ERP

INNOVATIVE ASSIGNMENT

JAVIYA VIRALKUMAR A.

07BCE043

GARDHARIYA CHIRAG K.

07BCE035
The commercial modalities of ERP
Company's Point of View:

Personnel
The relative success of an ERP process can be measured by the manner in which people adapt to
change. Choosing the appropriate business ERP software is very important. People here refer to all
stakeholders involved in the business namely customers, employees and others. The quicker and
smarter they adapt to ERP, the effect on business process will be greater. It is also to be noted that ERP
will have apprehensions initially to these people. The management needs to deal them carefully in the
larger interests of the company and for betterment of the business prospects.

Pacts
This is one of the foremost business drivers for ERP. This issue largely influences the business prospects
of a company that has successfully implemented the process of Enterprise Resource Planning. If the
company decides to go for a traditional contract the results will be slowly seen (step by site).But is a
time consuming process. The impact of ERP won't be felt all on a sudden in these companies irrespective
of whatsoever ERP business software is put in place.

This naturally means that it won't be a deciding factor immediately. On the other hand if they decide on
a fast track implementation they will be able to experience the change in the business scenario. It all
depends on the company's need and requirements and if ERP is their short term or long term objective.
They have to be made out in business case ERP.

Process
The business process in the company is the ultimate target for establishing ERP. If the business process
succumbs to change upon ERP implementation the chances of ERP success are very high. The company
can aim at profits only if there is a significant change. If the company goes ahead with the existing
process or modifies it only to a negligible effect it is the case of "Old wine in new bottle". The results of
ERP won't be reflected in the business and it will go waste. No business ERP software will help them to
achieve the results.
Vendor's point of view:

Edge over competitors

When a company decides to go in for ERP it is faced with the difficulty in choosing the service provider.
Almost all of them are identical. An ERP vendor will be able to succeed in the market only if his services
are up to industry standards and he has something more to offer when compared with the nearest
competitor.

Marketing expenses
The ERP vendor has to shell heavily on marketing his product or service. This is because companies
won't be ready to place orders just because of campaigning. On the other hand (vendors/consultant)
they may have to engage in all practices like demonstration and in house visit. No company will agree to
buy unless they practically see the results.

Conclusion
These points are based on the assumption that ERP implementation is perfect in the company and the
service of the vendor is equally good. The business ERP software is also assumed to be the apt one for
the organization. If this assumption is not validated in the real context then there will be no use in the
business drivers for ERP and trade.

How the industry React to ERP?

IT has become the buzzword of companies using ERP .It will even be fair to comment that ERP
has helped them to realize the full potential of information technology. Ever since IT had become a part
and parcel of companies the process and procedures got simplified. ERP Software consultant has helped
companies in a long in this regard.

There was still a filling in the bottom of the mind that IT was not being fully utilized by
companies be it manufacturing or service or even software!!(Of course the software companies did not
fail to use them properly for their own businesses but when it came to their in house use they were
lagging behind).
 The ERP intervention has filled this gap by making IT a part and parcel of the company and
business. For E.g. before the advent of ERP all the activities like accounts, H.R. were computerized.
However certain manual operations could not be eliminated. Industries have positively reacted to ERP to
computerize even these small operations.

Changing the working pattern

Companies will not easily resort to change in the working pattern. This remains true immaterial
of the type of firm modern or traditional. However companies tend to resort to major changes in the
working pattern in order to become more ERP friendly. They seek the advice of ERP Software consultant
even in advising on their work roles.

They not only tend to change the way of working but also get to introduce better and new
practices with the intention of revamping the organization. This is beneficial in two manners. Firstly it
ensures better working conditions. Secondly it paves way for representation of employee grievances and
improvement of human resources in the organization.

Encouraging novelty

ERP has brought a sea change in the thinking process, rules and procedures in the organization.
Conventional firms hardly resort to change practices followed for years together. The implementation of
ERP in those places is in itself an orientation of change management.

As a result they transform from the stubborn state of rigidity to flexibility. This change further
motivates them to offer incentives for novelties and innovations. This does not necessarily mean
strengthening the Department of research and development. On the other hand it can include anything
right from inviting an employee's suggestion to inviting the service of a third party or an outsider like an
ERP Software consultant to advice on restructuring the company's functions.
Conclusion

The above measures in the organizations are not a part of statutory obligations on the part of
organizations implementing ERP. This is the reaction of the industry in response to ERP intervention.
Companies have come forward with these proposals so as to make the optimum use of enterprise
resource planning. This is meant to give an idea of the areas that will be covered in ERP industry Paper.

