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ERP SUCCESS
Abstract
ERP (Enterprise Resource Planning ) comprises of a commercial software package that promises the seamless integration of all the information flowing through the companyfinancial, accounting, human resources, supply chain and customer information (Davenport, 1998). Much has been written on implementation of Enterprise Resource Planning (ERP) in organizations of various sizes. The literature is replete with many cases studies of both successful and unsuccessful ERP implementations. Research on the implementation of ERP in certain European countries shows that, the job of implementing an ERP is a riskier business for Small and medium-size enterprises (SMEs) than for Large Enterprises (LEs), still SMEs have been receiving lesser focus from the software vendors and consultants than LEs (Shanks et al.,2000). There have been very few empirical studies that attempt to delineate the critical success and failure factors that drive the success and failure of ERP implementation at Indian SMEs. Much of the time, ERP software vendors and consultants are the targets for blame when anticipated results do not materialize. Are the ERP vendors and consultants that sold the software the real culprits for the lack of business performance improvement
Enterprise solutions provide a centralized framework for all data and processes of an organization. It integrates all aspects of a business from planning to inventory control, manufacturing, sales, marketing, finance, customer service and human resources. A significant part of our service portfolio is our customized ERP solutions. The SAP business and MS dynamics NAV services provided by us include: software licensing, data migration, implementation, support, consultancy and training. We deploy resources on integrated teams that work with our clients to undertake complex enterprise transformation efforts. Selection of the three organizations is based on the need to collect detailed data about the ERP implementation process in each organization. In all the three industries, questionnaires were sent to 600 endusers. A total of 202 questionnaires taken for analysis have shown that the first three dominant success factors of TI InfoTech, BPCL and ITTI are related to the quality dimensions, suggesting that the success of implementing ERP system is largely determined by the quality dimensions. Thus the technological newness was the most important factor in determining the quality of the system.
Introduction
Enterprise resource planning (ERP), client/server applications for managing accounting, manufacturing, distribution, and human resources, are the de facto backbone of business intelligence. However, while many organizations consider the introduction or enhancement of an ERP solution, the significant and well publicized challenges associated with ERP implementations often daunt them. According to Gartner Group, "for 40 percent of enterprises deploying ERP or ERP II systems through 2004, the actual time and money they spend on these implementations will exceed their original estimates by at least 50 percent (.07 probability). Many enterprises have suffered spectacular project failures due to unplanned or under planned implementation projects." Reliably predicting implementation costs and the time required for implementation are two key outcomes of successfully planning an ERP initiative. Organizations must be able to accurately predict costs, resources, and requirements, and develop a plan of attack both before the implementation begins and throughout the project. While ERP implementation horror stories highlight serious business consequences and criticize leading ERP vendors for botched deployments, often the software giants are not to blame. Companies must realize that ERP systems are not a standalone solution, but instead an enabling technology to support a broad corporate change and the key to a successful deployment is in the process. Organizations must broaden their perspective in order to put their ERP efforts back on a successful path. Too many overlook a critical stage: New business processes must be established, thought through, and implemented before the selection, purchase, and deployment of a software solution. As more organizations worldwide choose to build their corporate knowledge base around complex infrastructure solutions, the need to understand how to successfully implement an ERP system has become increasingly important. Organizations today are constantly in search for ways to achieve better business performance and sustain competitive advantages through effective deployment of resources and business processes. To improve business performance, organizations require an efficient planning and
control system that synchronizes planning of all processes across the organization. The key to competitiveness lies in a solid information system (IS) infrastructure seamlessly aligned with core business processes developed for the delivery of high quality products and services to customers within the optimal time. These demands have prompted more firms to shift their IS strategies from developing in-house information systems to purchasing application software, such as ERP systems, to generate synergies and enhance operating efficiency (Hong & Kim, 2002). However, scarce work exists on measuring success for an ERP system. Although it is very important to evaluate the success offer implementation projects since a lot of financial and human resources are invested (Bradford andSandy,2002) reported that 57% of the interviewed companies launched no assessments on the performance of ERP systems owing to lack of empirically effective evaluation models. Information systems (IS) success is one of the most widely used dependent variables in information systems research. Not surprisingly, much attention has been given to how best to measure it (De Lone & McLean, 1992). This research accordingly attempts to propose success model former systems and to empirically investigate the multidimensional relationships among the success measures. Additionally, three case firms among the success measures are also empirically tested. Enterprise solutions provide a centralized framework for all data and processes of an organization. It integrates all aspects of business from planning to inventory control, manufacturing, sales, marketing, finance, customer service and human resources. A significant part of our services portfolio is our customized ERP solutions (Debone & McLean, 2003). At Irion, we provide cost-effective enterprise solutions that are developed and customized keeping in mind the individual requirements of clients and their areas of operation. Our process experts will evaluate every detail and thoroughly assess each option that they draw for your organization. Our enterprise solutions enable the integration of all business activities of an organization thereby improving operational efficiency. The SAP business one and MS dynamics NAVservices provided by us include: software licensing, data migration, implementation, support, consultancy and training. We deploy resources on integrated teams that work with our clients to undertake complex enterprise transformation efforts.
