Global Journal of Management and Business Research: A

Administration and Management

Volume 20 Issue 10 Version 1.0 Year 2020
Type: Double Blind Peer Reviewed International Research Journal
Publisher: Global Journals
Online ISSN: 2249-4588 & Print ISSN: 0975-5853

Challenges and Benefits of ERP System and Non-ERP System

Integration in a Developing Country
By Mohamed. YJ Ahamed, Muneeb M. Musthafa & Faiz MMT Marikar
General Sir John Kotelawala Defence University
Abstract- Enterprise Resource Planning systems (ERP) have emerged as solutions oriented to
manage organization´s resources in an integrated way. They allowed the automation of its
department’s activities, made information available to users at the right time, supporting more
accurately their decision-making needs. It is empirically proved that the best of the breed
application for the optimum benefit of an organization is a mixture of both ERP and non-ERP
application. Organizations faces lot of challenges while integrating these two application
systems. ERP system uses world best practices and they uses better software development
standards to develop the ERP application and to incorporate the application security. However,
other application vendors do not follow the best practices for application development and do
not incorporate optimum security to their application. Owing to these mismatches, the integration
of ERP and non-ERP system become very challenging.
Keywords: ERP, ERP integration, non-ERP system integration, benefits of integration.
GJMBR-A Classification: JEL Code: M10

ChallengesandBenefitsofERPSystemandNonERPSystemIntegrationinaDevelopingCountry

Strictly as per the compliance and regulations of:

© 2020. Mohamed. YJ Ahamed, Muneeb M. Musthafa & Faiz MMT Marikar. This is a research/review paper, distributed under the
terms of the Creative Commons Attribution-Noncommercial 3.0 Unported License http://creativecommons.org/licenses/by-
nc/3.0/), permitting all non-commercial use, distribution, and reproduction in any medium, provided the original work is properly
cited.
 Challenges and Benefits of ERP System and
Non-ERP System Integration in a Developing
Country
ρ
Mohamed. YJ Ahamed α , Muneeb M. Musthafa σ & Faiz MMT Marikar

Abstract- Enterprise Resource Planning systems (ERP) have become overly complex with higher functional

2020
emerged as solutions oriented to manage organization´s integration. Thereby, management decision making has
resources in an integrated way. They allowed the automation become more complex and more data oriented. In this
of its department’s activities, made information available to

Year
context, efficient information systems that inter-relate all
users at the right time, supporting more accurately their
business functions such as finance, logistics, and
decision-making needs. It is empirically proved that the best of
the breed application for the optimum benefit of an
production are obligatory and further, accurate and
69
organization is a mixture of both ERP and non-ERP timely information is considered a key for winning the
competitive advantage. The purpose of this research is,

Global Journal of Management and Business Research ( A ) Volume XX Issue X Version I

application. Organizations faces lot of challenges while
integrating these two application systems. ERP system uses either through the review of literature on the topic, or via
world best practices and they uses better software the case study, examine how an organization is a
development standards to develop the ERP application and to mixture of both ERP and non-ERP application benefit for
incorporate the application security. However, other performance in a positive curve in a business model.
application vendors do not follow the best practices for One of the most important characteristics of ERP
application development and do not incorporate optimum
systems is that they are built on a single comprehensive
security to their application. Owing to these mismatches, the
integration of ERP and non-ERP system become very
database to share information across the enterprise.
challenging. However, after this painful integration exercise, ERP system integration, on the internal side, can be
the management start to realize the benefit of that integration. assumed to be complete and comprehensive. Further, if
This research is based on two case study of two subsidiary the ERP systems covers all your information
companies of a conglobate group in Sri Lanka. These two management needs, and there are no external systems
companies have implemented an ERP system and an or applications in place or planned, integration should
operational system with the motive of automating their not be a concern. An ERP system is an integrated
operational and back office function and to ultimately software system package composed by a set of
consolidate the accounts to the group management. A
standard functional modules such as Financial, Sales
questionnaire has been developed based on the literature
review and discussions with consultants and supervisor.
and Marketing, Purchasing, Production, Inventory,
Managers, senior managers and consultant have been Human Resources etc... Developed by the vendor, that
interviewed according to the questionnaire. This interview data can be adapted to the specific customer needs. (Elragal
was analyzed to come up with the finding and conclusions. and Haddara, 2012).
The ultimate finding proves that, only the ERP system does not The integrated process framework provided by
fulfill the expectation of the analyzed companies. It is essential ERP enables standardization, visibility, traceability and
to build a tailor-made application to suite the unique need of controllability over the business. A successfully
the operational function of the company. Further the both integrated ERP system can improve operational
applications must be integrated to achieve the fullest benefit of
efficiency by supporting a firm’s business processes as
both the applications.
well as create competitive advantage by enabling
Keywords: ERP, ERP integration, non-ERP system
pioneering practices. (Albadri and Abdallah, 2009)).The
integration, benefits of integration.
Global ERP market grows 7 % annually through 2009
I. Introduction and to become from $8.8B in 2004 to over $12B in 2009.
Even though the demand for ERP applications rising,

