Term Report

ERP Implementation in TCF

Submitted by

Muhammad Mutahir Anwar

20181-23518

Instructor
Sir Fawad Alam

Institute of Business Management (IoBM)

Karachi

August 2020
ERP Implementation in TCF

Abstract

Organizations have been dealing with the unusual procurement procedures since long but
after the implementation of Enterprise Resource Planning (ERP) system within the
organizations in late 1980’s, a shift in the procurement processes took place and made
this system an essential part of the organization.

Implementation of ERP system will cultivate predominant organization level

performance, increase data accuracy as well as allow the higher management to view the
company’s progress. Indeed, poorly managed implementation process could result in
underachievement of the expected benefits.

ERP has a long list of providing the organization with a positive impact at all fronts. It
will help the organization to manage the resources in an efficient manner and provides all
sorts of important information that is available for future prospects. It is helpful for all the
departments of the organization ranging from Finance to HR to Supply Chain.

In this Report I have discussed, the implement of ERP system in The Citizens
Foundation. The aim of this study is to provide a theoretical view of implementing an
ERP system within an organization, under the supervision of Mr. Fawad Alam.

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ERP Implementation in TCF

Acknowledgement

I would like to take this opportunity to express my gratitude to Allah the almighty and
everyone else who supported us through this journey of learning.

First of all, I thank to Allah the gracious for granting the opportunity to learn about the
technology and current practices followed by the companies.

Secondly, I would like to thank our academic instructor Mr. Fawad Alam Lecturer,
Department of Supply Chain Logistics Management for his extended guidance,
encouragement and support throughout this learning journey.

I hope that this report will be useful for all those who are interested in learning about the
process of successfully implementing the ERP system within an organization and what
are the steps that should be followed in order to reach the milestone.

Many thanks,

Muhammad Mutahir

ID#20181-23518

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ERP Implementation in TCF

Contents
Introduction ...................................................................................................................................... 4
1.1. Background .................................................................................................................... 4
1.2. Problem That Company Face ....................................................................................... 5
1.3. Project Aim and Objectives........................................................................................... 6
2.1. History of ERP ................................................................................................................. 7
2.2. Enterprise Resource Planning (ERP) ............................................................................... 7
2.3. ERP and Organizational Integration ................................................................................ 8
2.4. ERP Training ............................................................................................................... 11
2.4.1. Training types ........................................................................................................ 12
2.5. ERP and data communication .................................................................................... 13
2.6. Factors for successful Implementation of ERP .............................................................. 14
2.7. ERP System Advantages................................................................................................ 15
2.8. Challenges during ERP Implementation ................................................................... 20
2.9. Five Phases Of Implementation Process .................................................................... 21
2.10. Critical Management Issues .................................................................................... 23
2.11. Reason why the ERP system failed ......................................................................... 25
3.1. The Case Study............................................................................................................. 27
3.1.1. About The Citizens Foundation .......................................................................... 27
3.1.2. Impact on Drivers ................................................................................................. 29
3.1.3. System Approach .................................................................................................. 29
Conclusion and Recommendation .................................................................................................. 30
5.1. Recommendations ........................................................................................................ 30
5.2. Conclusion .................................................................................................................... 31
References ...................................................................................................................................... 32

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ERP Implementation in TCF

Introduction

1.1. Background

We are living in an era where technology has taken a massive step and has made
many process of our lives easy and automated. If you look around these days you will
find almost every other thing has changed exceptionally since its inception since the
arrival of modern technology. When we mention modern technology here, many
processes within the industries have changed and people are now automating most of
their work through software’s, Artificial intelligence, machine learning and much more. It
has simplified the work and on the other hand enhanced the productivity of the employee.
Companies these days are investing huge sum of their budget over the implementation of
new softwares, training their employees to use those softwares efficiently in order to
grow their business and increase their profitability.

Similarly, software Enterprise Resource Planning is being installed within the

organizations and is comprised of strategic and powerful business process management.
ERP has a lot of tools that are used to manage, store and pass on the information to the
different departments of an organization. ERP is designed in a manner that it will support
and integrate almost each and every functional area of a business management process be
it procurement, productions, operations, human resource or even finance and logistics. It
has the ability to facilitate the flow of information among all the supply chain processes.
In the beginning, ERP was used in only manufacturing and some related organizations
but since ERP has updated time to time, now it is considered to be a pivotal point in an
organization.

Some of largest investments in IT have been made in ERP. A recent survey

predicts and approximately ERP will raise up to $66 billion in 2003 (Shehab, Sharp,
Supramaniam, & Spedding, 2004) Since the arrival of the different packages of ERP it

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ERP Implementation in TCF

has increased its worth to multiple folds, ERP is now efficiently used by the Inventory
material management and sales department and through that it has become very easy for
them to have a hold over inventory and sales team does know in real time when and what
they need to sell.

