ERP systems

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INTRODUCTION

This case study is providing the information about implementation of Enterprise Resource planning in public sector as well as private sector also and spends several years from the initial planning process. This paper describe the implementation on first large scale public sector which apply on over 50 different agencies in the state of Pennsylvania government and describe the issues, success factor ,implementation strategies and lessons learned as compared to private-sector Enterprises Resource Planning implementations. The Enterprise Resource planning helps Government to increased their business process and enabling the public support service and integrated processes and improves the quality of public-sector decision making and build more effective e-Government application.

In this paper author explain the ERP implementation on PA (The US state of Pennsylvania) is a public sector organization that has implemented and deployed a large-scale ERP implementation across 57 of its 59 agencies. This is the first and largest successful public-sector implementation with budget of over $300 M and spanning 3.5 years. But they faced lots of difficulties to implement the same model as compare to private sector. There are many differences between public sector and private sector such as- Culture, Organizational Structure, Top Management Commitment, Identify Appropriate Process Owners, Project Team, Budgeting and Allocations, Availability of Best Business Practices, Customer Identification. Funding sources are also different, government agencies have very complex budgeting and allocation process compared to the private sector. Overall most of the public sector share same requirement globally but each country have different trends.

Importance of Literature

Today's business environment is complex and dynamic, called for information technology support for real time decisions making to save cost and time, improve customer services, assess risk and add value in business for a competitive advantage I.T has changed the face of every sector weather it is public or private sector it is basically help full in following things and they are as follows -

1. Quality and Efficiency - Significant improvement in quality and efficiency of customer service, production and distribution.

2. Decreased cost - IT supports staff compared to the nonintegrated legacy system that was replaced by new ERP system ( in case of black out period it was reduced by 4 days)

3. Decision support - ERP provided vital cross functional information on business performance quickly to higher authorities to make their decisions in a timely manner.

4. Enterprise Agility - it breaks down many former departments and functional walls or “silos” of business process. a more agile and adoptive organization and work force that can move easily capture new opportunities .

Research problem

Research was basically descriptive in nature it was not exploratory because the topic was not fully new to us. In the case study the author has mentioned few things like the interview was basically semi structured, unnecessary cost of implementing like vise proper testing should have being done a proper format was to be prepared on their part like how to carry out research in a proper manner (Delphi technique would had done much better work there. ) but somehow afterwards with the help of private players they were able to manage it effectively and later it had become Causal research because they were trying to find out cause and effect relationship of the program as data are available in case study.

Several success factors are recognized and explained in addition to unique implementation strategies that promote knowledge transfer.

There are few ERP module which is implement within agency and department, the SME (Small and medium enterprises) ERP implementation applied on various governmental agencies in Australia, Germany and US. The large-scale ERP formations have been accepted in the private-sector; there have been few successful attempts to integrate multiple agencies of one public-sector organization using one single ERP package. But most of firm analysis the implementation of ERP takes too much time to producing the results.

Degree of Contributions.

The degree of contribution was basically when we go for ERP package, you are buying a solution for today's requirement with capabilities of meeting tomorrow's requirement .It helps to change business process easily as corresponding process/practices are readily available for deployment .ERP package enables you to remain dynamic and flexible in business operations a good ERP solution also paves way for expanding the I.T application scope to S.C.M, C.R.M, P.L.M.

Firstly the government (public sector) they were basically FOLLOWERS and private sector was PIONNER in this field so they got the first movers advantage and with the help of their experience they taught P.A how to implement ERP by giving their best suitable policy measures after wards PA (state of Pennsylvania) had got revenue generation program like donors, federal state or municipal government which made their work easier to do.

Though the work took lots of time approx 5 years but slow and study wins the race and somehow it was successful, timesaving, and cost-efficient. The thing is in 80% of the work place it was successful and if it gets political support then definitely it is going to enhance its working further.

The critical success element of ERP system is consists of proper implementation and control by the management. However there are many effecting factor which project the proper operation of ERP in the organization.

