Implementing Enterprise Resource

Planning (ERP) Systems in

Organizations

Project Report Submitted in Partial

fulfilment of the requirement for the

award of Degree of

MASTER OF BUSINESS ADMINISTRATION (MBA)

Submitted by

Ravit Kumar
Reg No: 2314109060

Under the guidance of

Komal
Guide Reg No:

MANIPAL UNIVERSITY JAIPUR (MUJ)

DIRECTORATE OF ONLINE EDUCATION

Feb 2025
 BONAFIDE CERTIFICATE

Certified that this project report titled “ Implementing

Enterprise Resource Planning (ERP) Systems in Organizations”
is the bonafide work of “Ravit Kumar” who carried out the
project work under my supervision in the partial
fulfilment of the requirements for the award of the MBA degree.

Komal
 DECLARATION BY THE STUDENT

I, Ravit Kumar bearing Reg. No 2314109060 hereby declare that this

project report entitled (Implementing Enterprise Resource Planning (ERP)
Systems in Organizations) has been prepared by me towards the partial
fulfilment of the requirement for the award of the Master of Business
Administration (MBA) Degree under the guidance of Mrs Komal.

I also declare that this project report is my original work and has not
been previously submitted for the award of any Degree, Diploma,
Fellowship, or othersimilar titles.

Place: New Delhi (Ravit Kumar)

Date: 22 Jan 25 2314109060
 A

BRIEF STUDY

ON

ENTERPRISE RESOURCE PLANNING IN ORGANIZATION

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 TABLE OF CONTENTS

INTRODUCTION TO ERP ............................................................................................. 1

ADVANTAGES OF ERP ................................................................................................. 5

DISADVANTAGES OF ERP .......................................................................................... 7

ERP Packages Feature Comparison ............................................................................ 9

Microsoft ................................................................................................................... 27

Oracle ........................................................................................................................ 27

PeopleSoft ................................................................................................................. 27

SAP ........................................................................................................................... 28

Siebel......................................................................................................................... 28

RETURN ON INVESTMENTS FOR ERP .................................................................. 29

Working out the Myths of ERP in the Initial stage ................................................... 29

Proper Implementation and Finance ......................................................................... 29

Strict Adherence to Changes ..................................................................................... 30

ERP SYSTEM SELECTION METHODOLOGY ....................................................... 31

Poor System Selection .............................................................................................. 32

A Proper System Selection Methodology ................................................................. 35

IMPORTANT ISSUES TO CONSIDER BEFORE ERP IMPLEMENTATION .... 38

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METHODS IN IMPLEMENTING ERP ...................................................................... 42

Joint ventures with the Respective Industry ............................................................. 42

Taking on everything by oneself ………………………………………………… 43

Full/Partial Implementation…………………………………………………….…..43

SUCCESSFUL ERP IMPLEMENTATION ................................................................ 44

Process preparation ................................................................................................... 45

Configuration ............................................................................................................ 47

Consulting services ................................................................................................... 49

"Core system" Customization vs Configuration ....................................................... 50

Extension................................................................................................................... 51

Maintenance and support services ............................................................................ 51

CASE STUDY: ERP SYSTEM IMPLEMENTATION IN INDIA: CASE OF TATA

STEEL LTD………… …………………………………………………………………52

RESEARCH METHODOLOGY .................................................................................. 56

ERP IMPLEMENTATION PLAN ............................................................................... 58

CONCLUSION ............................................................................................................... 61

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REFERENCES................................................................................................................ 62

1. CLASS A ERP IMPLEMENTATION: INTEGRATING LEAN AND SIX

SIGMA ………………………………………………………………………… .. 62

2. MODERN ERP: SELECT, IMPLEMENT & USE TODAY'S ADVANCED

BUSINESS SYSTEMS ……………………………….. ………………………………..62

3. MAXIMIZING YOUR ERP SYSTEM: A PRACTICAL GUIDE FOR

MANAGERS ................................................................................................................. ..62

4. ENTERPRISE RESOURCE PLANNING……………………………………….62

5. ERP SYSTEM IMPLEMENTATION IN INDIA: CASE OF TATA STEEL

LTD………………………………………………………………………………………62

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Introduction to ERP

The initials ERP evolved from MRP and CIM, expanding their capabilities. It was

introduced by Gartner, a renowned research and investigation firm, in 1990. ERP

frameworks strive to encompass all essential aspects of a business, catering to the

needs of the organization and its leadership. These frameworks can now be found in a

wide range of organizations, including non-manufacturing companies, non-profit

organizations, and government entities.

In order to be recognized as an ERP system, a software package must be capable of

performing the functions of at least two different systems. Take, for instance, a

software package that offers a comprehensive range of payroll and accounting

functions. It could be classified as an ERP software package.

Some of the modules in an ERP system that used to be separate applications include

product lifecycle management, supply chain management (such as purchasing,

manufacturing, and distribution), warehouse management, customer relationship

management (CRM), sales order processing, online sales, financials, human resources,

and decision support systems.

Certain organizations, often those with advanced IT capabilities, opt to implement

select components of an ERP system and create an external interface to integrate with

other ERP or standalone systems for their additional application requirements. As an

illustration, individuals may opt to utilize a human resource management system from

a single vendor and handle the integration between the systems independently.

This is typical for retailers, where even a mid-sized retailer will have a separate Point-

of-Sale (POS) system and financials application, along with a range of specialized

1
applications to manage various business needs like warehouse management, staff

scheduling, merchandising, and logistics.

Ideally, ERP delivers a single database that contains all data for the software modules,

which would include:

• Manufacturing Engineering, bills of material, scheduling, capacity, workflow

management, quality control, cost management, manufacturing process, manufacturing

projects, manufacturing flow

• Supply chain management Order to cash, inventory, order entry, purchasing, product

configuration, supply chain planning, supplier scheduling, inspection of goods, claim

processing, commission calculation

• Financials: General ledger, cash management, accounts payable, accounts receivable,

fixed assets

• Project management Calculating expenses, invoicing, tracking time and costs,

measuring performance, managing activities

• Human resources Human resources, payroll, training, time and attendance, rostering,

benefits

• Customer relationship management - Sales and marketing, commissions, service,

customer contact and call center support

• Data warehouse - along with a range of user-friendly interfaces for customers,

suppliers, and employees

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• User privilege levels are implemented to control access to processes based on

authority. • Process flow can be customized to accommodate extensions, additions, or

changes.

Enterprise resource planning is a concept that originated from manufacturing resource

planning (MRP II) which was built upon material requirements planning (MRP). ERP

systems underwent a transformation when "routings" became a crucial component of

the software architecture, and the inclusion of a company's capacity planning activity

became a standard feature of the software. ERP systems are designed to efficiently

manage various aspects of a company's operations, including manufacturing, logistics,

distribution, inventory, shipping, invoicing, and accounting. ERP software is incredibly

valuable for managing a wide range of business activities, such as sales, marketing,

delivery, billing, production, inventory management, quality management, and human

resource management.

During the 1990s, there was a significant increase in sales of ERP systems as

companies grappled with the Y2K issue in their existing systems. Many companies

seized this opportunity to upgrade their outdated information systems with modern

ERP systems. After experiencing a period of rapid growth in sales, there was a

subsequent decline in 1999. By that time, the majority of companies had already put

their Y2K solution into effect.

ERPs are frequently referred to as back-office systems, suggesting that their primary

focus is on internal operations rather than customer or public interactions. This is in

contrast to front office systems that focus on customer interaction, such as customer

relationship management (CRM) systems. There are also other types of systems, like

3
eBusiness systems (eCommerce, eGovernment, eTelecom, and eFinance) and supplier

relationship management (SRM) systems.

ERPs have a broad scope, encompassing multiple functions and spanning across the

entire organization. All functional departments that are involved in operations or

production are seamlessly integrated into one cohesive system. Aside from

manufacturing, warehousing, logistics, and information technology, this would

encompass accounting, human resources, marketing, and strategic management.

ERP II, a term that emerged in the early 2000's, is commonly used to refer to the

anticipated evolution of ERP software. This new generation of software is web-based,

providing real-time access to data for both internal employees and external resources

like suppliers and customers. ERP II stands out because it allows businesses to

customize the software to their specific needs, rather than having to conform to the

limitations of the ERP software. In 2009, numerous ERP solution providers integrated

these features into their existing offerings.

EAS — Enterprise Application Suite is a rebranded version of previously developed

ERP systems that encompass a wide range of business segments. These systems utilize

standard Internet browsers as lightweight clients.

Most ERP vendor's software packages incorporate best practices. When implementing

an ERP system, organizations have the option to either customize the software or adapt

their business processes to the pre-set "best practice" function provided in the standard

version of the software.

Before ERP systems were introduced, software was custom-built to align with the

unique processes of each business. Given the intricate nature of many ERP systems

and the potential drawbacks of a botched implementation, most vendors have

4
incorporated "Best Practices" into their software. These "Best Practices" are considered

the most efficient way to carry out a particular business process in an Integrated

Enterprise-Wide system, according to the Vendor.

A study conducted by Lugwigshafen University of Applied Science surveyed 192

companies and found that implementing industry best practices led to a decrease in

mission-critical project tasks such as configuration, documentation, testing, and

training. Furthermore, the implementation of best practices significantly decreased the

level of risk by 71% compared to other software implementations.

