficient ERP system still exists (Turner & Weickgenannt, 2013).
It was found that the cons behind the ERP were the main reasons why ICT companies were in a stiff competition to develop the most satisfying ERP systems. Every ICT company holds a believe that, their ability to come up with the most effective and cheap ICT system will render them giants in the ICT sector (Srivastava & Batra, 2010).
The other findings were the misery of competition. Some companies entered into a competition whose cause they could not comprehend. Their competition was based on the fact that they got into business and found others competing for ERP slots. They, too, started competing and thus making the ICT sector full of blind competitors with the few that have an object and a goal to work for (Schragenheim & Dettmer, 2001).
One of the findings was about the main reason why most companies were willing to adopt the ERP system at whatever the cost it demanded. Most of the companies are reducing the human labor in the execution of their functions (Srivastava & Batra, 2010). Thus, this is the reason why most of the companies are willing to adopt the ERP systems.
Study in some countries revealed that most companies currently are starting to embrace the technology in their businesses. Thus, they are investing most of their profits in the ICT sector especially in the ERP systems (International Conference on Information Systems Development, & Linger, 2013).
Conclusion
References
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