Implementation of ERP and Challenges – Research Proposal

Abstract

The system of ERP are the application packages at the wide level of enterprises that are formulated and designed to offer integrated support of information system to various functions of business. Although there are multiple benefits of ERP to the organization, the implementation of ERP involves multiple amendments in the processes of business and configuration of software for improved compatibility. The system of ERP integrates the solution of software that helps to support and ease out all the flow of information which leads to improvements in functioning of the organization. An emerging and clear channel in the system of ERP is implementation. Employees face the challenge of using system of ERP because of its complexity. This study will address the implementation problems of unfounded ERP which can also aid to lay a blueprint for using the ERP Systems and its impact on the productivity. The researcher outlines the research proposal which concerns the use and implementation of system of ERP in the organization. The researcher has presented various issues concerning the usage and implementation of ERP by taking the organizational perspective of knowledge and information from consultant and management aspects. The researcher ends the paper with the discussions regarding the work of the future.

CHAPTER 1 Introduction

System of Enterprise Resource Planning is a package of Information technology which provides the opportunity in real terms for modern cooperation to integrate the functions and processes of the businesses. By establishing the environment of ERP, all the transactions become the part of the business processes which are inter linked with each other. As per a researcher, ERP is considered as a software which can be put to use for integrating all the functional information of a corporation to mechanize the processes of business of the corporation, i.e., a system of business management that consolidates all the faces of business. Another researcher defined ERP as systems which are designed for the processing of transactions of organization and also facilitate the real time and integrated customer response, production and planning. The system of enterprise can consolidate the processes of business which are significant for the growth and success of the corporation into one consolidated system software that permits the flow of information seamlessly in the organization. It is also defined as a package information system that is configurable and is integrated by the processes based in information within all the areas of functions in the organization. Enterprise Resource system helps to drive the orientation of process, improvements of business processes, and overall changes in the organization. The structure that will be followed in this paper begins with a theoretical framework to the situational problem, followed by a meeting by the researcher with a company who is using system of ERP in the organization. Some of the research is conducted in the organizational problem area and after that the suggestions and response for designing of research are developed. In last, the researcher has concluded and discussed the performance and designing of the proposed research.

The Variables

In the research proposal, the researcher has identified two variables namely dependent and independent variables. The productivity of employees of the organization are dependent variables and the effective implementation and use of ERP system are independent variables. The selection of variable are on the basis of their importance, for instance, the productivity of employees in an organization are not eligible to be modified while the performance of organization is completely based on the effective utilization of system of ERP within the organization.

Research Question

There are multiple research questions which are addressed in this paper:

• How implementation of system of ERP does helps to impact the productivity of employees,
• The various approaches of ERP which may help to improve the productivity of employees in the organization,
• Value of business in ERP System,
• Evidence of all statistics which are available in regarding the employee’s efficiency in the sector
• Employees in sale department of Australian industry for telecommunication which can help to strive the sale increase by using the software of ERP,
• The model of input process output for implementing ERP and how it can impact the future.

Hypothesis

The researcher is conducting the research in order to examine and evaluate the below mentioned hypothesis:

H1: Implementation of ERP system improves the productivity of employees in the organization.

H2: Implementation of ERP system does not improve the productivity of employees in the organization.

CHAPTER 2 Literature Review

Topic 1: Impact of enterprise resource planning implementation on employees’ productivity

Literature Review:

Chen, Law & Yang (2009) argued that the impact of enterprise resource planning could be different for different organizations and the impact could be different in short term and long term. One of the objectives of ERP implementation is to increase the employee’s’ productivity in long term. The fresh implementation of ERP system can pose some problems relating to the ability of organizations to collaborate with stakeholders in horizontal relationships. As Daft (2015) points out, leaders who are unable to create collaborative, trusting relationships with others often fail and essentially the productivity of employees could depend on this collaboration. The interaction with organizations in the external environment, may introduce cultures and business strategies that function in opposition to the organizations historical view. Knutsen and Brock (2014) extrapolate that an organization cannot be independent of its environment, but interacts through influencing and being influenced. It is true that the use of ERP systems has become the norm in today’s business environment. It is expected that the leaders would be able to manage the change arising from the implementation of ERP systems and this would ultimately have a positive impact on employees’ productivity. It is important to mention that the implementation of ERP could be a big change in the organization and the employees’ productivity could also depend on the way organizational managers and leaders manage the change (Tran, 2013). Lack of leadership in ERP implementation causes so much stress and confusion for organizations. Leaders must be able to help guide his team to the successful implementation of the changes. The communication in the organization during the course of ERP implementation is also a key driver of employees’ productivity. Communication is key in any organization productivity and ERP implementation.

