In an organization, you want to have a competitive advantage over your competition. However, competitive advantages are not easily obtained and ever harder to keep. One way of gaining a competitive advantage is to implement an Enterprise Resource Planning systems or ERP.

The Enterprise Resource Planning system allows a company or business to consolidate and integrate all the different aspects of its business practice. The ERP systems are information systems, but they incorporate the entire organization and are online networking systems that allow cross-functional processes using a common database. There are many organizations that use the ERP systems to gain to competitive advantage by consolidating and integrating all the different aspects of its business practice to provide an overall view of the corporation. Also, the ERP systems give you much better access to real time information, which can make decision making much easier and more accurate.

However, ERP systems are very complex and hard to implement. These systems require huge amounts of time and money to implement and to keep them running properly. Though there are ERP systems that work great and give the company a competitive edge, most have failed. Companies continue to use ERP systems because if they are implemented correctly, they do give the company a competitive advantage over the competition. Also, in some markets, if your competitors are implementing these systems, it may be wise for you to consider it. Because of how beneficial these systems can be and how hard they are to implement, knowledge management approaches are being used to help the implementation process.

In the knowledge management structure, knowledge goes through four stages; creation, storage/retrieval, transfer, and usage/application. Knowledge creation is both creating new knowledge and/or replacing old knowledge that is no longer relevant to the organization, but not getting rid of knowledge because you store it for future reference. This is the next stage, knowledge storage/retrieval. It is important for an organization to store all its knowledge, including the knowledge it replaces, because it will allow the transfer of knowledge in the organization. This knowledge transfer references the old and new knowledge to keep from repeating mistakes. Finally, there is knowledge application. This step refers to putting all the knowledge that you know have into every aspect of your organization. In an ERP systems case, this will help with integration into the whole organization because you will not have to reinvent the wheel every time you run into a problem. However, the knowledge management approach is also affected by the organizational culture.

In every organization you are going to have individuals who are not excepting of change and do not want anything to do with the new system. This change often forces individuals inside the organization to learn new ways of doing a task or performing a process. These individuals, if left unchecked, can pose a serious problem to the knowledge management process, which will effect the integration of the ERP system. It is imperative that the organization makes sure it members understand why they implementing a new system and not just told to do it. If the individuals are more excepting of the new system, they will seek help and learn from other people in the organization, which it knowledge management.

The advantages of a successfully implemented ERP system are great. However, you must first be aware of the risk associated with ERP systems, and understand how to combat these risks when they occur. ERP systems can give a company a competitive advantage if implemented correctly or can loose the organization millions if implemented incorrectly. This is why many companies are using knowledge management with the implementation of the ERP systems. Though it does add another step to the implantation, it decreases the risk of failure and allows the company to learn from its mistakes.

(Sorry about the weird spacing, I couldn’t get it to line up the right way)