How is ERP received in each industry?

Some of the well known beneficiaries include the following sectors:

Manufacturing

ERP has helped to increase the efficiency and quality of the manufacturing process. The
manufacturing process experienced slumps quiet often because of improper communication,
miscommunication, wrong communication and even lack of communication. ERP provided solutions to
those troubles by coordinating the actions of supply chains, ware house and logistics.

It also helped greatly in functions like tracking down the status of the product. Formerly
customers were made to run from pillar to post to enquire the status of product or for enquiring a
technical problem. The customer service representative would not be in a position to directly reply to
these queries. On the contrary he would ask the person from the concerned department. The person
would check the details and get back to him be it the status of a product or technical issue. This seemed
to be time-consuming and meaningless. The longer the chains of communication greater are the
chances of mistakes. CSC erp finance is a software meant for accounting purposes.

Insurance

Enterprise Resource planning has played a vital role in this business by covering three vital
areas. Firstly it has provided a common platform for insurers and his agents. This has helped in easing
the transactions and keeping an eye on the performance of the agent. This has addressed the difficulties
of both the agents and insurers and thus facilitated coordination in the better interests of the business.

Secondly it has helped in curbing procedural delays and inefficiencies for which the sector is
famous for. This statement can turn out to be truer if the sector is owned and controlled by the
government either fully or partially. Of course bureaucracy and redtapism are inborn features in a
state's set up but their presence in an insurance industry can do more harm because it calls for
dispensing immediate information during lawsuits and pending claims. IBM erp Insurance is a famous
player in this sector.
Hospitality

ERP has helped a lot in bringing down the operational costs and coordinating the acts of
individual departments. Hotels are well known for the segregation of functions. One can find many small
departments like house keeping beverage supply room service etc. Even though these segregations
sound small they have a large impact on the organizational structure. ERP offers a common medium to
coordinate their actions. The entire action can be controlled in the reception desk. ERP industry paper
points the exact benefit as per ERP industry analysis. Besides this textile erp insurance is equally famous.

Healthcare

The sharing of databases among hospitals seemed to be a great advantage for doctors and
patients. This even makes one to exaggerate that a person need not maintain a collection of his medical
problems provided that his/her choice of hospital/hospitals has a database of patient records(or
commonly shares them by any other means).Even though it is not practical to follow those practices ERP
has been a lifesaving measure to patients who are admitted in a hospital in an emergency condition
irrespective of the fact that the doctor in charge is aware of his medical history as ERP provides
everything. ERP industry analysis here will reveal that confidentiality is affected but the life of a person is
to be given the utmost priority.

Software

The manufacturing sector has been rated as the largest beneficiary. This sector can be rated as
the one who uses ERP easily because it is a product from their species. This does not undermine ERP'S
use in Software sector because it becomes easy to manage projects with acute deadlines. ERP industry
paper will also reveal that it is easy to train and make people work in this sector than anywhere else.

Return on investments for ERP

Some of the instructions that have to be followed to ensure adequate Return on Investments
are given below:
Working out the Myths of ERP in the Initial stage

The question of Erg's ROI remains a puzzle to companies who are experiencing difficulties even
in implementing it. There is a simple and straight answer to the question of ROI on ERP. Companies can
definitely be assured of ROI from ERP if they properly follow the procedures and implement the right
practices.

This is often well said than done. One common blunder committed by the company is following
the age old methodologies and thereby the ERP process will not add any value to the company and
business process. The difficulty in implementation process makes them think it ids difficult to embrace
ERP and the returns will not be guaranteed. This mindset is not true and hence companies have to work
more as the process deepens and not vice versa, in order to achieve optimum benefits from ERP.
Otherwise the operations done by ERPROI calculator will not be true. Even using ERPROI tools will serve
no purpose.

Proper Implementation and Finance

There implementation process should take place in a smooth manner and in accordance with
the set standards .There should be no compromise or controversy in the funds allocated. One mistake
which is normally done by companies is that they tend to cut down the expenditures on some areas in
order to be monetarily benefited.

