Enterprise Resource Planning and its
Presence in Organization
Prepared by
NEXTERS
Name
Moktadir
2006-55
Masud
2006-46
Jamshed
2006-45
Shathy
2006-79
Rima
2006-
Contribution
(%age)
21%
20.5%
20.5%
19%
19%
Allocation of
works to
members &
managing
organization
for opinion
collection.
Questionnaire
preparation
and data
collection for
report.
Analyzing the
articles and
preparation of
a complete
report layout.
Works
description
Md. Gulam Mokta Dhir
Md. Masudur Rahman
Md. Jamshed Alam
Kamrun Naher
2006-55
2006-46
2006-45
2006-79
Sharmin Akther
2006-108
Typing and
making ERP
implementation
and selection
part.
Typing and
shaping the
raw data to
prepare the
aggregate
report.
Prepared for
Mohammad A Jahed
BBA MBA MS (Michigan, USA)
Associate Professor
Department of Management
University of Chittagong
1
Preface
This present study is an empirical study about the use of ERP in our organization and
their approach towards the ERP. This investigation was conducted on a shoe
manufacturing organization in Chittagong to identify there attitude towards ERP and its
future prospect.
We all know that business all around the world is increasing their reliance on ERP
programs as a cost efficient alternative to their current manual procedures or other
piecemeal software application.
However, current ERP programs suffer from a number of shortcomings which make it
especially difficult for the small/mid size organization to enjoy the tremendous benefits
of ERP. Here we tried to take executive opinion on how they treat the ERP and how they
overcome any problem in the process of ERP implementation.
The report is prepared under Mohammad A Jahed, Assistant Professor Department of
Management Studies. We are grateful to him for his cooperation and giving us the
opportunity to have such a report project.
Data were collected through two executives of maf shoes. We are also thankful to them
for their cooperation and sacrifice. We hope that the knowledge acquired from this report
and its preparation will help in our career.
NEXTERS
4th year
Department of Management studies
University of Chittagong
2
ACKNOWLEDGEMENT
The success of this report depends on the contribution of many people,
especiall y those who spare time to share their suspicious art of judging of
merits and faults and have given valuable suggestions.
We have tried our best to complete the report based on Enterprise
Resource Planning at Map shows Limited.
We would like to give thanks to all members who gave us the possibility to complete this
report. We would especiall y like to thank our department guide honorable
teacher Mr. Mohammad A Jahed, Associate Professor, Department of
Management Studies, Universit y of Chittagong whose inspiration and
consideration during the entire program made it possible to prepare this
report.
We would like to extend our thanks to the contributors of generous help
from whom we have received much information about Map shows limited.
We are grateful to Mr. Md. Anusur Rahman, Senior Executive IT.
3
Abstract
The present study is an attempt to identify major challenges and developments for
SCM and its related issues in selected company and to have better idea about how
ERP software use in our country. This report is an analysis of how ERP works in our
organizations and what are the executive’s opinion about the pros and cons of ERP
culture. We (Nexters) have tried here to draw some important issues to implement
ERP and how they can be managed.
We have designed our report with the general introduction of ERP. Then this report
proceeds into the introduction of major ERP vendors of the world and their products.
We visited an organization (maf shoes Ltd.) which is in the process of ERP
implementation. Synesis synergy ERP, the ERP vendors of concerned organization
has gotten special preferences here. Afterward we draw some important questions
from the questionnaire responded by the executives to have proper idea about the
current practices of ERP.
Then we move towards different factors that are related to the ERP selection and
implementation like ERP selection criteria, implementation cost, technical
requirement, implementation phases and challenges of ERP implementation etc.
At the last part of the report we portrayed some findings on benefits and applicability
of ERP in terms of cost, time, quality and flexibility. How does it effect in different
parts of the organization. How to get rid of the obstacles? Lastly we sketched the
future of ERP culture in chittagong.