Utilizing best practices can simplify the process of meeting requirements like IFRS,

Sarbanes-Oxley, or Basel II. They can also provide assistance in areas where the

process is considered a commodity, such as electronic funds transfer. This is because

the process of capturing and reporting legislative or commodity content can be easily

standardized within the ERP software, and then confidently replicated across multiple

businesses with the same business requirement.

Advantages of ERP

Without an ERP framework, a big industrialist may realize with numerous software

applications that can't communicate or interface viably with each other. Assignments

that need to transmit with each other may include:

• Ensuring proper communication, productivity, and efficiency through integration

among different functional areas

• Optimizing design engineering for maximum product efficiency • Ensuring seamless

order tracking, from acceptance to fulfillment • Streamlining the revenue cycle, from

invoice to cash receipt

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• Effectively managing inter-dependencies in complex processes and bill of materials

• Monitoring the alignment between purchase orders, inventory receipts, and costing to

ensure accuracy and consistency

• Meticulously keeping track of the revenue, cost, and profit at a detailed level for all

of these tasks.

ERP Systems centralize the data in one place. Benefits of this include:

• Addresses the challenge of synchronizing changes across multiple systems • Enables

management of business processes that span different functions • Offers a

comprehensive view of the entire organization, avoiding isolated pockets of

information

• Minimizes the chances of sensitive data loss by consolidating various permissions

and security models into a unified structure.

Some security features are included within an ERP system to protect against both

outsider crime, such as industrial espionage, and insider crime, such as embezzlement.

A data-tampering scenario, for example, might involve a disgruntled employee

intentionally modifying prices to below-the-breakeven point in order to attempt to

interfere with the company's profit or other sabotage. ERP systems typically provide

functionality for implementing internal controls to prevent actions of this kind. ERP

vendors are also moving toward better integration with other kinds of information

security tools.

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Disadvantages of ERP

Issues with ERP frameworks are basically because of insufficient funding in current

training for the concerned IT staff- including those executing and testing changes - just

as deficiency of corporate strategy securing the durability of the information in the

ERP frameworks and the manners by which it is utilized.

Disadvantages

• Customization of the ERP software is limited.

• Re-engineering of business processes to fit the "industry standard" prescribed

by the ERP system may lead to a loss of competitive advantage.

• ERP systems can be very expensive (This has led to a new category of "ERP

light" {Expand section} solutions)

• ERPs are often seen as too rigid and too difficult to adapt to the specific

workflow and business process of some companies—this is cited as one of the

main causes of their failure.

• Many of the integrated links need high accuracy in other applications to work

effectively. A company can achieve minimum standards, then over time "dirty

data" will reduce the reliability of some applications.

• Once a system is established, switching costs are very high for any one of the

partners (reducing flexibility and strategic control at the corporate level).

• The blurring of company boundaries can cause problems in accountability,

lines of responsibility, and employee morale.

7
• Resistance in sharing sensitive internal information between departments can

reduce the effectiveness of the software.

• Some large organizations may have multiple departments with separate,

independent resources, missions, chains-of-command, etc, and consolidation

into a single enterprise may yield limited benefits.

• The system may be too complex measured against the actual needs of the

customers.

• ERP Systems centralize the data in one place. This can increase the risk of loss

of sensitive information in the event of a security breach.

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ERP Packages Feature Comparison

Many CIOs have expressed growing concerns about the Total Cost of Ownership

(TCO) of enterprise software and have identified expenses as a contributing factor in

the decline of IT investments. Therefore, software vendors are striving to become more

structured in their "Proprietorship Experience" approaches and, in some cases, have

focused their research and development efforts and resources on enhancing the

ownership experience for customers. Given these official concerns, PeopleSoft

introduced its Total Ownership Experience (TOE) initiative, followed by other major

software vendors who implemented various programs with varying degrees of success

in reducing costs and enhancing the overall ownership experience.

We have thoroughly examined enterprise application software and carefully assessed

every aspect of the ownership lifecycle. We have analyzed and appraised the crucial

software features that directly influence the overall experience of owning enterprise

applications. Several feature sets were incorporated, such as enhanced data loading and

movement during implementation, user-friendly navigation for usability, and

performance testing focused on user satisfaction for maintenance. This research

provided an unbiased evaluation of these specific characteristics, confirmed through

extensive interviews with a group of consulting experts who have extensive experience

working with multiple vendors and lifecycles.

The resulting study offers a comprehensive evaluation of various vendors, covering all

aspects of the application lifecycle, including implementation, application usage, and

ongoing support and maintenance. The study examined various players and software

versions.

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 • Microsoft Great Plains version 7.5 and previews of Microsoft Great Plains

version 8.0

• Oracle E-Business Suite 11.5.9

• PeopleSoft Enterprise 8.8 and 8.9 and Enterprise One 8.11

• SAP my SAP Business Suite R/3 4.6 and SAP R/3 Enterprise 4.7

• Siebel 7.5 and Siebel 7.7.

From a summary perspective across the ownership lifecycle, PeopleSoft demonstrates

consistent advantages for the key features evaluated in this study. The research

validates PeopleSoft's leadership for key ownership features in three categories:

1. Implementation:

PeopleSoft's implementation features outperformed those of Microsoft, SAP, and

Siebel. They excel in facilitating the installation, implementation, and deployment of

enterprise applications through user-friendly configuration wizards and pre-packaged

integration packs for all major vendors. Oracle consistently excels in configuration,

data loading, pre-packaged integrations, and web services. PeopleSoft has made

significant advancements in its configuration and integration tools, surpassing other

vendors in this area.

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2. Usability:

PeopleSoft and Siebel were found to have the highest ratings in terms of usability

features evaluated. The structured arrangement of application screens and the

uniformity of screen designs throughout all modules in PeopleSoft applications

enhance user efficiency and facilitate quicker and more accurate task completion. The

usability of Microsoft Business Solutions is somewhat limited because it heavily relies

on a "thick client" architecture for most of its applications. Additionally, SAP was

found to be lacking in task-oriented dashboards.

3. Maintenance, Support, and Upgrades:

PeopleSoft has consistently received high ratings for its maintenance feature set. This

is mainly because of its ability to quickly and proactively identify and resolve

application issues through embedded diagnostics scripts, comprehensive test scenarios

and scripts, and a streamlined upgrade process. Regarding Microsoft Business

Solutions, PeopleSoft's web enablement significantly simplifies the upgrade process

compared to Microsoft Great Plains. Unlike Great Plains, which operates in a client-

server environment and necessitates upgrading the client as well. The findings of this

assessment conducted by our team of experts can offer valuable insights to decision

makers regarding the evaluation of leading enterprise application vendors. These

insights can help assess the overall ownership experience, including the cost of

ownership and the value derived from the applications.

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Key Research Findings

Every stage of the enterprise application lifecycle comes with its own set of challenges

that can greatly impact the overall outcome of the ownership experience. Take note

that if an enterprise software application is not installed completely or correctly, it can

lead to various issues during the rest of the implementation process. The costs

associated with maintenance often arise from the need to perform repetitive tasks, such

as upgrades that are carried out multiple times throughout the lifespan of an enterprise

application. In addition, the lack of effective diagnostic tools can result in unexpected

periods of downtime and disruptions to business operations. Ultimately, the adoption

of usability features plays a crucial role in the overall success of a product. When

usability is lacking, it can result in decreased productivity and ultimately lead to higher

costs. The experts analyzed the possible outcomes and identified the essential features

that allowed implementers, IT professionals, or end users to effectively implement,

maintain, or utilize the applications provided by the five vendors.

Then, using extensive research, the team evaluated each vendor's offerings and

assessed how well their implementation, usability, and maintenance features

contributed to the overall ownership experience. Vendors were categorized based on

the completeness of their offerings. A full circle represented a complete offering, a half

circle indicated a partial offering, and an empty circle meant no offering at all. The

following analysis represents a comprehensive vendor-to-vendor comparison by

application, providing a detailed compilation of the findings.

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1. Implementation

The implementation phase includes the initial installation of the software, its

configuration, the initial load of data into the new application, and any work that might

be required for the application to interface properly with the IT environment of the

customer, such as integration with other applications, and whether the integration is

batch or real time. The implementation phase is typically broken into three major steps:

1. Software installation

2. Configuration

3. Integration

The installation step is crucial as any mistakes or omissions during the initial setup of

the software can result in substantial delays during the subsequent implementation

process. Efficient configuration tools play a crucial role in ensuring that an application

implementation project stays on schedule. During the configuration process, these tools

capture and share all the necessary details of customer business requirements with the

implementation staff.

Finally, the integration step can often be quite challenging, with various hidden and

unexpected expenses that may arise. Three factors - the intricate nature of the

applications to interface with, the intricate nature of the business processes between

applications, and the intricate nature of the integration tools that may require multiple

experts and various types of expertise - pose challenges in establishing detailed project

plans and accurately estimating project costs. The experts used seven criteria to

analyze and compare vendor approaches to implementation.

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 1. Application installation wizard

2. Advanced configuration

3. Process modeler

4. Advanced data loading and moving

5. Process-oriented integration

6. Pre-packaged integration between vendor applications

7. Built-in web services integrations

PeopleSoft and Oracle offer a wide range of features that are highly beneficial during

the implementation phase. PeopleSoft is highly proficient in various areas such as

application installation wizard, advanced configuration, advanced data loading and

moving, pre-packaged integration between vendor applications, and built-in web

services integration. Oracle demonstrates its expertise in advanced configuration,

process modeling, advanced data loading and moving, and seamless integration with

web services. However, it falls short in providing pre-packaged integration between

vendor applications. SAP and Siebel partially meet all seven criteria, while Microsoft

falls short in four areas - advanced configuration, process modeler, advanced data

loading and moving, and process-oriented integration repository.