ERP can either be purchased as off the shelf or otherwise ask certain ERP
company to make it customize for them and then integrate it with their organization,
keeping in mind that customized version is very expensive as it involves a team to make
it suitable to work for their organization. Right now, ERP services has been provided by
almost 100 companies but out of that there are five companies that are called “Big Five”
ERP software providers and controls over 70 percent of the market share. These involves,
SAP, Oracle, PeopleSoft, Baan and JD Edwards (Shehab et al., 2004)

Although it is widely used but before implementing within the organization, an

organization must know at what level should and organization integrate this software.
Organizations need to analyze that at what stage they need to install it, because it will be
required whenever an organization faces a huge demand and a lot of warehousing
handling is required. Planning and forecasting as well as managing the operations of the
company which were not possible from the conventional systems.

Enterprise Resource Planning system is figured to be a kind of enterprise

application that is made to be utilized by big scale businesses. This application, on
occasion, requires devoted teams to analyze and alter the information to deal with the
arrangement and redesigns of the software.

1.2. Problem That Company Face

Traditional old school procurement and inventory management practices was

done manually. From supplier selection to preparation of quotes and inventory
management everything is done on paper and excel.

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ERP Implementation in TCF

As a result of which much time is wasted and chances of error are high, all the
task are people dependent as a result company face lot of queries regarding the stock
delivery and the inventory.

The traditional procedure involves different users and group, causing a barrier in
flow of information and thus creating loss in terms of time, information and money.
(Claritum, 2006)

1.3. Project Aim and Objectives

The solution to their problem was in implementation of ERP software, but since
it is a nonprofit organization and has limited and controlled resource any ERP software
available in market can’t be installed for due to budget constraints, so for this purpose a
Microsoft Daynamic (GP) installed with limited modules and limited licenses.

The aim of this project was to improve the procurement procedure and the
strict control on inventory and to secure the data of organization.

The primary objectives was the following

 To identify the key factors required for the successful implementation of ERP
 To make PR , PO and inventory management done via software
 To make documents store in database rather than hardcopies
 To automate the procedure

1.4. Conclusion

In conclusion, this chapter describes the introduction ERP system its functions
and its role in an organization. The research problem, aims and objectives that are part
of the research are discussed here

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ERP Implementation in TCF

2.1. History of ERP

The term of ERP was first initiated by Gartner in 1990, but its goes back to
1960s. At that time the concept applied control in the manufacturing sector and to
inventory management. Software engineers created programs to reconcile balances,
monitor inventory, and report on status. By mid-1970s , this concept transformed into
Material Requirements Planning (MRP) systems for scheduling production processes.

By 1980s, MRP started to incorporate more manufacturing processes, prompting

many to call it MRP-II or Manufacturing Resource Planning. By 1990, these systems
grew beyond inventory control and other functions and departments like accounts, HR,
Finance were also thus setting the stage for ERP as we've come to know it. (Robert
Jacobs & “Ted” Weston, 2007)

2.2. Enterprise Resource Planning (ERP)

Enterprise resource planning (ERP) is an integrated software set used for
business management, when utilized efficiently can manage and integrate all the
business functions within any organization. ERP may incorporate tools for cost
accounting and finance, distribution and sales, human resource materials management,
production planning and software integrated manufacturing, supply chain, and customer
information (Boykin, 2001; Chen, 2001; Yen et al., 2002). ERP enhances the
transparency between all supply chain process and make a proper flow of information
between all stake holders (internal and external) in an organization (Al-Mashari and
Zairi, 2000a). Furthermore, supply chain can be improved using ERP by reducing the
cycle time ( Gardiner et al., 2002). However, traditionally ERP has been applied in
capital-intensive industries such as construction, manufacturing, defense and aerospace.
Recently, ERP systems have been expanded beyond manufacturing and introduced to the
finance, hotel chains, health care, insurance, education, telecommunications sectors and
retail stores.

ERP is now considered to be the price of entry for running a business, and helps
to connect with other enterprises in a network economy to create “business to business”

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ERP Implementation in TCF

E-commerce (Boykin, 2001). Many multinationals only work with those companies that
operate the same ERP software as the multinational firm.

Among the most important attributes of ERP (Nah et al., 2001; Soh et al., 2000)
are its abilities to:

 Integrate and automate business processes across all organizational functions and
locations
 Enable best business practices to be implemented thus enhancing productivity;
 Share of data across the organization to reduce errors
 Real time data display for better and rapid decision making and cost reducation.

2.3. ERP and Organizational Integration

Today, ERP has been implemented by the majority of the organizations and
replacing the old legacy softwares that were being used since ages. In the past, there
wasn't all-round solution programming software that can help organizations in dealing
with all business forms, yet as the tech world has grown a lot, so now we have ERP
software available. ERP software is incredible when it comes to keep up and manage an
organization's processes in the most proficient manner. and with time, it is showing signs
of improvement and getting better and better day by day. An upgraded version of ERP,
for example, CIS ERP, amazingly brings all your business forms together to let your
organization settle on information-driven decisions, improve coordinated effort, and
reinforce business efficiency.