4
Introduction
We mean ERP as software that integrate all departments and functions across a single
computer system that serve all those departments particular needs. These sets usually
include a set of mature business applications and tools for financial and cost accounting,
sales and distribution, materials management, human resource, production planning and
computer integrated manufacturing, supply chain, and customer information. These
packages have the ability to facilitate the flow of information between all supply chains
Processes (internal and external) in an organization. Furthermore, an ERP system can be
used as a tool to help improve the performance level of a supply chain network by
helping to reduce cycle times. If we consider Bangladesh perspective then use of ERP is
becoming new culture. Not only established organizations are using ERP but also new
entrance of the different markets are using ERP to have better application of their
resources and rendering service to customers.
Benefits of ERP
Organization actually introduce ERP due to high levels of inventory, mismatched stock,
lack of coordinated activity, excessive need for reconciliation, flouting of controls, poor
customer response levels and operations falling short of industry benchmarks in terms of
cost controls and general efficiency.
The tangible benefits due to ERP adoption include: reduction of lead time by 60 per
cent, 99 per cent on-time shipments, increased business, increase of inventory turn over
by 30 per cent, reduction in cycle time by 80 per cent and work in progress reduced to 70
per cent.
The intangible benefits include: better customer satisfaction, improved vendor
performance, increased flexibility, reduced quality costs, improved resource utility,
improved information accuracy and improved decision-making capability.
5
6
Figure: ERP system modules
7
Our selected organization for data collection was maf shoes. Is a new organization in the
field of shoe manufacturing. It is mostly an export oriented organization. It has another
unit which produces paper. They are in the ending stage of ERP implementation.
In response to the question of the importance of ERP, they are strongly agreed about the
importance of effective supply chain management and ERP is introduced to accelerate the
supply chain management. maf shoes is in the process of introducing ERP
software(Synesis Synergy ERP). Let’s have primary idea about synesis IT.
About Synesis IT
Synesis IT is a US based Multinational IT Company that operates 8 places around the
glove. Synesis is a MS Certified Gold Partner. It has also partnership with IBM, Cisco,
Citrix, Oracle, Avaya etc. Synesis IT does not work for IT, it makes IT work for you and
your business by reducing TCO to make ROI significantly higher. It is a first locally
developed ERP implementer in BD Telecom industry. Synesis is one of the leading Small
Business Solution Specialist in BD ranked by Microsoft.
Key Benefits
Synesis Synergy ERP delivers a comprehensive set of integrated, cross-functional
business processes. With Synesis Synergy ERP, you can gain the following benefits:
Improve alignment of strategies and operations
o Run your enterprise in accordance with strategy and plans, accessing the right
information in real time to identify concerns early.
o Pursue opportunities proactively.
o Achieve corporate objectives by aligning workforce and organizational objectives.
o Find the best people and leverage their talent in the right job at the right time.
Improve productivity and insight
o Leverage self-services and analytics across your organization.
o Improve operational efficiency and productivity within and beyond your enterprise.
Reduce costs through increased flexibility
o Use enterprise services architecture to improve process standardization, efficiency, and
adaptability.
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o Extend transactions, information, and collaboration functions to a broad business
community.
Support changing industry requirements
o Web-based technology to integrate your end-to-end processes seamlessly.
Reduce risk
o Solve complex business challenges today with Synesis Synergy ERP
Improve financial management and corporate governance
o Gain deep visibility into your organization with financial and management accounting
functionality combined with business analytics.
o Increase profitability, improve financial control, and manage risk.
Optimize IT spending
o Integrate and optimize business processes.
o Eliminate high integration costs and the need to purchase third-party software.
Gain higher ROI faster
o Install Synesis Synergy ERP using rapid-implementation techniques that cost less than
half what traditional approaches cost.
o Leverage preset defaults and prepackaged versions available for specific industries.
Retain top performers
o Retain your top performers through clearly defined career and development plans.
o Link employees' performance to compensation programs such as variable pay plans and
long-term incentives.
Provide immediate access to enterprise information
o Give employees new ways to access the enterprise information required for their daily
activities.
9
Leading ERP vendors
SAP AG
SAP AG is the world’s leading ERP software provider &the world’s third largest
software provider. Its flagship product is known as R/3.More then 17,500 organizations
in 120 countries have used. Its products are including major multinational firms such as
Chevron, Colgate - Palmolive, Exxon, IBM, & Microsoft.