I
t is obvious that over the last few decades, ICT has failure rate of ERP applications is remaining high and
seen a significant growth. Simultaneously the modes according to survey conducted by Robbins-Gioia LLC, a
of business the modes of business operations have leading provider of management consulting services
Author α: Union Road, Akkaraipattu 01, Sri Lanka. found that 51 % of companies across a wide range of
Author σ: Department of Biosystems Technology, Faculty of industries stated that their ERP implementations were
Technology, South Eastern University of Sri Lanka, University Park, unsuccessful. Sri Lanka has experienced ERP systems
Oluvil, , Sri Lanka.
Author ρ: Staff Development Centre, General Sir John Kotelawala for nearly two decades, and it is observed that several
Defence University, Ratmalana, 10350 Sri Lanka. Sri Lankan organizations are still struggling to achieve
e-mail: [email protected] the anticipated benefit of their ERP implementations.
© 2020 Global Journals
 Challenges and Benefits of ERP System and Non-ERP System Integration in a Developing Country

The emergence of the enterprise resource and can significantly improve an organization’s
planning (ERP) software radically transformed the workflows, business, and decision making. Doing it right
computing platform of most organizations (Haddara and though is worth the extra effort.
Hetlevik, 2016). One of the ERP systems characteristics Although integration success in ERP
is the ability to automate and integrate organizations’ implementations is questionable, ERP system
business processes (Ha and Ahn, 2014). However, even functionality and integration greatly improved over the
though ERP systems were introduced as integrated last decade by incorporating specific industry solution.
suites, they have not achieved many of their anticipated In addition, integration capabilities with third party non-
benefits while they still co-exist with autonomous and ERP systems increase system functionality, flexibility
heterogeneous applications (Peng and Gala, 2014). This and integration, supporting streamlined business
fact indicates the importance and the need for processes. This research reports on a case study
applications integration and justifies the recently large aiming at describing and evaluating the integrated
2020

number of publications examining integration operational and financial system implemented at a

technologies. (Claybaugh et al, 2017) group company utilizing an ERP application and non-
Year

Despite the advantages, ERP implementations ERP systems. Serendib Group is presently
have a nasty reputation for going over time, over implementing, Oracle E-Business Suite ERP application,
70 budget, and underperforming. There are several for few of its subsidiary companies, and plan to extend
examples and many reasons why. Let’s look at a few of the ERP system to other subsidiaries also. Though the
Global Journal of Management and Business Research ( A ) Volume XX Issue X Version I

