Enterprise Resource Planning (ERP):

Enhancing and Sustaining Value

Contents
Overview

Section I
ERP in Emerging Scenario
1. ERP Today 3
S Jaya Krishna

2. ERP-II: Making ERP Deliver on its Promise to the Enterprise 12

www.exactamerica.com

3. Integration of Enterprise Applications and Functional Fit: The Role of ERP in Supporting
Management Objectives 22
Fergal Carton and Frédéric Adam

Section II
Model Frameworks
4. Managing ERP System Deployment – A Consideration of Best Practices 45
Richard M Kesner

5. IT Evaluation Frameworks – Do They Make a Valuable Contribution? A Critique of Some of

the Classic Models for use by SMEs 75
Pat Costello, Andy Sloane and Rob Moreton

6. The Emergence of Un-Integrated Information Artifacts during IS Innovation Processes:

Resource Wasting Detours or Necessary Part of an Effective Evolution Path? 92
Angelo Caruso and Mara Giannotti

7. Making a Case for Continuous Support for ERP Systems to Enhance ROI 112
Amit K Saraswat and Pankaj M Madhani

Section III
Experiences
8. The Influence of Legacy IS at Threads: A Comparative Study of North American and
European Operations 125
Christopher P Holland and Ben Light

9. ERP Implementation Problems in N.I.C.I.Co 152

Ali MollaHosseini

10. Gaining Value from Enterprise Resource Planning – A Case Study of ONGC 173
B C Sharma and Ajay Kumar Gupta

Electronic
Electroniccopy
copyavailable
availableat:
at:https://ssrn.com/abstract=1966815
http://ssrn.com/abstract=1966815
11. Embedding Hands-On Experience with ERP Systems into University Courses: Aligning
Academic and Industry Needs 188
Mark Stevenson

• Index 203

Electronic
Electroniccopy
copyavailable
availableat:
at:https://ssrn.com/abstract=1966815
http://ssrn.com/abstract=1966815
 Overview
As the business operation landscapes of most global corporations have matured, they have also
become more complex. In this era of globalization mergers of business organizations have
combined heterogeneous systems, individual divisions have developed non integrated legacy
systems and IT solutions now span across multiple platforms and technologies. This IT maturity
has created a new organizational climate for ERP (Enterprise Resource Planning) systems. ERP
investment is huge and risky in nature, as its implementation is highly prone to failures. It is very
important to establish a standard process within a business entity for assessing the value of an
ERP investment, as well as how to address the difficult challenge of assessing productivity-based
and intangible benefits. As ERP systems have become a vital requirement for running a business
successfully, it is very important that the implementation be successful. The book emphasizes the
crucial role of contextual factors for successful ERP deployment. The book is presented in three
sections and includes eleven articles.

The first section “ERP in Emerging Scenario” includes articles on the new faces of ERP in the
evolving scenario, ERP-II for more effective, total enterprise solutions and the role of ERP in
supporting management objectives.

The second section “Model Frameworks” contains articles on best practices for ERP system
deployment, IT evaluation framework for SMEs, the emergence of information artifacts for
effective ERP implementation and managing ROI on ERP investment.

The third section “Experiences” contains case studies on the influence of legacy information
systems on North American and European operations, ERP implementation problems in
N.I.C.I.Co, value creation through ERP at O.N.G.C. and experience of ERP systems in
academics.

Section I: ERP in Emerging Scenario

The opening article of the book “ERP Today” written by S Jayakrishna presents some key trends
in ERP like its integrity with CRM, SCM, BW and E-enabled applications. It also discusses mid-
market and SME as growth drivers and focuses on upgrading to new versions and functionality.
ERP is maturing from an IT strategy to a comprehensive business strategy. The changing market
demands and technological advancements are shaping it into a new form. Some of the changing
market demands are shift to low-end markets, emergence of custom and vertical needs,
automation of additional functions, enterprise integration, incorporation of e-business solutions,
extending accessibility to new users, application outsourcing and technology developments. It is
important to meet new challenges and not just replace legacy systems.

The second article “ERP-II: Making ERP Deliver on its Promise to the Enterprise” sourced from
Exact Software describes how conventional ERP has fallen short in few areas that are critical to
today’s business needs. Competitive pressures and globalization have made it clear that the
business world is still in need of more effective, total enterprise solutions. ERP helps automate
individual departments, but back office benefits have not been transferred to front-office to help
business manage people, workloads and supply chain issues. ERP is not just about

Electronic copy available at: https://ssrn.com/abstract=1966815

manufacturing, distribution, and accounting. Projects, workflow, sales documentation and
employees play an important role in the enterprise and day-to-day operations. ERP II focuses on
project management, knowledge management and workflow management.