CORE FUNCTIONS
The core functions in R/3 include financial accounting, Cash Mgt. Fund Mgt. personnel
Administration & payroll, Investment Mgt., Plant maintenance, Treasury, Real estate
Mgt. Materials Mgt. production planning, Logistics, Sales & distribution, Quality Mgt
Service Mgt., Plant Mgt., Human resources, Product life cycle & workflow.
ORACLE
The oracle corporation was founded in the late 1970s by Larry Ellison, Bob Miner, &
Ed Oates. The focus of the company has been to provide business applications that utilize
relational data bases for storing information. Oracle technology is used in nearly every
industry aground the world & in almost all fortune100 Companies. Today, Oracle
continues to be the world’s leading supplier of information mgt. software. It is the
world’s second largest independent software company after Microsoft.
CORE FUNCTION
Oracle e-business suite offers, solution in product life cycle mgt. supply chain planning,
procurement, manufacturing resource mgt. & other fulfillment.
PEOPLE SOFT
The primary focus of the company has been to built client/server business
Applications instead of focusing on application for the traditional mainframe
Computers people soft serves customer around the glove, including analog devices
corning.
CORE FUNCTIONS
HRM, Financials Supply chain Mgt. Customer relationship Mgt. & supplier relationship
Mgt.
J.D.EDWARDS
J.D.Edwards founded in 1977 by Jack Thompson. It is one of the worlds leading
Developers of agile software solutions, providing cutting- edge, collaborative
Technology that runs global business & integrates process across multiple systems
&supply chain partners. It has over 6500 Customers world wide, which includes
Boston properties, Casio computer company ltd. Chevron chemical company, City of
Orlando, Swiss Army. In august 2003, J.D.Edwards was acquired by People Soft.
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CORE FUNCTION
This family of modular enterprise Software product & services consists of seven products
lines enterprise resource planning, supply chain Mgt, CRM, SRM, Business intelligence,
collaboration & integration,& tools &technology.
BAAN
Bann was founded in 1978, with headquarters in the Netherlands and a current workforce
of approximately 2,800 employees a world wide customer base. It is a part of the
production Mgt. division of invests PLC, a global provider of e- business and automation
solutions. Bann provide application solutions to more than 15,000customer sides
worldwide, many of which are world leaders in the manufacturing industry, including Del
Monte, Volvo, solectron, flextronics, landini.
CORE FUNCTION
Enterprise, CRM, product lifecycle Mgt, supply chain Mgt, business intelligence, &
dynamic enterprise modeling.
Market share of the ERP vendors
This institution choosing the ERP vendors because product features and functionality
are best fit their requirements. Leading ERP vendors include:
Consona
Epicor
SAP
 Global Shop Solutions
IFS
Intacct
UNIT4
Microsoft Dynamics
Netsuite
Plex Systems
Sage
Syspro
VAI
Solarsoft
Fig 1: Percentage of Global ERP Revenue by Vendor (2008)
11
Factors affecting the implementation process
Although companies spend millions on ERP packages and the implementation process,
there is extensive evidence that they experience considerable problems, particularly
during the actual implementation project. If the following 11 factors are not treated
wisely then the implementation process will hamper these are
1. ERP teamwork and composition.
2. Change management program and culture.
3. Top management support.
4. Business plan and vision.
5. BPR with minimum customization.
6. Project management.
7. Monitoring and evaluation of performance.
8. Effective communication.
9. Software development.
10. testing and
11. Troubleshooting; project champion; appropriate business and IT legacy systems.
In
ERP selection criteria
The system selection process is deceptively difficult. While most ERP packages have
similarities, they also have fundamental design differences. The selection involves
listening to the views of various people whose involvement would be essential and the
criteria to go beyond technical issues such as proven experience of the supplier in the
desired industry, along with support infrastructure. Selecting a system that is simple
offers smart tools for system administration, a consistent interface and supports graphical
and character interfaces that could reduce the implementation time.
