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CHAPTER 1
INTRODUCTION
“ERP is an industry term for the broad set of activities supported by multi-module
application software that help a manufacturer or other business mange the
important parts of its business, including product planning, parts purchasing ,
maintaining inventories, interacting with suppliers, providing customer service,
and tracking orders. ERP cans also include application modules for the human
resources aspects of a business. Typically, an ERP system uses or is integrated with
a relational database system.”
MRP II added a focus on the planning aspects of this processes these system
integrated capacity, design engineering and management, cost and long range
planning of the enterprise in to the equation. Many organizations that implemented
this approach instituted mechanisms to correlate the planning and forecasting
process with the actual production numbers this allowed the organization to
achieve higher level of over all efficiency in the manufacturing arena. The real
issue is that while the organization had a better handle on the manufacturing
aspect of the business, it was still missing integration to other components of
finance, sales, marketing, customer satisfaction and distribution to name a few.
ERP is massive software engine that seeks to provide one seem less interface to all
departments, systems and existing data with in organization sp that each
department understands how it fits with in the organizations macro structure and
how it impacts that macro structure. Such understanding in crucial in facilitating
enhanced communication between departments, better knowledge management,
and improved processes. Such enhancement is the foundation for fundamental
business changes.
ERP sits between all of the systems and users regardless of where they are in the
pipeline. It knows all the different data collection points, and it must interface with
all the different formats of the particular data. It also intelligently routes the order
to the appropriate department at the appropriate time; reducing the number of
times a human has to enter data can dramatically reduce errors. ERP also takes all
the data and formats it so that each department can perform its required function.
Today, ERP has gone beyond its original limits to evolve into ‘extended ERP’
Extended ERP includes (Customer Relation management) CRM and Supply chain
management Applications.
ERP buying intention remains strong, even in 2002. A William & Blair LLC
survey revealed that 20% of companies were in the process of making a significant
investment in ERP. Another 25% indicated a willingness to buy in the future.
Another 50% had stable ERP systems. Only the rest 5% were unclear. Companies
are rushing to buy ERP systems to address their business needs. Why such a high
demand? The underlying drivers come from both the business and technology side.
The business drivers that compel companies to add brand new ERP systems or
replace homegrown, function specific legacy systems are:· Gaining greater
visibility and control. Too many administration headaches and information
breakdown. Managers want to know instantly and accurately:
Manufactures who are considering building an in-house system must know the
associated costs and risks.
⇒ · High total cost of ownership and complexity associated with developing
and maintaining
⇒ · Custom-designed applications.
⇒ · Software development may not be the core competency. It is estimated that
more than 70 percent of internal software projects fail.
⇒ · Internal development is time consuming. Installed applications are
becoming
⇒ Technically outdated and the ongoing redesign of the business process
makes existing software functionally obsolete.
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Besides product capabilities, the vendor and local support should be carefully
evaluated.
The vendor history:
⇒ · Size of the organization. How many project managers, consultants, systems
and hardware engineers, trainers and support personnel, software developers
are available? How long have these employees been with the firm?
⇒ · Length of time in business. Vendors who have been in business longer than
five Years are generally more stable and more likely to continue in business.
Beware of small firms with less than five employees, or firms that have been
in business less than two years
⇒ Current Software Version. Does the Vendor provide software upgrades
during the course of the products life cycle. Early versions tend to be bug
prone, and require lots of improvement. Avoid those risks, use products that
have proven track record.
⇒ · Size of the vendor’s client base. The size of a vendor’s client base is
directly related to the success of the firm and its level of experience and
expertise. Focus on the client base with a similar profile as your business in
⇒ · Does the system have XML, EDI capabilities for data integration
and transactions with other systems internally or externally?
⇒ · Is the system Web Service ready?
The Total Cost of Ownership:
One time software license fee of core and optional modules
⇒ · Server license fee
⇒ · Client or database license fee
⇒ · Other required software (e.g. reports, SPC)
⇒ · Hardware, LAN costs
⇒ · Software annual maintenance fee
⇒ · Implementation fee (consulting, development, test, configuration,
documentation,
⇒ · installation, training)
Project Milestones:
⇒ Conduct requirements-gathering meetings
⇒ Conduct business analysis review sessions
⇒ Conduct business process improvement sessions
⇒ Document data migration and integration strategy
⇒ Identify and train key users in different business units
Project & Change Management:
⇒ Assess impact on users and manage concerns and expectations
⇒ Create project schedule and training, support plan
Gate 1: Key Deliverables
⇒ Project team formation, senior management sponsor, and project kick off
⇒ Functional requirement document and gap/fit analysis
⇒ Project schedule and plan including the estimation of project resources,
costs, and duration of each activity.