Let's examine each of the seven feature sets in the installation category.

1.1. Application installation wizard

Both Microsoft and Siebel provide a streamlined installation wizard that is thorough

and neatly packaged. PeopleSoft provides an application installation wizard that

streamlines the installation process by automating important steps, such as configuring

14
the database. In contrast, SAP's installation procedure and wizards are proprietary and

can be more complex. Implementers often need to step out of the automated process to

handle tasks that were overlooked during the planning phase. Oracle has made

significant improvements to its installation wizard in recent releases. However, there

are still inconsistencies across modules, and some manual steps are necessary outside

of the wizard.

1.2. Advanced configuration

PeopleSoft has made significant strides in allowing users to configure the application

based on their specific needs, whether it be by product or by business processes. As an

illustration, the PeopleSoft Setup Manager configuration tool allows implementation

staff to easily access online documentation and navigate through it by selecting

specific products and features directly from the configuration screen. Both Siebel and

Oracle offer sophisticated tools for supporting the definition of business processes and

data flows. SAP offers advanced tools that demand a higher level of technical

proficiency. Microsoft restricts the level of customization available to end users when

configuring applications.

1.3. Process modeler

1.4. Advanced data loading and moving

Microsoft's data loading and moving capabilities are limited. Oracle iSetup streamlines

and simplifies the initial setup of data. Oracle iSetup is a highly intelligent tool that

effortlessly generates all the necessary application parameters and flows, including

chart of accounts, expense policies, and rules. PeopleSoft offers sophisticated data-
15
loading and moving features that allow users to seamlessly load data from Excel

spreadsheets into PeopleSoft applications using component interfaces. SAP offers a

complimentary collection of tools and procedures that enable the seamless transfer of

data from various sources, eliminating the need for any programming. Siebel offers a

range of exclusive tools for data loading. These tools are ideal for batch loading data

that needs to be reloaded periodically, once the data mapping is complete.

1.5. Pre-packaged integration between vendor applications

PeopleSoft Process Integration Packs provide comprehensive integration capabilities,

including data transformation, routing, cross-reference maps, and standard-based

connectors/adapters, ensuring seamless end-to-end integration. PeopleSoft offers five

pre-packaged integrations for important SAP and Oracle business processes as part of

its standard package. These pre-packaged integrations eliminate the need for custom

integrations, resulting in significant cost savings of up to 60% for customers. Although

Oracle does not provide pre-packaged integration packs, they do have adapters

available for a wide range of commonly used applications. The adapters provided can

significantly decrease the amount of effort required for custom integration. SAP

incorporates integration tasks into its NetWeaver platform, necessitating a strong grasp

of technology to successfully execute the integration. The Siebel Universal Application

Network offers a standardized interface layer that allows the Siebel Application to

seamlessly connect with external applications. However, it does rely on the use of

third-party components. Microsoft has recently unveiled a new toolbox for integration,

which serves as a replacement for the previous Great Plains integration tools,

specifically the Integration Manager. According to reports, this tool is considered a

significant improvement compared to previous proprietary options. However, it still

16
has some way to go in terms of usability and completeness when compared to other

vendors.

1.6. Process-oriented integration

Oracle Workflow within Oracle E-Business Suite provides support for basic process-

oriented integration and allows for the modeling of these processes. Siebel's method of

process-oriented integration involves making all of its process-oriented business

services available as web services. PeopleSoft's latest integration repository allows

customers to easily view integration points from a business process perspective and

create integration process plans. SAP's integration approach has been highly

concentrated on business processes, yet it heavily depends on exclusive technologies.

Microsoft Integration Manager offers a range of templates that provide control over the

underlying business logic.

1.7. Built-in web services integrations

PeopleSoft provides built-in web services and fully supports industry standards for web

services. In addition, Oracle supports web services integration at every layer of its

application framework (database, middle-tier, and application layer) using open

connector standards such as SOAP, WSDL and UDDI. Siebel's strategy is to expose all

its business processes as web services to deliver business services-driven integration.

SAP provides integration based on web services through its SAP NetWeaver platform.

2. Usability

The usability phase encompasses all essential functionality that pertains to the

application's ease of use. Usability encompasses a range of factors that contribute to a

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smooth user experience. These include the ability to complete tasks accurately and

efficiently, an intuitive interface, high user productivity, ease of learning without

extensive training, minimal steps or clicks required for specific tasks, support for users

of all skill levels, adherence to industry standards, quick response times, and the ability

to adapt application terminology to fit customer needs. Given the broad range of

factors to consider when assessing usability, it is valuable to conduct an impartial

comparison of different applications.

Indeed, the usability of a product can have a significant impact on the overall

experience of owning it. First and foremost, the ease of use greatly influences how

readily users will embrace a new system, ultimately determining its success or failure.

Insufficient usability can result in ongoing hidden expenses due to decreased

productivity for end users, applications prone to errors, or applications that do not align

with a company's business processes.

Five criteria were involved in the analysis assessment of usability:

1.Task-oriented navigation

2.Navigation configurability

3.Task-oriented dashboards

4.Web client

5. Integrated office productivity.

It is clear that both PeopleSoft and Siebel have prioritized usability for their customers.

Among the five vendors, they offer the most comprehensive set of features for

usability. These include task-oriented navigation, customizable navigation options,

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task-oriented dashboards, and web clients. SAP lacks task-oriented dashboards, while

Microsoft does not offer web clients.

Now, we will carefully analyze all five feature sets within the usability category.

2.1. Task-oriented navigation

A task-oriented navigation is specifically designed to enable users to efficiently

navigate through business processes and successfully complete their tasks. PeopleSoft

presents a user-friendly graphical interface that showcases task-oriented language and

intuitive icons to represent the content of the portal registry. The navigation pages in

the application have a consistent layout, making it easier for users to locate navigation

items. The new 2-level navigation shortcut collection allows users to quickly find what

they are looking for by scanning. The application's flow is consistent throughout, from

the top level portal page to the specific application pages. These pages provide

process-driven recommended actions and only display relevant fields based on the

current stage of a specific business process. In order to ensure the best possible design

for this task-based navigation metaphor, PeopleSoft conducts usability tests with a

minimum of 100 customers for each application in every release. This ongoing

commitment to designing solutions based on customer needs allows PeopleSoft to

consistently enhance usability, which is why it stands out among other vendors.

Oracle's screens can be adjusted to better suit the customer's business processes and

tasks, although this capability is not universally available across all modules and

demands a high level of expertise in Oracle. Customizing navigation within SAP can

be achieved through custom development on top of the SAP Portal. However, it's

worth noting that the SAP Portal, which is part of SAP NetWeaver, is not widely

19
utilized by most customers at present. Both Microsoft and Siebel have dedicated

significant resources to enhancing usability, resulting in user-friendly interfaces that

make navigating their applications a breeze.

2.2. Navigation configurability

Many vendors offer tools that allow technical staff and implementation teams to tailor

the application interface to align with the customer's unique business needs and

processes. Microsoft offers a modest selection of tools for customizing the application

interface. Modifications to the interface and navigation of Microsoft Great Plains are

achieved through custom coding, rather than relying on configuration and wizard-

driven, point-and-click tools. Using PeopleSoft, Oracle, and Siebel, you have the

ability to effortlessly create navigation pages that are tailored to your specific needs.

These pages can be customized and personalized to your liking, allowing you to use

them in place of or alongside the default navigation pages that come pre-installed. SAP

necessitates a high level of programming expertise in order to attain the desired level

of configuration and customization for the interface, which may not be suitable for the

average user.

2.3. Task-oriented dashboards

Task-oriented dashboards from Microsoft and Oracle have limited functionality. With

task-oriented, pre-built dashboards that efficiently organize essential tasks like

applicant job tracking and reporting, PeopleSoft enhances productivity for end users.

PeopleSoft places a strong emphasis on usability and end user productivity. As a result,

new releases are only shipped when a majority of new users are able to successfully

complete key tasks without any assistance in a timed usability exercise. Siebel also

offers dashboards that are focused on end users and their tasks. In contrast, vendors
20
like SAP have yet to fully transition their interface to a more task-oriented navigation.

Users are still required to click back and forth between multiple screens to complete

the various steps needed for a specific business task.

2.4. Web client

All PeopleSoft modules and applications, including PeopleSoft Enterprise One, are

completely web-based and do not require any application code to be downloaded on

the end user workstation. This feature allows for seamless upgrades that do not disrupt

the end users or require any involvement from the technical staff when it comes to

client side issues. Siebel's latest software version now includes 100% web deployment.

In the past, there was a requirement to download certain code to the client when using

Siebel. Although Oracle asserts its web-enabled capabilities, certain code components

still need to be downloaded to the client. Regrettably, the web architecture of Oracle is

not uniform across all its modules. SAP still lacks full web functionality. In contrast,

Microsoft's applications primarily operate on a client-server model, which can cause

significant disruptions to business operations when upgrades are released. This can

result in additional downtime and unnecessary costs to upgrade each end user

workstation.