Enterprise Resource Planning softwares adjusts to the advancement of

technology, complying to business necessities and staying aware of market demands.
ERP can be beneficial for various department of an association:

 Managing and controlling the costs by efficiently tracking

 Automate your daily routine tasks
 Incorporate with other departments and refine the daily tasks
 Planning and forecasting for sales,planning and manufacturing

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ERP Implementation in TCF

 Training
 Streamlining of all the management tasks.
 Service and merchandizing data centralization
 Comprehensive sight of sales, production, warehousing, and finance

ERP provides the organizations and their teams the tools, techniques and data
which is required to monitor focused measurements & to respond with compelling
decision and planning. The backend workforce can make better decisions depending
upon the data available and thus serve the business and clients in a much better way.

Furthermore, ERP is best utilized to be the main component to centralizing &

connecting each and every departments of the organization, enhancing clarity and
impeding data duplication. Incorporating with the current software of the organization,
ERP will help in dealing with each department of the organization, with every
department of the organization practicing its own module. With adequate installation,
ERP can convey huge profits for the long term. {cispl, 2007}

Indeed, ERP covers a huge variety of organizational processes. Here, we are

highlighting some of the fundamental business processes that crave for an ERP system,

Finance

Nowadays ERP offers an advanced dashboard option that gives users an exact
review of their finances, so they can take advantage of ongoing business dealings and
have real-time information available whenever required. The solution can likewise help
you eliminating entering business data physically via automating everyday tasks.
Presently, ERP incorporates the tracking abilities that help employees in keeping their
business' regulatory compliance.

Areas, for example, payrolls, sales, account receivable, account payable and
records are core to your accounting, with clients, for example, Microsoft Dynamics and
similar softwares are providing additional functionality that is used by specific
companies & organizations.

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ERP Implementation in TCF

Human Resource

ERP helps to review the areas like, staff tracking, their skills and academics, staff
evaluation, administration and compensation management. Advanced ERP programming
will let you manage organizational data and help you enormously in streamlining
employee tasks, for example, hiring, reducing staff, payroll, and different tasks. The best
part of having an ERP in HR operations is: it can spare your time, energy, and risk factor
as you could follow every employee's performance and pinpoint HR issues before they
begin to occur. HRMS key focus and modules have everything that will assist you in
dealing with each and every task of your department like an expert!

Manufacturing

The modern Enterprise Resource Planning solution enhances project and cost
planning as well as production planning. The core idea of this package is to improve
factors that have a prominent impact on, automizing everyday processes, business
correspondence and offers producers the ability to manage resources by getting the real-
time data that is available to all everywhere and fulfilling customer needs by offering
distinctive assistance and services. Moreover, an employee can also view packages for
example product lifecycle management, BOM, MES & others.

Inventory Management

ERP has a wide variety of modules that will keep up with all the inventory
management of the organization. To avoid over budgeting, inventory management is
utilized to analyze and track real time data related to the firms merchandizes or
component supply. It will help the organization to keep a check as what are the products
that are hot selling and what are not. Managing inventory and having ample safety stock
will help the organization to overcome all the situations related to the inventory
management through ERO. This affirms that stock levels are maintained efficiently.
There are different ERP softwares that are available in order to cater the need of some
specific industries.

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ERP Implementation in TCF

Supply Chain

If an organization is still depending upon entering data by hand while

endeavoring to track down the stock present in their distribution center, this means they
are way behind and living in the past with all the equipment that is of the stone age.
Having an ERP system isn't less than a blessing to the organization. With this amazing
software, one can easily save money and time via automating all these procedures.
Ordering of raw material to supply of it to your store then sending it to the production
unit and after packing sending it to the warehouse or to the distributor, all this is possible
and manageable with the current and modern ERP modules providing dashboards and all
advance tools to analyze and keep a track to the inventory, stocks, production, and
delivery to the distributor.

ERP is an advanced programming software, it incorporates the unchanging ways

of doing business. Reports have outlined that an ERP system isn't only a common
software to be custom-fitted for an organization but an organizational infrastructure that
influences how employees work and that it "imposes its own logic on a company’s
strategy, organization, and culture" (Elbanna, 2007)(Alshawi, Themistocleous, &
Almadani, 2004)

2.4. ERP Training

The enterprise resource planning systems are followed by the organizations now a
days as it is emerging step toward the technology .Now a days ERP systems are most
frequently used to replace the ageing and legacy systems. Different nature of ERP
systems are accessible in the market for different purposes, for example system for
financial record keeping and tracing the transactions. E-procurement software’s,
inventory management systems and etc.

Whenever something new is introduced in the market the training is mandatory to

aware the people about their uses and benefits. Employee or user training is considered to
be the third most significant dynamic in the organization. For the batter understanding
toward the software can help them to learn more and make the thing accurately. Most of
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ERP Implementation in TCF

the times companies fail to implement the ERP software just because of the lake of
training, they ignore the significant of the training just to save the cost. New and updated
systems also help to change the process of the organization and bring the accuracy and
efficiency in their work. By involving the people in training through the implementation
process must be addressed to accomplish the assistances. Training is considered the
critical success factor of any organization. (DOROBĂŢ1, 2012).