The internal project leader should have the authority to make changes happen
quickly and who has a sense of urgency and true accountability for completing the
preparation and implementation activities on-time.
reality is much harsher. People don't like to change, and ERP asks them to change
how they do their jobs. That is why the value of ERP is so hard to pin down. The
software is less important than the changes companies make in the ways they do
business. If you use ERP to improve the ways your people take orders,
manufacture goods, ship them and bill for them, you will see value from the
software. If you simply install the software without changing the ways people do
their jobs, you may not see any value at all—indeed, the new software could slow
you down by simply replacing the old software that everyone knew with new
software that no one does.
the system for your business are felt. Among the 63 companies surveyed—
including small, medium and large companies in a range of industries— the
average TCO was $15 million (the highest was$300 million and lowest was
$400,000). While it's hard to draw a solid number from that kind of range of
companies and ERP efforts, Meta came up with one statistic that proves that ERP
is expensive no matter what kind of company is using it. The TCO for a "heads
down" user over that period was a staggering $53,320.
because workers almost invariably have to learn a new set of processes, not just a
new software interface. Worse, outside training companies may not be able to help
you. They are focused on telling people how to use software, not on educating
people about the particular ways you do business. Prepare to develop a curriculum
yourself that identifies and explains the different business processes that will be
affected by the ERP system. One enterprising CIO hired staff from a local business
school to help him develop and teach the ERP business-training course to
employees. Remember that with ERP, finance people will be using the same
software as warehouse people and they will both be entering information that
affects the other. To do this accurately, they have to have a much broader
understanding of how others in the company do their jobs than they did before
ERP came along. Ultimately, it will be up to your IT and businesspeople to provide
that training. So take whatever you have budgeted for ERP training and double or
triple it up front. It will be the best ERP investment you ever make.
Integration and testing: Testing the links between ERP packages and other
corporate software links that have to be built on a case-by-case basis is another
often-underestimated cost. A typical manufacturing company may have add-on
applications from the major— e-commerce and supply chain— to the minor—
sales tax computation and bar coding. All require integration links to ERP. If you
can buy add-ons from the ERP vendor that is pre-integrated, you're better off. If
you need to build the links yourself, expect things to get ugly. As with training,
testing ERP integration has to be done from a process-oriented perspective.
Veterans recommend that instead of plugging in dummy data and moving it from
one application to the next, run a real purchase order through the system, from
order entry through shipping and receipt of payment— the whole order-to-cash
banana— preferably with the participation of the employees who will eventually
do those jobs.
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Customization: Add-ons are only the beginning of the integration costs of ERP.
Much more costly, and something to be avoided if at all possible, is actual
customization of the core ERP software itself. This happens when the ERP
software can't handle one of your business processes and you decide to mess with
the software to make it do what you want. You're playing with fire. The
customizations can affect every module of the ERP system because they are all so
tightly linked together. Upgrading the ERP package— no walk in the park under
the best of circumstances— becomes a nightmare because you'll have to do the
customization all over again in the new version. Maybe it will work, maybe it
won't. No matter what, the vendor will not be there to support you. You will have
to hire extra staffers to do the customization work, and keep them on for good to
maintain it.
Data conversion: It costs money to move corporate information, such as customer
and supplier records, product design data and the like, from old systems to new
ERP homes. Although few CIOs will admit it, most data in most legacy systems is
of little use. Companies often deny their data is dirty until they actually have to
move it to the new client/server setups that popular ERP packages require.
Consequently, those companies are more likely to underestimate the cost of the
move. But even clean data may demand some overhaul to match process
modifications necessitated— or inspired— by the ERP implementation.
Data analysis: Often, the data from the ERP system must be combined with data
from external systems for analysis purposes. Users with heavy analysis needs
should include the cost of a data warehouse in the ERP budget— and they should
expect to do quite a bit of work to make it run smoothly. Users are in a pickle here:
Refreshing all the ERP data every day in a big corporate data warehouse is
difficult, and ERP systems do a poor job of indicating which information has
changed from day to day, making selective warehouse updates tough. One
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expensive solution is custom programming. The upshot is that the wise will check
all their data analysis needs before signing off on the budget.