2.5. Integrated office productivity

Microsoft has created a seamless integration between its business applications and

desktop applications, including Microsoft Office and Outlook. Siebel offers a

rudimentary integration feature that connects its sales force automation modules with

email. Additionally, PeopleSoft CRM offers seamless integration with popular desktop

software tools such as Microsoft Office Suite and Lotus Notes. It also extends its

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compatibility to mobile devices like laptops, Pocket PC, and Blackberry devices. This

comprehensive integration aims to enhance user adoption and empower users with

increased levels of efficiency. Oracle and SAP have some capabilities in the area of

integrating with personal productivity tools, but it is an area that still needs further

development.

Maintenance, Support, and Upgrades

The maintenance incorporates all post-execution exercises that are required to keep the

application working under ordinary and pressurized conditions. It incorporates

continuous help, overhauls (patches and minor and significant updates), all diagnostics

and tuning exercises overseen by heads to keep up the application running in ideal

conditions, and the chronicling of recorded information. Support expenses importantly

affect the general proprietorship experience, due to the customarily work escalated and

redundant nature of these exercises. Diagnostics and tuning encourage the overhaul

procedure by remaining current on discharges, while poor diagnostics instruments lead

to capricious personal times and business interruption. Seven criteria were associated

with the master evaluation of the support stage:

1. Diagnostic and technical support

2. Remote and online support

3. Performance diagnostics and tuning

4. Patch management

5. Automated upgrade process and toolsets

6. User-centric performance testing

7. Data archiving.

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During this phase, PeopleSoft provides a comprehensive range of features that include

diagnostic and technical support, performance diagnostics, patch management, user-

centric performance testing, and data archiving. PeopleSoft, Oracle, and SAP all

provide comprehensive performance diagnostics and tuning capabilities. PeopleSoft,

Microsoft, and Siebel have comprehensive solutions for patch management.

Additionally, PeopleSoft and Siebel have taken significant steps to address user-centric

performance testing. All vendors offer automated upgrade tools and have made

significant improvements in addressing maintenance issues to enhance the ownership

experience.

Now, we will carefully analyze all seven feature sets within the maintenance, support,

and upgrade category.

3.1. Diagnostic and technical support

Support for Microsoft, SAP, Oracle, and Siebel is provided through conventional

methods, such as accessing a knowledge base online and engaging in phone

conversations with technical support. PeopleSoft is the exclusive vendor offering a

comprehensive diagnostic framework with embedded diagnostics scripts. This unique

feature allows customers to securely send real-time production system snapshots to

PeopleSoft's support center. This exceptional feature guarantees expedited problem

identification and solution. When using SAP, Oracle, and Siebel, customers and

vendors communicate through customized emails to exchange diagnostic and

resolution information. The effectiveness of this process depends on the vendor's

support staff being available, responsive, and knowledgeable. For certain situations,

effective support may involve a thorough back-and-forth communication and sharing

23
of files, like log files that provide detailed information about the customer's setup.

3.2. Remote and online support

All vendors provide some form of a remote support and online capabilities to help

customers self-diagnose issues. Both PeopleSoft's and Oracle's online support

databases are rich in content but can be time consuming to navigate. Siebel provides

some support content over the web but, once a problem has been logged online, always

promotes interaction with the customers over web self service support. SAP has

recently introduced multiple web sites to provide better post implementation

information to its customers, but the efforts remain fragmented across various

interaction points with customers.

3.3. Performance diagnostics and tuning

Oracle, PeopleSoft, and SAP offer a convenient performance monitoring tool that

keeps track of application performance in real time, both as a whole and by individual

component. The tool offers comparisons to average performance levels to proactively

detect and resolve underperforming components. Siebel offers robust application

response-time management that streamlines performance tuning across all tiers of the

Siebel Smart Web Architecture. It also enables proactive performance monitoring by a

third-party monitoring application that complies with industry standards. Due to the

need for third-party software, Siebel's rating is not as high. Microsoft focuses on

performance monitoring at the platform level (Windows/NT), without offering specific

tools for monitoring individual applications.

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3.4. Patch management

Applying patches to enterprise applications can be a very time consuming and

disruptive activity. SAP, Oracle, and Siebel make their list of patches fully available on

the web but provide limited guidance and automated tools to select which patches are

relevant to a specific configuration. PeopleSoft has streamlined this task by offering a

Change Assistant toolset that supports the automatic checking of pre and post-

requisites and by automatically selecting which patch should be applied for the

customer to be current. Microsoft releases new versions of patches for its applications

very infrequently (less than once a year), so the features with respect to patch

management are well suited.

3.5. Automated upgrade process and toolsets

SAP offers tools to identify pre-requisites and guide technical staff through the various

steps of an upgrade. The SAP upgrade process is only partially automated, with many

complex tasks to be performed manually. PeopleSoft provides Upgrade Assistant, an

automated upgrade tool with well tested and complete upgrade scripts. Starting with

Enterprise Human Capital Management 8.9 customers, PeopleSoft has re-engineered

the upgrade process from eight steps to five with Accelerated Upgrades. Now

customers can use a visual compare tool to identify customizations and an ETL-based

data migration tool to ensure downtime is less than a day. Oracle offers upgrade scripts

and tools but with a lesser degree of automation. Microsoft provides basic upgrade

automation tools that are adequate for Microsoft's low frequency of releases.

25
3.6. User-centric performance testing

Customers can submit test cases through PeopleSoft, which are then utilized in the

application testing and release process. PeopleSoft is the exclusive vendor that

conducts thorough testing of functionality and performance using actual customer data

on high-capacity database systems. Oracle heavily relies on its database performance

test to validate the performance of its application. SAP offers test services that are

known for their high cost, resulting in limited customer adoption. Siebel has always

prioritized usability, starting from its initial CRM application release. User-centric

testing is a crucial component of its product development cycle. Microsoft provides a

user-friendly experience, although the features offered may not be as advanced.

3.7. Data archiving

Oracle's purge capabilities do not extend to archiving or restoring/reinstating archived

data into production. Both SAP and PeopleSoft offer built-in features for archiving,

purging, and restoring data. Furthermore, PeopleSoft offers rules-based archiving

templates that allow administrators to establish distinct archiving rules for various

regions, enhancing global compliance support. Siebel and Microsoft do not provide

direct support for archive, purge, or restore functions.

26
ERP Vendors

Microsoft

Microsoft does not currently have a formal program in place for individuals seeking

proprietorship experience. Microsoft has developed its cost management strategy

around a very affordable software price point and nearly 100% out-of-the-box

solutions with limited ability to customize the software. As a result, Microsoft provides

basic functionality that doesn't require extensive training, but it may not fully meet the

customer's expectations in terms of the overall user experience.

Oracle

Oracle's philosophy for Enterprise Applications centers around addressing the cost of

ownership. Oracle asserts that by utilizing the Oracle e-Business Suite, organizations

can reduce implementation expenses by eliminating the need for expensive custom

integration between applications. While Oracle's approach may have some merit, there

are still serious concerns being raised about the results they have delivered so far.

Although there have been some measurable benefits highlighted through ROI case

studies, there is room for improvement.

PeopleSoft

Implemented within a rigorous program, PeopleSoft allocated significant resources to

enhance the overall customer experience, with a team of over 1,000 developers and a

substantial investment of $800 million. Instead of solely focusing on improving the

ownership experience, PeopleSoft has completely redesigned its applications to

minimize deployment and maintenance costs.

27
SAP

Many users of SAP applications have, over the years, observed the intricate nature of

SAP applications, the subsequent expenses associated with their implementation, and

the resulting budget overruns. SAP emphasizes SAP NetWeaver as the central

component of its product strategy to address these concerns, aiming to reduce the

complexity and cost of owning SAP applications. At present, there is still uncertainty

surrounding the effect of SAP NetWeaver on the overall cost of owning SAP. SAP has

not yet provided evidence to support the claim that its customers experience improved

ownership through the implementation of SAP's latest technology.

Siebel

Siebel's customer experience initiative initially prioritized customer satisfaction and

measured return on investment at a high level. Only in the past year or so, Siebel has

started to pay more attention to cost-of-ownership concerns, primarily due to customer

feedback. Siebel's software development process has been enhanced through careful

analysis of 200 Siebel 7.x deployments, allowing for valuable experience and insight to

shape their improvements.

28
Return on investments for ERP

Some of the instructions that have to be followed to ensure adequate Return on

Investments are given below:

Working out the Myths of ERP in the Initial stage

The uncertainty surrounding Erg's ROI continues to perplex organizations that are

struggling to implement it. There is a clear and direct response to the topic of ROI on

ERP. Organizations can achieve a guaranteed return on investment from ERP if they

diligently follow the strategies and implement the appropriate practices.

This is easier said than done. One frequent mistake made by the company is sticking to

outdated methodologies, which ultimately hinders the potential value that the ERP

process could bring to the company and its business operations. The challenges

involved in the implementation process may lead some to believe that adopting ERP is

a daunting task and that the expected benefits may not be assured. This perspective is

incorrect, requiring companies to increase their efforts as the process becomes more

complex, rather than the other way around, in order to maximize the benefits of ERP.

Otherwise, the calculations performed by the ERPROI calculator may yield inaccurate

results. Even with the use of ERPROI tools, there will be no meaningful outcome.