If the organization understand the importance of the training of ERP systems that
can bring a tremendous change in the working style

2.4.1. Training types

The types of training for ERP are as follows

a) On the job Training

As name demonstrates, preparing is given hands on hand. Right now preparing

procedure new representatives are really playing out an errand by watching the prepared
workers, so it is less cost devouring in light of the fact that the representative is dealing
with place of work itself.

b) Off the job training

Right now, the preparation is parted with from the place of work (like a "study
halls technique") which can be close or distant from the place of work yet not on the
genuine place of work. So it’s more expense and tedious one. Nonetheless, Of-The-Job
Training technique doesn't give learners the genuine workplace.

c) Video based Training

Some of the organization trains their employees by using videos related to the
software. Most of the software houses that develop the software also focus on the video
based training. Lot of related tutorial is available for the batter understanding of the
system. Video based training is less expensive and easy to learn.

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ERP Implementation in TCF

2.5. ERP and data communication

The Information accuracy is the basic concern during the execution of an

undertaking asset arranging (ERP) framework. Along these lines, it is basic to understand
information quality matters to guarantee accomplishment in executing ERP frameworks.
This study utilizes SAP for instance of an ERP framework and describes an inspection,
which examines information quality issues with existing frameworks, and discriminates
basic achievement factors that sway information quality. The investigation brought about
the advancement of a structure for understanding information quality issues in executing
an ERP, and use of this system for a situation concentrate in two huge Australian
associations. The discoveries of the examination propose that the significance of
information quality should be generally comprehended in executing an ERP, just as
giving proposals that might be helpful to professionals. (Xu, Nord, Brown, & Nord,
2002)

An assembling ERP settles on examination and dynamic simpler and

progressively successful. Nobody needs to accept that their correspondence isn't being
heard or that something must be rehashed again and again to be heard. With assembling
ERP frameworks, work processes are computerized and, in many frameworks today, they
are likewise measured, cloud-based and adjustable. Numerous undertakings that were
recently performed physically, or that necessary decoding for use inside an office, are
done consequently. This unshackles staff to settle on subjective choices dependent on the
precise and quick investigation gave by the framework. With a typical database and less
tedious undertakings, investigation is quicker, more obvious and increasingly
comprehensive. It pushes groups to convey in light of the fact that they no longer feel the
correspondence isn't being heard nor do they feel that it must be expressed again and
again. This liberates colleagues and takes into consideration great correspondence all
through the association

All the data stored in the data base of the system that can help to recall the data
and save the information accurately .it also help to reduce the documentation coat.

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ERP Implementation in TCF

2.6. Factors for successful Implementation of ERP

Information technology has prevailed many outstanding outcomes for both the
manufacturing and service organizations. Companies have implemented system such as
enterprise resource planning (ERP) , MRP, EDI etc. overtime these systems have put
tremendous impact on the productivity level of the organizations, also they have attained
much attention for being best decision making instrument. Many companies have
implemented ERP for the purpose of reducing operating cost, increasing productivity and
for better customer services, but the same system can paralyze the organization if it has
not been implemented properly, there are many horror stories concerning implementation
gone astray.

The most important consideration while implementing ERP system is the clear
plan and the worthy strategy for that plan, as for successful implementation one would
need a powerful directorship, a clear execution plan, and a constant steer on the budget.
The plan must be made by evolving of the company’s requirement and the ability to
manage the changes that would incur during the process of implementation, there must be
some question answered in the planning stage.

1. What are the needs of various functional in terms of information required?

2. How will it be the perfect fit to the existing system?
3. What is the procedure of this turnaround and how it would gel ?

Questions like above must be answered for the successful implementation of an

ERP system. There must be an strategy following the plan, there could be a step by step
strategy or ‘big bang”, but this must decide by the fact that how much relative change an
organization can absorb. There has been study that 90% of the time organization has
performed poorly when they don’t have proper implementation strategy. Because the
change this system could bring is enormous, there must be change management adopted
way before implementation into various parts of the organizations where the impacts is
forecasted. (Da Silva & Rahimi, 2004)

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ERP Implementation in TCF

2.7. ERP System Advantages

ERP system is strength for an organization whether they have a large or small
business. ERP software is beneficial for making departments to run smoother by merging
and securing your organization data, automating processes, and friendly users. ERP
Software have many more qualities and capabilities. As the main advantage for an
organization by implementing ERP software is it’s provide potential to departments for
performing daily operations and long-term planning more efficiently. ERP Software is
unique type of Integrated Information Management Systems (IIMS). Organization is able
to make management processes efficiently more smoother by using ERP software as
compare to before ERP implementation it was been done manually on papers or via
telephone. Due to implementation of ERP software it reduces the logistics costs, and flow
of data is aligned. This significance is noticeable not just for senior management of entire
organization but as well as by the individuals employees. ERP software impacts a
positive response in relationships with the clients and suppliers. The question that's raise
why ERP system is vital for an organization therefore the answer is ERP system is
especially used for main core process of organization that has manufacturing, finance,
HR, services, sales, customer support, procurement, supply chain. ERP software merges
these various processes into a single system. ERP helps you to get on your toes by
reducing errors and being efficient. Time and tide await for none. In this competitive
world, it's important to deliver things on time than being late and losing out the clients.
To illustrates the classification of the ERP software modules. Following are the
applicable areas of ERP software which are as follows:

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ERP Implementation in TCF

AREA OF THE MODULES’ USE AREA DESCRIPTION

Applicable area for the ERP software, which may
include Organizations accounts department that includes:
FINANCIAL AREA
accounts statements, Funds Reports, Supplier and Clients
accounts, fixed assets management.
Logistics depart consists company procurement and
LOGISTIC AREA commercial planning which is defined as inventory
management
Admin Department that deals with the payroll,
STAFFING AND PAYROLL AREA timekeeping, career planning and recruiting of best staff for
a particular post.
Software applicable in Planning depart for
PROJECT MANAGEMENT AREA providing services that includes project team management,
forecasting ,Business planners
Software applicable in CRM Customer Relation
CUSTOMER RELATIONS Management) that includes sales team management,
MANAGEMENT AREA customer services, sales effectiveness forecasts, order
evolution management.

The advantages of implementing a ERP software system can be challenging for an

organization, but it’s a best strategy of an organization to streamline implementation of
ERP software as it engages the employees’ therefore the modern approach of the
management, are getting very familiar with the ERP system and using it in daily routine
work.

As ERP system is strength for an organization whether they have a large or small
business. ERP software is beneficial for making departments to run smoother by merging
and securing your organization data, automating processes, and friendly users. Below are
several of the most important ERP benefits that are gain by the organization when ERP
system is implemented:

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ERP Implementation in TCF

a) Improved I.T Efficiency

Implementation of ERP software is usually a huge investment for an organization,

as it merges organization IT department efficiency. Instead of spending capital on
purchase of multiple systems that requires a separate dedicated staff, support teams and
software license agreements. Organization focuses on the cost of ERP software. ERP
software is a key tool that secures other systems and their data altogether. Whenever
organization purchases a new processor/software, they've got to pay a good amount of
money. Every software is going to be charged for individually. But with ERP, you don’t
have to purchase different software products because it's all integrated into one, thus
helping you save a lot of money within the long-term.

b) Monitoring

The Selling points for the system is the competitive advantage of ERP software.
For instance, ERP software enables management of an organization to monitor inventory
levels of firm on regular basis each day, which includes the forecasts of future shipments
that are yet to be received by procurement department. By analysing of inventory levels
position of an organization can be determined, as it enables firm to control its assets on a
precise level.

c) Improved Reporting System

Having an improved monitoring system, the better picture of firm is to be

visualized which maybe one of the best advantage of ERP software implementation.
Deployment of ERP software across each departments means that organization has a
single merged improved reporting system for each process. ERP removes cross functional
barriers removing multiples filing systme. Standard accounts reports for an example
income and cash flow statements are built-in generally in software, and customize reports
are generated easily without IT intervention.

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ERP Implementation in TCF

d) Modification

One of the most recent advantages of the ERP software is its software
modifications. The Vendor/consultant of ERP vendors proposes several applications of
software that can be applicable altogether with respect to organization needs. Every
application of software is designed in a unique way so that it can be able to stand alone or
can be integrated with the complete software suite also. So it’s an advantage for
organization to selects applications of ERP software with respect to its requirement.

e) Customer Care

Implementation of ERP software in an organization may also be beneficial to firm

clients unexpectedly they don’t even notices. Due to ERP Software client data is
centralized and well organized, the commercial department team get able to focuses on
building and bonding customer relationships instead of maintaining the spread sheets.
ERP software provides point to point tracking and insight, which results to form a better
customer interaction from targeted marketing as compare to late-phase customer service
which is competitive advantage for organization

f) High Protected Data

Implementation of ERP software one more benefit is to secure data of

organization. It processes the exchange of information across departments like
commercial, procurement and research and development department enhances
collaboration throughout the organization. As software provide options to end user to
customize the security of data handling and have access control of the data that allow
user to edit the data and set authorize permission of designated user to visualize the data,
ERP software have quality built-in controls features to ensure the protection and security
of organization data.

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ERP Implementation in TCF

g) Visualizing of Workflows

In thriving businesses collaboration plays a vital role, more often it is found that
department’s usually works cross functionally in an organization due to consumption of
time and more efforts that are to be put on. This problem is also been resolved by the help
of ERP software as it provides a better platform in an organized manner by authorizing
employees to access the organization data, however the departmental wise data is
channeled into one centralized location.

In result the ERP software provides real-time protection and provides a platform
for better communication to organization. The software allows access of organization
data to be visualized to get the big picture of organization limited to authorize end user
only.

h) Forecasts

In a world driven by uncertainty, it's always better to be surrounded by forecasts

that can help navigates the way ahead. As forecasts need to be accurate in order to
prepare for what’s to come. ERP software helps in creating an accurate forecast for their
management. Compared to other software, ERP gives you powerful insights for the
business by pooling all the information together. So, to feature to the bucket of all the
good things ERP brings, organization surely put forecasting as one of the best benefits of
the ERP system

i) Supply Chain Up-Gradation

ERP Software benefits those organizations also that deals with production and
inventory flow. The ERP software provides a great support to supply chain management
in many ways for an instance reduces the lead times, enhancing the general operations.
ERP software provides a platform of organization supply chain; it’s an opportunity for
organization to be more responsive by improving demand forecasting, inventory
management and procurement. Implementation of ERP software can improve
profitability and limits the overages involving inventories.