Basically Companies very well knowledge of what is Enterprise Resource is Planning after that they implementing them. Companies are adopting the enterprise resource planning because they have need to enhance the task and give better platform for the organization, enterprise resource planning produce faster work done and better result. Before implementation of enterprise resource planning companies should needed to resolve issues which are basic root of success ERP system. Enterprise resource planning used for different operations and applications in several industries. Each industry has their own loop hole and advantage in using the enterprise resource planning applications program.

The implementation of enterprise resource planning for small business massive money investments. The budget was reasonably manageable to small business group. There is no confusion or too say about benefits. But it's not possible for every small scale industry to manage this type budget. The answer is they can manage their task to outsourcing the ERP application which specially design for the SME (Small and medium Enterprise) which give better result and there are limitations also.

Implementation of ERP system has increased from the year 2003 which clearly shows that the companies are confident enough to adopt the ERP systems on the large scale in the last five years.

US navy, army and us states have applied ERP systems to improve and to be accurate by processing through ERP systems which is a great contribution which is encouraging other sectors to adopt the ERP system and to implement well to be successful in future plans and goals.

Contributions of different employees in the in the understanding of ERP projects are benefitting from the different terms in understanding of ERP systems, and to get as much as they can and deliver to others in the coming years. Challenging to top level management to improve and to understand well. In benefitting the company and employees. Easier to identify the roles and participation in the companies .Contribution in attracting new customers.

Training employees over 85,000 with a clear budget of over $3bn and over 150,000 vendors.

Contribution of workshops in which 45 agencies attended and then they trained over 45000 employees.

ENTERPRISE RESOURCE PLANNING SYSTEMS

ERP systems, as Kumar and van Hillegersberg explain are tack together information systems packages that harmonize information and information-based processes within and across functional areas in an organization. Spanning the enterprise they automate and structure an organization's business processes by providing reference models and process templates. ERP systems come as standardized software packages from firms like SAP, Baan, Oracle, PeopleSoft, and JD Edwards, allowing customers to buy them off-the-shelf and adapt them to their requirements, rather than having to develop complex software solutions. In fact, they have become a preferred method for replacing previously developed proprietary systems that now define in-house legacy systems. The power of the standard ERP solution lies in its automation of core business activities. More recently in light of e-business developments, ERP systems have been extended to include inter-organizational processes that complement today's supply chain management requirements.

In today business vista, ERP has amplified the speed of task and integrating the entire department to maximize the output capacity and minimize the work load of organization.

Research Methods & Implementation

There are two research method used in this paper.

1. Descriptive Research -

This type of research seeks to determine the answers to answer to who, what, and how questions. It often helps to segment and target market, accuracy is of paramount important in descriptive research. Although errors cannot be completely eliminated good research strives for descriptive precisions .Unlike exploratory research, descriptive research are based on some previous understanding of the nature of the research problem. The descriptive research can be carried on following basics like-

v Who , what , where , how

v Estimating, predicting, examining

Objectives

v Define characteristics and functions

Characteristics

v Specific hypothesis

v Pre-planned and structured design

Methods

v Secondary data

v Surveys

v Panels

2. Longitudinal study -

This type of study it is continuous where by the same respondents are questioned or observed at predetermined time intervals over a designated time frame. .Their responses are collected and after an analysis the conclusions are drawn.

The research method which were adopted by the author were good as every person has his own perception about things and finding way out for it therefore it was also significant and was justified at the end of the process but according to our study there are many things which we can do in this case such as follows-

* Systematic approach - In this case study the systematic approach is somehow missing because the interview was conducted in a semi structured manner only 20 persons were interviewed and this does not account to whole population, there were several agencies which were higher for the research process and complications were there in the process and at the end they had to take the help of CIO advisory council.

* Objectivity - The objectivity was clear and the purpose of the research was also clear that how to implement ERP in an effective manner there was no problem in objectivity as such in the case

* Reproducible- the study can be further modifier and can be analyzed with different angles which means more work in future can be done on this topic further also.

* Relevance - The study was relevant as it draws the conclusion at the end and findings and suggestions were appropriate too.

* Control - This means the study was confined and in case study some where there were many additional expenses which government has done to fulfill its goal but at last the ERP system was established successfully and was doing well.