the reasons ERP software implementations go over organization has implemented a sophisticated ERP
time, over budget, and under perform. One issue with application, they had to implement some non-ERP
implementing an ERP system is, knowing what should application also to fully automate their entire operation
be integrated, and what should not. It is difficult to know and needed to integrate both the ERP and non-ERP
where integrating systems in an organization can gain a application to get a maximum benefit of the automation.
competitive advantage and where it will hinder the At the present implementation they face lot of
organization’s workflow. This becomes even more challenges in integrating the ERP system with existing
complicated in a large organization where different and newly developed non-ERP system. Hence, this
business divisions view each other as competition, or understanding would make them more committed and
good old-fashioned office politics gets in the way. The would make them to provide more support in the future
challenge this adds with ERP implementations is that ERP implementation.
decision makers often do not know fully what the ERP
system is capable of when they are planning the II. Methodology
system, and these decisions and goals need to be a) Conceptual Framework
decided on in the beginning. Researcher has developed the following
The biggest problem by far though with ERP conceptual model based on the literature review and
implementations comes from not having well-defined discussions with experts (Figure 1).
measurable goals and objectives at the outset of the
project as well as a process in place for adding to or
changing these goals. Many projects, not just an ERP
implementation, have failed because of this. One of the
most often misunderstood issues with most ERP
systems is that they typically require extensive
customization. Often what a company is buying is not a
packaged solution, but a framework with which to build
a solution. When decision makers do not ask the right
questions and do not appreciate these two factors,
projects are delayed and experience cost overruns.
Another issue that is often a problem is that an
ERP system that is not flexible may force an adopter to
change their business processes to fit the ERP system
model. This requires a re-engineering of steps needed
to complete business tasks and a retraining of
employees and business partners; and sometimes even
customers. As we all know people inherently do not like
change, and this will create resistance and delays for
any organization (at least in the short term). Despite
these challenges, ERP is a resource that is here to stay

© 2020 Global Journals

 Challenges and Benefits of ERP System and Non-ERP System Integration in a Developing Country

Year 2020
71

Global Journal of Management and Business Research ( A ) Volume XX Issue X Version I

Figure 1: Conceptual Framework
b) Case Study C: Benefits of the integration, this part is constructed to
The case study technique was selected as the identify the ultimate tangible, intangible and monetary
methodology for the research. Case study is now benefits achieved by the implementation and integration
accepted as a preferred research strategy within the IS of both ERP system and non-ERP system. The work of
research community (Haddara and Moen, 2017). A this research was intended to answer questions that
series of well-known research investigations have used initially arose. These issues defined how the problem
the case study method to develop and support a range was approached and led the search for answers to the
of IS hypotheses and Yin has provided the guidelines to achievement of the objectives. The following are the
follow for case study researchers (Seethamraju, 2015). questions that guided this research.
Case study-based researchers are aligned more
towards practically, which may suggest more relevance III. erp System and Non-erp System
for practitioners. The natural setting gives case Integration: Challenges & Benefits
researcher the opportunity to conduct situational and in-
depth studies of complex phenomena that is not always Why there is a need for both ERP system & non-
possible due to the restrictions on studies conducted ERP system?
using laboratory conditions.
1. What were your main reasons to go for an ERP
c) Questionnaire system?
Questionnaire has been designed in English, 2. What are the benefits you were expecting from the
and the questions are driven from the observation and ERP system?
literature review of the researcher and the discussions 3. Did you achieve those benefits? (if No, go to
had with consultants and research supervisor. The question 04)
structure of the questionnaire has divided into three 4. Why do you think, that you could not achieve those
parts, and the parts are as follows. Part A: Need for both benefits from the ERP application?
ERP system and Non-ERP system; This part is 5. Did you consider customizing ERP application to
constructed to identify the objectives of the companies suite your requirement?
to implement an EPR system, and to identify the needs 6. Did you consider re-engineering your business
to implement a non-ERP system as well to the same process to suite world best practices of ERP?
organization. This part will find out the major benefits 7. So, did you require a customized application to full
and drawbacks of the ERP system from their own fill those gaps?
business point of view and will ensure that there is a real 8. Did the customized/tailor make application full fill
business need for another non-ERP application. Part B: the expected benefit? / did it fill the gap?
Challenges faced during the integration of ERP system 9. Did it require to integrate the tailor-made application
and Non-ERP system. This part is constructed to identify with ERP application? Why? What are the
the various challenges faced during the integration of challenges when integrating?
the ERP system and the non-ERP system and how did 10. Since the both applications are from two different
they manage to overcome from those challenges. Part vendors and uses two different technology, did you

