EFFECTIVENESS AND RISK FACTORS IN ERP IMPLEMENTATION

INTRODUCTION OF THE STUDY:

The study is about an risk factors of ERP in an organisation. ERP is an

application that automates business processes and provides insights and internal
controls, drawing on a central database that collects inputs from departments
including accounting, manufacturing, supply chain management, sales,
marketing and human resources (HR).

Every business must complete work that requires numerous stakeholders

with various responsibilities. But that’s a struggle when the information needed
to execute processes and make key decisions is spread across disconnected
systems. Whether data is held in basic business management software or
spreadsheets, employees have a hard time finding what they need and may lack
access to it entirely. For example, the accounting and FP&A teams could each
have different spreadsheets with different figures for expense tracking.

These disparate data sources make it very challenging to keep everyone on the
same page and hinders collaboration and efficiency, especially as an organization
grows. Staff waste time hunting for documents and potentially duplicating work
because there is no one place to look for up-to-date information on all aspects of
the business relevant to them. This also makes it difficult to see the full cause and
effect of developments affecting your business.

An ERP system solves this problem by compiling information in a central

database to grant managers and employees cross-departmental visibility. It also
eliminates the problems that come with conflicting sources of data and empowers
them to analyze various scenarios, discover process improvements and generate
major efficiency gains. That translates to cost savings and better productivity as
people spend less time digging for needed data.
ERP software that’s tailored to meet the needs of an individual business pays
major dividends, making these systems a critical tool for companies across
industries and of all sizes. Many of the world’s best-known and most successful
firms have leaned on ERP for the last quarter century. Now, this software can be
configured and priced to meet the needs of all-size businesses.Put simply, an ERP
system helps unify people, core business processes and technology across an
organization.
Here, we will talk to some key trends that suggest when it’s time for a business
to implement or upgrade their ERP system, which include:

1. Times of Growth
 The organization is growing, has grown or is planning to grow
significantly
2. Issues with Operations
 The organization needs enterprise software to better manage
processes
3. Mergers or Acquisitions
 For example, the parent organization needs to streamline systems
across companies
4. Old Legacy Systems
 The organization’s current system is outdated and not available for
upgrades, or no longer serves the business and users adequately
5. Strategic Roadmapping
 Organizations with forward-thinking executives have outlined a
business technology roadmap that includes a new enterprise solution
While many factors indicate the need for implementing an ERP system,
companies in certain industries stand to gain the most from making the move.

Benefits Of ERP
What are the key business benefits of ERP software?

1. Enhanced Business Reporting:

 Better reporting tools with real-time information
 A single source of truth – one integrated database for all business
processes
2. Better customer service:
 Better access to customer information
 Faster response times
 Improved on-time delivery
 Improved order accuracy
3. Improved Inventory Costs:
 Only carry as much inventory as needed, avoid these common issues
 Too much inventory, and higher overhead costs
 Too little inventory, and longer customer fulfillment times
4. Boosted Cash Flow:
 Better invoicing and better collections tools to bring cash in faster
 Faster cash means more cash on-hand for the business
5. Cost Savings:
 Improved inventory planning
 Better procurement management
 Better customer service
 Improved vendor relationship management
6. Better Data & Cloud Security:
 Dedicated security resources
 Avoid installing malicious software
 Data distributed across multiple servers
7. Business Process Improvements:
 Automate manual or routine tasks
  Implement smarter workflows
 Gain efficiency
8. Supply Chain Management:
 Effective demand forecasting and lean inventory
 Reduce production bottlenecks
 Transparency through the business

Cons of ERP – Important Factors & Disadvantages

1. Costs of an ERP Software
 Third-party software add-ins
 Implementation costs
 Maintenance
 Initial and continuous training
2. Complex Data Conversion
 Developing a solid data conversion strategy can be difficult
 You have to define, examine and analyze data sources
 Bad data conversion will cause delays and increased costs
3. Requires thorough training
 Training needs to cover all of the ERP system’s features.
 ERP training sessions need to be in line with business processes
 IT users need to be trained for the technical aspects of the ERP
System

Cons of ERP – Important Factors & Disadvantages

1. Costs of an ERP Software
 Third-party software add-ins
 Implementation costs
 Maintenance
 Initial and continuous training
2. Complex Data Conversion
  Developing a solid data conversion strategy can be difficult
 You have to define, examine and analyze data sources
 Bad data conversion will cause delays and increased costs
3. Requires thorough training
 Training needs to cover all of the ERP system’s features.
 ERP training sessions need to be in line with business processes
 IT users need to be trained for the technical aspects of the ERP
System
ERP projects are an investment of time and money and the most successful ERP
software implementations require:

 Alignment between the business and IT

 Executive sponsorship and support
 Internal team leaders
 Trusted external partners (consulting and software vendors)
ERP software is like any business technology – the tool on its own doesn’t cause
failure or success. The business environment, leadership, and end-users
determine the ROI of an ERP system – along with the project planning,
methodology, and implementation.