Consultants ad infinitum: When users fail to plan for disengagement, consulting
fees run wild. To avoid this, companies should identify objectives for which its
consulting partners must aim when training internal staff. Include metrics in the
consultants' contract; for example, a specific number of the user company's staff
should be able to pass a project-management leadership test— similar to what Big
Five consultants have to pass to lead an ERP engagement.
Replacing your best and brightest: It is accepted wisdom that ERP success
depends on staffing the project with the best and brightest from the business and IS
divisions. The software is too complex and the business changes too dramatic to
trust the project to just anyone. The bad news is a company must be prepared to
replace many of those people when the project is over. Though the ERP market is
not as hot as it once was consultancies and other companies that have lost their
best people will be hounding yours with higher salaries and bonus offers than you
can afford— or that you’re HR policies permit. Huddle with HR early on to
develop a retention bonus program and create new salary strata for ERP veterans.
If you let them go, you'll wind up hiring them— or someone like them— back as
Consultants for twice what you paid them in salaries.
Implementation teams can never stop: Most companies intend to treat their ERP
Implementation as they would any other software project. Once the software is
installed, they figure the team will be scuttled and everyone will go back to his or
her day job. But after ERP, you can't go home again. The implementers are too
valuable. Because they have worked intimately with ERP, they know more about
the sales process than the salespeople and more about the manufacturing process
than the manufacturing people. Companies can't afford to send their project people
back into the business because there's so much to do after the ERP software is
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installed. Just writing reports to pull information out of the new ERP system will
keep the project team busy for a year at least. And it is in analysis— and, one hope,
insight— that companies make their money back on an ERP implementation.
Unfortunately, few IS departments plan for the frenzy of post- ERP installation
activity, and fewer still build it into their budgets when they start their ERP
`projects. Many are forced to beg for more money and staff immediately after the
go-live date, long before the ERP project has demonstrated any benefit.
Waiting for ROI: One of the most misleading legacies of traditional software
project management is that the company expects to gain value from the application
as soon as it is installed, while the project team expects a break and maybe a pat on
the back. Neither expectation applies to ERP. Most of the systems don't reveal their
value until after companies have had them running for some time and can
concentrate on making improvements in the business processes that are affected by
the system. And the project team is not going to be rewarded until their efforts pay
off.
Post-ERP depression: ERP systems often wreak cause havoc in the companies
that install them. In a recent Deloitte Consulting survey of 64 Fortune 500
companies, one in four admitted that they suffered a drop in performance when
their ERP system went live. The true percentage is undoubtedly much higher. The
most common reason for the performance problems is that everything looks and
works differently from the way it did before. When people can't do their jobs in the
familiar way and haven't yet mastered the new way, they panic, and the business
goes into spasms.
CHAPTER 2
REVIEW OF LITERATURE
A large number of corporations have moved with the ERP wave and
implemented one or other of the leading edge ERP software be it SAP R/3 or
Baan Series or Oracle Applications or Ramco Marshal. Many of them reaped
significant benefits by way of cost reduction, improved customer care, shorter
supply chain, reduced inventories and in turn healthy bottom-line. The ERP
wave also helped major hardware, networking & software vendors; in fact in
the last years ERP was the catalyst behind large corporate IT
investments. Several consulting houses & training establishments also
benefited by the wave. However several companies also burnt their fingers;
they could not either manage the resulting organizational change or manage
the expectations of end users from ERP.
This in turn led to lots of criticism that started questioning the very
utility of ERP. That apart, ERP has come to stay. Significant numbers
of corporations have either implemented ERP or implementing ERP. The
natural question that arises is what next?
Anticipating that ERP growth would taper off and end users would clamor
for things beyond ERP several ERP software vendors & consultants have
been propagating a number of ideas that could be a natural extension to ERP.
This in turn led to three distinct directions of growth
1. Looking beyond the limits of enterprise one would like to extend the notion
of an enterprise to suppliers and the management of their enterprises. Supply
Chain management (SCM) and the resulting optimization of logistics,
production planning and control in the form of Manufacturing Execution
Systems and Advanced Planning Systems. I2 Technologies in particular are
the pioneers in this area.
2. Extending the notion of the enterprise all the way to the end
consumers led to another area generally known as Customer Relationship
Management (CRM). Tools such as data mining find extensive use in
this area and IBM did some pioneering work in this area.