Proper Implementation and Finance

The implementation process should be carried out smoothly and in accordance with the

established standards.There should be no room for negotiation or disagreement in the

allocation of funds. One common mistake made by companies is reducing expenses in

certain areas to maximize financial gains.

29
However, it is important to consider the long-term impact on the company unless there

is a strategic reason for implementing a partial change that can justify the decision.

When discussing the implementation process, it's crucial to make sure it aligns with the

standards and follows the instructions of the vendor/ERP consultant.

Strict Adherence to Changes

Many of ERP's welfare measures are easily noticeable. Nevertheless, certain unseen

factors can have a significant impact on the organization. These factors lead the

company to believe that ERP is not a worthwhile investment. As a result, they even go

as far as disregarding it halfway and not implementing the changes that were suggested

and planned for extensively. They will undermine the purpose of ERP ROI. There is no

point in complaining about ERPROI tools.

30
ERP System Selection Methodology

A preference technique for selecting an ERP framework is a formal procedure used to

choose an Enterprise Resource Planning (ERP) framework.

Whether the organization is a global multi-million dollar association or a small

organization with single-digit million turnover, the goal of system selection is to find a

system that can provide functionality for all business processes, gain complete

customer acceptance, obtain management approval, and most importantly, deliver

significant return on investment for the shareholders.

Ever since the mid-70s, when computer packages were first introduced to help with

Material Requirements Planning, companies have been working hard to develop

comprehensive software packages that cover all aspects of business operations. These

packages now include features for Manufacturing, Supply Chain Management, Human

Resources, and Financials. This resulted in the development of ERP Systems.

Since 1990, numerous packages claiming to be ERP systems have flooded the

marketplace. There are high-end packages available in the market, including SAP,

Oracle, Movex, and IFS. Additionally, there are medium enterprise systems like

Microsoft Navision, Axapta, Tropos, Great Plains, Dynamics, iRenaissance, Sage, and

Epicor Vantage, along with numerous other packages that vendors claim to be ERP

Systems. There are also packages that are highly regarded for specific processes and

are sold as an additional component to an ERP System. There are numerous options

available, which poses a challenge for the company in making a decision.

Choosing an ERP system becomes even more challenging when considering the

31
different requirements of discrete manufacturing and process industries. Discrete

manufacturing involves a specific number of items that make up a final product, while

process industries like chemical and food processing deal with ingredients that are not

exact and may involve re-work and byproducts.

In the past ten years, companies have also shown a growing interest in advanced

features like Customer Relationship Management and e-Commerce capability.

Considering the various options available, it is not unusual for companies to select a

system that may not be the most suitable for their business, resulting in a more costly

implementation. Therefore, it is understandable that the costs of ERP can be quite

significant, reaching as high as two or three percent of revenues. An effective ERP

system selection methodology ensures that the chosen system aligns perfectly with the

business processes and user needs, while also being delivered on time and within

budget.

Poor System Selection

It is seldom that companies adopt a fully objective system selection methodology when

choosing an ERP System. Some of the common mistakes that companies resort to are:

Incomplete Set of Requirements

When a new ERP has been implemented in an enterprise, Wallace & Kremzar state

that "it requires people to do their job differently" . Therefore, it is very important to

understand the requirements of each user for current processes and for future processes

[i.e. before and after the new system is installed]. One can then review systems that

have the best fit from a functionality perspective. It is also imperative that the

32
requirements go into great detail for complicated processes or processes that may be

unique to a particular business.

Reliance on Vendor Demos

Vendor Demonstrations tend to be focus on very simplistic processes. A typical

demonstration will show an ideal order to cash process where a customer orders a

quantity of product that is in stock. The reality in most businesses is that most

customers have varying and more complicated commercial arrangements and products

are not always in stock.

Over-Emphasis on System Cost

According to Finlay and Servant “The differential in purchase price between packages

is unlikely to be the dominant factor". While the cost of an ERP system is very

important for a company, there tends to be a lack of focus on the other important

decision criteria such as functionality; future proofing; underlying infrastructure

[network & database]; and e-commerce capability among others.

Selection Bias

It is not unusual that the decision on which system to purchase is made by one

individual or by one department within the company. In these situations, an ERP

system that may be excellent at one function but weak at other processes may be

imposed on the entire enterprise with serious consequences for the business.

33
Failure to use Objective Professional Services

One of the primary causes of system selection failure is a lack of knowledge within the

company, which is understandable. Experienced consultants are well-versed in the

various packages available in the marketplace. They can offer valuable insights into the

latest functionality found in the most commonly used packages. Most importantly, they

can help users determine if a specific requirement would truly benefit both the user and

the business. However, it is important to consider that the assistance should come from

unbiased consultants who are not affiliated with ERP System vendors. "If a

consultancy has developed a deep understanding of a specific package, it is in their

best interest to suggest that package to their client."

Inability to Understand Offering by ERP Vendor

It is estimated that around 90% of enterprise system implementations experience

delays or exceed their budget. One possible reason for delays and cost overruns in

implementations could be attributed to a lack of understanding on the part of the

company regarding the vendor's offering prior to signing the contract. An example that

illustrates this situation is when a vendor provides a 5-day service for data migration. It

is evident that a significant amount of effort is necessary to input data onto a new

system. The vendor will handle the data import into the new system, but they require

the company to provide the data in a format that is compatible with the system's import

process. The company is also expected to extract and clean the data from the old

system, as well as add any necessary new data for the new system. "For ERP to

achieve success, companies must strive for levels of data integrity that surpass their

previous achievements and expectations." It is crucial for inventory records, bill of

materials (BOM), formulas, recipes, routings, and other data to be meticulously

34
accurate, comprehensive, and well-organized. This common situation is just one

example of the various challenges that can result in project delays and the need for

additional resources.

A Proper System Selection Methodology

To address the common mistakes that lead to a poor system selection. It is important to

apply key principles to the process, some of which are listed hereunder:

Structured Approach

The first step in selection of a new system is to adopt a structured approach to the

process. The set of practices are presented to all the stakeholders within the enterprise

before the system selection process begins. Everyone needs to understand the method

of gathering requirements; invitation to tender; how potential vendors will be selected;

the format of demonstrations and the process for selecting the vendor. Thus, each

stakeholder is aware that the decision will be made on an objective and collective basis

and this will always lead to a high level of co-operation within the process.

Focused Demonstrations

Demonstrations by potential vendors must be relevant to the business. However, it is

important to understand that there is considerable amount of preparation required by

vendors to perform demonstrations that are specific to a business. Therefore, it is

imperative that vendors are treated equally in requests for demonstrations and it is

incumbent on the company [and the objective consultant assisting the company in the

selection process] to identify sufficient demonstrations that will allow a proper

decision to be made but will also ensure that vendors do not opt out of the selection

process due to the extent of preparation required.

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Objective Decision Process

"Choosing which ERP to use is a complex decision that has significant economic

consequences; thus, it requires a multi-criterion approach.". There are two key points

to note when the major decision makers are agreeing on selection criteria that will be

used in evaluating potential vendors. Firstly, the criteria and the scoring system must

be agreed in advance prior to viewing any potential systems. The criteria must be wide-

ranging and decided upon by as many objective people as possible within and external

to the enterprise. In no circumstance should people with affiliations to one or more

systems be allowed to advise in this regard.

Full Involvement by all Personnel

The decision on the system must be made by all stakeholders within the enterprise. "It

requires top management leadership and participation…… it involves virtually every

department within the company". Representatives of all users should:

• Be involved in the project initiation phase where the decision-making process is

agreed;

• Assist in the gathering of requirements;

• Attend the Vendor Demonstrations;

• Have a significant participation in the short-listing and final selection of a

vendor.

36
The implementation of an ERP system takes a significantly longer time and level of

resource than the selection process. However, the extent of the implementation will be

profoundly influenced by the level of resource and objectivity within the selection.

Companies that use a proper System Selection Methodology reap the benefit not only

during the implementation phase but also and most significantly during the life of the

ERP System.

37
Important Issues to Consider Before ERP Implementation

Prior to coordinating business operations, directors must carefully evaluate several

important factors that will help them determine whether an ERP integration is the right

choice for their organization. The following important topics are organized into the

following categories: key issues, process of organizational change, individuals, and

various approaches to implementing ERP.

Foundational Concerns

First and foremost, managers must carefully examine the crucial aspects of system

integration by thoroughly analyzing the organization's vision and corporate objectives.

For example, does management possess a comprehensive understanding of its existing

business processes, and are they capable of making prompt implementation decisions?

Is management prepared to embark on significant business process reengineering

efforts to achieve remarkable results? Is management open to making any adjustments

to the structure, operations, and cultural environment to accommodate the options

configured in the ERP system? Is the organization financially and economically

prepared to make a significant investment in an ERP implementation? Next,

management must carefully consider the crucial implementation and business matters

and determine the best course of action. Indeed, ERP may not be the best fit for

companies facing rapid growth and frequent changes in an unpredictable environment.