© 2020 Global Journals

 Challenges and Benefits of ERP System and Non-ERP System Integration in a Developing Country

experience any difficulties in integrating both actively involves in process designing, resource
application? allocation and decision making. This people will use the
11. Did both vendors supported well for the integration? systems for reporting and management decision making
12. Did you ever require your senior management purposes.
involvement to solve any issues?
c) Data collection
13. Was the data transfer between both system smooth
The researcher is part of the group ERP
or have you faced any issues?
implementation team. Even before the idea of the
14. What would you say the key challenge for the
research come to his mind, he was observing the total
integration of ERP system and non-ERP system?
lifecycle of the implementation of ERP system, non-ERP
15. How did you overcome from that challenge?
system and the integration of the both systems.
16. What are the benefits of the integration of ERP
Therefore, starts the research with the observation, and
system and non-ERP system?
then through the literature review he could find out the
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17. What were benefits you were expecting from the

relevance of the same concept in other companies. In
integration of the both application?
order to carry out the survey, an open-ended
Year

18. Did you achieve those benefits?

questionnaire has been constructed. Researcher made
19. Do you see any tangible benefits from this
special emphasis on designing the questionnaire as this
72 integration? Any cost cutting or profitability
is the most critical stage in the research process and the
increase?
more specific data collected would help the researcher
20. Do you able to get a management information
Global Journal of Management and Business Research ( A ) Volume XX Issue X Version I

to come to a better conclusion. Good questionnaire

report easily now?
design should focus upon three areas; the wording of
21. Does your management happy about the
the questions, the principle of the measurements, the
implementation of the both system and its
general appearance of the questionnaire (Juell-Skielse
integration?
and Enquist, H. 2012).
a) Business Rules and Control Data
Business rules and control data, which defines IV. Results
or constrains some aspect of business and always In order gain competitive advantage by
resolves to either true or false. Business rules are synergizing all the subsidiary companies, the group
intended to assert business structure/logic or to control management has decided to move into a new model of
or influence the behavior of the business model of any operating with the concept of share services for the
given business function. This rule is defined to control entire group. The group believes that this model of
the information flow and management of the information operating would enable the central point of control of all
inside the ERP system, and non-ERP system. Hence, the subsidiary company and eliminate duplication of
this rule needs to be shared between the both work and would bring optimum benefits by synergizing
applications to have seamless integration between the the resources within all the subsidiary company.
both applications.
a) Consultant’s View of Group IT System
b) Sampling Implementation (Company 1)
The sample selected should represent the
population in unbiased manner. By studying the sample, “You need the ERP to cover the back office, and you
the researcher should be able to draw the confusions must need customized system to match certain
that would be generalized to the interested population. requirement of the company”.
However, presently only two companies have (Source: Mr. X, Head of Business Applications &
implemented the ERP and non-ERP system within the Consulting, Company 1).
group. Serendib Group is a diversified group of Therefore, the better solution is a hybrid solution
company in Sri Lanka, manages one of the nation’s of ERP and a tailor-made system. ERP may cover the
most successful diversified blue-chip portfolios back-office operation, and the tailor-made system
spanning into the following different industries. bridge the gap of ERP and business requirement. This
Therefore, the researcher will conduct interviews from solution would reduce the total cost of a fully integrated
both the companies key resource persons. The key application. This ERP system enhance the process and
objective of the research is to make the Serendib Group optimize the process to reduce the cost, by eliminating
management to understand the importance of the ERP manual and non-value adding activities which incur
system and Non-ERP system integration and strategic additional overhead cost and time to the company. This
benefits what they would gain from the integration. helps to discontinue the legacy and isolated system and
Hence, the sample should represent the senior to come up with an integrated solution to manage all the
management interest also. Therefore, the sample for the companies in one platform and one window.
research has been categorized and identified as follows. Management need enough, accurate, and timely
These are the people at the management level, who information in order to compete and survive in the
© 2020 Global Journals
 Challenges and Benefits of ERP System and Non-ERP System Integration in a Developing Country

market. Further, ERP provides better communication the necessary validations, integrity checking, etc.
between not only between different functional units, but However, the custom application vendors use outdated
also between different legal entities. This helps the technologies provide cost effective solutions and they
management to have a better consolidated picture of have limited human resources who knows those
their entire function in a comparative manner. Which technology very well. This is one of the main problems
help them to take much better decisions. when it comes to custom application.
Though the ERP system has all these benefits, When pulling out the data from custom made
some companies find difficulty to adopt ERP system system, it does not provide all the required data by the
alone to cater their entire requirement. Though the ERP ERP system as they make the system to exactly fit the
system incorporate the world best practices in it, the requirement. Therefore, they need additional software
uniqueness of certain business operations cannot be components to feed the missing parameter to the
mapped with ERP system. Therefore, the ERP custom application. Further, the data in the custom