The third article “Integration of Enterprise Applications and Functional Fit: The Role of ERP in
Supporting Management Objectives” written by Fergal Carton and Frédéric Adam, talks about a
gap between the information required and actual information available in ERP system. An ERP
implementation implies a certain number of assumptions about the company and how it operates.
These assumptions may change, due to organizational changes. This also reflects in rigidity and
daunting complexity of relational data models in markets leading ERPs (SAP has 8000 distinct
data tables). When selecting and implementing an ERP system, companies look at suitable
operations, not from the point of view of decision making. The data model of ERP applications is
inventory centric, and therefore, lacks the scope to be able to support managers in decisions, that
involve trading off costs related to these resources.

Section II: Model Frameworks

The first article of this section “Managing ERP System Deployment – A Consideration of Best
Practices” written by Richard M Kesner gives a framework for the design and delivery of project
plans for effective ERP systems deployment and creating a business value statement. This
ensures common overall project vision and value in place. The article also examines the
application of the project management life cycle framework to ERP systems. ERP project
analysis is to be done involving line-of-business operations and business process experts. ERP
project design requires focus on utilizing the standard features and functionality of each module.
There should be a responsibility assignment matrix which divides the responsibility between the
core project team and the internal and external partners. The author suggests categorizing the
ERP project risks by describing and finding solutions for them.

The next article “IT Evaluation Frameworks – Do They Make a Valuable Contribution? A
Critique of Some of the Classic Models for use by SMEs” written by Pat Costello, Andy Sloane
and Rob Moreton underscores that the value of the IT evaluation approach may be recognized if
the organization first decides its priorities and selects appropriate frameworks. The issue of ERP
implementation is very critical to SMEs. They need to evaluate IT maturity beforehand and to
make an exact evaluation they need to use certain frameworks. There are several frameworks
available for this purpose. The article evaluates seven popular ones with particular emphasis on
small to medium industries. These frameworks focus on four areas – technology, people issues,
management aspects and evolutionary position. They provide the ability to consider the benefit
of IT from organizational perspective. Many SMEs do not take this view and are locked in a
continuous round of what they see as step-wise improvement, when they are merely perpetually
playing ‘catch-up’. SMEs generally consider their IT investment as a cost and expect its
application to reap short term benefits. They need to reach a level of IS maturity.

The subsequent article “The Emergence of Un-Integrated Information Artifacts during IS

Innovation Processes: Resource Wasting Detours or Necessary Part of an Effective Evolution
Path?” written by Angelo Caruso and Mara Giannotti, recommends organizational plan based on
‘ceddies’. Ceddies are small data processing units, aimed at solving a very specific, management
issue. If cleverly nurtured, they can be instrumental in creating a strong alliance for a smooth

Electronic copy available at: https://ssrn.com/abstract=1966815

path towards integration systems, which will lead to better level of information maturity of
organizations and thereby successful ERP implementation. Information maturity factor model
examines whether the organization is able to build business advantages following technology
adoption. A suitable level of maturity is seen as a precondition for the project. This plan fits well
with the perspective of change management and enables better rapport between ERP
implementer and users. In this process the overall system may not be optimal in every sense, but
it will lead to reduction/misunderstanding and thereby towards success.

The last article “Making a Case for Continuous Support for ERP Systems to Enhance ROI”
written by Amit K Saraswat and Pankaj M Madhani emphasizes that the management of the
implementation process directly affects a firm’s ability to create organizational capabilities and
transform such competencies into future economic returns. The present scenario of the
companies has become very complex. Earlier companies were working on a different set of
legacy systems for different functional purposes. This means that companies had to work on
different platforms which required a greater IT maturity and a greater role for the CIO. The
positive link between how IT implementations are conducted and the returns on IT investment
has led to the development of a group of best practices, which include the following: end-user
involvement from project inception, solid governance process including constant senior
management involvement, focus on achieving business results from the start and better resource
allocation for the smooth running of projects, so well planned that resources are not exhausted
but rather enhanced.