Similarly, organizations undergoing shifts in corporate management and philosophy, or

anticipating mergers or liquidation, may find ERP less suitable for their needs. It is

expected that there may be additional challenges in integrating systems if one of the

merging companies is currently undergoing an ERP upgrade. This is due to the need to

38
address scalability, implement a new IT infrastructure, and navigate a different

corporate culture all at once. In addition, companies that thrive on flexibility or

produce constantly evolving products may not find ERP integration to be the best fit

for their needs. Likewise, organizations lacking familiarity with formal information

systems or facing frequent changes in their information systems needs will not find an

ERP implementation advantageous. Ultimately, organizations must harness upcoming

communication and computing technology to seamlessly integrate the ERP system

with e-business applications. Many times, running the powerful software system

requires additional new hardware and specialized professionals. Depending on the size

of the company and the modules installed, the cost of implementation can vary

significantly, ranging from one million to five hundred million dollars. The timeline

for completion will also vary, taking around two years for a mid-size company and up

to seven years for a large, multinational corporation.

Individuals Individual-related matters such as corporate philosophy and leadership

style can have a significant impact on the ERP implementation process. Studies have

shown that the support and commitment of top management play a crucial role in the

success of system implementation. Often, teams of high-level managers come together

to strategize and oversee IT projects. Senior managerial involvement often leads to

improved optimization of IT business values. Employees may exhibit apprehension

towards any alterations in the business processes, especially during times of economic

decline. Employees who resist changes in the business process and lack proper training

often struggle to perform well. Thus, in order to enhance the likelihood of a prosperous

ERP implementation and minimize resistance from users, it is crucial to engage end

users throughout every phase of the implementation process, particularly those who

39
possess extensive operational expertise. It is important for employees to receive proper

education regarding the ERP installation. An educational endeavor of this nature

should encompass a succinct introduction to the fundamental concepts and structure of

ERP systems. It would be beneficial to incorporate visual aids, such as screen shots of

the function modules, to enhance understanding. During these training sessions, it is

crucial to address the managerial concerns and develop a fundamental grasp of the

integration concepts before proceeding with the installation of the ERP system. In

addition, it is important to consider any Business-to-Business initiatives, reengineering

projects, alliances, and the introduction of new technologies. It is essential for project

managers to assume full responsibility for overseeing the implementation process at all

times. They are responsible for overseeing the reengineering of important business

processes, reassigning job responsibilities, restructuring the organization's chart, and

redefining work relationships. In addition, it is crucial for individuals to acquire the

skills necessary to effectively handle software vendors and external consultants.

The Process of Organizational Change

Implementing ERP necessitates organizations to fundamentally reengineer their key

business processes, overhaul outdated business practices, redefine job responsibilities,

and restructure the organization. When it comes to major multinational corporations

(MNC), it is crucial to customize ERP systems to tackle global challenges. This

involves accommodating the diverse business practices and country-specific

requirements related to accounting, taxes, environmental regulations, human resources,

manufacturing, and currency conversion. By integrating these aspects into the systems,

MNCs can effectively navigate the complexities of operating in different countries.

When integrating information systems across different countries, it's important to be

40
aware of potential issues that can arise. These issues can be categorized into three types

of misfits: data, process, and output. They occur when there are incompatibilities

between software functionality and organizational requirements, as well as differences

in cultural and regulatory environments. The distinct cultural and societal factors of

each country where an organization operates need to be thoughtfully integrated into the

ERP systems, which have historically been influenced by Western business practices.

In their study, Diese, et al. (2000) outline a comprehensive eight-level process that

managers can utilize to effectively navigate and handle change. The initial step

involves developing a thorough change vision and implementing it effectively. Next, a

strategy is developed to evaluate the organization's preparedness for change, determine

the most effective change approach, and establish a system for managing change. The

third step involves cultivating strong leadership skills to effectively guide the change

program and enhance leadership capabilities.

Building commitment from teams is achieved through effective communication,

addressing resistance, and sharing knowledge and skills. The fifth step involves

effectively managing the performance of employees and stakeholders by identifying

their needs and implementing performance management and people practices. Business

benefits are achieved by developing strong business cases and effectively measuring

and maintaining those benefits over time. The next step involves cultivating a strong

organizational culture by first gaining a deep understanding of the existing culture.

From there, the goal is to create a desired culture and successfully implement the

necessary changes. The last step involves designing the organization by gaining a

thorough understanding of the current structure, followed by designing the desired

organization and implementing necessary changes.

41
Methods in implementing ERP

ERP application assist incorporates every one of the administrations of the seller.

Organizations invest a great deal of energy talking about the need to go for ERP. They

make a wide range of appraisals and expedite the fundamental assets to work ERP.

They even convey the activities recommended in rebuilding. At the point when the

stage is good to go to take ERP the following million-dollar question that comes to

them is the fitting strategy for usage because of the hazard for ERP execution.

Some well-known strategies for usage are as per the following:

Joint ventures with the Respective Industry

Implementing ERP doesn't have to be a solo endeavor for the company. They can also

share it with prominent figures in the same industry. This will help minimize the

potential losses by taking necessary precautions. This practice is becoming

increasingly important in the current situation. The sharing enables individuals to

interact with the systems using a shared platform. This is gaining popularity in the

market, although some competitive firms are hesitant to collaborate due to concerns

about losing their own business strategies. It is also viewed as a solution to the problem

of implementing ERP.

While companies have the freedom to secure their own information, there is no

guarantee of protection for the shared database of records. Nevertheless, this has

proven to be highly beneficial in numerous ways. For example, the medical history of a

patient brought in an emergency condition can be quickly accessed through ERP. This

specific fact has actually saved numerous lives. However, they would need to undergo

42
a thorough process of identifying the patient and dealing with the subsequent steps,

which greatly reduces the likelihood of the patient's survival without ERP. This is a

valuable resource for ERP implementation support. There may be numerous risks

associated with ERP implementation.

Taking on everything by oneself

This method has been used for a long time and is still in practice today. This approach

involves a significant amount of risk. However, if the calculations are done accurately,

the regime would be remembered as a prosperous era in the company's history. The

straightforward explanation for this phenomenon is that the company should pursue it

based on its financial capacity, needs, technical expertise, management strategy, and

other relevant factors. All of these factors will assist individuals in reaching a

resolution for ERP implementation issues.

Implementation Status: Full/Partial

It is commonly believed that ERP products and services are tailored to fit the specific

needs and resources of each company. There is no cause for concern when it comes to

ERP implementation. Therefore, companies have the option to adopt a comprehensive

ERP system and implement it throughout the organization, effectively connecting all

processes and relevant individuals. Otherwise, individuals may opt for an ERP system

that specializes in a specific function of the company. This step is crucial in selecting

the right ERP software and also enhances the value of the implementation process. It is

also a significant solution for ERP problems.

43
Successful ERP Implementation

Organizations have a wide range of applications and processes throughout their

functional units; developing ERP software systems that are typically complex and

often require significant changes in staff work practices. Implementing ERP

programming can often be too complex for internal expertise, so it is appealing and

highly recommended to hire external specialists who are professionally trained to

implement these systems. This is often the most cost-effective approach. There are

three types of services that can be utilized for - Consulting, Customization, Support.

The duration of implementing an ERP system depends on factors such as the

company's size, the number of modules, the level of customization, the extent of the

changes, and the client's ability to take ownership of the project. ERP frameworks can

be implemented gradually, as they do not all need to be implemented at once. It is

typically divided into various stages or phases. The typical endeavor lasts

approximately 14 months and necessitates the involvement of approximately 150

advisors. A small venture (e.g., an organization of under 100 staff) can be planned and

executed within 3-9 months; however, a large, multi-site or multi-country

implementation may take years.It would be helpful to provide a citation for that

information. The duration of the usage is closely tied to the level of customization

desired.

Companies frequently enlist the assistance of an ERP vendor or third-party consulting

firms to implement ERP systems. These firms usually offer three main areas of

professional services: consulting, customization, and support. The client organisation

may also hire independent experts in program management, business analysis, change

44
management, and UAT to ensure that their business requirements are given top priority

during implementation.

Data migration plays a crucial role in determining the success of an ERP

implementation. Given the importance of making decisions prior to migration, it is

crucial to engage in thorough planning. Regrettably, data migration tends to be

overlooked in ERP implementations as it is the final task before the production phase

and often gets rushed due to time constraints. Here are some steps to consider for a

successful ERP implementation:

• Identifying the data to be migrated

• Determining the timing of data migration

• Generating the data templates

• Freezing the tools for data migration

• Deciding on migration related setups

• Deciding on data archiving

Process preparation

ERP vendors have meticulously crafted their systems to align with standard business

processes, drawing from the most effective business practices. Various vendors offer a

range of processes that are standardized and modular in nature. Companies that wish to

implement ERP systems are thus compelled to adjust their organizations to

standardized processes rather than customizing the ERP package to fit their current

processes. Failure of ERP projects often stems from a lack of attention to mapping

45
current business processes before implementation begins. It is essential for

organizations to conduct a comprehensive business process analysis before choosing

an ERP vendor and embarking on the implementation journey. This analysis will

comprehensively outline all current operational processes, allowing for the selection of

an ERP vendor whose standard modules closely match the existing organization.

Redesign can be implemented to achieve greater process congruence. Studies suggest

that reducing the risk of business process mismatch can be achieved by connecting

each existing organizational process to the overall strategy of the organization,

evaluating the efficiency of each process in relation to its corresponding business

capability, and gaining a thorough understanding of the current automated solutions in

place.

Implementing ERP in organizations with independent business units can be quite

challenging due to the varying processes, business rules, data semantics, authorization

hierarchies, and decision centers that exist within each unit. This complexity is further

compounded by the political dynamics involved. Possible solutions involve

coordinating requirements through local change management professionals or, if that's

not feasible, implementing a federated approach using loosely integrated instances.