2020
application may not fit to the exact and hundred present application is inconsistence and it is not in a standard
business requirements. When it comes to Sri Lankan presentable manner as they do not use better software

Year
context, to adopt a fully-fledged ERP application is very development models and standards. ERP system has
expensive and sometimes it may suite exactly the local high information security and standardized data models;
requirement owing to its global nature. Therefore, it however, the custom application does not follow those 73
requires some customization and personalization to standards. Therefore, ERP system cannot pull the data

Global Journal of Management and Business Research ( A ) Volume XX Issue X Version I

match with the exact requirement, however that also can as it is from the custom applications.
be done up to a certain level. Owing to these reasons “In ERP, high security and standardized data models
there are always a gap between ERP and business are used. But in legacy system does not have those,
requirement. or they do not follow those standards, therefore ERP
Further, since we cannot upgrade, we are stuck cannot take data as it is from the legacy system. So it
with one version of the application. ERP is the world best required to modifying legacy system to match with
applications, where they incorporate new enhancement ERP data set standards, and it is a cost”.
and improvement to the application time to time in order (Source: Mr. X, Head of Business Applications &
to cater the dynamic world, which cannot be ad in to the Consulting, Company 1).
customized application. Therefore, customizing up to a Sometimes, ERP consultants also not
certain extend is fine, without changing the core of the competent enough to understand the requirement and
ERP, however, customizing highly to exactly fit to the scenarios. Owing to these issues integration between
requirement is not advisable. Having said that, it is not ERP and non-ERP system become very challenging.
advisable reengineer a business process to suite the Therefore, these type of project needs very keen
ERP application also. Though the ERP application has attention of the senior management or the project
all the world best practices, the way our business steering committee of the company. When we face any
operates may have some unique nature to compete the issues which cannot be sorted out within our level, then
market. If we change that process, then we may lose the immediately seek for the steering committee or senior
competition. management support. Without their involvement the
Further, even the reengineering is costly. Mainly project would be a failure.
the cost of reengineering by changing the process As consultants, before we initiate any major
model, introducing new functions and eliminating certain project, we look at the level of commitment of the senior
functions. Then, training the staff is also another management towards the project. If we found that they
additional cost. Nowadays, finding the labors to the are not very keen and sincere to the project, sometimes
shop floor work is very difficult, and their turn over also we may not commence the project. In summary, key
high. If we introduce a sophisticated process challenge of the integration is not using the standard
environment, then we must have a training team only to software development models and not having
train the shop floor workers. Sometimes, we may have competent resource personal. To successfully address
to layout people after reengineering, which is a very this, the key things are the management support and
difficult task in Sri Lanka. the testing of the integration with all possible scenarios.
b) Challenges Faced During the Integration (Company c) Benefits of the Integration (Company 1)
1) ERP itself has a lot of benefits to the company,
ERP vendors always knows that they may need and a customized application also has numerous
to integrate with other applications, therefore, they have benefits to the company. ERP helps to streamline the
incorporated this as part of their ERP application. ERP processes and bring the processes into the right track,
applications have some feature call interface tables, while custom application fills the gap of ERP and
which provides any other application to use these tables business process. By integrating both the application
to integrate the data transfer. These tables provide all that would bring the benefit of the best of the breed
© 2020 Global Journals
 Challenges and Benefits of ERP System and Non-ERP System Integration in a Developing Country