Topic 2: Necessary approach of ERP in increasing the employee’s productivity in an organization

Literature Review:

The necessary approach to the implementation of ERP in increasing the employees’ productivity in an organization should focus on two key aspects. These are change management and transformation. According to Dibrell & Davis (2008) the implementation of ERP creates a transformation between the organization and the environment where the environment becomes an essential part of the organization instead of a perceived external variable. The researchers described the symbiotic relationship between environment and organization creates a depth of adaptiveness where the organization continually adjusts according to changes in the environment. The researchers recognized the challenges of transformation in a participatory organization that operates with an open systems approach. According to Dibrell & Davis (2008) the challenges included “inertia, managerial ‘bounded rationality’, political constraints and institutional ‘embeddedness’, and weak organizational learning mechanisms” (p. 185). Ke & Wei (2008) argued that the approach to improve employees’ productivity with the implementation of ERP should also include the system of feedback and employee engagement. The organization outcome and feedback from the organization’s environment are very important when it comes to evaluate, improve, or measure the implementation of ERP. The feedback helps to evaluate and improve the input and the process of the transformation. With the ERP implementation, organization is considered as a system of transformation in which the environment put the input and the organization transforms it into output for the use of the environment, and the feedback from the environment is welcome. Welch, Bednar, Milner, (2011) suggested, “the purpose of knowledge management within an organization is creation of vehicles to support people to create and share their individual, contextually-dependent understandings” (P. 3). The technology products like employee resource planning helps the organization learning from its environment and improving its products. Many of success companies like Avon, Exxon, Microsoft, Ford, General Motors, Toyota, and Nissan used the benchmarking which is similar to the open system. This used the external criteria to evaluate and improve its products. However, certain companies prefer used the internal system analysis to improve their technology products like ERP products.

Topic 3: Business value of ERP system

Literature Review:

There are various benefits and business value of using ERP system. In simple terms it can be said that the use of ERP system creates and open, effective and transparent culture in the organization. According to Starnes, (2000). “Open systems theory argues that organizations must interact with the environments in which they operate in order to be successful. Organizations that attempt to be self-sufficient without interacting with the environment are referred to as closed systems” (P. 15). With the use or ERP systems, organization can actually be open and effective in nature. It would result in the business value of cost optimization, increased revenue and improved profitability. It can be said that the organization’s success depends only on the degree on which the organization considered open systems and use technology as a business integrator. However, with today environment with its cyber security problems, the cross cultural challenges, and the lack of inputs material and the organization good tool of transformation, the open system theory presented more challenges in management. The use of ERP system would also enable the organization to track down the quality of products and services. This is the reason that organizations have started to integrate ERP systems with the supply chain management solutions. With the implementation of ERP systems, the focus of management is to create a platform of Total Quality Management. It helps organizations to create a culture in the organization where all the stakeholders are aware of the goals and objectives. The use of technology products like ERP systems also helps the large organizations like Coca-Cola to manage the teams that are spread in different parts of the world. With the CRM (Customer Relationship Management) module of ERP the organizations can also manage customers in an effective manner. It is important that the organizations should develop goals and objectives with respect to ERP implementation. The organizations would be able to derive maximum benefits from ERP implementation only when business values map with the defined goals and objectives.

Topic 4: Statistical evidence available regarding efficiency of employees’ in the sector?

Literature Review:

The statistical evidence regarding efficiency of employees in the telecommunication sector could be seen with the key metrics like employee satisfaction index, customer satisfaction index, employee productivity index, etc. The statistical evidence could also be observed in terms of the stability index of the organizations in this sector. This evidence, assumes that an organization exists in a stable environment, that it does not need to adapt to its environment, and that it does not interact with its environment in a substantive way. Knutsen and Brock (2015) further note that an organization utilizing a close system approach is likely to have a strong, vertical hierarchy and a mechanistic structure. Given the speed at which change occurs in the contemporary business environment, particularly in the area of communications technologies, and the already significant changes to the business environment that have been caused by globalization, it seems to me that employing elements of open systems theory, at least to some extent, is virtually essential. And yet there remain successful organizations that operate primarily or in part as closed systems. Brynjolfsson & Saunders (2010) discussed the importance of using various metrics to measure the efficiency of employees. It is believed that implementation of ERP system should start with an assessment phase. In the assessment phase the organization should establish the key metrics that would be used as a goal with the ERP implementation. The implementation of ERP could be termed successful only when there is a significant improved in the metrics that were established in the assessment phase. For example, it is expected that the customer satisfaction index should increase after ERP implementation. Likewise the statistical evidence could be found in other metrics like employee satisfaction index.