Some selection criteria on the basis of the size of the Org. are given below:
Large size: Stability and history of the ERP supplier, Last 12-month track record of
ERP sales Implementation support from suppliers, Improvement in ERP packages
including stability of the product and functionality, Applicability, Integration,
Adaptability, Competitive strategy, Vendor evaluation and functional and technical
aspects of the software.
Mid size: Fit with business process, Flexibility, User-friendliness, Costs, Scalability,
Supplier support and training, Product functionality and quality, Implementation speed
Interface with other systems, Price, Market leadership, Corporate image, international
orientation and implementation time.
SME: Affordability, Domain knowledge of suppliers, Local support, Technical
upgradable, Incorporation of latest technologies, Price and Cost.
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Critical implementation factors
Key success factors of ERP implementation include cross-functional team approaches,
organizational experience of similar scale IT or organizational change projects, and
understanding of the key issues relating to ERP implementations. The failure factors
including top-down or consultant-driven implementations, IT department-driven
implementations, or implementations where the ERP is seen as a quick technological fix
to problems within the operation of the firm, rather than as a strategic investment. The
following are important for ERP implementation:
1. Top management support.
2. Effective project management.
3. Implementation strategy.
4. Technical software configuration.
5. Selecting an appropriate ERP strategy.
6. ERP teamwork and composition.
7. Change management program and culture.
8. Top management support.
9. Monitoring and evaluation of performance.
10. Effective communication.
11. Cross-functional team approaches.
12. Deep understanding of the key issues relating to ERP implementations.
13. Strong committed leadership.
14. Balanced and empowered implementation team.
15. Extensive education and training.
Technical Requirements
There are two different strategic approaches to ERP software implementation. In the first
approach, an Organization has to re-engineer the business process to accommodate the
functionality of the ERP system, which means deep changes in long-established ways of
doing business and a shake up of important peoples’ roles and responsibilities. This
technique will take advantage of future ERP releases, benefit from the improved
processes, and avoid costly irreparable errors. The other approach is customization of the
software to fit the existing process, which will slow down the project, introduce
dangerous bugs into the system and make upgrading the software to the ERP vendor’s
next release excruciatingly difficult, because the customizations will need to be torn apart
and rewritten to fit with the new version. However, the former approach has proven to be
more logical and effective; historically, ERP implementations have had to deal with the
critical issue of changing the business process or modifying the software. Since each
alternative has drawbacks, the solution can be a compromise between complete process
redesign and massive software modification. However, many companies tend to take the
advice of their ERP software vendor and focus more on process changes.
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Implementation phases
Bancroft et al. (1998) presented a view of the implementation process which was derived
from discussions with 20 practitioners and from studies of three multinational corporation
implementation projects. The Bancroft model has five phases:
1. focus.
2. As is.
3. To be.
4. Construction and testing and
5. Actual implementation.
Focus
The focus phase is essentially a planning phase in which the key activities are the set-up
of the steering committee, selection and structuring of the project team, development of
the project’s guiding principles and creation of a project plan.
As is
The as is phase involves analysis of current business processes, installation of the ERP,
mapping of the business processes on to the ERP functions and training of the project
team.
To be
To be phase entails high-level design and then detailed design subject to user acceptance
followed by interactive prototyping accompanied by constant communication with users.
Construction and testing
The key activities of the construction and testing phase are the development of a
comprehensive configuration, the population of the test instance with real data, building
and testing interfaces, writing and testing reports and finally, system and user testing.
Actual Implementation
Finally, the actual implementation phase covers building networks, installing desktops
and managing user training and support. In summary, the model of implementation
extends from the beginning (focus) of the project proper to the cut-over of the live
system.
Challenges of ERP implementation
challenges in managing enterprise wide project can be as follows.
1. The challenge of re-engineering business processes to “fit” the process which the
ERP software supports.
2. Investment in recruiting and reskilling technology professionals.
3. The challenge of using external consultants and integrating their applicationspecific knowledge and technical expertise with the existing teams,
14
4. The risk of technological bottlenecks through client/server implementation and
the challenge of recruiting and
5. Retaining business analysts who combine technology and business skills.
Current limitation of erp system:












Lack of awareness of the importance of Enterprise resource planning system(erps)
of organization owner.
