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Abstract
ERP implementations in the South Asian
countries, are comparatively different, harder
and financially very expensive than the other
parts of the worlds. This is because of different
socio-economic conditions, working style of
businesses, their operation methods and low
currency
comparative
to
international
currencies. Most of the well renowned ERP
solutions and their licenses are in foreign
currencies such as Dollar, Pound or Sterling.
When, a third world country would like to
implement an ERP solution, investment
becomes many folds due to the currency
difference. But, the post implementation cost is
lesser than the international market due to the
cheaper labor cost. With the growing market of
mobile operators in Pakistan, PTCL as a
landline operator needs the cutting edge
technology as its products and operations.
Though, the ERP implementation has high cost
but without it, gap between expenses and
revenue could not be widened: profit only
comes with less cost and high revenue. Making
a decision for the ERP implementation is a huge
and tough task for the management. But, the
tougher is its proper implementation and post
implementation monitoring and maintenance.
1.0 Introduction
A proper ERP solution has become a vital need
of this era for the enterprises due to the market
globalization and day by day growing
competition. For the very fact, the ERP solution
has become mandatory for an enterprise to run
the business in an effective and efficient way.
But, before going for the implementation of an
ERP solution, an enterprise has gone through
immense hard-hitting times: choosing the right
solution, planning, selection of implementation
team and managing the change. Whether it is an
ERP implementation or reimplementation, it
should be well thought as its life spreads over
many years.
Cost
Cost is the major factor of an ERP
Implementation. Cost of implementation
and support should not impact business
to run its normal operation. Cost of an
ERP implementation has different
aspects and faces. Few of them are:
license cost, support, maintenance, HR,
hardware and infrastructure cost. Most
important is the post implementation
cost for maintenance and operation. As
post implementation period is much
larger than the implementation. 59% of
implementations cost more than that
initially assumed[8].
Customization
Major difference between bespoke and
ERP off the shelf solution is
customization.
If
ERP
solution
configuration module is not strong
enough to support the business and its
changes then successful implementation
could not be possible. ERP solution
should
provide
flexible
and
comprehensive and easy to use
configuration solution. Configuration
solution should accommodate business
changes and new requirements without
going into development. Though,
development feature should also be
there to cater exceptional cases. But,
Efficiency
If an ERP solution is giving business
everything but not efficiency, it means it
is not a good ERP solution. As without
efficiency, business could not achieve
its targets and business requirements.
The biggest differences between manual
and automated system are efficiency
and accuracy. Efficiency can be
measured by number of transaction
processed per second
Accuracy
Reliability comes from accuracy. If
solution has issue with accuracy then it
is
not
considered
for
ERP
implementation. Accuracy of ERP
solution can be measured with number
of accurate results per number of
transactions or queries. Accuracy is
considered as the basic salient feature of
an ERP solution and with it, the concept
of ERP methodology could not be
achieved.
Comprehensive & Flexible Standard
Reports
End product and crux of an ERP
solution is the reporting solution which
can provide management the right
reports at the right time to make timely
correct decisions for the organization. If
the standard reports cover sixty to
seventy percent of an organizations
requirements, it should be considered as
a good ERP Solution. Otherwise, more
efforts will be required to develop the
reports which result in an increase in
cost and time of implementation. If the
reporting solution is not flexible in
terms of parameters, display options and
Integration
ERP means modules integration and
flow of data and information from one
module to another module without
effecting efficiency and accuracy. If
ERP solution modules are not well
integrated or there are issues with
integration between modules then it
should not be considered as the ERP
Solution. As the strength of ERP is the
integration of modules and data flows.
Multi Currency
ERP
solution
should
support
Multicurrency feature and it should be
across the application. As few solutions
only provide the option on few
interfaces with limited functionalities.
The ERP implementation should be well
thought and it should at least cover five
to seven years. Even, an organization
does not need a multicurrency option, it
should be part of implementation so that
in future this could not be a bottleneck.
Graphs
ERP solution should have an option to
see reports in graphical mode for the
management to see figures and trends in
less time. Graphical reports should be
flexible to change the view as per
requirement.
Business Intelligence
ERP solution should provide its own
Business Intelligence. The major
advantage of ERP solution is to the
Management to make quick decisions
and for this very reason BI module
availability in ERP Solution is definitely
a plus. Using third party BI, slows down
the main application and have more
complexities and issues unlike if ERP
solution has its own real time BI
module.
Support
After implementation, support is very
important while considering the ERP
solution selection. After the successful
implementation, there are chances that
the application could not run along with
the business if after implementation
support is not good from the vendor or
consultants. Often vendors or business
partners put their all efforts to make the
implementation successful but they
vanish from the scene once their
implementation contract is over. After
implementation support though often
mentioned in RFP but when time comes
organizations found out the support was
virtual and actual support. It is best
practice to check the real support
experience from the existing clientele of
the vendor and consultants.
Security
An ERP solution should have a tight
Security embedded into it and should
have it at a granular level. In this era,
security is considered to be the top most
priority of the organizations. Business
data is the most important asset of an
organization.