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ERP Implementation in TCF

j) Innovation for Business Growth

Implementation of ERP Software promotes the innovation on-going success of

organization business, as organization has planned and kept an eye on the future business
growth by the help of software. ERP software implementation in an organization will
reward elegantly and efficiently to accommodate organization’s growth. As it helps
organization in expanding their customers and touching the new markets making its self
to grow in the business market, by enhancing the functionality of ERP software and
another important thing is that during the implementation of ERP software make sure the
vendor should understand your organization software customization, so that organization
can get better growth.

2.8. Challenges during ERP Implementation

Implementation of ERP system do involve with several issues and challenges, only 62%
organizations consider ERP project to be success around the world in 2013.the major
problems of ERP system implementation is not technical nor technological complexity,
nor standardization. It always been human related issues like resistance not to change,
organizational environment, old business process, project mismanagement, top
management involvement, top nine issues of ERP implementation are:

1. Lack of upper management involvement

2. Lack of effective communication
3. Unidirectional training modules for the users
4. User support missing
5. ineffective project management methodology
6. Conflicts within department and stakeholders
7. Problems while making project teams and timelines
8. Ineffective measure to revamp business process
9. Lack of change management

Despite all the promises made by ERP implementation for the better
operationalization and reducing cost strategies, all are in vain if not implemented in right

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ERP Implementation in TCF

proportion as needed. Most of the ERP implementation are delayed about estimated
schedule and overrun an initial budget. They do bring change to the organization which
sometimes is expected by the organizations but most of the time they are all surprise.

These implementations do bring a lot of demands requiring the change of business

process which steps must be taken as soon as they arise but are neglected by the top
management as they are committed less in the process of implementation and all they
need is to finish the given task.

Another key point which must be inherited is the unlearning of the old ways of
business as now after the implementation new ways must be learned and must be taught
to the end users also, moreover causes centralization by integration of data, away from
the multinational subsidiary. The major setback of ERP implementation could be the
change of balance of the power within organization it usually favours central
administration at the cost of subsidiaries.

To sum it all of the challenges can be that the organizational barriers are the most
common ERP implementation challenges, other could be the technological or the change
required while imparting the new system within system, the individual’s challenges are
the least important challenges faced while implementing ERP. (Babaei, Gholami, &
Altafi, 2015

2.9. Five Phases Of Implementation Process

The failures of implementation of ERP are not as it was coded incorrectly rather
these are because of uncap abilities of the companies to meet the requirement of the
organization which would comprises of the system needed.

Implementing enterprise resource planning system as a success is an extremely

important future competitive strategy of a company, management must know the
important role it plays for the betterment of the organization, as a backbone in today’s
dynamic business world.

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ERP Implementation in TCF

The process is split up into five stages, each representing a different task to be
done which is so important for the process as a whole, it is to make sure that management
carries out evaluation of each stage ends before the start of the new phase as to render the
proper path. There must be a value chain made between these phases as it would be very
difficult to go back and correct mistakes if done any.

Change management and organizational development are the two components

which are being involved while these phases are being taken place:

Phase 1 This stage involves project preparations involving people handling leadership
roles with the budget analysis and a project plan to be followed.

Phase 2 There must be enough insight to have a blueprint of the business process and the
extensive education and training on functionality and configuration to design new
business process, new framework which should be followed throughout the stages, which
would trail it to the success.

Phase 3 This stage deals with the realization part and here there is need to make the
technical foundation while testing each process design on conference room pilot.

Phase 4 Now final preparation, entire new process is run with all the data integration on
full load and extreme conditions to test the validity of the new business process and its
durability. Alongside the training of the end user will also proceed as the people
influenced by the new system must go through the education and training needed to
understand how data transfers and how the system works at each point of operation.

Phase 5 Finally, the system goes live to integrate the whole system within, where process
flow optimization is done and continuous expansion of the system is made to reaping all
the advantages of it in order to increase competitive advantage. (Ehie & Madsen, 2005)

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ERP Implementation in TCF

2.10. Critical Management Issues

a) Partner Selection Criteria

The most important factor to be assessed is the partner selection criteria , this
partner could be the product or the project manager and implementation , as the first thing
organization must assess is the modules and its needs to be effective within organization
where its going to implemented and the most important part of it is the vendor selection.
Many times, the vendor eminence, support and service infrastructure are considered to be
very important.

b) Dirty Tricks by Vendor

At the implementation many software vendors use dirty tricks to win the project.
Few of them are discussed below

 Under bid and then over charge

 The magic demo
 The customer headlock
 Billing mistake
 Forced upgrade
 The clueless customers

c) Project Planning

Project planning is the key success factor of any large project many analysts have
stressed the importance of project planning and management for the success of
implementation of ERP. Each project must be plan with the proper methodology given by
the vendor as says ASAP by SAP.They must follow all the models given by the vendor as
it covers all the major aspects of the required needs for the implementation of ERP main
focusing the project planning phase.