Recommended Research methods

I. Research design was missing

II. Data collection methods were not clearly mentioned in the case study

III. Sample size of 20 does not account to the whole population

IV. Analyze of data was not up to the mark

Findings

ERP has been implemented and has been successful in many firms as it mentions in the Case as well that it has been adopted by the firms listed in Fortune 500.

ERP has been implemented for the first time at a very large scale in Public sectors which covers 50 agencies.

Organizations who have adopted the ERP system has realized that ERP systems are best for the long term planning, it will be more beneficial for the firm in the long term planning and will be more useful for the organizations to get most out of the system rather than applying the system for the short term planning.

if we read more the differences has been given between public and private sectors , which clearly shows that both the sectors implements by their own way because if the management is good and strong they will implement well and will receive good positive outcomes which will benefit the company.

United States has adopted the ERP system and was the first Public Sector Company of Pennsylvania who has been successful in the recent past in adopting the ERP system and covering 57 agencies out of 59 which encourages other public sector companies to adopt the system at a large scale and implement well to get more good outcome as ERP systems are very successful in the private sectors.

ERP system includes different Phases and company had to adopt and implement the phases step by step to learn and experience and apply it correctly to get the maximum output from it. As it requires years of planning to understand and to plan how to implement the phases.

Good management handle the system well with good planning and implementation, without the good management it will cause problems and issues in the organization, and specially in the public sectors where the firm lack with the good management skills and planning and if the public based company adopts the ERP system has to keep in mind that it has to be implement well to avoid errors or issues and the problems in the company.

It is also adopted by the US army n US navy which resulted in more than 135,000 end users, so from this number u can just imagine how useful ERP is for the organizations. So here the example is not good enough to understand they should have given three examples of the companies who have already applied in their organizations and what they have achieved after that.

It's really hard to manage the system with having so many departments like Navy, Army which consists of many departments, and every department has their own manager to understand and deal with, so it has to be really planned and good management skills are required to control and to experience the system at its best. This is where ERP lacks where the companies having lots of departments and it creates lots of issues and problems for the firm if they implemented in a wrong manner and that will surely affect the firm profitability. So in this case ERP system are not much efficient and is really confusing and has to upgrade the system more well for the companies having complicated systems and have their own rules.

ERP system has to be planned before applying in the project, and has to select how the company should adopt the system as it depends on the nature of the business and how many phases to adopt to make the system successful in the organization. So it has to be plan before applying in a project and cannot be changed once it has been implemented in the project as it covers lot of time to think and to plan. So it might not be good for the organization to change the system to come up with different thoughts and ideas as it has been mentioned in the Case study as well.

Most of the public sectors shares similar basic requirements to deal with so it's not much difficult to apply in small companies and is easy to implement as compare to implement at a large scale of business. Public sector need more time to understand and apply the system in the firm.

Before applying the ERP systems in the organizations the training has been provided for the consultants before applying the system in the organization to understand the whole procedures and methods and to deal with and then to deal the system efficiently in the firm.

ERP should be implemented well by the management, so it depends on your management how they get full use of the ERP otherwise it will lead in management issues and problem which will affect the organization.

ERP is based on the 4 phases that has to be remember in making the system for the organization and to go through with every stages that has been mentioned in the given case study. By following the phases properly it will make the system and planning more beneficial for the company in the long learn and to achieve what they have planned in future and to give training to all the employees and to make most of it. Managers are the only one that should have knowledge of the system because they are responsible in decision making so they should have the knowledge about the system that the company has applied and to learn from the mistakes and try to make it better and plan accordingly. So it is really important for the organizations to train the Managers as well to understand about the new things and technologies that have been adopted by the organization and what changes should be made in the future to make public sectors more successful in applying the ERP systems in the firm. Without the knowledge of the system the managers can do nothing except creating more issues and problems that would be really tough for the firm to come over with and that will create further difficulties in dealing with the challenges.

The Research limitation was as follows:-

1. As everything has its advantage and disadvantage therefore response given by respondents may not be totally true and authentic.