What can cause an ERP implementation failure?

 Data conversion
 One of the biggest issues during an ERP project is data conversion
– moving data from the old system and mapping it into the new ERP.
 Integrations
 Early in the project, you need to start thinking about what other
systems need to integrate with your ERP system and have a solid plan
for integrations.
 People
  An executive needs to be involved in the ERP project, and other key
business leaders need to be included. Having a communication plan is
also key.
 Training
 Training needs to be an integral part of the ERP project. Internal
teams and end-users have to be comfortable with the new software.
 Project planning
 Planning is crucial to ERP implementation success. Following a
methodology is also fundamental to avoiding failure.
INDUSTRY PROFILE:

Jacobi carbons wholly owned subsidiary of Osaka Gas Chemicals Co., Ltd.
(OGC). OGC acquired Jacobi in 2014. dedicated to becoming the most
sustainable supplier in the industry. With a strong focus on safety, customers
needs and people and their communities where they operate. Taking an
innovative approach to meeting future customer needs and reducing our
environmental impact.

The world’s largest manufacturer of coconut shell-based activated carbon,

with over double the capacity of any other manufacturer. Coconut shell being the
most sustainable commercial raw material to produce Activated Carbon.global
manufacturing organisation, with 20 manufacturing and processing facilities and
2 reactivation plants in Europe.

The supplier of the broadest array of activated carbons in the industry,

including carbons based on coconut shell, bituminous coal, lignite, and wood.
Customer product solutions offered in powdered, granular, extruded, spherical,
and felt cloth forms as well as a full range of complimenting Ion Exhange Resins
and Filter Service Solutions.

committed to one simple mission: to be the preferred supplier to our customers

of Activated Carbon, Ion Exchange Resin and Filter Service Solutions, with
technical support and customer service that are second to none.
committed to one simple mission: to be the preferred supplier to our customers
of Activated Carbon, Ion Exchange Resin and Filter Service Solutions, with
technical support and customer service that are second to none.
Committed to one simple mission: to be the preferred supplier to our
customers of Activated Carbon, Ion Exchange Resin and Filter Service Solutions,
with technical support and customer service that are second to none.

The Quality Company

Jacobi Carbons is fully committed to a total quality approach, starting from
the first phone call going all the way through to making sure that the delivered
product meets and exceeds the specified requirements.

Jacobi Carbons is an accredited organization meeting the rigid

international ISO-9000 standards with local accreditations in the production,
distribution and administration points.
Our strict quality assurance procedures ensure you get a quality product with
leading industry product packaging, excellent customer service, each and every
time.

COMPANY PROFILE:

1916

The Jacobi Group was founded by Ferdinand Adolph Wilhelm Jacobi. A

German emigrant from Bremen, Mr. Jacobi set the pace for the company’s future
global expansion in the chemical industry through the entire 20th century.

2009

CEO of Jacobi carbons india private limited is Mr.Remko Goudappel.Director

of this company is Mr.Antony Thomas . It is a MNC company.Jacobi carbons
India opens what is to become the world’s largest coconut shell carbon plant in
Coimbatore with annual capacity of 1600MT per year.propelling Jacobi to the top
spot in the world in the coconut shell activated carbon space .Number of
permanent workers in Jacobi carbons Coimbatore is about 250.

Jacobi Carbons is very much aware of the responsibilities that a large

corporation has in the welfare and rights of its employees and stakeholders alike.
In addition, the location of many of the company’s manufacturing facilities in the
developing world places further onus on us to ensure that the social impact of our
operations are positive and not to the detriment of the regions in which we
operate. Jacobi fully subscribe to the fundamental premise of organizations such
as SIDA (Swedish International Development Agency) that require investors to
safeguard all employees and their families; will not exploit young or vulnerable
persons, and actively contribute to the local community. Jacobi Carbons does not
employ child labour, nor does it contravene regulations relating to minimum pay
or working conditions.
Mission, Vision, & Values:
To be the lowest cost / highest quality carbon manufacturer in the business, with
technical support and customer service that are second to none.
REVIEW OF LITERATURE:

Before implementing an ERP system, business enterprises analyse

organisational strategy, structure, culture, and operations. Making an
organisation and ERP system compatible may require the organisation to
change some or all of the aforementioned facets of the business. This drives
change to business process, which means people must also change. If
change management is not handled well, ERP projects are apt to fail. In
fact, most ERP failures are blamed on people issues rather than technology
issues. People, process and technology are the three drivers of change
management for ERP projects.
Hurt (2011) relates in the case study several established management
and information systems concepts: the value chain, expectancy theory,
change management principles, the capability maturity model and the
systems development life cycle.
They relate eight competencies required for successful change
management based on literature of Crawford and Nahmias (2010)
especially to ERP projects. These competencies are leadership, stakeholder
management, planning, team selection/team development, communication;
decision making and problem solving, cultural management and project
management.
Poti et al. (2010) presented the analysis of the relationship between
organisational change processes and its impact on individuals from the
perspective of ERP users. The study is based on the perceptions of ERP
users on change processes adapted in their organisations and its outcome at
an individual level. The data collected has been analysed using statistical
techniques such as multiple regressions.
The identified relationships would facilitate decision-making on
change processes as per their impact. The study of this nature is the first of
its kind in India.
Al-Shamlan and Al-Mudimigh (2011) discussed that the top management
usually faces an unexpected attitude from potential users during
implementing an ERP system. As their resistance may cause failure of
project top management should deal with this problem using effective
change management strategies and processes. They also provided a very
significant and very explicit contribution towards the change management
factors for ERP implementation.
Though paper discusses the strategies and processes used for the
successful enterprise system through a case study there is scope for
improvement for research by evaluating the impact of change management
on employees and various stakeholders.
Adams and Martin (2011) in the web paper discusses in detail role of
change management to address the People aspect in an ERP
implementation project, realise the path for delivering the new processes
and ERP solution into production operations, and gain ‘reach’ into the
organisation. It also addresses how resistance to change affects ERP
implementation and how to mitigate these challenges. The paper also
stresses the importance of organisation alignment, skill assessment,
training requirement during the project execution.
This good concept needs to be applied in other implementation and
analysis to be done through the results. There is need felt for development
of tools and methodologies for better assessment.
Reddi and Moon (2011) presented a service-oriented architecture (SOA)-
based framework to carryout engineering change management (ECM)
across a supply chain. Each service in the SOA framework accomplishes
an independent task, then performs a set of tasks constituting a business
process. This framework enables the interaction between the partner’s
information systems in a communication backbone to achieve an effective
ECM over a collaborative network of product development.
Madapusi and D’Souza (2012) presented a literature-based and theory-
driven model developed to examine the relationship between ERP system
implementation and operational performance and also influence on
operational performance. A better understanding of the contribution of
ERP systems to operational performance can be obtained if researchers
address and assess changes at modular and system level also the use of
longitudinal designs to capture and tease out the time delayed effects
between ERP system fine-tuning (at the module and sub-module levels) as
well as changes in operational performance.
Kwak et al. (2012) conceptualises an alternative view of users’ ERP
acceptance model. This study incorporates the best practices of ERP system
implementation projects, internal support, external (consultant) support,
and functionality selection, into the extended technology acceptance model
(TAM) that includes belief constructs and socio environmental construct
(subjective norm).
The concept needs to be applied in the manufacturing and other
sectors to offer valuable managerial insights that enable them to appreciate
and improve end-users’ ERP system acceptance.
Hofton et al. (2012) has identified the critical people-related challenges
organisations typically face at each phase of an ERP implementation, as
well as specific steps to take to mitigate them. With so much on the line,
consider what your organisation should plan to minimise risk and make the
ERP project implementation journey as smooth as possible. It presents the
top ten change management challenges and also provides guidance for
mitigating the same.
Krigsman (2012) in his paper discusses transforming the business using
cloud-based ERP and explores the important role of professional services
when implementing cloud ERP. The author also offers suggestions to
encourage cloud ERP adoption, an important foundation to create business
transformation that endures.
OBJECTIVES OF THE STUDY:
There are two types of objectives ,they are primary and secondary
objectives.
Primary Objective:
To study the effectiveness and risk factor of ERP in Jacobi carbons
India private limited.
Secondary objective:
 Organizational factors to be analyse
 Employee skills to be analyse
 Management factors
 Software systems design issues
 Absence of a realistic Go Live Objective
QUESTIONNAIRE

