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Devender Singh, Mary Jacintha, Mukul Kumar

Integrating Business Functions of CDAC, Noida through ERP


Devender Singh, Mary Jacintha, Mukul Kumar
Abstract-Enterprise Resource Planning (ERP) systems include several
configurable modules that integrate core business activities into a single
environment based on an integrated, shared database. These systems have been
recognized as the most important development in the corporate use of information
technology in the promising seamless integration of all the information flows
throughout a firm [1]. This applies to applications, which are promising in
supporting business processes in many organizations. It involves the seamless
integration of processes across functional areas such as finance, HR,
manufacturing and logistics. It supports improved workflow and standardization
of business practices.
However, implementing an ERP system is costly and time-consuming. The costs
are mainly due to the short supply of professionals with requisite skills. School of
Management in C-DAC is running Certificate course in ERP Programme.
Leveraging the existing faculty for this course and other members from the eGovernance team, the centre is currently engaged in implementing the ERP system
for integrating the business functions of C-DAC, Noida.
Keywords: ERP, Integration, Business Functions.
1. Introduction
In the competitive market, an industry requires new business opportunities to increase
their competitiveness. To improve the quality of performance in its business applications,
the centre implemented ERP solution for the functional areas such as Human Resource
and Payroll, Financial Accounting and Control, Materials Management and Project
System. Its focus is to coordinate all the activities by facilitating communication and
information exchange across departments and improve the quality of the activities.
There is a growing awareness in most of the industries that IT could be used as change
the business functions [2]. It is a planning philosophy enabled with software that attempts
to integrate all the business processes. Before the ERP concept, each department has its
own computer system optimised for the requirements that a department needs. These will
result in local optima but cannot ensure global optima across the company. ERP combines
all the business requirements of the company together into a single, integrated software
program that runs off a single database so that the various departments can more easily
share information and communicate with each other.
According to a NASSCOM-McKinsey report, annual revenue projections for Indias IT
industry in 2009 are US $ 118 billion and market openings are emerging in ERP solutions.
ERP solutions are known as a gradual evolution of their functional scope. Report indicates
that originally ERP solutions concentrated on the integration of an enterprises functions of
Finance, Human Resource, Logistics and Manufacturing with improved quality.
Considering the above, we have decided to initiate implementation of ERP with its existing
resources. The ERP Department in School of Management was tasked with this process
with the team of 10 members including Management Trainees. The initial implementation
was for integrating the functions of support services in the centre. The major support

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Integrating Business Functions of CDAC, Noida through ERP

service groups in the centre include HR, MM, Finance and Project Systems. This paper
presents the details of implementation. It is organised as follows. Section 2 gives the
literature Review of the ERP Implementation. Section 3 gives the methodology. Section 4
gives the implementation details of the HR with payroll system. Section 5 details Financial
Accounting and Control. Section 6 gives the details of ERP Implementation in MM and
Project Systems and Section 7 discusses on the issues relating to data migration. Section 8
concludes the paper.
2. Literature Review
Previous studies reveal that many companies had implemented integrated systems or ERP
solutions in the functional areas, financial management, Human Resource Management,
and logistics/productions, which are also considered to the most important areas of crossfunctional integration [11]. The actual integration of the marketing and sales function is
less than the perceived necessity. By accessing enterprise-wide information from
databases, IS integration is providing numerous opportunities to coordinate organizational
activities by facilitating communication and information exchange across departments
without the need to go up and down the vertical chain of command. [3]. It is not possible to
think of an ERP-system without sophisticated information technology infrastructure. It is
said that, ERP is the finest expression of the inseparability of business and information
technology. [4].
Tata Power is the first utility company in India to implement an industry specific ERP
solution and benefits were evident in four major areas - cycle time reduction, inventory
reduction and manpower reduction. This made people available for redeployment, and
most importantly it helped to provide better quality information [5]. It also enabled better
scalability and reliability. Other advantages were better speed, better realisation of
information value, extended enterprise boundaries; better focus on distribution and
improved project management and execution skills [6].
3. Methodology Adopted In Implementing ERP in CDAC, Noida
ERP Implementation follows the six stage model, as given below:
Stage 1: Initiation- Top Management Vision and Need to Change
Stage 2: Adoption Cost/benefit analysis and suitability
Stage 3: Adaptation Implementation and availability of the system
Stage 4: Acceptance Enhancing compatibility and Integration of functional units
Stage 5: Reutilizations Acceptance of the system, using system through routine activity
and enhancing performance
Stage 6: Infusion Looking for the innovation to become more competitive
Since ERP implementation is a change management strategy, the full support of Top
Management is needed. One of the major decisions to be made was the functional areas to
be considered for the implementation. Human Resource, Finance, Materials Management
and Project System. Since all activities in CDAC Noida are in the project mode, Project
system was selected for this. Since all activities in the centre are in the project mode,
Project system was also considered for implementation. Other three groups are the normal
candidates in any ERP implementation of any enterprise.
The next quested relaltes to setting up of the team. School of Management in CDAC Noida
is teaching ERP as a course to its MBA students. To improve the quality of MBA and to