These instances can be linked through Master Data Management and can be

specifically configured or customized to meet local needs.

One downside often associated with ERP is that adjusting business processes to align

with standardized ERP modules can result in a loss of competitive edge. There are

instances where this has been proven to be true, but there are also cases where careful

planning and preparation of ERP systems can lead to a significant boost in sustainable

competitive advantage.

46
Configuration

Setting up an ERP system involves finding a balance between your desired system

functionality and the system's limitations. Start by selecting the modules to install, and

then fine-tune the system using configuration tables to seamlessly align with your

company's processes.

Modules are commonly used in systems to provide flexibility in implementing certain

functions while excluding others. Many companies choose to implement common

modules like finance and accounting when adopting enterprise systems. However, not

all companies find it necessary to adopt modules like human resource management. A

service company, for instance, may not require a module for manufacturing. In some

cases, companies may choose not to adopt a module due to their confidence in their

own proprietary system, which they consider to be superior. In general, selecting more

modules can lead to greater integration benefits. However, it is important to consider

the potential increase in costs, risks, and changes.

Configuration Tables allow companies to customize specific aspects of the system to

align with their preferred business practices. As an illustration, an organization has the

option to choose the type of inventory accounting it will use, such as FIFO or LIFO. It

can also decide how it wants to recognize revenue, whether by geographical unit,

product line, or distribution channel.

So what happens when the choices provided by the system fall short of expectations?

At this point, a company is faced with two options, both of which have their

drawbacks. One option is to modify portions of the enterprise system's code, while

another is to integrate it with the new enterprise system through interfaces. Both

options will require additional time and resources for the implementation process. In
47
addition, they can diminish the system's integration benefits. As the system becomes

more customized, the potential for seamless communication between suppliers and

customers decreases.

48
Consulting services

Many organizations lacked the necessary internal skills to successfully implement an

ERP project. This led to many organizations providing counseling services for ERP

implementation. Typically, a counseling group was responsible for overseeing the

entire ERP usage process, from organizing and preparing to testing, implementation,

and delivery of any customized modules. Customization options include additional

product processing, creation of strategy triggers and workflows, expert advice to

enhance the utilization of the ERP in the business, system optimization, and assistance

with writing reports, complex data extracts, or implementing Business Intelligence.

For most mid-sized companies, the cost of the implementation can vary from the list

price of the ERP user licenses to double that amount, depending on the level of

customization needed. Large companies, particularly those with multiple sites or

operating in different countries, often allocate a significant amount of their budget

towards the implementation process. In fact, it is not uncommon for the

implementation costs to be three to five times higher than the cost of user licenses,

especially in the case of multi-site implementations.

Unlike many other applications, ERP packages have traditionally come with complete

source code and have been shipped with vendor-supported team IDEs for customizing

and extending the provided code. During the early years of ERP, the availability of

reliable tools and comprehensive support for customization played a crucial role in

persuading potential customers to either develop their own unique solution in-house or

integrate multiple "best of breed" applications to create a cross-functional solution.

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"Core system" Customization vs Configuration

More and more, ERP vendors have made efforts to minimize the necessity for

customization by offering pre-installed "configuration" tools that cater to the majority

of customers' requirements for modifying the functionality of the core system. There

are notable distinctions between customization and configuration:

Customization is not required, but certain configuration steps may be necessary to

ensure the software functions properly. This includes setting up cost/profit centre

structures, organizational trees, purchase approval rules, and more.

Configuration is accessible to all customers, while customization empowers each

customer to implement unique and innovative processes that outperform the market.

Typically, configuration changes are documented as entries in data tables provided by

the vendor, while customization often involves programming and/or modifications to

table structures or views.

The impact of configuration changes on system performance can be anticipated and is

primarily the responsibility of the ERP vendor. The impact of customization can be

difficult to predict and may necessitate extensive stress testing by the implementation

team.

Configuration changes are typically reliable and will persist through software

upgrades. Certain customizations, such as code that utilizes pre-defined "hooks" for

data screen display, may persist through upgrades, although they will require re-

testing. Extensive customizations, such as modifications to fundamental data

structures, will be overwritten during upgrades and will need to be manually re-

implemented.

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Based on this analysis, it is evident that customizing an ERP package can prove to be

quite costly and complex. Additionally, this customization often leads to delays in

reaping the clear advantages of an integrated system. However, tailoring an ERP suite

allows for the implementation of unique strategies for success in specific areas, while

still adhering to industry standards in less critical areas.

Extension

In this context "Extension" refers to ways that the delivered ERP environment can be

extended with third-party programs. It is technically easy to expose most ERP

transactions to outside programs, e.g.

Scenarios to do with archiving, reporting and republishing (these easiest to achieve,

because they mainly address static data);

Transactional data capture scenarios, e.g. using scanners, tills or RFIDs, are relatively

easy (because they touch existing data); however, because ERP applications typically

contain sophisticated rules that control how master data can be created or changed,

some scenarios are very difficult to implement.

Maintenance and support services

Maintenance and support services involves monitoring and managing an operational

ERP system. This function is often provided in-house using members of the IT

department, or may be provided by a specialist external consulting and services

company.

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Case Study: Erp system implementation in india: case of tata steel ltd.

ERP Implementation at Tata Steel Ltd.

Background

Tata Steel Ltd., formerly known as Tata Iron and Steel Company Limited (TISCO), is

an Indian multinational steel-making company and a subsidiary of the Tata Group. It is

one of the largest steel producers globally. The case study focuses on the

implementation of an ERP system at Tata Steel to improve business processes and

customer focus.

Need for ERP

Tata Steel faced significant issues with their legacy systems, which were outdated and

not customer-friendly. The ERP system was chosen to address these issues and ensure

seamless integration with existing and future systems.

Vendor Selection

The selection process for the ERP system vendor at Tata Steel involved several key

steps:

1. Structured Approach: A systematic approach was adopted, involving all

stakeholders in the decision-making process.

2. Focused Demonstrations: Potential vendors provided demonstrations relevant

to Tata Steel's processes.

3. Objective Decision Process: A multi-criterion approach was used to evaluate

potential vendors.

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 4. Full Involvement: All personnel, including top management and various

departments, were involved in the selection process.

Implementation Challenges

Several challenges were faced during the ERP implementation at Tata Steel:

1. Consultant Selection: Choosing the right consultants to define the correct

blueprint was crucial.

2. Change Management: Designing and executing a change management

program was essential to ensure acceptance of the new technology.

3. Rigorous Testing: Extensive testing of hardware and software was required to

ensure system readiness.

Implementation Approach

Tata Steel adopted a "big bang" approach, going live with all modules simultaneously

across 46 locations within eight months. This approach required meticulous planning

and a fast-paced implementation process.

Implementation Experiences

The implementation of the ERP system SAP was associated with several strategic

goals:

1. Continuous Learning and Change: Tata Steel aimed to bring forth a culture

of continuous learning and change to achieve a world-class status for its

products and services.

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 2. Quick Decision-Making: The ERP system was expected to result in quick

decision-making, transparency, and credibility of data.

3. Improved Responsiveness: The system aimed to improve responsiveness to

customers across all areas.

Factors Affecting ERP Implementation

Several factors influenced the success of the ERP implementation at Tata Steel:

1. Top Management Commitment: The management was fully committed and

participated actively in the project.

2. Competent Project Team: A competent project team with clear goals and

objectives was essential.

3. Proper Documentation: Proper documentation and alignment of processes

with business needs were crucial.

4. Adequate Training: Proper training was provided to all users to ensure they

could effectively use the ERP system.

5. Healthy Vendor Relationships: Maintaining healthy relationships with ERP

vendors and consultants was important for technical support and training.

Success Indicators

The ERP implementation at Tata Steel led to several positive outcomes:

1. Improved Business Processes: Enhanced business processes and better

customer service.

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 2. Cost Savings: Significant savings in manpower and inventory levels.

3. Enhanced Decision-Making: Availability of online information facilitated

quicker and more reliable decision-making.

4. Efficient Resource Management: Improved workflow management and

reduction in credit management errors.

Conclusion

The ERP implementation at Tata Steel Ltd. was a significant success, leading to

improved efficiency, cost savings, and better customer management. The company's

strategic approach and involvement of all stakeholders were key factors in the

successful implementation. The ERP system enabled Tata Steel to transition

seamlessly from a production-driven company to a customer-driven one, enhancing its

competitive edge in the steel industry.

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Research Methodology

For this investigation, the exploration was organized with a focus on key ownership

experience criteria that allowed the study to gather both quantitative and qualitative

data on the major aspects of enterprise applications. The criteria for evaluation were

carefully defined to take into account the expertise of the technical staff and the needs

of the end-users who must accomplish specific business tasks with the application. The

product forms that were examined included:

• Microsoft Great Plains version 7.5 and previews of Microsoft Great

Plains version 8.0

• Oracle E-Business Suite 11.5.9

• PeopleSoft Enterprise 8.8 and 8.9 and EnterpriseOne 8.11

• SAP: mySAP Business Suite R/3 4.6 and SAP R/3 Enterprise 4.7

• Siebel 7.5 and Siebel 7.7

The research also included functional areas such as Financial and Human Capital

Management Systems (FMS & HCM), Supply Chain Management (SCM), Customer

Relationship Management (CRM); and application lifecycle phases such as

installation, implementation, configuration, usage, maintenance, support, and upgrades.