Employees limitation of understanding Enterprise resource planning
systems(erps).
High installation cost.
Difficult to cope with current business practice.
Traditional mentality of the owner of the organization about supply chain
management and customer relationship management.
Employees fear of unknown for the implementation of enterprise resource
planning (erps) system.
Time consuming process.
Need specific data of supply chain management (SCH) & customer relationship
management (CRM).
Related person isn’t careful about enterprise resource planning (erp|) system in a
democratic system.
Lake of expert in the field of enterprise resource planning (erp) system.
Enterprise resource planning (erp|) system is based on software and computer
related system so it’s difficult for those shareholder and stockholder whose
literacy level is low.
Sometime there is a possibility to failure enterprise resource planning (erp|)
system.
Projected future impacts of ERP:









Enterprise resource planning system (ERPs) critically evaluates the success factor
of enterprises. Affective prime target picture and processing of enterprise resource
planning system.
The performance effects of latent factors of assimilation of commercial open
source ERP software.
Enterprise resource planning (erps) system will reduce cost and increase revenue
of the organization.
Enterprise resource planning system ensures sustainable growth and economic
development.
Identifying critical issue of enterprise resource implementation.
Valuation and operability 0f valuation drivers and future stock return.
It will increase the productivity of organization work.
It will smooth the organizational task.
Within a short time any information collects from the database.
15






Shipment failures of RMG sector are going to be low.
Employees of the organization will motivate with readymade database system.
Business will held faster than current system.
Software organization is going to generate more profit through this system in the
earlier year.
Traditional business supply chain management and customer relationship
management system will vanish at an earlier time.
IT experts get job with a attractive salary scale.
Recommendation:
There are some recommendations about enterprise resource planning systems (erps)
which must be critically explained here:
 Increase the awareness of the importance of enterprise resource planning
systems (ERPs) in the industrial unit to industry owner.
 Create a favorable environment for the employees to implement enterprise
resource planning systems.
 Cost must be reducing to install Enterprise resource planning system in the
organization.
 Establish Enterprise resource planning systems (erps) learning center.
 Creates available expert to get solution of Enterprise resource planning
systems(ERPs) problem
Conclusion
ERP systems are sets of integrated applications that can provide a total solution to an
organization’s information system needs by addressing a large proportion of business
functions including financial, accounting, human resources, supply chain and customer
information. They support a process-oriented view of the business as well as business
processes standardized across the enterprise.
Although ERP packages provide generic off-the-shelf business and software solutions for
customers, there is growing evidence that failure to adapt ERP packages that are
implemented in companies with different corporate and national cultures, to fit these
cultures, leads to projects that are expensive and overdue. ERP technology faces
additional challenges in developing countries related to economic, cultural and basic
infrastructure issues.
Most ERP systems still lack the more advanced product costing techniques, such as
activity-based costing (ABC), life-cycle costing and target costing. Also, they lack the
capabilities of the advanced techniques for dealing with uncertainties such as fuzzy logic.
Furthermore, state-of-the-art techniques such as neural networks and genetic algorithm
should also implement in the existing ERP systems.
ERP software still requires many resources and efforts to integrate all of the major
business functions in the initiating firm. Some of the topics will be on the impact of
ERP on organizational alignment, organizational learning, infrastructure, mass
customizations, competitive advantage and organizational structure. A customer
relation management (CRM) module should be included in the ERP packages.
16
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TABLE OF CONTENTS
1. Preface .....................................................................................................02
2. Acknowledgement....................................................................................03
3. Abstract.....................................................................................................04
4. Introduction and benefits of ERP..............................................................05
5. Drawbacks of ERP....................................................................................06
7. ERP System Modules................................................................................07
8. Synthesis IT ............................................................................................8-9
9. Leading ERP vendors................................................................................10
10. Market Share of the ERP Vendors..........................................................11
11. Factor affecting the ERP implementation process.............................12-14
12. Current Limitation of ERP......................................................................15
13. Recommendation and Conclusion...........................................................16
14. References...............................................................................................17
18