Topic 5: Sale employees of telecommunication industry in Australia can strive for increase in sales performance by using ERP software.

Literature Review:

Organizational leaders must manage the feedback received and adapt organizational operations through ERP system in a manner that can optimize organizational processes (Karata & El-Rayes, 2015). Karata and El-Rayes (2015) posted that managers must include in organizational operations specific steps or sessions that identify those points raised from various stakeholders as warranting attention and action. Without purposefully incorporating work sessions or planning sessions focused on stakeholder feedback, organizations fail to benefit from the rich intelligence provided by key constituents. In the interactive stage the organizational response to stakeholders input is most effective. This is because Lawrence and Weber (2014) state that in the interactive stage the organization has an ongoing relationship and line of communication with stakeholders continually to maintain respect and open communication. With this being so, the organization can more effectively communicate responses or concerns to stakeholders being that trust and loyalty has been established. Lawrence and Weber (2014) share that the inactive stage is where stakeholders are ignored. This can be seen as the least desirable stage. With this being so a response from the organization can be very valid being that communication is becoming active between both the organization and stakeholders. Also, because this can be seen as effort being put forth where stakeholders are not being ignored and both parties are coming together for the greater good regardless of the lack of communication or relationship that exists. Momoh& Roy (2010) highlighted that the sales performance of the company would depend on number of factors. The organizations must figure out the interaction of ERP with the sales cycle or customer touch points. It is expected that the sales performance would include if the implementation of ERP products can improve customer touch point. The sales performance could also be improved if the ERP system can improve the communication levels in the organization. Therefore, one of the key objectives of ERP implementation is to overcome the communication barrier and have a system of effective communication at workplace.

Topic 6: Input process output model for the implementation of ERP and its future impact

Literature Review:

Cereola, Wier & Norman (2012) outlines the input-output theory of ERP implementation and the idea that it has become the most well know of all the theories of ERP implementation. It focuses on the fact that all organizations are unique and have several subsystems that are not equally important in organizational development and that issues within the organizations should be handled based on this idea. This may pose a problem for some organizations in that no subsystem is likely to be considered as being unimportant by them to the whole organization. In other word the open systems theory can be seen as diminishing the relevancy of every subsystem that exists within an organization. Many times a blended approach is taken on by organizations because they have to implement different organizational strategies when changes occur in the competitive circumstances, structural design, and experiences. Powell &Riezebos (2013) argued that organizations could also use the ambidextrous approach to implement the input process output model. It is the model used by a firm to simultaneously achieve decentralization as well as centralized controls during the ERP implementation. Ambidexterity is viewed as a structural issue targeting certain levels of achievements. Organization uses this approach to put in place dual structures to alignment while closely focusing on the adaptations of ERP (Daft, 2015). In established companies, ERP implementation is only a disruptive innovation in a separate unit that can be pursued. The ambidextrous approach assists in the creation of a separate unit for examining and pursuing new opportunities as well as keeping the same management to be able to manage both the parent company and the new unit of innovation (Stemberger, 2008). In this approach, the management or leadership should possess the ability to attend to the already existing procedures, services, products and all models as well as processes while still giving support to the innovations that will eventually drive the organizations future (Daft, 2015). Daft, (2015) provides examples of organizations such as Google releasing imperfect or unfinished experiments to try and improve the existing business processes with ERP implementation. This approach entails continual overseeing the key business while protecting the emerging venture concurrently as it develops and grows. Executive leadership can apply this approach to form segregated business units that will help to explore and develop a breakthrough of innovations while at the same time managing the existing business uninterrupted with (Saunders, 2010). The teams that manage the project are encouraged to form their own processes, cultures and structures but still connected to the other organization. Through this approach, new opportunities are developed and presented to the market by the team of executive as new business units and therefore slowly introduced into the existing units (Bober, 2014).Introduction of another approach can only be useful if it does not interfere with the processes in place immediately, the existing management and the people (Daft, 2015). This approach should be spontaneous but not prompt development and implementation (Eldabi, 2008). If it may interfere with the gradual acceptance of the new innovation to any organization, then it is not appropriate.

