By definition, Enterprise Resource Planning (ERP) is an enterprise total management system. An ERP solution integrates and automates many of the business practices associated with the operations or production and distribution aspects of a company, including planning, checking, distributing, accounting, human resources, etc.
An ERP solution integrates IT with management experience. Therefore applying ERP solution is not simply buying the software program, but standardizing enterprise’s management with IT applications.
A lot of benefits …
“It changes the working thoughts of every position in the enterprises, which is the first benefit. By applying a modern management system, not only can the management board get information quickly and accurately, but the management levels can also optimize the productivity in every production stage,” said Mr. Nguyen Duy Cuong, general manager of Tinh Van ERP Company when mentioning benefits of ERP.
“Computerizing management processes creates a complete system, providing accurate and prompt information from the beginning to the end of the production line,” said Mr. Vuong Quan Ngoc, deputy director of the Department of Market Development under the FPT ERP Service Center.
Currently, joint-venture and wholly foreign-owned companies are the first to apply ERP. Mr. Tran Van Sen, General Manager of the Huong Sen Company, which have applied ERP solutions, said that ERP solution is an important part of an enterprise’s comprehensive strategies of development and production expansion.
Those which have already applied the ERP said that the benefits of the solution manifests itself when ROI (Return on Investment) is used to estimate the economic efficiency.
… But it’s hard to deploy
Most of the enterprises applying ERP have a complicated production processes and operation model, needing accuracy in management.
In practice, ERP is not for every one. Despite its benefits and efficiencies, US$100,000 for a medium ERP project is a sizable investment that merits a careful consideration. Only big enterprices with much capital for investment and quick ROI could consider the application of ERP.
Many Vietnamese enterprises have failed to produce expected outcome due to their low-level management skill, non-standardized manufacturing process which have to be changed in response to the latest development.
For production processes which involve much manual processes, the adaptation of the solution will become a “nightmare” for the supplier. Many businesses have deploy ERP, but rarely used the system to its full capability, and limited the usage at supervising function. Few enterprises can apply “planning”, the best capability of the ERP.
ERP providers admitted that there are few experts in this area, and the majority of them have gained experience on the job while deploying ERP in foreign enterprises in Viet Nam. In order to install the ERP system in an enterprise, 80 percents of the experts’ work is focused on consultation and only 20 percent remaining is actual technical exercises.
However the consulting staff of ERP providers are limited at the “deploying” level, and just a few of them can advise users on the new processes coming from using the ERP solution. That’s why the enterprises in Viet Nam still say no to ERP despite the obvious benefits of integrating IT with management.