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Devender Singh, Mary Jacintha, Mukul Kumar

give live exposure to MBA students in its project work, top management decided to
implement ERP in the centre by taking MBA students as management trainees. A team of
10 members, existing professionals from various departments in CDAC Noida and MBA
students, were given an opportunity to implement ERP across the functional areas.
Implementing ERP should have full knowledge of the enterprise where it is implementing,
not only the theoretical knowledge about the ERP system/functions but should know about
the integration about each activity and process of the organization. Training was imparted
to the team members who are involved in ERP implementation to understand its activities
and configure the same in ERP system. With full support from functional department
heads, the team started ERP implementation in August 2008.
Three major processes had been followed for finalising the system specifications. They are:
Studying the existing system
Mapping the existing system with ERP system
Analyzing the GAP and rectifying the GAP with Functional Team Members.
Once this has been complete, the ERP system was configured as per the finalized
specifications and tested out. This was followed by creation of various master data file.
Subsequent to this, the entire system was tested to see its effective functioning. This
completes the testing features.
In the production phase, the tested systems and databases were transferred to production
servers and linked with client systems in the user department. Training and handholding are
given to the user departments and the operations were allowed to start in a dual mode with
the ERP system providing the support parallel to the existing manual mode. After the
system is completed evaluated in this fashion, over a period of time, the manual mode is
discontinued and the operation is taken over by the ERP System.
The remaining sections of this paper describe the implementation details of the major
modules.
4. Human Resource Management and Payroll
The Human Resource Department (HRD) performa the following services for its
employees:
Recruitment and Manpower Planning
Leave and Absentees Management
Transfer, Deputation, Promotion and Increment
Medical, Travel and Loan sanction
By taking attendance record from HRD, Salary was generated by Finance and Accounts
(F&A) Department. Salary slip generated by F&A department consists of earnings,
standard deductions including tax, loan EMI. Figure 1 gives the As Is process of HR.

Fig.1: As Is Proess of HR

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Integrating Business Functions of CDAC, Noida through ERP

In the ERP system, salary generation was made to be a part of HR Module. The other
function of the module was Service book updation and payroll preparation.
Total functions of HR functions may be listed as
Joining Process
Probation Clearance
Annual Increment of Scale Employees
Contract Review and Increment
Promotion
Reliving (Resignation, retirement, termination)
Transfer
Deputation
Pay fixation, Continuation of Past Service
Passport
Post applied in other Departments, Employee Attendance
Employee Leave
Payroll Preparation
Reports.
Most of the above activities require manual updation in the Service Book and are reflected
into the system as well. Once this is complete, the system is ready for payroll preparation
and other report generation.
Figure 2 Gives the To Be Process of HR.

Fig.2: To Be Process of HR
It consists of earning, deduction, loan accounting, reimbursement / claims and
leave/absenties. The major outputs are salary slip, pay bill register, PF report, bank transfer
and generation of Form 16 and Form 24.
EARNING: Includes all regular salary component i.e. Payband, GP, DA, HRA,
TA, CEA and all other allowances.
DEDUCTION: Includes all regular deduction part of salary i.e PF, Income Tax,
Transport Recovery, Canteen Recovery, Library fine etc.

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Devender Singh, Mary Jacintha, Mukul Kumar

LOAN ACCOUNTING: Includes all Interest bearing and Interest free Loan given
by CDAC.
REIMBURSEMENT/ CLAIMS: These are paid along with payroll and they are
based on entitlement and policy based i.e. Medical, Tour, LTC, Telephone,
Newspaper, Lease etc.
LEAVE/ ABSENTIES: Currently for salary generation, we are assuming that all
employees is present in office and mark only those day in ERP system as absent or
leave, in which an employee is actually not present in office.

All the employees in CDAC were divided into the following four categories for generation
of salary slips:
Regular Employees
Scale on Contract employees
Consolidate employees
Consultants
The sample Salary Slip is indicated in Fig. 3.