As a conclusion it can be said that the approach to improve employee productivity should focus to take employees together to a desired state of ERP implementation. It is important that the employees should be communicated about all the aspects of change management that arises from ERP implementation.

Theoretical Framework of ERP

The system of Enterprise Resource Planning offers multiple benefits to the organization. At the same time, if this project of ERP fails, it can threaten the presence and establishment of the organization as wrong selection of ERP Project can lead to the weakening and failure of the system which can cause adverse results on the performance of the company. Many big organizations and corporations initially installed the system of ERP and later abandon the implementation of that system. The main reason behind the failure of projects of ERP in the organizations are mismanagement and mishandling of the project. Implementing the system of ERP is very complex because it drives the significant ratio and portion of the efforts for implementing the development code to configure software packages that are already existing and also the complexity which evolve from technical factors to organizational aspects. It also involve the amendments of processes of business and configuring the systems for good and improved compatibility. The system of ERP is not much technological practice because it is regarding the revolution of the organization as it interacts and interrelates with the organizational actors. Thus, it is critical and significant for the corporation to possess as much knowledge as possible before embarking the project of ERP and also require the assessment of ERP.

The techniques and methodology used for collection of data will be secondary sources and all quantitative method for the research will be used to finish the study which is related to the initiatives regarding development and learning effectiveness. Quantitative method also aids for collection of data for verifying the hypothesis. Questions which are close ended are used by applying the deductive approach to test and verify the hypotheses in the most effective and efficient manner. The survey by using questionnaires was used to conduct the research and to gather the information at maximum level. The research which is conducted for this study is exemplary in nature. The research which is done at primary level is conducted on over 100 respondents to study the topic in depth and gather maximum authenticated information regarding this study. Analysis of data is done by using the software of MS Excel where multiple graphs are used to assess and analyze the information. The survey by using questionnaire is used for conducting the survey and the questions used in the questionnaires are close ended which are used in order to find out the answers which are required for the questions. The use of Likert Scale helped to measure the correct answers which are gathered from the respondents. The researcher make use of all the 100 respondents in order to conduct the successful research who had used the software of ERP and they are randomly chosen by the organization for the sample accuracy. Sampling method used to randomly select the respondents is convenient sampling by making use of non-probabilistic method. The questionnaire consists of 10 questions which relates to the application of ERP software and its visible outcome in respect of the productivity of the employees efforts. In this research proposal, the impact of ERP System on the productivity of the employees of an organization and various approaches for implementing ERP system successfully are discussed. Furthermore, the value of business in ERP System, evidence of all statistics which are available regarding the employee’s efficiency in the sector, employees in sale department of Australian industry for telecommunication which can help to strive the sale increase by using the software of ERP, the model of input process output for implementing ERP and how it can impact the future are discussed in the succeeding paragraphs of the study.

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BIBLIOGRAPHY

Al-Fawaz, K., Al-Salti, Z., & Eldabi, T. 2008. Critical success factors in ERP implementation: A review.

Brynjolfsson, E., & Saunders, A. 2010. Wired for innovation: how information technology is reshaping the economy.

Cereola, S. J., Wier, B., & Norman, C. S. 2012. Impact of top management team on firm performance in small and medium-sized enterprises adopting commercial open-source enterprise resource planning. Behaviour & Information Technology, 31(9), 889-907.

Chen, C. C., Law, C., & Yang, S. C. 2009. Managing ERP implementation failure: a project management perspective. Engineering Management, IEEE Transactions on, 56(1), 157-170.

Daft, R. L. 2015. Organization theory and design (12th ed.) Mason, OH: South-Western, Cengage Learning.

Dibrell, C., Davis, P. S., & Craig, J. 2008. Fueling innovation through information technology in SMEs. Journal of small business management,46(2), 203-218.

Karatas, A., & El-Rayes, K. 2015. Evaluating the performance of sustainable development in urban neighborhoods based on the feedback of multiple stakeholders. Sustainable Cities and Society, 14, 374-382.