ERP market in India steadily growing for the last few years and the main reason for this enormous growth can be attributed to the inability of order system to manage the conversion to year 2000. There are also other factors such as industry best practices, easy and faster implementation and good cost predictions. Another factor behind the growth is that already existing clients acquire more licenses and modules. The number of employees using the ERP system is increasing and the ERP clients who have started with the basic modules are going for subsequent applications. There is also a trend to replace customized system with standard application packages, like an ERP system. India is expected to present ERP suppliers an important marketplace as manufacturing companies are significantly investing in technology solutions to improve their manufacturing operations. According to observation made by some experts in the field, the ERP market started showing solid organic growth since 2004 as IT spending improved. The Indian ERP market experienced CAGR (compounded annual growth rate) of 25.2 during the period of 2004-2009. The market was $83 million in 2004, and is projected to be over $250 million in 2009, according to a research report. The report further clarifies that manufacturers in India are increasingly implementing ERP solutions to ensure that decision makers have the required information visibility across the value chain. Majority of Indian manufacturers are small by global standards, requiring easy-to-use ERP solutions to meet their specific process requirements, including localization needs to address the continually evolving tax and statutory requirements. Small and medium enterprises across industry verticals and micro verticals, such as automotive, pharmaceuticals, and textiles, are leveraging ERP solutions to gain sustainable competitive advantages.
BARRIERS TO SUCCESS
Typically, there are three process barriers that prevent many ERP implementations from being successful. These barriers result in an elongated development cycle with poorly defined and managed requirements and, as a result, poorly defined measures of success. The implementation team often is tasked with chasing a series of fluid requirements, no process for managing changes to the project scope, and a false belief that technology alone will prevail. These teams are, without fail, disappointed with the results. Specifically, the three most common mistakes of ERP implementations are the following:
Focusing on technology: The technology "silver bullet" approach is one sometimes sold by vendors. However, there is no evidence anywhere in the history of IT that software alone will solve a business problem. Ignoring the importance of requirements definition: Organizations too often ignore the need to define an optimal process and then use the technology as an enabler for the process. In too many instances, organizations either try to adopt a process that is inherent in the ERP solution, even if it does not fit their business requirements, or they try to shoehorn their legacy processes into a software package that is not designed to support their processes. In both cases, they sub optimize the capabilities in the technology and don't take advantage of the opportunity to streamline their business process the entire point of technology implemen tations. Jumping from the requirements definition to the development phase: Pressed to deliver systems against predefined timelines that don't take into account all of the necessary implementation steps, organizations often rush the process, neglecting to build both a solid implementation plan and solid agreement across the organization as to what it will take to develop and implement the solution before implementing the technology.
is also enhanced. Inventory costs reduction must be given a great importance in every organization. ERP helps reduce inventory costs by better planning and forecasting of requirements. ERP system helps getting higher return on investments (ROI) in a fast manner. While there are absolute benefits, an ERP system also poses significant challenges in the areas of information security and business continuity planning. Above mentioned things point to a very critical step, the right choice of an ERP for your enterprise! Off all the ERP systems exiting in the market, all seem to be performing the same function but the one best suiting your requirements needs to be picked up in order to achieve required results. The choice depends upon the structure and type of the organization e.g financial, manufacturing etc. This is why some organizations experience higher benefits as compared to others because they've made the right choice and are able to make the right use of their system. One of the most powerful advantages to ERP is the implementation of software. Even though Y2K didn't become the disaster that many people expected, it gave rise to the concept of making sure software was properly implemented. In addition to dealing with software issues, ERP can also help companies integrate their operations. At the same time, it is important to realize that there are a number of challenges involved with utilizing ERP. Perhaps one of the greatest of these challenges is cost. Enterprise Resource Planning tools are outside the price range of many organizations. It is important to understand that ERP tools must be customized to meet the needs of the company. In most cases, it will not be useful when it first purchased. Each company has unique needs, and ERP tools must be able to meet them. A number of companies run into problems when they attempt to customize the software. To summarize, ERP has a great importance and ERP systems have become the biggest need of today's organizations to survive. They provide tremendous benefits provided the Critical Success Factors of ERP system implementation are kept in mind.
TI InfoTech: TI InfoTech is an information technology company in Noida, New Delhi, India. It specializes in Reimplementation for SAP B1 and oracle E-business suite. For tour and travel companies we have ERP "travel assist" and XML integrated online booking engine. This industry offer offshore custom software development for websites, portals, SEO activity, IT infrastructure consultancy and hosting solutions for websites and emails. It has expertise in
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industry like travel tour, trading, manufacturing, wholesale distributions, logistic service providers, FMCG, chemical, automotive and pharmaceuticals.