application.Both the application together, will help the very advanced. We cannot simply adopt that.
company to get the operational and financial information Therefore, there was a gap there. I call it our
day by day and timely manner. Any management expectation gap.
information could be obtained without any time delay, it (Source: Mr. Y, Chief Financial Officer, Company 2)
is just one button click away. Communication between Though the ERP is not fitting to the exact
different functional divisions is easy and quick as the requirement, it also not possible to customize the ERP
information passed through the applications can be as it is huge cost and even the consultants does not
accessible by any department any time. Accurate and advice to customize the ERP application. Sometimes,
consistent information, and the security and control of customizing may make their life more complex and
information is very high. difficult, there they have dropped the idea of
“The management can really achieve their benefits, customizing the ERP. Since they could not customize
as we have brought up the both systems together, it the ERP, they must reengineer certain business
2020

becomes the best of the breed application for them. process, and reengineering is very beneficial for SL to
Therefore, they will achieve. However, if it is only ERP eliminate the loopholes of the present business setup.
Year

or only legacy system, they may not achieve the full “Yes, with the ERP the process or this kind of a major
expected benefit”. system implementation re-engineering is a must,
74 (Source: Mr. X, Head of Business Applications & without reengineering certain practices we will not
Consulting, Company 1). achieve the maximum benefit of those project, and by
Global Journal of Management and Business Research ( A ) Volume XX Issue X Version I

Owing to the above benefits, any company can reengineering the process only we can eliminate the
achieve their objectives of implementing a loop wholes which we have had”.
comprehensive application system to support their (Source: Mr. Z, Director, Company 2)
entire business function. Further, there could so many However, SL could only reengineer their
intangible benefits, such as less time for preparing process up to a certain extent. They could not
monthly and quarterly accounts, elimination of reengineer the process to exactly match with the ERP as
duplicated and manual data entry work, and timely and it very expensive and not practical for their business
accurate reporting makes the customers happy with the model.
company so help to retain them, and employee’s “We cannot re engineer entirely to match with the
workload is reduced therefore relaxed and cool work ERP practices. That is very expensive, and it is not a
environment without manual paper work. workable solution”.
Moreover, management always require (Source: Mr. Z, Director, Company 2)
management information reports with all the operational The ERP system has very advanced business
and financial analysis. Since the integrated application process model, which requires SL to upgrade the
capture all the data into the share database, it is just a workshop infrastructure and requires additional training
matter of pulling out the data into the required form. to work shop staff. These are extra burden for SL,
Which would have consumed number of days to therefore they do not want to reengineer the process to
prepare earlier, could be reduced to minutes. match with the ERP practices.
“The Sri Lankan industries are not matured enough for “Our workshop people are just technicians they are
an entire suite of an ERP solution. Few of the blue- not capable to hand computer systems, sometime
chip companies and banks in Sri Lanka has one or two may capable, and the turnover also high.
implemented ERP. However, most of them has So that is very difficult”.
implemented part of the ERP system and have a (Source: Mr. Z, Director, Company 2)
legacy system cover-up the gap. Therefore, for
Owing to the above reasons, they compelled go
country like Sri Lanka, the best of the breed
for another system to capture the nonfinancial and
application will be obtained by having both ERP and
operational data where ERP is focusing on financial data
non-ERP application”
and cannot match with operational requirement entirely.
(Source: Mr. X, Head of Business Applications &
Without the operational system, the information what
Consulting, Company 1).
they get from only the ERP is not enough for the
d) Motivation for the ERP & Non-ERP system (Company management decision making, and end of the day ERP
2) is not beneficial from the management perspective.
Our business model is quite simple when we This custom application/operational system gave
consider with international business in the same flexibility which ERP could not give to SL. ERP could be
industry. Certain functions in the ERP is exactly what customizable up to a certain extend but the other
we required, and we were needing that badly. As I system is made exactly to their requirement.
have already explained to cover up the loopholes of Moreover, both this system required integrate to
our operation. However, some other functions and achieve fullest benefit. Some of the information in the
models in the ERP is not exactly what we require, it is front end should be reported with financial information,
© 2020 Global Journals
 Challenges and Benefits of ERP System and Non-ERP System Integration in a Developing Country

