ERP Implementation Issues in PTCL

Supervised by
Mr. Abdul Zahid Khan

Undertaken by
Sumaira Inayat ( 7 7 - F M S ~ A I T ~ O S )
Akasha Butt (50-FMSmAITIFOS)

Department of Technology Management

Faculty of management Sciences
International Islamic University, Islamabad
 FINAL APPROVAL

It is hereby certified that we have checked and evaluated this project report submitted by
Sumaira Inayat and Akasha Butt on the subject "ERP Implementation Issues in PTCL". It
is approved that this project is of sufficient standard to warrant its acceptance by
Department of Technology Management, Faculty of Management sciences, International
Islamic University Islamabad for the award of degree MBA-';~T-!

Dr. ~ a F o Hussain
o~
Head
Department of Technology Management,
Faculty of Management Sciences,
International Islamic University,
Islamabad.

Mr. Abdul Zahid Khan

Lecturer
Department of Technology Management,
Faculty of Management Sciences,
International Islamic University,
Islamabad.
 DEDICATION

To our beloved Prophet (PBUH).

Sumaira Inayat & Akasha Butt.

 A Dissertation submitted to the
Department of technology management
Faculty of Management Sciences
International Islamic University, Islamabad
As partial fulfillment to requirements
For the Award of the Degree of
Masters of Business Administration
(Information Technology)
 ACKNOWLEDGEMENT
All Praise to Allah Almighty, the most beneficent and merciful, who gave us the
blessings of knowledge and courage to accomplish this task.

We gracefully acknowledge the supervision of Mr. Abdul Zahid Khan, who has been
kind enough to extend his valuable guidance, encouraging attitude and positive criticism
during the development of this project that kept us on the right track. May Allah bless
him in this world and hereafter.

Our special thanks to Nazia baji for her kind support and help in our project

We also like to say thanks to our dear friend Sobia Azeem, who has encouraged us on
every step of our project.

And last but not least, we would like to acknowledge the support of our family members
and admit that we owe all our achievements to our truly, sincere and most loving Parents,
brothers and sisters, who mean the most to us, and whose prayers are a source of
determination for us.
 Abstract

ERP is a complex system. Its implementation process is Time consuming and difficult.
Organizations have to face many problems during and after its implementation. These
issues must be identified in order to successfully implement the ERP system. Issues can
be behavioral or can be technical. Main purpose of our project is to examine the
behavioral issues affecting successful adoption of ERP system in Pakistan
telecommunication Company limited (PTCL).we have studied that how ERP system and
its implementation process affects on employees behavior. Whether the affect is positive
or negative. For this purpose we have proposed a model in our study. For conducting a
survey we had developed a questionnaire based on ow proposed model. Ow results show
that overall employee's behavior is negative towards ERP implementation. This involves
many issues such as lack of top management support and commitment, lack of training,
lack of trust. These factors in result cause negative attitude in employees towards ERP
implementation. This can lead to a failure ERP implementation in PTCL.
 Table of Content

-
Chapter: 2 History & Evolution of Enterprise Resource Planning------------------------I2
2.1. Evolution of ERP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
5.2, Oracle Corporation............................................................................ 62
5.3, PeopleSoft Inc.................................................................................. 63
5.4, The B- Company........................................................................... 64
5.5, J.D. Edwards & Co 64
5.6. AMR Research Releases ERP Market
Report Showing Overall Market Growth of 14% in 2004-------------------------------65
5.6.1. Report Findings and Analysis 66
5.7. Vendors of popular ERP software include
Chapter: 9 - Analysis and interpretation ........................................ 103
9.1. Top management Commitment and support (TMC) -----------------------------------lo4
9.2. Perceived Usefulness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106
9.3 Perceived Ease of Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 4
9.4 . T-ng
.. 120
9.5, ~~~t 123
9.6 Attimde 126
. .
9.7, Co-mcabon ......................................................... 128
9.8. Quality ........................................................................................ 131
9.9, Intention to use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135
 Table of Tables

Table 1: Description of each system evolved

through many years...................................................................... 16
Table 2: Year wise detail that how each system

Table 3: Particular module area 61

Table 4: Market share 2005 according to Gartner Dataquest--------------------------------65
Table 5: ERP Vendors ranked by 2004 ERP revenue (incl.est.'05 growth) -------------66
Table 6: Vendors of popular ERP software include
(Sorted roughly according to worldwide ERP related revenue) -----------------67
Table 7: List of companies in which SAP ERP
. .
1s by Siemens............................................................ 85
Table 8: SAP ERP implementation plan of PTCL............................................. 95

vii
 Table of Figures

Figure 2: old system before ERP (source: anonymous) ........................................ 5

Figure 3: ERP Circle................................................................................. 7
Figure 4: E m Diagram............................................................................ 13
Figure 5: Evolution of ERP........................................................................ 14
Figure 6: How M w 11 works 24
Figure 7: ERP Lifecycle ........................................................................... 28
Figure 8: Major ERP 11architecture components.............................................. 30
Figure 9: ERP Modules . ................................ 3
 ERP Implementation Issues in PTCL

Chapter: 1
Introduction

International Islamic University Islamabad

Enterprise resource planning (ERP) systems attempt to integrate all data and process of an
organization into a unified system. A typical ERP system will use multiple components of
computer software and hardware to achieve the integration. A key ingredient of most ERP
system is the use of a unified database to store data for the various system modules [I].
Figurel presents an overview of a typical ERP system.