In the recent years ERP software vendors have partially addressed this
problem by the introduction of "ERP verticals". Typical such solutions are
specific to "vertical market segments - Oil, Automotive manufacturing,
Banking, Telecom, Food & Beverage, Media, Government etc. These are re-
packaged solutions based on extensive experience gained by a specific
software vendor through dozens of implementations in many firms that are key
players in a chosen industry. With some ERP software being more
successful in specific industry segments - for example SAP in Oil
industry, BAAN in discrete manufacturing, Oracle in Telecom and Ramco
Marshal in process industry - this is a natural evolution. Such re-packaged
solution leads to significant gains in implementation time & quality. However,
they continue to maintain the "plain vanilla" nature of the ERP software by way
of addressing mainly the "common business processes".
For sustained competitive advantage firms should start leveraging the "special
processes" that give distinct competitive advantage. Such an activity must be
driven by the "core competence" of the firms and not by ERP software vendors
alone.
For example, for firms where product designs, development, deployment &
maintenance constitute the "core competence"; current generation of ERP
software only addresses the peripheral functions. Industries in this segment
1. Shared by all
2. Available readily
3. Reliable enough to be depended upon
4. Forms the backbone of all activities
5. Leveraged by many value-added services
1. To be really useful ERP should meet all the key features mentioned
above. First and foremost, it must be shared by all departments across
the organizations and owned by all users. ERP is NOT one more project
initiative from EDP/ MIS/ IT departments. We do not necessarily
mean a “big bang” approach to ERP implementation. Even if Finance
and Logistics modules alone are implemented other related functions like
Production & Quality must be interfaced or externally integrated so that
the base-data of ERP truly reflects the state of affairs across the
organization. There are enough tools available today, both from ERP
vendors or other tools vendors to accomplish this. Even Microsoft Back
office can be used for this external integration. More important the users
in the departments where ERP modules are currently not implemented
should be as much part of ERP as those departments where ERP is being
implemented. The essence of ERP is integration and this must not be lost
sight of under any circumstances.
CHAPTER 3
Specifically the following objectives have been set for the research
investigation:
To identify the strategic advantages that ERP has brought to the
organization.
To identify the organizational processes that has improved due to
ERP implementation.
To study the effectiveness of ERP on the organization.
RESEARCH METHODOLOGY
1. Type of Research
For the present study, the researcher has based his theme on
Exploratory Research. The major emphasis of Exploratory Research is
on the discovery of ideas. Through Exploration, the researcher develops
concepts more clearly, establish priorities, develop operational
definitions, and improve the final research design. This research is both
quantitative and qualitative. This study is based on the data collected through “In
-depth Interview” with key personnel from ERP Implemented Companies.
2. Sources of data
Data has been collected from various sources; there is a
combination of both primary and secondary data that has been used in
this research.
3. Sampling Technique
Since this project deals with key personnel from ERP Implemented
Companies, Judgment Sampling is considered appropriate for making
projections in the study. Judgment Sampling occurs when a researcher selects
sample members to conform to some criterion. When used in the early stages of
exploratory study, a judgment sample is appropriate. When one wishes to
select a biased group for screening purposes, this sampling method is also a
good choice. We have therefore chosen this sampling method.
4. Sample Size
This research is restricted to a sample size of 30. Since the study deals
with ERP implemented companies in Bangalore city only, the sample size of
this magnitude serves the purpose.
5. Sample Description
The sample under this study consists of key personnel from those
companies that have implemented ERP. In some companies, these key
personnel were the ones who were involved in actual ERP
Implementation. In other companies, the key personnel were from EDP
(Electronic Department), ISY (Information System) Department and
Computer Department. Most of the key personnel whom the researcher
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6. Research Instrument
In-depth Interview:
The primary data has been collected by conducting “In -depth Interview”
with key personnel from 17 ERP implemented companies. The data collected
through this method was adequate enough to make projections in the study.
Questionnaire:
The primary data has also been collected through questionnaires from 23
companies.
8. Plan of Analysis
All data collected was carefully classified, tabulated and interpreted on
the basis of which, tables, charts and graphs were drawn up. Percentages were drawn
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from the tabulated frequencies and the data have been analyzed. The analysis
helped in drawing inferences and for better understanding graphs were plotted.
LIMITATIONS OF STUDY
1. Research investigation is restricted to selected key personnel of the
organization.