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ERP Implementation in TCF

d) Project Team Constitution

Because of the enterprise wide scope, the ERP implementation requires cross-
functional and multi-skilled team, as successful project depends on the teams. All the
organizations went with cross-functional implementation teams. About 91% of the team
members had a strong software individuals and functional representation on the teams.
Top managers are committed in about 55% of the implementation projects.

e) Training

The most important lacking which can cripple the organization is the non-skilled
staff which does not know about the cross-functional process of the ERP. To avoid this
training are much needed in the process of pre-implementation, and post-implementation
phases of ERP, they are the important link to the success of the implementation of ERP.
“train the trainer “model can be implemented while the process of the phases as there
could be team made from different departments in the organization which will train the
other members of the original departments.

f) Infrastructure

Analysts were asked as of which challenges, they faced within the infrastructure
to support the new system 55% of the organization deployed new infrastructure while
26% redesigned their IT architecture and 17% found the significant difficulties as there
was no fit found between existing and the new system.

g) Software Configuration and Institutionalization

As we all know that software packages are the ERP systems keeping the industry
needs in minds, there must be a study that whether the software matches all the
requirements needed in the organization or not?

In the study its says 43% are the organizations where the software were not
compatible, 33% were the limitation of the sophistication of the software used in the
organizations. To meet the success many of the organization have ended by buying the

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ERP Implementation in TCF

add ons in the software incurring cost , what if these were enlisted before so the post
implementation cost would get decreased.

h) Testing and Quality Assurance

Ensuring the new system before going live, testing and quality assurance is the
major key which should be done most of the bugs and software issues are identified in
this phase.

i) Shakedown Challenge

Shakedown phases have always been trouble for the organization implementing
ERP system , as most of these type of projects has been terminated during shakedown
process, it also incur huge losses to the adopting organization. Low productivity, business
disruption are the two main challenges while having a shakedown phases.

j) Organisational Change

“Organization Wide Revolution” as what is said to be to ERP implementation,

institutionalization of of change which is occurred by the implementation of ERP must be
encountered by the change management modules adopted by the organization, ERP
brings large number of changed to the organization.

2.11. Reason why the ERP system failed

There are most of the reasons due to which many companies failed in
implementing the ERP system. Some of the explanations that case the failure of the ERP
system in the organizations are. (Peng, 2010)

k) Poor consultant effectiveness

Due to the inexperienced project team member with the ERP system are unable to
provide the professional level of advice to the planning team.it may occur due to the
communication barriers and the insufficient information.

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ERP Implementation in TCF

l) Poor quality of ERP system

The team don’t exactly know about the system unclear vision about the system.
They observed that the advisors gave loads to resolve issues related with business process
befuddle. Undertaking colleagues thought that it was hard to team up and add to the low
quality of ERP prompted off base framework arrangement issues. The recommend
system is not able to store a huge amount of data and have some quality issues which
may cause hurdles.

m) Software mismatch

A variety of software are available in the market. Before the implication of the
software it is important to gather the information about the best match software that can
afford the burden of data and information flow. For instance, the ERP was
uneconomically dealing with a high capacity of item ace records, and unfit to
configuration convoluted bills.

n) Poor IT infrastructure

Because of top supervision's inadequate budgetary asset accommodated the

tradition spending limit, a short presentation. The poor IT foundation added to the
moderate handling ability of the ERP framework.

o) Poor top management support.

Top management is required to offer help in the provinces of focusing on the ERP
undertaking, acceptable money associated and human asset. Restricted monetary help
added to a surged ERP execution process, project colleagues were over-burden and in this
manner high staff turnover rate, insufficient information move, issues happened.
Inadequate responsibility could prompt political issues which ruined the execution
procedure

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ERP Implementation in TCF

p) Training budget

One the ERP systems is implemented it’s compulsory to allocate a budget for the
training and continues improvement for the system.

3.1. The Case Study

The case is regarding the implementation of ERP software in a nonprofit

organization The Citizens Foundation.

3.1.1. About The Citizens Foundation

The Citizens Foundation (TCF) is a professionally managed, non-profit
organization set up in 1995 by a group of citizens who wanted to bring about positive
social change through education. 25 years later, TCF is now one of Pakistan’s leading
organizations in the field of education for the less privileged having five regional office
and 36 area office across the Pakistan. The Foundation operates a network of 1,567
school units, educating 252,000 students through 12,000 teachers and principals, with
over 17,400 employees. Approximately 94% of the Foundation's expenditure is allocated
to the Education program.

(Before The Implementation of ERP)

TCF follows Traditional old school methodology where all the requests are done
manually inventory was managed by using excel or by using papers the procurement is
also done manually. From supplier selection to preparation of quotes and inventory
management everything is done on paper and recorded in files in hardcopy.

