The Psychology behind ERP
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The Psychology behind ERP

1.Introduction: A Definition of ERP and the Processes that Make ERP Successful.

ERP, which stands for Enterprise Resource Planning, is a type of business management software. This software largely replaces the use of former business management systems such as various accounting software packages, cybernetics systems which are now outmoded, business analytic systems and BPM programs.

ERP software standardize business information across a range of departments and companies. This traditionally includes back office or behind-the-scenes functions which do not directly involve the customer. The ERP business management software integrates information from departments such as:

  • Financial and managerial accounting

  • Human resources, in regard to recruitment, training and payroll

  • Manufacturing, with regard to bills of materials, scheduling and workflow management

  • Order Processing, so as to track order entry, credit checking, pricing and shipping

  • Supply Chain Management, dealing with such issues as purchasing, inventory, warehousing and packing

  • Project Management, which includes project planning, resource planning and project costing

  • Customer Relationship Management, inclusive of sales, marketing, commissions and call center support

  • Data Services, which are involved with the user interfaces for customers, suppliers and employees

  • As described, ERP is a complex suite of software applications which can be utilized by large or small enterprises. Implementing an ERP program within an enterprise may take many months for a small business or years for a large enterprise. Nevertheless, the philosophies and practices that make the application of an ERP suite advantageous to a business are similar: These are Standardization, theories about best practice and real time data entries.

    Psychology of ERP

    Standardization across departments makes cross-referencing simpler, whereas standardization from enterprise to enterprise means that companies can inter-communicate more easily. ERP provides a standardized platform throughout all the departments of a company which increases the ability of an enterprise?s employees to collaborate without the need for mastering several departmental languages and jargons. The connection with plant floor management provides a consolidated base through which these employees can communicate with other departments, including the enterprise?s executives.

    Best Practice strategies usually reflect the standards of the ERP packages? developers. These strategies allow enterprises to easily comply with the requirements of the IFRS, which is the agency of international financial reporting.

    The Real-Time Data entry function of an ERP program allows further unification between all the departments of an enterprise as all records can be viewed simultaneously in real time, without the need for data to be updated in small, incremental fragments.

    2.The Psychological Advantages to Employees of the Implementation of an ERP Package.

    The extent to which employees are empowered by the implementation of an ERP suite depends upon the ?championing? of this program by the upper management strata of the enterprise, as individual behaviors within an enterprise are influenced by the behavior of the management. This championing creates a climate of empowerment as individual workers are catalyzed by the beliefs of management.

    The individual workers may then interject the goals and values of the ERP program, making them their own. The feeling of success which has been created by the management will change the individual worker?s view of himself/ herself and as a result stronger feelings of intrinsic motivation and a higher degree of confidence and competence will show up in the workers? behaviors. He/she will benefit from a sense of well-being and success which is shared by other employees at all levels.

    The sense of identity as a team member will also be improved, as with the new tools of the ERP program, the team becomes more autonomous and able to make decisions. Access to information is also very empowering; this grants the employee a sense of a shared viewpoint and a sense of inclusion or importance.

    ERP is a complex suite of software

    The acceptance of ERP into the daily routine may stimulate the clear-cut setting of goals, more effective and enthusiastic teamwork and the easier resolution of conflicts. All of these outcomes will produce an enlightened self-concept in the individual workers which, in turn, will contribute to further acceptance of ERP procedures, such as the Best Practice strategies mentioned previously.

    3. Companies Whose Success Has Been Ensured by the Implementation of ERP.

    Many small businesses have been driven to greater success, or towed out of the slide to failure, by implementing an ERP package. Enpress LLC, IQMS and Ashleigh Furniture are three names on this rather long list. However, the story of Power Curbers, a three generation family run business, shows the remarkable improvements to a business and the staff of that business which can be achieved with the implementation of and ERP suite.

    After losing administrative staff who were disgruntled by current accounting system, Power Curbers invested in an ERP software package. The results have been tremendous as the company has cut its costs and improved its product, but the biggest positive change has been in the staff. The staff have developed a forward-looking attitude, combined with a strong desire to see the company realizing its highest potential. These positive changes were caused by an increase in competence and the enjoyment of working with a system which has benefited the company Power Curbers so greatly. The owner/managers of this SMB have praised the ERP program and this general glow of success has definitely rubbed off on the workers.

    Increased transparency helps get work done

    The Childcare Network was already raising the bar very high in its quest to promote high test scores for its young clientele. The enterprise was acquiring a client-base of more and more schools, to the extent that their administrative services software was no longer adequate. An employee from the new ERP based administrative department has this to say ? ?Our company is in sustained growth mode ? we are always acquiring new schools. I have grown as a person by using the new ERP program. My skill-set has grown too, and I am ready to take on large tasks such as processing several large journal transactions. I use the ERP upload feature and no longer need to enter the data manually.

    4. ERP and FM, or Enterprise Resource Planning and Facility Management.

    ERP supports core business processes which include many of the processes that can also be grouped under the heading FM. The core processes that have relevance for FM are distribution, production, maintenance, organisation, property management and energy management.

    Companies which have implemented ERP software will experience re-energized productivity and a renewal of commitment from staff members. The psychological benefits which have accrued to employees who have routinized ERP are recognized again in the FM employees: increased efficiency and effectiveness, increased productivity, increased ability to resolve questions of process optimization, higher self-esteem and a more confident self-appraisal in reference to the successful completion of tasks. It?s important for an FM staff manager to feel in control. This control, whether it is of the Self, of the facility or of an event, is easily achieved by the use of the ERP system.


    The psychology behind an ERP program can be defined as the benefits which are generated from accepting the process of change, and the resulting feeling of accomplishment. When the upper management of an enterprise motivate their staff to accept new work methods by advocating these changes as the best, the most cutting edge, the most likely to bring success, staff members are more likely to integrate the new methodology.

    The climate of triumph that emerges as the employees assimilate the uses of the new program causes field workers to feel empowered as individuals and as a part of a team. The advantages to the enterprise which employs these enlightened workers is that happy, self-esteeming employees are more productive.
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