2. The information given by few personnel deemed to be correct in the
assumed that all of them have perceived the questions in the correct way.
5. The study is restricted to Bangalore city only.
CHAPTER 4
Telecommunication sector
Over 1.8 billon subscribers depending on mobile as wireless
technology
Worldwide carrier revenues are predicted to grow from under $1.2 trillion in
2005 to just over $1.5 trillion in 2010.
Total revenues will grown to 46.3% to 55.6% In the year 2006
Information technology
The Information Technology Industry is the fastest growing segment of
The Indian economy. The Information Technology Sector has grown in size
From Rest. 5,450 crores in 1994-95 to about Rest. 64,200 crores in 2001-02
Contributing 0.59% and 2.87% to G.D.P.
The NASSCOM estimates the global market and the opportunity for Indian
Exports to a level of US $700 billion and India's exports form about 5%of
the global market by 2005.
Power sector
India is fifth largest power market in the world with an installed generation
capacity of 126GW, a transmission and distribution network of more than 6.3
million circuit kms generating 600 billion Kwh. However, India still remains
power deficit with peak electricity demand shortfall of about 12% and the average
energy shortfall of about 7%. This demand-supply gap backed by favorable
government policy and initiatives presents considerable opportunity within the
sector.
Banking Sector
"Indian Banking Sector Analysis”, report provides extensive research and objective
analysis on the growing banking industry, their product quality, and their services
in India. This report helps clients to analyze the leading-edge opportunities critical
to the success of the banking Industry in India. Detailed data and analysis helps an
investor, financial service providers, and global banking players navigate the
evolving market of banks in India.
Key Findings
• The nationalized banks have more branches than any other types of banks in
India. Now there are about 33,627 Branches in India, as on March 2005.
• Investments of scheduled commercial banks (SCBs) also saw an increase
from Rest 8,04,199 crore in March 2005 to Rest 8,43,081 crore in the same
month of 2006.
• India's retail-banking assets are expected to grow at the rate of 18% a year
over the next four years (2006-2010).
Engineering
Employs over 5 million skilled and semi-skilled workers, directly or
GM, GE, Ford, Electrolux, Toyota, Sony, Honda, Siemens among others
Chemicals
Indian Chemical industry ranked 12th in the world production of chemicals
Rate of Chemical industry growth over last 5 years has been double that of
Asia’s growth & 5 times the world growth rate for the sector
Indian chemical industry valued at Rest. 1200 billion (US$ 28 billion)
Growth rates have been as high as 8.6% over the last five years
Indian trade is 1.3% of total chemicals trade worldwide
Pharmaceuticals
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Asia
Discovery research has begun in a major way by Indian companies
Steel Industry
World’s 8th largest producer of steel
Production of - Finished steel (2004): 24.37 million tones - - Pig iron: 6.7
million tones - Sponge iron: 5.6 million tones
Export of steel (2004-05): 4.47 million tones, increase of 32.67% over
previous year
Increasing role of private sector in production – increase in share from
Million tones
Refining capacity: 119 million metric tones p.a.
stream refinery
Strong retail infrastructure comprising over 17,000 petrol stations; 6,500
Textiles sector
Sector accounts for 14 % of India’s industrial production and 27% of
Major segment: Manmade fibers accounting for 40% share in Indian textile industry
FMCG:
Annual growth of the industry is 6.9% (2004-05)
Growth in the capital goods sector was healthy & production is
increased in the sector around 12.7%
The growth in the consumer non-durable is 12% (2004-04)
LG, Samsung, Hyundai, Pepsi, GE, General Motors, Ford, Suzuki etc
Increased implementation of state-of-the-art IT technologies – current IT
usage of15%
Segments showing high potential: automobiles, steel, aluminium, cement, auto
CHAPTER 5
1. Very 2. 3. Not
important Important important 4. Can't Say TOTAL
Reponses 27 3 0 0 30
% 90 10 0 0 100
1. Very important
2. Important
3. Not important
4. Can't Say
Graph: 5.1
Interpretation
The figure shows that 90% of the respondents felt that replacing legacy
systems is very important, whereas the rest 10% of the respondents felt that
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60
50
responses
40
Reponses
30
%
20
10
0
SAP AG ORCALE JD OTHERS
EDWARDS
Software vendors
Graph: 5.2
Interpretation
The figure shows that 57% of the companies that the researcher visited are
“SAP” implemented companies, 16% companies have implemented
“Oracle”, 7% companies have implemented JD Edwards and the remaining
20% have implemented ERP packages from Local Vendors. Hence we could
infer that most of the manufacturing companies go in for SAP AG ERP
package.