As a result of which duplication of document is possible, files can get lost, and if
the record keeper is not available searching for the required document is a hassle and lot
of hurdles and miscommunication during the audit.

Multiple stake holders are present causing a barrier in flow of information and
thus creating loss in terms of time, information and money

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ERP Implementation in TCF

(After Implementation of ERP System within TCF)

After the implementation of ERP the company save the time and cost. The
process is transparent and without any barriers user can access the data. It also save
money in terms of stationary paper and files and also due to up to date supplier record
helps in selecting the best supplier giving a monetary benefit.

In the automation of procurement procedure (process) in TCF does involves several

functional areas of the organization which are directly or indirectly involved in the
implementation process of the procurement module of ERP in the organization as in earlier
the whole process was being manual which includes doubling of data, error in uploading,
and error in storing and issuing of data, which sometimes causes mess and cripples the
intra-functional communication of the organization. These functional areas include;

a) Procurement Department
All the items are procured from reliable sources. The vendor are registered in to the
software after verifying their credibility and potential. The potential vendor help the
company to save the cost and save the time with minimum lead time with a good quality.
b) Finance Department
Now all process in any organization involves transfer of finance and all the trade is
dependent on the finance department which handles all the situations involving receipt,
payables, receivables, financial reporting and control. They also handle capital budgeting
involving procurement of any supplies for the laboratories.
c) Administration Department
Admin department is the backbone of the organization, it handles all the links
between all the departments. This department is responsible for the undisturbed flow of
information within organization and to the other business partners. they have access to data
for batter performance.
d) IT Department

They oversee the installation and maintenance of computer network system within
the organization; also ensure that the network is running smoothly. Moreover for some time

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ERP Implementation in TCF

in TCF they are maintaining the finance software and now after implementation of ERP for
organization , the workload of IT depart is going to increase a little to manage servers for
both software and to facilitate the network functioning properly in the organization.

3.1.2. Impact on Drivers

The installation of ERP software bring change in the following supply
change drivers of TCF.

a) Inventory
There is a major impact on the management of inventory in TCF after the
installation of ERP software. How much the stock area office, school or warehouse have.
Proper forecasts could be made and if supplier development is done and he is given access
to ERP module they can also go for VMI.

b) Information
This is the other driver that greatly influenced by the implementation of ERP. Right now all
the information is stored on data base. So with ERP implemented the process flow that
takes day is done in hours.

3.1.3. System Approach

As the problem begins with the flow of information and more importantly the
handling, storage, the backup of that information. Maintaining the proper records were
the crucial issue and in defined scenario if any department ask for any older records, the
flow of smooth information chain is then challenged the real credibility is shown.

These circumstances forced the top management for the implementation of ERP
software for the organization as in increasing business the record of data is becoming
crucial element of failure for the organization. Now the internal and external factors
relating this automation with their pros and cons are discussed below

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ERP Implementation in TCF

Conclusion and Recommendation

5.1. Recommendations

There is still a need to upgrade the ERP software as the organization is

continually growing. The current module of Microsoft daynamic is not fair enough for
such a huge organization. The company should need to upgrade the software or move
toward another recommended software. Company should conduct training session for
empyoyees regarding the use of ERP and the lates application of ERP.

i. Error will always occur in the software and is part of it, sometimes due to
upgradation or viruses or due to software failure. What is important is to prepare yourself
with a team that is able to deal with it at moments notice
ii. The business process will require restrucuturing so plan for it ahead of
times and make a strategy in order to incorporate the change rather being stubborn and
lossing it all. This restructuring is generally done in the implementation phase.
iii. Reengineering of business processes would essential to be a collective
effort of all levels of employees.
iv. Top management support plays a vital role in the ERP software
implementation and up gradation.
v. Top management will check the accuracy of this data and can make the
strategies according to it. Their support is very essential. All in all, if there is no support
from the top management one cannot change the process.

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ERP Implementation in TCF

5.2. Conclusion
Implementation of ERP in the TCF results very fruitful. It optimize their business
processes by giving them accurate and timely access to reliable information. The ability
to share information between all components of the organization not only prevent delays
but also speed up the whole procurement procedures. The elimination of unnecessary
operations and data thus removing duplicate records or playback operations, that is,
redundancy is avoided. There is a reduction of time and costs of litigation.
The performances of all work units that make up their business because better use
time is increased. ERP software increase the productivity of organization by integrating
data and processes across the other departments. The ERP software also have more
accuracy, relevancy because it all comes from single source, instead of multiple sources.
ERP software is providing the procurement various reporting tools and make
generating time more sensitive and up to date information and one more advantage it is
friendly user. If previously a department had to make reports and take them from one
place to another, now the time is spent on other activities. Another obvious advantage is
in terms of customer service because the response time decreased.
All the departments are working effectively and efficiently by the implementation
ERP software. ERP software eliminate the requirement of data synchronization with
multiple systems. The software is providing the real time information to all the depts.
anytime so that clear image of inventory is visualized and inventory management is done
efficiently.
.

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ERP Implementation in TCF

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