A STUDY ON ENTERPRISE RESOURCE PLANNING (ERP) IMPLEMENTATION IN

JACOBI CARBONS INDIA PRIVATE LIMITED,COIMBATORE.
PERSONAL DETAILS

1) Name of the employee:

2) Gender:

a) Male

b) Female

3) Educational qualification:

a) HSC

b) Degree

c) Diplomo

d) Other

4) Age:

a) Below 20 years

b) 20-25 years

c) 26-35 years

d) Above 50

5) year of experience

a) Below year

b) years

c) 3-5 years

d) Above 5 years

6) What is your monthly salary?

a) Below 10000

b) 10000-20000

c) 20000-30000
 d) Above 30000

7) Marital status of the respondent

a) Single

b) Married

8)Which of the following activities did you undertale before evaluating andbefore evaluating
and selecting an ERP?

a) Documented current business process

b) Identified to our expectations from the new system

c) Learnt about an system

d) None the above.

9) How did you collect did you collect information on ERP brands/vendors before evaluating
an ERP?

a) Analysed marketing materials

b) Used consultant for the purpose.

c) Studied market research reports.

d) Other

10) What was the composition of the ERP selection team?

a) CEO

b) Functional Heads

c) Technical Heads

d) Other

11) Name the ERP vendors/ whose ERP system you have implemented

a) Microsoft

b) Oracle

c) Tally
 d) Other

12) Why did you decide to implement an ERP system?

a) To avoid duplication data entry.

b) To integrate various departments location.

c) Better inventory control

d) Other

13) Indicate the degree of influence the factors stated below had on your choice of ERP
brand/vendor?

a) Recommendation of the finance/IT head

b) consultant advice

c) Competitor's choice of ERP system

d) Features of ERP system

14) Which modules did you choose to implement?

a) Inventory and materials management

b) Marketing and sales

c) Finance and accounting

d) Human resource

15) What was the level of customization your ERP system?

a) No customization

b) Minor customization

c) Extreme customization

d) Other

16) To what extend do you satisfy with this ERP system?

a) Highly satisfied

b) Satisfied
 c) Modernte

d) Not satisfied

17) What was the composition of the implementation team?

a) Functional heads

b) Vendor,s consultant

c) human resource

d) Other

18) Rate the project manager on the following parameters

very Good good average poor

a) business process knowledge () () () ()

b) b)technical knowledge () () () ()
c) c)project planning skills () () () ()
d) d)interpersonal skills () () () ()

19)what was the level of involvement of the following people in the implementation?

Very high high low very low

a)employee () () () ()

b)CEO/PRESIDENT/MD () () () ()

c)functional head () () () ()

d)others () () () ()

20) who communicated the ERP decision to the rest of the organization

a) CEO/PRESIDENT/MD

b) CFO

c) TECHNOLOGY HEAD

d) others
21)Who provided end-user training for ERP?

a) the ERP vendor

b) the implementation partner

c) an academician

d)a training agency

22)how would you rate the implementation partner’s team on the following parameters

very Good good average poor

e) Technical knowledge () () () ()
f) Product knowledge () () () ()
g) Project planning skills () () () ()
h) Interpersonal skills () () () ()

23) Which of the following were part of your communication plan?

a) Regular updates on the project

b) Feedback sessions to seek user views

c) Regular meetings

d) None of the above

24) Are you satisfied with information sharing within the organization due to ERP solution

implemented in the organisation?

a) Highly satisfied

b) Satisfied

c)Moderate

d)Not satisfied

25) Rate your satisfaction with ERP solution in your organisation?

 a) very good

b) good

c) average

d) poor

26) Did your organisation use outside consultant to assist with ERP implementation?

a)yes

b)no

c)don’tknow
d)maybe

27) What is the motivation for ERP implementation your organisation?

a) Technical

b) Business strategic

c) Functional

d) Cost saving

28) What were the benefits of the ERP system for the organizations?

a) Increase overall productivity and better customer satisfaction

b) Reduced cycle time and Inventory levels

c) Reduced head count and Return on investment

d) All of the above

22) What managerial problems, if any, were faced during after ERP implementation?

a) Project cost overrun

b) Employee resistance to change

c)conflict with vendors

d)all of the above

23)How much the ERP system fulfil your company’s strategy?

a)81%-100%

b)61%-80%

c)41%-60%

d) Below 40%

24) What technical problems, if any, were encountered during or after the ERP
implementation?

a) Integration with existing systems

b) Integration with new business software

e) Data migration

d) Security

25) How frequently do you experience problems with your application interfaces?

a) Almost all the time

b) Frequently

c)Sometimes

d)Almost never