No of
Respond responds %
1. Strongly
Disagree 0 0.000
3. Strong Agree 19 63.333
5. Neutral 7 23.333
2. Disagree 0 0.000
4. Agree 4 13.333
6. Not applicable 0 0.000
Total 30 100
70
60
50
% of respond 40
30
20
10
0
1. 5. Neutral 4. Agree
Strongly
Disagree
Satisfaction Level
Graph: 5.3
Interpretation:
The figure shows that 63% of the companies that the researcher
visited are very much satisfied with their ERP package, 13.33% are
satisfied, 23.33% are Neutral. Hence we could infer that majority of
these companies are satisfied. Other companies are Neutral in their
opinion because they have not reaped the benefits from ERP
implementation as they have recently implemented the ERP package.
4. When you buy ERP Solutions, to what extent does your organization customize the
software?
Do not
A great deal A little customize TOTAL
Reponses 9 18 3 30
% 30 60 10 100
60
50
40
30 Reponses
%
20
10
0
A great deal A little Do not customize
Graph: 5.4
Interpretation
5. Do you feel you are using ERP Software to its full extent?
80
60 Reponses
40 used %
extensively
20 20%
used full small portion
0 extent not used
7% 46%
large portion
not used
27%
Graph: 5.5
Interpretation:
6. Overall, the ERP vendor(s) provided your company with strong support after you
purchased the products?
No of
Response responds %
1. Strongly
Disagree 0 0.000
3. Strong Agree 22 73.333
5. Neutral 4 13.333
2. Disagree 0 0.000
4. Agree 4 13.333
6. Not applicable 0 0.000
Total
100 30 100
80
60 Post pucrhaseEaAssistance
st
West
40
North
20 80
0
70
% of Respons
60
1st Qtr 2ndQtr 3rdQtr 4thQtr
50 No of respondts
40
30 %
20
10
0
l
e
le
ee
e
tra
re
re
re
ab
r
u
ag
Ag
ag
Ag
ic
Ne
s
pl
s
ng
4.
Di
Di
ap
5.
ro
ly
Interpretation:
2.
t
St
ng
No
ro
3.
6.
St
1.
Assistance Level
Graph: 5.6
Interpretation
The figure shows that 73% of the companies that the researcher
visited are very much satisfied with their ERP package, 13.33% are satisfied,
33.33% are Neutral.
Other companies are Neutral in their opinion because they have not reaped the
benefits from ERP implementation as they have recently implemented the
ERP package.
7. If you have decided not to implement ERP Package software for one or
more of your enterprise system, why not? (Select all that apply)
Not Implement ERP Package for 1 or more Enterprise system why not?
No Of
Types Of Responses Responses
1. Our legacy system works 8
2. The ERP solution available in the market
did not seem to be good for our needs 2
3. The experience of others raised red flags 1
4. The company had other priorities 6
5. Unable to secure approval from senior
management 3
6. Wanted to wait for the production to mature 5
7. Waiting for reduction in price 2
8. Other 3
1
8. Other
Interpretation:
Among the 30 respondents, 8 of them feel that their legacy system works, 2 feel
that the ERP solution available in the market did not seem to be good for their
needs, only 1 felt the experience of others raised red flags, 6 had other
priorities, 3 failed to get approval from top level, 5 wanted to wait for the
production to mature, 2 waited for price reduction.
8. Did you use any other outside consultant to assist you in your
implementation?
No of
Response responds %
1. Strongly
Disagree 1 3.333
3. Strong Agree 17 56.667
5. Neutral 4 13.333
2. Disagree 0 0.000
4. Agree 8 26.667
6. Not applicable 0 0.000
Total 30 100
le
ee
e
al
ee
ab
gr
re
gr
tr
gr
ag
a
eu
ic
A
is
pl
A
is
N
ng
D
ap
4.
D
5.
ly
tro
2.
ot
ng
N
tro
3.
6.
S
Usage of Consultant
1.
Graph: 5.8
Interpretation
The figure shows that 57% of the companies that the researcher
visited are very much satisfied with their ERP implementation by using outside
consultant, 26% are satisfied, 13.33% are Neutral & 1% of the companies they do
not use any consultant to implement the ERP package.