However the fact is that it will affect the company in the long run unless the step is meant to
change the decision like partial implementation (provided it is supported by some logical reasons. While
talking about the implementation process it is important to ensure that it confirms with the standards
and as per the instruction of the vendor/ERP consultant.

Strict Adherence to Changes

Many of ERP's welfare measures are visible to the naked eye. However there are some elements
that are unseen but still impact the organization in a large manner. These elements make the company
to assume that ERP is not worth the money and hence they even go to the extent of violating/discarding
it halfway and not following the changes that were arrived after a long suggestion and deliberate
planning. They will defeat the very objective of ERP ROI .There will be no use even in disgruntling on
ERPROI tools.
ERP failures and manual actions in Signal
International
Signal International

About the company

Signal International is a reputed multinational corporation based in Australia. Their principle

offices are located in Sydney Detroit and Zurich. All transactions are primarily routed from here to their
branches located all over the world. Apart from that the company has few production plants in countries
as far as India and China. In addition they undertake franchising services for a number of international
brands and distribute them in the local markets with their expertise. The production plants manufacture
and sell goods under the banner of "Signal International". When it comes to franchising of other brands
each office acts independently without necessarily associating it with another local office in a different
country.

Background of ERP problems

The company decided to implement ERP systems for all its offices. They hired the services of E-
Systems for implementing an ERP software program called Global Lease. Their subsidiary company
Tuukku was referred for consulting services. The troubles started off right from the Implementation
process. The ERP software is specialized in providing services for companies that follows common
practices in all its offices. However Signal international did not have such a system. In addition they have
acquired few companies who have their own ways and means of working. This contradiction did lot of
mishap in the organizational procedures. People in the respective offices did not use ERP properly and
resorted to adopt their own style of working thereby making ERP's intervention meaningless and
unproductive.

It was then decided to ensure operational efficiency and correct the inherent errors in ERP and
acclimatize it to the organization within a period of 4 months. Training programs were arranged by
hiring experts from the software major. However the trainers developed software in polish language
because they were not used to Chinese or English.

When the installation process began the first process went undisturbed. The phase of installing
proved to be trouble free and spic and span. The formatting of data set the next trouble. The data
formats used by the company were totally unacceptable to the ERP software. This necessitated
conversion to the format preferred by Global lease.

The next problem was with the business process. The personnel from the software company
could not deal with the various demands of Signal International in using the software to suit the
business process. They were undoubtedly experts in handling software but could not render any
assistance as far as new business practices and changes to the existing ones were concerned. Finally the
company had to wind up with the idea of ERP in order to avoid anymore losses and damages
How the mistakes could have been averted?

The first mistake lies in the choice of the software. The company could have very well gone for
customized software than a readymade one as it had currently chosen. Customized software will be able
to handle the variations of a big corporation like Signal International. If this was done in the first place
most of the troubles could have been avoided.

Secondly the training programs should have emphasized more in using the software program
productively rather than following their own practices. When the first mistake has been committed the
only option to avoid a second mistake like what has happened is to introduce a radical and rapid change
in the business process to suit with the working of the software. The company has no other choice after
having chosen the wrong sector.

Thirdly the deadline given to make good the ERP systems are unrealistic. It is not possible to
make .This point applies to the time given to implement ERP in the organization and the time given to do
the data conversion process. Such deadlines add up to the confusions and affect the progress of the
projects. The first task was required to be completed in 4 months which would otherwise take up a
period of 20 months ideally. There was no specific time allotted for the second task which requires
about 7-8 months.

The next problem lies with the language data formats and business procedures. Polish software
would only add to the miseries if the persons employed in the company have no prior knowledge of
Polish language. Instead this could have been avoided if the company hired a language translator well
versed in technical and software aspects.

The data formatting could have been changed long back when the company had firmly resolved
to go for ERP rather than rushing with it at the fag end of the project. This is followed by the controversy
due to the inability of the trainers from the software major to handle doubts on changes in new and
existing business practices. This should have been reduced to a considerable extent if the company had
held consultations with the software people right from the day of inception. Even though that would not
have solved the issue completely major changes could have been expected from both sides to make
things better. Everything remains about ERP failure Story in 1998.