Business A p p W n s I

Web Application
1IP8881
Data M h h g Supply-Chai, Eedrmic Data WaMorce Crd-I FTO&CI

Server

DepartmentaLEfledahed Modules. These Typically Hmse the Bsiness Lode

Resome Resources

-
Figurel. Typical ERP system

178 Linux in nn ERP World June 1% 1999 by Uche Ogbuji in Software

Source: hnp:l/www.linuxjoumal.comlarticld3

Enterprise resource planning (ERP) systems are software packages that allow companies to have
more real time visibility and control over their operations [Z].

There is an increasing need to implement a total business solution which supports major
functionahties of a business. ERP s o h a r e is designed to meet this need, and has been widely
adopted by organizations in developed countries and meanwhile, ERP is beginning to appear in
many organizations in developing countries[3] .ERP system solutions are currently in high
demand by both manufacturing and service organizations because they provide tightly integrated
solutions to an organization's information system needs[4].

As it has been discussed earlier that ERP is one of the most widely implemented business
s o h a r e systems in a wide variety of industries and organizations. It is just not only software,
but its definition refers to both, ERP software and business strategies that implement ERP
systems. ERP software attempts to integrate business processes across departments into a single
enterprise-wide information system. The major benefits of ERP are improved coordination
across functional departments and increased efficiencies of doing business. The implementations
of ERP systems help to facilitate day-to-day management as well. ERP software systems are
originally and ambitiously designed to support resource planning portion of strategic planning. In
reality, resource planning has been the weakest link in ERP practice due to the complexity of
strategic planning and lack of adequate integration of ERP with Decision Support Systems
(DSS). An Enterprise Resource Planning (ERP) system is a software infrastructure embedded
with "best practices", respectively best ways to do business based on common business practices
or academic theory.

The aim is to improve the co-operation and interaction between all the organizations'
departments such as the products planning, manufacturing, purchasing, marketing and
customer's service department. ERP is a fine expression of the inseparability of IT and business.
As an enabling key technology as well as an effective managerial tool, ERP systems allow
companies to integrate at all levels and utilize important ERP applications such as supply-chain
management, financial and accounting applications, human resource management and customer
relationship management. They represent large, complex, computerized and integrated systems,
which can strongly influence long-term business success [S].

ERP has taken the business community's opportunities to new heights. The holistic integrated
transaction and business analysis afford by the ERP paradigm has provided the synergy needed
to keep the business process as dynamic as possible and cut down the reaction time to customer
needs. there is no larger the need to subject a customer's query or order to be input into different
databases as which support different processes at considerable effort of non-value added work to
seek answer and often the delays caused can turn way or frustrate the customers to this space age
everything is sought with extreme sense of urgency and there is no room for duplications of data
inputs and serial processing.

ERP solutions cannot replace some of the legacy system totally, as they are deemed unique to a
core process. Thus there is need for co existence of ERP solutions and well founded legacy
applications .this predicament pose new challenge to ERP implementers. Added to this is the
human resistance to change without change and reengineering various process it is difficult to
achieve implementation of ERP based software solutions [6].

Integration is an extremely important part to ERP .ERP's main goal is to integrate data and
process from all areas of an organization and unify it for easy access and work flow.ERP's
usually accomplish integration by creating one single database that employs multiple software
modules providing different areas of an organization with various business functions, Although
the ideal coni5guration would be one ERP system for an entire organization, many large
organizations usually create and ERP system and then build upon the system and external
interface for other stand alone systems. This might be more powerful and perform better in
fulfilling an organizations needs.Usaully this type of configuration can be time consuming and
does require lots of labor hours [7].
Figure 2: old system before ERP (source: anonymous)

Before ERP systems each department in an organization would most likely have their own
computer system, data and database. Unfortunately, many of these systems would not be able to
communicate with one another or need to store or rewrite data to make it possible for cross
computer system communication. For instance, the financials of a company were on a separate
computer system than the HR system, making it more intense and complicated to process certain
functions. Once an ERP system is in place, usually all aspects of an organization can work in
harmony instead of every single system needing to be compatible with each other. For large
organizations, increased productivity and less type of s o h a r e are a result [7].

ERP implementation utilizes various ERP s o h a r e applications to improve the performance of

organizations for
1) Resource planning,
2) Management control and
3) Operational control.

ERP software consists of multiple software modules that integrate activities across functional
departments - h m production planning, parts purchasing, inventory control and product
distribution to order tracking. Most ERP software systems include application modules to
support common business activities like finance, accounting and human resources.