9. Does the ERP system provide the accurate information you need &
providing Exact Reports at the right time?
No of
Response responds %
1. Strongly
Disagree 0 0.000
3. Strong Agree 23 76.667
5. Neutral 4 13.333
2. Disagree 0 0.000
4. Agree 3 10.000
6. Not applicable 0 0.000
Total 30 100
le
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5
tr
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tr
.
6
.S
Usage of Consultant
1
Graph: 5.9
Interpretation
The figure shows that 77% of the companies that the researcher visited
are very much satisfied with their ERP performance in the firm, 10% are satisfied,
13.% are Neutral.
10. Do you agree that ERP software has given your organization the following
Strategic advantages?
Graph: 5.10
Interpretation:
The Above figure shows that the companies have agreed very much that
the ERP has helped them to gain better collaboration, improved communication,
and increased efficiency. Most companies agree that the ERP has helped
moderately in lowering operating costs, increasing revenues and gaining higher
profits. Hence we can see that companies have gained intangible benefits more
tangible benefits.
Graph: 5.11 A
• Interpretation
The above figure shows that the companies have performed better in
increasing productivity and reducing defects. Performance was average in both
cost reduction and employee satisfaction.
2) Improvement in Performance Areas with reference to Marketing & sales
Graph: 5.11 B
Interpretation
The above figure shows that the companies have performed better in
increasing productivity and customer satisfaction. Performance was average
both in market coverage and in reducing costs and defects.
Graph 5.11 C
• Interpretation
The Above figure shows that ERP package has not helped the companies
much in Human resource management. The benefits are average in all
performance areas. In some of the companies ERP is not in HR department.
Most of work in HR department is done on legacy system.
Logistics Performance
% of Respons
70%
60%
50% Productivity
Customer Satisfaction
40%
Quality
30%
Cost Reduction
20% Defects Reduction
10%
0%
1 2 3 4 5 6
Level of Satisfaction
Graph 5.11 D
Interpretation
The Above figure shows that ERP package has helped the companies
much in both in the in bound & out bound logistics. The majority of the
companies are having a better satisfaction in the various functions of the
logistics department.
50%
45%
40%
35% Efficiency
30% Employee Satisfaction
25% Accuracy
20%
Cost Reduction
15%
Defects Reduction
10%
5%
0%
Negligible Inferior Average Good Excellent
Graph 5.11 E
Interpretation
The Above figure shows that ERP package has helped the companies
much in Finance & Accounts. The majority of the companies are having an
excellent satisfaction level in the finance department.
No of
Response respondents %
1. Strongly
Disagree 0 0.000
3. Strong Agree 20 66.667
5. Neutral 5 16.667
2. Disagree 0 0.000
4. Agree 5 16.667
6. Not applicable 0 0.000
Total 30 100
70
60
50 No of respondts
40
30 %
20
10
0
le
al
e
ee
t a ree
...
re
ab
utr
gr
sa
Ag
No Ag
lic
Ne
sa
Di
pp
ng
.
Di
4
5.
ly
ro
2.
ng
St
ro
3.
St
6.
1.
Usage of Consultant
Interpretation:
No of
Response respondents %
1. Strongly
Disagree 20 66.667
3. Strong Agree 0 0.000
5. Neutral 2 6.667
2. Disagree 5 16.667
4. Agree 3 10.000
6. Not applicable 0 0.000
Total 30 100
70
% of response
60
50
40 No of respondts
30 %
20
10
0
4. Agree
Strongly
Disagree
5. Neutral
1.
response
Interpretation:
Among the 30 respondents, 20 strongly disagreed with the idea of upgrading ERP
package, 5 disagreeing, 2 being neutral. The other 3 agreed with the idea of
upgrading ERP package.
HYPOTHESIS:
SL.NO D D²
1 20 400
2 20 400
3 10 100
4 30 900
5 30 900
6 0 0
7 45 2025
8 0 0
9 40 1600
10 35 1225
11 30 900
12 30 900
13 30 900
14 20 400
15 20 400
16 10 100
17 0 0
18 20 400
19 40 1600
20 10 100
21 30 900
22 35 1225
23 20 400
24 10 100
25 30 900
26 0 0
27 20 400
28 10 100
29 10 100
30 40 1600
∑D =645 ∑D²=18975
n=30
X=∑D/n = 645/30 = 21.5
Y= ∑D²/n=18975/30 =632
SD =
SD = 13.137
Tcal = 8.964
Two related samples test: these tests concern those situations in which
persons, objects etc are measured twice.