Section III: Experiences

The first article of this section “The Influence of Legacy IS at Threads: A Comparative Study of
North American and European Operations” written by Christopher P Holland and Ben Light
reinforces the idea that legacy information systems is a dynamic, multi-dimensional construct
that plays a key role in the implementation of ERP systems. Legacy IS matter even though they
do not appear to be leading edge. According to the authors, the idea is to first focus on what is
available instead of going for new technologies. It is very important to know how ERP systems
are maturing, and organizations are learning to live with the significant investments they are
making. The authors highlight that managers have a critical role in navigating through the hype
of technology providers to deliver a ‘business solution’ that is palatable to the organizational
climate, and one that will work in practice. The article concludes with the reasons for the
complexity of transformation of IT infrastructure from fragmented and unresponsive to
composite ones exploiting the scale of European organizations. Although the focus is on the
formation of a new European IT strategy, an outline of the North American IT strategy is given
to illustrate the different approaches within the same organization.

The second article “ERP Implementation Problems in N.I.C.I.Co” written by Ali MollaHosseini
studies the problems of ERP system performance in National Iranian Copper Industries
Corporation (N.I.C.I.Co) and reviews the effect of organizational and technological culture for
establishing of ERP. N.I.C.I.Co. catalogued risk and continuously reviewed it. The risks register
is very large but some of the points are: inability to align goals through conflicting directions
within the organization, inadequate education to the workforce regarding the operation of the
new system properly, inability to load data, inappropriate systems’ testing of volume, stress and
data conversion. The research study conclude that ERP implementation success is positively

Electronic copy available at: https://ssrn.com/abstract=1966815

related with organization’s learning, development culture, participative decision making culture,
power sharing culture, collegial support and collaboration.

The subsequent article “Gaining Value from Enterprise Resource Planning – A Case Study of
ONGC” is written by B C Sharma and Ajay Kumar Gupta. The authors study value creation
process through ERP implementation at ONGC. The project is one of the largest in Asia with
around 500 physical locations and about 13,500 users. The idea of implementing ERP was to
promote creation of value by its employees working on an integrated, comprehensive and
validated database in line with world class systems. ONGC has implemented the Business
Information Warehouse (BW) with the objective of standardization and integration of business
processes across the organization. It has also implemented Strategic Enterprise Management
(SEM) module of SAP to achieve accurate information regarding business processes at various
management levels. The case study has also framed out the model of Business Intelligence (BI)
adopted by ONGC.

The last article is “Embedding Hands-On Experience with ERP Systems into University Courses:
Aligning Academic and Industry Needs” written by Mark Stevenson. ERP systems are widely
used in industries and provide significant business benefits when implemented effectively.
However, there is misalignment between the way in which ERP concepts are taught within
academics from a theoretical point of view and the expectations of employers in practice. This
article provides a brief overview of a new and innovative course which gives students hands on
experience with ERP systems. The new course enhances students’ experiences, improves
employability and increases their ‘readiness’ for the industry. The author also describes how a
number of challenges to incorporate new course material within the existing course structure
were overcome.

Electronic copy available at: https://ssrn.com/abstract=1966815

Enterprise Resource Planning (ERP): Enhancing And Sustaining Value
Editor: Amit K Saraswat & Pankaj M Madhani
© 2008 The Icfai University Press. All rights reserved.

Although every care has been taken to avoid errors and omissions, this publication is being sold
on the condition and understanding that the information given in this book is merely for
reference and must not be taken as having authority of or binding in any way on the author(s),
editor(s), publisher or sellers.

Neither this book nor any part of it may be reproduced or transmitted in any form or by any
means, electronic or mechanical, including photocopying, microfilming and recording or by any
information storage or retrieval system, without prior permission in writing from the copyright
holder.

Trademark notice: Product or corporate names may be trademarks or registered trademarks, and
are used only for identification and explanation without intent to infringe.

Only the publishers can export this book from India. Infringement of this condition of
sale will lead to civil and criminal prosecution.

First Edition: 2008

Printed in India

Published by

The Icfai University Press

52, Nagarjuna Hills, Punjagutta
Hyderabad, India–500 082
Phone: (+91) (040) 23430 – 368, 369, 370, 372, 373, 374
Fax: (+91) (040) 23352521, 23435386
E-mail: info@icfaibooks.com, icfaibooks@icfai.org, ssd@icfai.org
Website: www.books.iupindia.org

ISBN: 978- 81-314-1704-2

Electronic copy available at: https://ssrn.com/abstract=1966815