Fig.3: Sample Salary Slip


5. Financial Accounting and Control
Finance and Accounts (F&A) department provides the following services to its employees:
Releasing salary, personal loan, reimbursements and claims, advances

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Integrating Business Functions of CDAC, Noida through ERP

Releasing fund to all projects in CDAC Noida as and when required


Preparing different type of reports

The purpose of this implementation is to fully derive the benefits of total integrated process
for functions of HR, Finance, Material Management and Project teams in CDAC. The
higher level As-Is process for FI Function is as given in Figure 4.

Fig.4: Higher level As-Is process for FI Function


The Scope ERP system implementation of FI Module includes
Salary Generation
Tax Calculation
Employee Claim/Advance
Income/Expenditure from Training
Income/Expenditure from R&D
Asset Maintenance
Invoice/payment
MIS Reports
Other Ledgers
Integration with HR/MM/PS module.
The system is currently under implementation and the parallel runs are expected to start
from the financial year 2010-11.
6. Material Management and Project System
Materials Management Department in CDAC Noida provide the following services to its
employees
Procurement Processes
Purchase Requisition
Request For Quotation
Maintain Quotations and comparisons
Standard Procurement
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Devender Singh, Mary Jacintha, Mukul Kumar

Asset Procurement
Purchase Order-Imports
Stock Transport Orders
Purchase Order- Services
Third Party Procurement
Inventory Management
Goods Receipt/ Issue
Invoice Verification
The process of implementing ERP systems will be done in the next financial year.
Every Business or commercial projects, and small-scale projects, require precise Planning
of the many detailed activities involved. The project manager has the job of ensuring that
the project is executed efficiently, on time, and within budget - which he or she achieves by
ensuring that the required resources and funds are available as and when needed. Projects
are generally part of the internal processes of a company. To be able to control all tasks in
project execution, all the activities in CDAC Noida is considered as projects. The structure
of Project system involves following activities:
By structures, using a work breakdown structure (WBS)
By process, using individual activities (work packages)
These modules are under implementation and will start from the next financial year
onwards.
7. Data Migration
Data migration is one of the most important activities in determining the success of an ERP
Implementation. Since many decisions has to be made before migration, a considerable
amount of planning is required. But data migration is the first activity of the production
phase of ERP Implementation and so it receives minimal attention due to time constraints.
The following steps have been followed for data migration to make the ERP
Implementation a success:
Identifying the data to be migrated
Determining the timing of data migration
Generating the data templates
Freezing the tools for data migration
Deciding on migration related setups
Deciding on data archiving
Eventhough ERP Implementation is only relating to the activities in CDAC Noida, it has to
follow the reporting models acceptable by its head quarter, CDAC Pune. And so, lot of
customization had been made through Business Application Programming to make the
formats of the report required as per CDAC Pune.
8. Conclusions
ERP System implementation in an organization will be successful only through the support
of top management and functional managers. Due to lack of ERP professional's
availability, the cost of ERP implementation is high. Most Institutions should come
forwarded to teach all ERP modules along with their professional courses. Students should

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Integrating Business Functions of CDAC, Noida through ERP

be given a live project to implement ERP in their Institutes/colleges/University. ERP


implementing companies are increasing because of improved performance. ERP System is
suitable for all type of companies. ERP brings transparency, effective service and
efficiency in production. It reduces the business process and cycle cost. We have
successfully completed the implementation of HR with Payroll modules through ERP.
Other modules i.e. FI/CO, MM and PS will complete soon. Since most companies are
coming forward to implement ERP System, productivity, quality and service increases
which leads to reduce the cost and hence develop the economy of the nation.
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About Authors
Mr. Devender Singh, after his post-graduation in Computer Science and
Application (MCA) from Aligarh Muslim University has been working
with many reputed national and international companies since last 19
years. Presently, he is working with C-DAC Noida as Sr. Research
Scientist in e-Governance Group and has been instrumental in
implementation of ERP.
Ms. Mary Jacintha: She, working as a Sr.Lecturer, School of
Management, CDAC Noida, UP, is pursuing Ph.D in the area of ERP
and Finance. By having 10 years of experience in teaching, she started
her research in this area from 2004. Her areas of interest is Finance and
Accounts, ERP, Operation Research and Statistics.

Mr. Mukul Kumar: He is working as a CE III in E-Gov division in


CDAC, Noida. Having 4 year of experience in development .He has
successfully implemented 3 end to end major projects of client like
MCD, CWC etc. Now he is implementing ERP (HR, FI/CO) in CDAC,
Noida. His area of interest is J2EE, HR ABAP, ABAP and Project
management.

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