CHAPTER 6
Findings & Suggestions
Overall analyzing the responses it was found that the ERP package has
helped the organizational functions of different sector in improving their
performance and yielding much better results. The findings show that the
companies are on costs reduction and defect reduction with improved
productivity.
The employee and customer satisfaction has increased in the past after the
ERP package was implemented with increase in performance in productivity
and market coverage. Most of the organizations which have participated in the
research agree to the fact that the implementation of ERP in their organization
has opened the gateway for a more systematic work processes.
Government RC College Commerce & Management Bangalore-01 72
ENTERPRISE RESOURCE PLANNING 2008
Many companies are not satisfied with the response that they receive
from their ERP packages. Some companies were not satisfied with the
response, accuracy, precision of the information reports generated by their
ERP package.
SUGGESTIONS
1. Study the structure and needs of the users and the causes of potential
resistance among them.
2. Deal with the situation by using the appropriate strategies and
techniques in order to introduce ERP successfully.
3. Evaluate the status of change management efforts.
4. The companies should look towards implementing the ERP Packages in
their organization in step wise manner, evaluating the success rate of
each stage
CHAPTER 7
CONCLUSION
CHAPTER 8
ANNEXURE
BIBLIOGRAPHY
Websites:
www.google.com
www.wikipedia.org
www.imtma.org
www.microsoftbusinesssolutions.com
www.projectmanagement.ittoolbox.co
www.itbusinessedge.com
ANNEXTURE
QUESTIONNAIRE
From,
Manjunatha.B
Government RC College of Commerce & Management
Race course road
Bangalore
Dear Sir/Madam,
A) Name -----------------------------------------------------
B) Age --------------------------------------------------------
C) Organization---------------------------------------------
D) Designation ----------------------------------------------
15. Please indicate which software vendor supplied your ERP software.
1. SAP AG 2. Oracle
3. JD Edwards 4. Others
ANS { }
17. Overall, the ERP vendor(s) were responsive to your company's requirements during
the sales process?
1. Strongly Disagree 2. Disagree
3. Strong Agree 4. Agree
5. Neutral 6. Not applicable
ANS { }
18. When you buy ERP Solutions, to what extent does your organization customize the
software
1. a great deal 2. A little
3. Do not customize 4. Not applicable
ANS { }
19. Overall, the ERP vendor(s) provided your company with strong support after you
purchased the products?
1. Strongly Disagree 2. Disagree
3. Strong Agree 4. Agree
5. Neutral 6. Not applicable
ANS { }
20. If you have decided not to implement ERP Package software for one or more of
your enterprise system, why not? (Select all that apply)
1. Our legacy system works
2. The ERP solution available in the market did not seem to be good for our
needs
3. The experience of others raised red flags
4. The company had other priorities
5. Unable to secure approval from senior management
6. Wanted to wait for the production to mature
7. Waiting for reduction in price
8. Other
ANS { }
21. Did you use any other outside consultant to assist you in your implementation?
1. Strongly Disagree 2. Disagree
22. Do you feel you are using ERP Software to its full extent?
1. No, a small portion of the software is not used
2. No, a large portion of the software is not used
3. Yes, software is used to full its extent
4. Yes, Software is used extensively
ANS { }
23. Does the ERP system provide the accurate information you need?
1. Strongly Disagree 2. Disagree
3. Strong Agree 4. Agree
5. Neutral 6. Not applicable
ANS { }
24. Does the ERP system provide reports that seem to be just about exactly what you
need?
1. Strongly Disagree 2. Disagree
3. Strong Agree 4. Agree
5. Neutral 6. Not applicable
ANS { }
25. Do you agree that ERP software has given your organization the following
Strategic advantages?
Employee
Satisfaction
Costs
Reduction
Defects
Reduction
Employee
Satisfaction
Market
coverage
Costs
Reduction
Defects
Reduction
Employee
Satisfaction
Costs
Reduction
Defects
Reduction
Applicable
Productivity
Customer
Satisfaction
Quality
Costs
Reduction
Defects
Reduction
Employee
Satisfaction
Accuracy
Costs
Reduction
Defects
Reduction
27. Do you think successful implementation of ERP in a firm add better corporate
image
1. Strongly Disagree 2. Disagree
3. Strong Agree 4. Agree
5. Neutral 6. Not applicable
ANS { }