then only the information is very meaningful to the competitive and challenging business, they need
management. Just only the operational system may accurate information in timely manner. Secondly, they
beneficial to the operational staff and just only the ERP have a lot of loopholes in their operations due to
may beneficial to the finance department staff or information unavailability. They cannot monitor
shareholders, but for the management to run the everything as and when it happens. It is all what they do
business very effectively, they need the financial and is postmortem analysis. Therefore, by the time they
non-financial data consolidated reports, which provides found some mistakes, it has been already done and
them the right detail for decision making. may not be corrected. Therefore they want control on
every operation upfront.
e) Challenges Faced During the Integration (Company
2) “Do not just invest on ERP. You need to have
“We have just evaluated the requirement and output customize solution to capture some data which does
not captured by ERP. Then only you will have a 100%

2020
and accepted the solution. At the time of integration
only we got to know, that there are so many things to benefit from those applications. Further, you need to
have one team to do the entire project a to z, and that

Year
consider. But that knowledge was not shared”.
(Source: Mr. Y, Chief Financial Officer, Company 2) must comprise with financial and non-financial team”.
(Source: Mr. X, Chief Financial Officer, Company 1)
Most of the companies including SL do not 75
have technical expertise within the company. They see Comparison of both case studies was shown in

Global Journal of Management and Business Research ( A ) Volume XX Issue X Version I

the system with the business and requirement point of the Table 1.
view, they do not know the underlying technology and
other stuff. There was no mediator between both
vendors and both applications. Therefore, they have
faced a lot of challenges and issues while integrating
both the applications. SL would be more benefited, if
both the vendors communicate very openly and frankly
about their requirement and needs for the integration,
etc. From SL point of view, is very less complicated the
integration is, if the vendors put forward all what they
require at the beginning of the implementation.
Sometimes the consultants also exactly do not know,
what they require. This is owing to their less expertise.
This caused lot of issues as the both systems needed
so may changes even at the live run.
Further, they faced some other issues like data
transferred from one system to another was not smooth
that could be because of data entry mistakes because
the users are new to the system. Depending on the
challenge and issue, they have required the senior
management/director board involvement to sort out
those. Sometimes, there were some additional
development required to capture certain information
which would be out of the scope and needed more
funding, sometimes, need some changes in the process
and it requires certain management decisions, therefore,
these types of issues have got escalated to the board
and sorted out.
“If there is a person who can understand both the
language, which is the ideal solution for these kinds
of implementation. That person will understand the
business process and he can talk in IT technical term
as well. I think that is the solution”.
(Source: Mr. Z, Chief Financial Officer, Company 2)
f) Benefits of the Integration (Company 2)
Their major motive to go for these systems is to
get the management information report with financial
and non-financial data. Since they are in very
© 2020 Global Journals
 Challenges and Benefits of ERP System and Non-ERP System Integration in a Developing Country

Table 1: Comparison of Case studies

Logistics Company Advertising and Media Company

Common
Company1 To have a structured solution To have proper structured solution
Requirements
To provide very efficient and accurate management
To get report of operational and
reporting with financial and non-financial data linked
financial information linked together.
together.
Unique To eliminate lot of loopholes of present To maintain the client accounts and monitor costing
Requirements operation and profitability
Group decision to go with ERP.
They could not reengineer the process They cannot adopt the ERP process to their business
Common to exactly match with the ERP as it is model as the organization’s operational model is very
Company2
2020

Requirements very expensive and not practical for simple and less complicated when compared with the
their business model. international standards of the ERP.
The critical information what we need is coming from
Year

Unique Some functions and the models in the

the operation and it does not get captured with the
Requirements ERP are not exactly that they require
existing modules of the ERP
76 They could not effort to buy a new module of the ERP
as the cost of the module is not bearable by the
Global Journal of Management and Business Research ( A ) Volume XX Issue X Version I

company
Integration Common Consultants also exactly do not know,
Consultants’ incapability
Company1 Challenges what they require
The operational system was very straight forward and
Unique There was no mediator between both simple. However, the ERP system required some extra
Challenges vendors and both applications parameters to get captured from the operational
system.
Less communication between both
vendors about their requirement and Compatibility issue between the both systems.
needs for the integration
The mix of the both systems helps to streamline the
process to match with world best standards like
Integration Common The management information report
budgeting and controlling and bridge the gap of the
Company2 Benefits with financial and non-financial data
ERP and captures all necessary information required
for management reporting.
Management and control on each
operation upfront.

