CRITICAL LITERATURE REVIEW Enterprise Resource Planning

Nah and Lau (2001) define ERP as an information system that integrates and manages all the business process in the organisation. According to Jrliem (2009), Enterprise Resource Planning is an integrated suite of software that handles and coordinates all the resources like manufacturing, distribution, logistics, inventory, invoicing and shipping in large businesses. Jrliem (2009) perceive Enterprise Resource Planning as software where as Guffond and Leconte (2004) defines Enterprise Resource Planning as a tool that assembles and integrates all the data and management skills which determine the organisation activities in a unique database. ERP is not a pure software system to be adapted to an organisation but it affects the organisational infrastructure and it imposes its own logic on organisations strategy and culture (Davenport, 1998). Shehab et al., (2004) declares that an ERP system incorporate all the major business process in an organisation to enhance efficiency and maintain a competitive position.

Kimberling (2007) in Denver Business journal suggests that the ERP software is considered to be a common phrase in every business. Many organisations of all sizes would have considered about implementing ERP systems.

Historically, many companies used separate software and paper based process in order to manage the multiple divisions in business such as customer service, accounting, etc. On the other hand, the ERP is mainly used to integrate the organisation functions into a single integrated system. ERP software would be balancing the resources of an organisation like machines, man power, methods, material, marketing and money to stay competitive in a global economy (Siriginidi, 2007).

Jacobs and Whybark (2001) provided an excellent report on ERP where they emphasis the implementation of ERP in organisations.

Enterprise resource planning used to integrate the various functions in business like sales, vendors, finance, Marketing etc. All the data in an organisation are updated in real time, so changes can be available to everyone immediately.

The existing business processes are completely replaced by ERP. If the data are quickly and accurately available, then the resources are used in better and efficient manner. Implementing ERP in an organisation is not an easy task as the role of each person can change due to ERP. Dont deploy everything on ERP; it should be integrated only in critical areas where the information is needed to be integrated.

Various authors convey that implementing ERP in SMEs is different from the implementation process in the big companies. The difference is stated as follows: It will affect their information seeking practices (Lang et al., 1997); Lower level of resources will be available for data gathering (Lang et al., 1997); Lack of information system management (Kagan et al., 1990); Frequent absorption of data-gathering process responsibilities will be given to one or two persons, rather than giving to top executives (Hambrick, 1981);

Skok and Legge (2002) identified some key drivers for adopting the ERP system in an organisation such as globalization of business, flexible and scalable emerging client /server infrastructures, Y2K system and legacy systems.

Need of ERP
Kimberling (2008) indicates that 55% of respondents decided to either start implementing ERP or continue the new ERP system in 2009. 27% of respondents plan to improve the current system of ERP. 9% of respondents are planning to upgrade their ERP system.

According to the author Grant (2008), implementation of Enterprise Resource Planning is essential for every business organisation because a single ERP package can cover all the work functions of a company. The implementation of ERP eliminates the task of external systems that used to intermediate between the two systems. It also gives benefits like systematic data integration, standardisation and lower maintenance. He suggests that the ERP implementation eliminate the task of external systems. In addition to that, Exforsys Inc (2009) declares that the ERP implementation will be used to increase production level and control the cost. Their views are mentioned below:

Nowadays most of the developing companies need procedures and resources to be maintained in a good way where it is highly necessary to have a tool that can help to integrate various kinds of activities. One of the best ways is ERP that helps to integrate several procedures and processes in an organisation and improve the quality of business. It is also used to increase the production levels and control the cost in an effective and efficient way. In addition to that, Carton and Adam (2003) says that the ERP implementation is very essential for an organisation because it improves the efficiency with less technical risk. They conducted a survey that identified the various issues involved in the ERP implementation process.

Silicon India (2008) conducted the survey in many industries about the impact of ERP which was taken between 1995 and 1998 in India regarding the deployment of ERP. The targeted person involve in this survey was ERP professionals. The survey report proved that the Indian companies are in need of implementing ERP in their organisation in order to reduce the inventory level and lead times, improve the client satisfaction.

Kimberling (2007) explains in Denver Journal about various reasons for changing from fragmented system to ERP software system.

ERP provides business executives with much transparency of business process since all the data are stored in a common place; It is very easy to train the employees on single integrated systems rather than multiple systems; It is used to provide a standard way of performing the business processes;

Caldwell and Stein (2000) mention the main things need to consider while implementation namely, People, Processes and Technology

Price Waterhouse Coopers survey report (2009) identifies the employees view about the implementation of ERP in their organisations. The top level management and low level management are readily accepting the importance and the necessity of implementing ERP in their organisation. But the people who are in middle level management are afraid to accept. The reason is the top level people believe that the ERP implementation will surely reduce the inefficiencies and also increase the competitiveness. In many organisations, the lower level people are unionized. The middle level people have fear of losing job due to increased efficiency by the ERP systems. Similarly, a study was done in larger manufacturing company in Midwest which reveals the employees point of view about implementing ERP. Helm et.al. (2003) found that the job type and job tenure of a workers influences attitude on ERP systems. New workers and mangers used to have a favourable attitude towards the implementation of ERP systems but the older employees are more doubtful regarding the benefits of ERP software systems. Kumar (2002) said that the managers who involved in ERP implementation are became more 'task oriented' rather be human relations oriented'. But Bingi, Sharma, and Golda (1997) talked mainly about the organisation change where they suggest that while implementing ERP, it is always necessary to manage the organisational changes carefully. Unlike development and design phase, the implementation of software requires the organisation to adopt the necessary processes in order to fit the business practices. Many researchers such as Griffith (1999), Markus and Robey (1988) observed that the implementation of ERP process is a social interaction between organisations and IT departments. Volkoff (1999) and Markus et.al (2000) argue that the success of ERP often requires the process of mutual adaptation between the organisational environment and Information Technology. This adaptation process suggest that the implementation process of ERP needs a fit among all contingent variables in company settings like business process, organisational culture, IT capabilities and users background.

The research specialists Somers and Nelson (2007) declares that the modules and version of ERP must be continually installed and updated in order to improve the fit between the systems and business. Zhang, et.al (2005) says that the vendor support is considered to be an important factor and it often needs extended technical assistances, service responsiveness, user training and emergency maintenance.

Kimberling (2007) reveals that the ERP systems may seem to be giving interest only to technical managers but it affects the business managers as well. ERP is not only software but it is also a way of optimizing and transforming an entire business. Therefore, the managers and business owners should involve in implementation and purchase decision.

Barbey (2000) said that the ERP implementations are in need of Business Re-engineering process as forcing the ERP to combine with existing business process lead to various business issues so it is necessary to choose the right package before implementation.

LakshmanaRoa (2008) convey that the Business Re-engineering process is a most essential requirement for going ahead with a good planning of ERP. Detailed study of BPR should be done before taking up ERP. BPR usually brings out the deficiencies of existing system and used to maximize the productivity through re-organizing and restructuring the human resources and divisions & department

ERP Strategy

Mabert et al. (2000) convey the valuable suggestion about the strategies in implementing ERP. He declares that big bang strategy is cheapest but it is dangerous and high risk. Big bang approach will leads to success in the implementation of ERP only if it is carefully planned. Phased rollout is said to be low risk and increases time, and it is especially good for large organisations.