BPCL: In November 2001, Bharat Petroleum Corporation Limited (BPCL), a leading player in the Indian petroleum industry, successfully implemented an enterprise resource planning (ERP). Implementation began in April2000 after the company decided to integrate all
itsactivitiesthrough the ERP package SAP R/3 the Company hoped to speed up its decisionmaking and respond faster to customer needs through ERP. The intention was to show the differentiation in service, retain customers and help increase the business of its industrial and commercial (I&C) customers BPCL also wanted to increase its retail thrust by exploiting IT initiatives to them maximum.
ITTI: (formerly, Innovation Technology Transfer India) is system integrator and software services company with core competence in the areas of enterprise business solutions (ERP implementation & support, business intelligence solutions and business integration projects);application development & maintenance services and infrastructure management services. ITTI have significant domain expertise in the manufacturing vertical (discrete &process industries), as well as CPG, retail, automotive, Parma, cement and engineering industry verticals. ITTI Project teams provide world-class consulting and software services with the objective of building enduring relationships with our customers. Based on the leading edge CMMI (Capability maturity model integration)SW model and ISO 9001:2008 standards, our multishore delivery capabilities have further enhanced the value add that our customers experience, in their engagements with ITTI.
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Sales and Distribution module Purchase and Supplier Module Inventory and Material Management Module Production and Shop Floor Management Module Total Quality management Excise management Accounts and Finance Management Human Resource Management
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Ere source ERP benefits Gain Business Visibility, Get accurate, timely information, Make better business decisions
Increase Operational efficiency Gain Business Visibility Improve Customer Relationship Streamline Production and Planning Optimize IT Investments Comply with Regulations Cut Costs Bring product to market sooner Monitor and control and expenses Reduce errors Get accurate, timely information Support your changing needs Get a complete view of your business Make better business decisions Deliver the right product at the right time Keep customer promises Ability to modify/configure statutory changes Reduced product cost, reduced expediting Improved closure rates, Increased market share Improved sales and opportunity visibility better customer relationships, lower customer service costs Global reach, better inventory visibility, reduced distribution costs, higher
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selection. The same user never used in his earlier tenure any computerized output and did not even know how to load paper into printer. The major flexibility expected by Indian ERP users can be summarized as "I want to do transactions any way, later on it should get corrected." Hence we find demand of provisional entries, temporary databases, notional requirements, etc. The fundamental principle of ERP is doing right things right at first time is not understood and deviations are expected to be regularized. We find many of such cases, ultimately making ERP as unused ornament lying in the bank locker.
Familiar Interfaces
It is important that systems are easy to navigate for people who may use them only occasionally as well as for power users. Information workers today spend a large portion of their workday using their e-mail applications, probably the most widely deployed applications in the world. Messages from co-workers, customers and suppliers constantly flow through e-mail inboxes. Rather than jump from an ERP system to e-mail, its simpler if business applications not only look and feel like e-mail but are actually integrated with it. A familiar interface enables workers to feel comfortable with an application immediately. And since industry analysts agree that one of the biggest costs involved in implementing new ERP systems is training, which often equals or exceeds the cost of the actual software purchase, eliminating the need for some training can speed up the implementation time frame dramatically, leading to faster ROI and time to benefit from the ERP investment.
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information. No wonder most manufacturers ran by the seat of their pants. They simply had no tools. Today its possible for analytics engines to be embedded in applications or in the IT stack. Engines can access information from multiple disparate systems instantly and present the user with up-to-date information in a graphical format. Some engines and search tools can combine both structured data, like that found in ERP databases, and unstructured data, like that found in documents like contracts or RFPs (requests for proposal), to present the user with an immediate and complete picture.
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ERP facilitates a company-wide integrated Information Systems covering all functional areas such as manufacturing, sales and distribution, accounts, payables, receivables, inventory, human resources. Etc.
ERP integrates and automates most business processes and share information enterprisewide in real-time, thereby improving customer service and the corporate image.
ERP provides complete integration of the system not only across departments but also across companies under the same management.
ERP bridges information gaps across a company and focuses on key issues such as productivity enhancement, customer service, cash management, inventory, quality control and prompt delivery. Etc.
ERP is the solution for better project management. ERP provides business intelligence tools like decision support system, executive information system, reporting, data-mining, early-warning system, enabling people to make better decisions and improve business processes.