We have broken the entire process down into five steps:

• Reviewed vendors' web sites and their positioning documents, as well as their

online and hard copy documentation.

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• Utilized analyst reports, press articles, and technical reviews that are available

to the general public.

• Validated, using the defined criteria, the information collected in steps 1 and 2

through in-depth interviews with the consulting panel of experts. For the

interview process, preference was given to respondents with multi-year

experience and experience with the latest version of the application to ensure

that the entire application lifecycle was properly covered.

• Compared and analyzed findings from this primary and secondary research to

generate a rating for each vendor on specific criteria. In this comparison and

analysis, the respondent's experience with multiple vendors was leveraged as

well.

• Aggregated comparisons and ratings along three major phases of the enterprise

application ownership lifecycle.

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ERP Implementation Plan

The flowchart in Figure 1 outlines several exercises that need to be completed prior to

implementing an ERP framework. First and foremost, managers should conduct a

feasibility analysis of the current situation to evaluate the organization's requirements.

This involves assessing the availability of equipment, software, databases, and internal

computer expertise. Based on this evaluation, a decision can be made to implement

ERP if integration is necessary. It is important for them to establish goals for growth

and develop targets for implementation, as well as determine the break-even points and

benefits to be obtained from this costly IT project. The second important movement

involves guiding and involving end users throughout the implementation process.

Furthermore, managers will assemble a project team or steering committee comprising

of knowledgeable individuals from various functional areas to take charge of the

project. Once a decision is reached, a team of knowledgeable consultants will be

brought on board to assess the suitability of implementing an ERP system. They will

also assist in choosing the most suitable enterprise software provider and the optimal

approach for implementing ERP. Typically, the consultant team will also provide

suggestions on the modules that align with the company's specific operations, such as

manufacturing, financials, human resources, logistics, and forecasting. They will also

offer guidance on system configurations and Business-to-Business applications like

supply-chain management, customer relationship management, e-procurement, and e-

marketplace.

The significance of thorough employee and manager training cannot be overstated.

Experts in the field often advise managers to allocate approximately 11% of the

project's budget towards training. All business stakeholders, including managers, end

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users, customers, and vendors, should receive various types and levels of training prior

to the implementation of the system. Training programs of this nature are typically

tailored to specific needs and can be delivered by trainers from within the organization

or external experts.

The system installation process will cover aspects like software configuration,

hardware acquisition, and software testing. The data and information stored in the

databases need to be converted to match the format used in the new ERP system.

Additionally, it is necessary to upgrade the servers and networks. The system

maintenance will effectively resolve any issues or problems that may arise during

operations. It is highly advisable to conduct a post implementation review to ensure the

successful attainment of all business objectives set during the planning phase.

Modifications that are needed are addressed during this phase as well.

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ERP Implementation Plan

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 Conclusion

Implementing an ERP system is a significant responsibility for any organization,

involving a substantial investment and a lengthy timeline to complete. However, when

it is implemented correctly, the benefits can be tremendous. An efficiently organized

and effectively coordinated ERP framework allows for the latest information to be

shared among various business functions, resulting in significant cost savings and

improved efficiency. When making decisions about implementation, the board must

take into account important factors such as the organization's readiness for a significant

change, the level of coordination, key business processes to be implemented, e-

business applications to be integrated, and the potential need for new hardware.

To enhance the likelihood of user acceptance, it is crucial to engage employees and

seek their input throughout every step of the implementation process. Offering quality

education and relevant training are two crucial approaches to boost the rate of

acceptance among users. The organization is currently undergoing significant changes,

including shifts in business practices, restructuring efforts, and redefined job

responsibilities. Managers are advised to make use of the eight-level organizational

change process in order to facilitate the change process. Managers have various options

for implementing their ERP systems, such as complete integration, the franchise

approach, or the single-module approach. Lastly, the paper wraps up with a flow chart

that illustrates the various activities managers need to carry out for a successful ERP

implementation.

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References

1. Class A ERP Implementation: Integrating Lean and Six Sigma - by Donald H.

Sheldon

2. Modern ERP: Select, Implement & Use Today's Advanced Business Systems -

by Marianne Bradford

3. Maximizing Your ERP System: A Practical Guide for Managers - by Scott

Hamilton

4. Enterprise Resource Planning - by Bret Wagner

5. Erp system implementation in india: case of tata steel ltd.- Suraj Kumar Mukti

and Dr. A.M. Rawani

6. www.wikipedia.org

7. www.sap.com

8. www.oracle.com

9. www.nasscom.com

10. www.google.com

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THANK YOU

63
 Implementing
Enterprise Resource
Planning (ERP)
Systems in
Organizations

R AV I T K U M A R

Manipal University Jaipur

 Introduction

What is ERP?
•
ERP
o Evolution: ERP evolved from MRP and CIM in the 1990s to streamline business operations.
o Purpose: Integration of core business processes into a unified system. SCM Manufacturing
o Scope: Covers Manufacturing, HR, CRM, SCM, Financials, and more.

• Key Features:
o Centralized database for all business data.
o Modular design for scalability.
Finacial HR
o Real-time integration and analytics capabilities.

CRM
 ERP in Modern Organizations

• Adoption Trends:
o Growing adoption across industries like retail, healthcare, and manufacturing.
o Cloud-based ERP solutions gaining popularity.
100
• Role in Digital Transformation:
80
o Enables businesses to adapt to Industry 4.0.
60
Integrates IoT, AI, and Big Data for smarter operations
40
20
0
Without ERP With ERP
 Advantages of ERP

• Key Benefits:
o Integration: Seamless communication across departments. 100
o Efficiency: Optimized resource utilization and streamlined workflows. 80
o Decision-making: Real-time data improves strategic planning. 60
o Security: Enhanced protection against data breaches with centralized controls.
40
20
0
Without ERP With ERP
 Challenges/Disadvantages

• Key Challenges:
o High initial cost and lengthy implementation periods.
o Limited flexibility due to standardization.
o Resistance to organizational change.
o Increased risk of data breaches due to centralized systems.
 ERP Vendors

• Feature Comparison:
o Microsoft: Affordable, limited customization, basic functionality.
o Oracle: Comprehensive integration tools, higher cost.
o SAP: Robust and scalable but complex to implement.
o PeopleSoft: User-friendly interface with advanced customization options.
o Siebel: Excellent for CRM integration and usability
 ERP System Selection Methodology

• Structured Approach:
o Requirement Gathering: Identify needs and align with business goals.
o Vendor Demonstrations: Compare system capabilities through demos.
o Objective Decision-making: Use scoring criteria to evaluate vendors.
o Stakeholder Involvement: Engage all departments for better adoption.

• Importance of Professional Consultancy:

◦ Consultants ensure unbiased, informed decisions
 ERP Implementation Process

• Key Stages:
1. Feasibility Analysis: Assess organizational readiness.
2. Team Assembly: Form cross-functional teams.
3. Vendor Selection: Choose the best-fit system.
4. Data Migration: Plan and execute secure data transfer.
5. Training & Testing: Ensure users are trained, and systems are tested.

Go-Live: Launch system with monitoring

 Strategies for Success

• Best Practices:
o Adhere to vendor-provided best practices for smoother adoption.
o Strike a balance between customization and configuration.
o Invest in strong change management strategies.
o Provide ongoing training and support for employees.
 ERP ROI and Future Outlook

• Return on Investment (ROI):

o Cost savings through streamlined processes.
o Increased productivity and efficiency.
o Long-term value in adapting to market changes.

• Future Trends:
o AI-driven ERP solutions.
o Integration with blockchain for secure transactions
 Case Study: Successful ERP Implementation

1.Background: Tata Steel Ltd., formerly known as Tata Iron and Steel Company Limited (TISCO), is an Indian multinational steel-making
company. The case study focuses on the ERP system implementation at Tata Steel Ltd. to improve business processes and customer focus

2.Need for ERP: Tata Steel faced issues with their legacy systems, which were not customer-friendly and were outdated. The ERP system was
chosen to rectify these issues and provide a seamless integration with existing and future systems

3.Vendor Selection: The selection process involved a structured approach, focused demonstrations, and an objective decision process. The
management and all stakeholders were involved in the decision-making process

4.Implementation Challenges: Several challenges were faced during the implementation, including selecting the correct consultants,
designing a change management program, and rigorous testing of hardware and software

5.Implementation Approach: Tata Steel adopted a "big bang" approach, going live with all modules simultaneously across 46 locations
within eight months

6.Success Indicators: The ERP implementation led to improved business processes, enhanced customer service, reduced costs, and improved
productivity. The company also saw significant savings in manpower and inventory levels
 Potential Risks and Mitigations

• Risks:
o Misaligned goals and expectations.
o Inadequate training leading to low adoption.
o Cost overruns due to scope creep.

• Mitigations:
o Clear communication and goal setting.
o Comprehensive user training programs.
o Regular project reviews to stay on track
 Industry-Specific ERP Applications

• Manufacturing: Inventory and production management.

• Retail: POS integration and supply chain optimization.

• Healthcare: Patient records and billing systems.

• Finance: Regulatory compliance and reporting.

•.

Key Lessons Learned

• Insights from Implementations:

o Strategic alignment of the ERP system with business goals.
o Careful selection of the right ERP software.
o Adequate preparation and training of personnel
o Effective project management during implementation
•.
Q&A