2. The research is limited in a very specific part of world which makes limited scope of learning.

3. The methodology which is mention by the author is not as specific as research methodology is not properly mention in it.

OTHER RESEARCH WHICH CAN BE USED IN THIS CASE STUDY ARE AS FOLLOW-

1. CAUSAL RESEARCH:-

This is a part of conclusive research it defines that an independent variable directly influences the behavior of dependant variable .The main goal of causal research is to identify cases and effect relationship among variable .In causal studies it is topical to have an expectation of relationship to be explain .

Causal research attempts to establish that when we do one thing, another thing will follow. The world cause is frequently used in every day conversation but from a research perspective a causal relationship is impossible to prove. Nevertheless, researchers seek some certain type of avoidance to help them understand and predict relationship.

A typical causal study has management change one variable (example training) and then observes the effect of another variable (e.g. Productivity).In this situation there is evidence for establishing causality because it appears that the cause precedes the effect. In other word, having an appropriate causal order of events, or temporal sequence, is one criterion that must be met to establish a causal relationship. If an organization behavior theorist wishes to show that attitude change causes behavior change, one creation that must be established is that attitude change precedes behavior change.

2. Quantities Research -

In this type of research mathematical measures and statically techniques are used to determine relationship and difference among large sample of target population. Response which can be measured and analyzed mathematically. This type of research basically deals with numbers.

3. Pilot studies -

in this type of research mainly 2 components are studied and they are as follows -

1) Projective Techniques -

There are several techniques which are used to determine the result of the study

2) In Depth interview -

The interviews are conducted with deep thoughts and are subjected to topic only, deep knowledge is collected about the topic and then the conclusion is drawn.

4. Delphi Technique -

In this type of research the expert are taken into account and further interviewed. Remember the persons those who are taken into process are having immense knowledge about the topic and are expert in that field only, that are why they can impart helpful knowledge about the subject.

5. Performance monitoring research -

This type of research provides feedback for evaluation and control. It indicates that things are going in planned manner or not if they are going in an in appropriate manner it will tell you and evaluate according to the parameters assigned to it only.

These were some research which we know and according to our group discussion we found these were appropriate and can be applied for this case study.

Suggestions for future research

Ø Preparing a Request for Proposal (RFP) and identifying selection criteria.

Ø Testing strategy & plans throughout system development at all levels; criteria for software promotion to next level of tests.

Ø Altering company processes, Shifting functional organization structures.

Ø Cleansing, reformatting and mapping data.

Ø Interfacing with other 3rd party applications.

Ø Creating new policies, procedures, work flows and controls.

Reference:

Al-Mashari, M., Al-Mudimigh A., & Zairi, M. (2003). Enterprise Resource Planning: A Taxonomy of Critical Factors, European Journal of Operational Research, 146(1), 352-364.

Al-Mashari, M., Zairi, M., & Okinawa, K. (2006). Enterprise Resource Planning (ERP) Implementation: a useful road map, International Journal of Management and Enterprise Development, 3(1-2), 169-180.

Barker, T. & Frolick, M. N. (2003). ERP Implementation Failure: A Case Study, Information Systems Management, 20(4), 43-49.

BearingPoint. (2004). Implementing ERP Systems in the Public-sector: Nine Sure Ways to Fail - or Succeed, Whitepaper BearingPoint Inc.

Akkermans, H., & K. van Helden. (2002). Vicious and Virtuous Cycles in ERP Implementation: A Case Study of Interrelations between Critical Success Factors, European Journal of Operational Research, 11(1), 35-46.

Rummler, G., & Brache, A. (1995). Improving Performance: How to Manage the White Space on the Organization Chart. San Francisco: Jossey-Bass.Umble, E., Haft, R., & Umble, M. (2003).

Enterprise Resource Planning: Implementation procedures and Critical Success Factors, European Journal of Operational Research,146(1), 246-257. Windsor, S. (2003, May).

Change Management in the Public-sector—The New Holy Grail?, Publicnet, Retrieved March 6,2006. http://www.publicnet.co.uk/publicnet/fe030520.htm Total Words Count-3685

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