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ERP not only addresses the current requirements of the company but also provides an opportunity for improvement and refinement in the business process on a continuous process
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have good understanding of their internal customer needs or current processes, or if these processes are not well defined and documented, then it is quite possible that while selecting the standard process from the ERP package, employees may not be able to perceive the difficulties likely to be encountered during the implementation stage. Employees would lack process ownership and orientation. Other than technical issues, issues like organization structure, culture, lack of involvement of people etc. can lead to major implementation difficulties, and full benefits of standard ERP package may not be achieved. It may lead to a situation where the organization may have to again reengineer its processes. This could be a very costly mistake. There is also a third option of reengineering business process during implementation of ERP. But it does not considered to be a practical option and is likely to cause maximum disruption to existing work. It should not be forgotten that during BPR and ERP initiatives, routine work is still to be carried out and customers need to be served.
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Selection of ERP vendor Risk Analysis & Mitigation Plan Pre Implementation Approach Project Management and Monitoring ERP Training and Implementation Operational Audit Post Implementation Audit Measuring Range compatibility and ROI
We work with you jointly to deliver the most favorable ERP solution for your organization, to help you further maximize your return on the investment. Ere source ERP, India's leading ERP solution provider offers a centralized framework to integrate and automate all business processes of an establishment with the aim of increasing operational efficiency and improving the accessibility and flow of information across all departments. Availability of timely information combined with a flexible framework enable organizations to respond and adapt quickly to the changing marketplace and business environment in a more efficient manner, which obviously results in good ROI (Return on Investment).
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Our list of services also includes training of employees on the use of the system and post implementation support and maintenance services.
The five main reasons to choose ere source ERP solution are: 1. OPERATIONAL EFFICIENCY:
Automates all business and functional processes thereby increasing overall operational efficiency. 2. CUSTOMER SATISFACTION: E-resource ERP solution help in enhancing internal business processes and enables organizations to improve customer satisfaction. 3. EASY ACCESS: Our web-based ERP solution enables easy accessibility and availability of timely information, which results in better decision making and forecasting. 4. FLEXIBILITY: E-resource ERP packages have a flexible and scalable structure thereby enabling organizations to adapt and cater to future business expansions and requirements. 5. COST-EFFECTIVE: E-resource ERP for Small and Medium Enterprises is affordable, quick to implement thus enabling the SMEs to focus on growth and improvement of their business rather than worrying about software. And over and above, eresourceInfotech work with you jointly to deliver the most favorable ERP solution for your organization, to help you further maximize your return on the investment.
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Interaction with other areas of the system, gives you a 'clear' view of the customer Maximizing opportunities and retaining high value customers enhances revenue and profit. Provides value-added services enable you to stay ahead of your competitors. Improves product development and service delivery processes Prepare your personnel with in-depth knowledge of the customer's needs Organizes the customer experience through quick problem resolution Easy re-run of customer information over and over again
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The e-resource ERP CRM module also facilitates control and organization of entire sales process, from offer to invoice. It empowers your sales staff by providing details such as inventory status, estimated costs and delivery time, risk status, habits and special demands, and previous trades during offer stage. The e-resource ERP CRM module offers an effective customer complaint management tool which also includes repairs processing and document management.
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Conclusion
The first three dominant success factors of TI InfoTech, BPCL and ITTI are related to the quality dimensions, suggesting that the success of implementing ERP system is largely determined by the quality dimensions. The results indicated that technological newness was the most important factor in determining the quality of the system. System quality, such as performance, flexibility of changes, response time and ease of use, is a technical issue. This result confirmed conventional wisdom that the pursuit of state of-heart technology is a risky proposition. In addition, different aspects of system quality, such as response time, ease of use, system reliability, and flexibility of the system have been examined by IS researchers. Most of these measures are fairly straightforward, reflecting the more engineering (technical) oriented performance characteristics of the system. Researchers found that these engineering-oriented performance measures were significantly related to technical-related issues of the proposed projects. This paper proposed a success model and empirically tested the relationships between variables. In summary, this research discovered that system quality and service quality are important dimensions for measuring post-implementation ERP success. Service quality and system quality dimensions play more important roles than their information quality counterpart in terms of influencing ERP benefit of use and user satisfaction. Its rare today that a company has no IT systems in place, so its important to select applications that run on industry-standard platforms so that applications can easily interoperate. Investigating the technology that surrounds required business functionality can be even more important than the functionality itself. After all, its relatively easy to add new features to a system.
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Bibliography
Bradford M and Sandy R (2002) Realizing value in ERP. J. Cost Management. 1319. http://www.indjst.org/8A5EC6EC-FCAE-44AB-AAC372E488574AC6/Final Download/DownloadedB04D8E3B616BAFF6197566069D4A0896/8A5EC6EC-FCAE-44AB-AAC372E488574AC6/archive/vol.3.issue.9-10/oct10seetharam-9.pdf http://www.eresourceerp.com/ERP-success-in-India.html http://www.academictutorials.com/erp/erp-analysis.asp
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