Comprehensive
authorization mechanism is required to
every organization which will enable
Other considerations
Most of the organizations fell into the
traps of vendors and consultants. It is a
marketing gimmick of vendors and
consultants to come up with highly
colored presentation with lots of good
references of big brands. Organizations
should not completely rely on vendors
or consultants but they should check the
actual truth by contacting the references
provided by vendors or consultants.
This will not only make their decision
more practical but also would help them
to negotiate prices with them.
Following should be evaluated against
the ERP solution:
Age in market (number of years).
Stability in market.
Average Human Resources required
for each module.
Average cost of Human Resources
required
for
operations,
development and its support.
How easy to find resources: human
and other.
Number of platforms it can support:
Unix, Linux , Windows etc
Cost of Infrastructure required and
how easy to get that in market.
Frequency of new releases and how
easy to upgrade it?
Frequency of bug fixing patches.
Does it follow industry and business
standards like ISO, CMMI etc?
SDC ( Environment )
j) Employees Buy-in.
j) BPM
Without
employees
buy-in,
successful
implementation is close to impossible. If
management
decide to go for the ERP
implementation without buy-in from its
employees, issue starts popping up from day
one till the day of the final failure.ERP
implementation is for the whole enterprise and
not only for the management and thats why it is
termed as ERP and not Management
Planning. Only 13% of respondents
characterize themselves as very satisfied with
their companys software implementation and
38 % of respondents indicated lack of
employee buy-in as the biggest challenge
facing the ERP implementation teams[8].
Organization should also assure its employees
that job losses will be minimum otherwise there
will be a considerable resistance from
employees.
c) Quality Team
A quick migration to an ERP system without
time for testing and validating the systems is not
wise nor advisable,[7]. There should be proper
quality testing and assurance teams. Quality
begins with the initiation of the implementation.
To reduce the cost of implementation, some
organizations ignore the formation of dedicated
teams for quality testing and quality assurance.
But, after implementation low quality cost the
organization many folds then investing the
money on quality during implementation.
Despite other quality assurances, the most
important for quality team is to keep check on
the unnecessary development of reports.
Without quality the objectives of successful
implementation could not be achieved. Quality
should be checked and assured at every process
and step of implementation. Some of them are:
documentation, AS-IS and TO-BE processes,
configuration, development.
d) Documentation with Configuration
The prime focus of implementation and Project
Management office is on
configuration,
testing, and
deploying the ERP solution in
the best
possible manner. However,
the importance of proper documentation and it
configuration is
placed aside And logic
presented by the PMO office
or
the
implementation team is that
documentation
slows down the entire project. But, it is proved
that lack of documentation cost more
in
implementation than maintaining proper
documentation.
5.0Advantages
Successful ERP implementation comes with a
bouquet of advantages. Visibility across the
company figures saves time, resources and
money. With one centralized database and
integrated modules, fast and accurate
information helps the management to make
decisions and act quickly on decisions. Easy and
automated fore casting, reduces the stock
keeping
and
investment.
Enhanced
empowerment of employees through increased
information sharing [4], Real time processing
enables the organization for fast business
moves, Reduces operations, paper environment,
pain points and bottlenecks. Optimized
processes and cycles which reduces resources
and cost factors. The purpose of ERP
technology is to support the companys strategic
opportunities [9]. In a 2001, survey by
information technology toolbox, 59% of 1124
respondents, by a margin of 3 to 1, saw their
highest return on investment(ROI) coming from
ERP [12].
6.0 Disadvantages
Every picture has two sides and so does the ERP
implementation. With flowers come thorns:
disadvantages: huge investment on ERP
implementation and its maintenance, too much
reliability on the system and limitation ERP
solution brings with it as inheritance. Some
limitations of off shelf ERP solutions, also limit
the business to grow in a particular direction.
9.0 Conclusions
ERP implementation is different from conventional IT Software Projects.ERP implementation involves
process reengineering and optimization. It brings a new culture and a fresh breath to an organization if
implemented in the right way. It takes an average of two and a half years from project initiation to achieve a
quantifiable return on investment for an ERP system. Ninety percent of those quantified benefits are the
result of a cost reduction, according to the study [6]. ERP implementation if would have been done with
proper planning and long thought out process brings its benefits. But, if planning or processes are not in
place, it would be a disaster for the organization. Studies showed that ERP implementation could only be
possible if well planned along with organizations well placed processes.
10.0 Acknowledgements
We would like to acknowledge Mr. Wasif Ihsan who has provided us the support and cooperation during
our case study.
References:
[1] The Robins-Gioia Survey 2001.
[2] Supply Chain Digest, Springboro, OH, 2005]
[3] Successful ERP Implementation required planning by Robert W.Stanisky-2000
[4] A Case Study of ERP Implementation Issues by Dr. Tom Bramorski University of Wisconsin USA
[5] Paul Wahl SAP America
[6] Meta Group study
[7]Dr. John T. Whiting
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After Implementation Support
Cross-functional process orientation with high
Advantage after implementation
Disadvantages after implementation
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