V. Conclusions the ERP functions. The list as certain unique nature of

the business operation cannot be matched by the ERP.
The intention of this study is to identify the need Furthermore, certain modules of the ERP are very
for the ERP system and non-ERP for an organization to advanced when compared to the operations of the firms
fulfill the complete requirement, challenges of the in Sri Lanka. Also re-engineering of the operation to
implementation and integration of both application match the ERP’s best practices is expensive and it may
system and the final benefit from the integrated not be right solution. Finally customizing ERP system to
application. The researcher had three objectives to fulfil match with the business process is never advised and
from the study. the customization also very expensive.
First objective is to ascertain the importance of Therefore, there is a gap between the ERP and
integrating non-ERP system to the ERP system. It is the business requirement. To bridge the gap, the
obvious that the ERP system has the world best organizations need non-ERP applications. This non-ERP
practices incorporated to its functions and modules application required to bridge the gap of the ERP by
which benefitted to any company to streamline and capture all required data for the business management
match the business process to world standards and to reporting purposes. Developing this custom application
have best control over the business information. It also or non-ERP application is not enough, but this must get
provides best financial and management reporting integrated with the ERP system to get best out of the
function in various angles for the management to both systems. Through the integration, the data is being
analyze their operational and financial activities very shared from on system to another, then there will be on
closely. database with all the necessary data for the
However, owing to the following reasons, all the management to analyze. In conclusion, the best of the
companies may not be able to adopt the entire suite of breed application solution can be achieved by these

© 2020 Global Journals

 Challenges and Benefits of ERP System and Non-ERP System Integration in a Developing Country

type companies by using a hybrid solution of ERP and and link all the functional departments in a single and
non-ERP application and integrating those application. common database. In the meantime, ERP does not full
Second objective is to determine the challenges fill the entire requirement of an organization and non-
& issues faced during the integration. From the above ERP applications plays a major role in bridging these
analysis researcher found out so many issues and gaps.
challenges during the integration of both ERP and non- After the integration of the both applications,
ERP application and found out the reasons and these applications functions as the best of the breed
solutions also. The challenges of the integration of the application and bring the maximum benefit to the
both ERP and non-ERP system is listed below. Its organization. The key benefits of the ERP system and
custom application is developed for the exact non-ERP system integration is listed below. Benefits of
requirement of the business need and does not intend the best of the breed application can be achieved by the
to capture additional details required for an ERP. Also, organization. Also cost-effective solution to automate

2020
ERP system follows best standards of application the entire business process. Management information
development models, however the custom applications reports can be driven with financial and nonfinancial

Year
does not. But also, ERP system is having lot of control data for decision making easily. Furthermore, less
sequence and measures on its data, but the custom harm/modification to the existing business process or
application does not. Sometimes, ERP consultant or model. Any reports can be generated easily and 77
software application engineers do not the exact comparatively in very much less time as the entire data

Global Journal of Management and Business Research ( A ) Volume XX Issue X Version I

requirement for their system, and what type of data is are available in the shared database. From the analysis
needed for the integration. of the case study, the researcher has developed the
Third objective is to make certain the benefits to model/framework for the adoption of ERP system and
the company in integration ERP systems are known for non-ERP system and its integration. The developed
its world best practices and functions which allows the model is been given in Figure 02.
organizations to streamline their business processes

Figure 2: Proposed model for adoption of application integration

© 2020 Global Journals

 Challenges and Benefits of ERP System and Non-ERP System Integration in a Developing Country

The research has focused on few

organization’s case studies where they implement a
specific ERP application. Subsequently, the research
can be generalized through a quantitative research with
the mix of all other world known ERP system. The
companies selected for the case study is business to
consumer companies. Research can be extended to
other type of companies as well to find whether out the
same condition is applicable.

References Références Referencias

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