ERP is much more than just computer software. An ERP System includes ERP Software,
Business Processes, Users and Hardware that run the ERP software. An ERP system is more than
the sum of its parts or components. Those components interact together to achieve a common
goal - streamline and improve organizations' business processes. Most important factor for ERP
system is the users. Successful implementation of any ERP System more depends on intelligent
users who are going to use them, because any standard ERP Software would consist hundreds of
input information for any particular business activity. Thus good knowledge of each entity of
system to the users is most important factor in ERP Software. To name more here are some
examples of ERP Vendors [5]:
1. SAP
2. Peoplesoft
3.SysPro
4.0RION Enterprise
5 .Matrix

ERP overcome the old standalone computer systems in finance, HR, manufacturing and the
warehouse, and replaces them with a single unified software program divided into s o h
modules that roughly approximate the old standalone systems as showing in Figure 2. Finance,
manufacturing and the warehouse all still get their own software, except now the software is
linked together so that someone in finance can look into the warehouse software to see if an
order has been shipped. Most vendors' ERP software is flexible enough that you can install some
modules without buying the whole package. Many companies, for example, will just install an
ERP finance or HR module and leave the rest of the functions for another day.

ERP's best hope for demonstrating value is as a sort of battering ram for improving the way
your company takes a customer order and processes it into an invoice and revenue--otherwise
known as the order fulfillment process. That is why ERP is often referred to as back-office
software. It doesn't handle the up-front selling process (although most ERP vendors have
recently developed CRM software to do this); rather, ERP takes a customer order and provides a
software road map for automating the different steps along the path to hlfilling it. When a
customer service representative enters a customer order into an ERP system, he has all the
information necessary to complete the order (the customer's credit rating and order history from
the finance module, the company's inventory levels from the warehouse module and the shipping
dock's trucking schedule f?om the logistics module, for example.

Figure 3

Source: hnpfllwmv.erpsoftwarebusiness.~dimages/ERP~Cir~Ie~jpg

People in these different departments all can see the same information and can update it. When
one department finishes with the order it is automa6cally routed via the E W system to the next
department. To find out where the order is at any point, you need only log in to the ERP system
and track it down. With luck, the order process moves like a bolt of lightning through the
organization, and customers get their orders faster and with fewer errors than before. ERP can
apply that same magic to the other major business processes, such as employee benefits or
financial reporting.

That, at least, is the dream of ERP. The reality is much harsher. Let's go back to those inboxes
for a minute. That process may not have been efficient, but it was simple. Finance did its job, the
warehouse did its job, and if anythu7g went wrong outside of the department's walls, it was
somebody else's problem. Not anymore. With ERP, the customer service representatives are no
longer just typists entering someone's name into a computer and hitting the return key. The ERF'
screen makes them businesspeople. It flickers with the customer's credit rating from the finance
department and the product inventory levels fiom the warehouse. Will the customer pay on time?
Will we be able to ship the order on time? These are decisions that customer senice
representatives have never had to make before, and the answers affect the customer and every
other department in the company. But it's not just the customer service representatives who have
to wake up. People in the warehouse who used to keep inventory in their heads or on scraps of
paper now need to put that information online. If they don't, customer service reps will see low
inventory levels on their screens and tell customers that their requested item is not in stock.
Accountability, responsibility and communication have never been tested like this before.

People don't Like to change, and ERP asks them to change how they do their jobs. That is why
the value ofERP is so hard to pin down. The software is less important than the changes
companies make in the ways they do business. If you use ERP to improve the ways your people
take orders, manufacture goods, ship them and bill for them, you will see value from the
software. If you simply install the software without changing the ways people do their jobs, you
may not see any value at all-indeed, the new software could slow you down by simply
replacing the old software that everyone knew with new software that no one does [S].

1.1. ERP various Tasks

ERP systems, in theory, can help with all the back-office administration tasks of most
companies. Say you are running a bicycle shop. Once you make a sale, you enter the order on the
ERP system. The system then updates the stock of bicycles in the shop, incorporates the sale into
the financial ledgers, prints out an invoice, and can prompt you to purchase more bikes to replace
the ones that you have sold. The ERP system can also handle repair orders and manage the spare
parts stocks. It can also provide automated tools to help you forecast future sales and to plan
activities over the next few weeks. There may also be data query tools present to enable
sophisticated management reports and graphs to be generated. In addition, the system may
handle the return of defective items from unhappy customers, the sending out of regular account
statements to customers, and the management of payments to suppliers.

ERP systems can assist with the scheduling and deployment of all sorts of resources, physical,
monetary and human. A water company might use their ERP system to schedule a customer
repair job, deploy staff to the job, verify that it got done, and subsequently bill the customer. An
oil company might use it ensure that their tankers are loaded, that a shipping itinerary is prepared
and completed on schedule, and that all the equipment and people required for loading and
unloading the cargo in each port are present at the right times. A bus company might use their
system to manage customer bookings, record receipts and plan preventative maintenance
activities for their fleet.

ERP can provide advanced levels of information visibility to a business. Once the data is entered
into the system, then everybody can have access to it. Less waiting around for items to arrive.
A lot of inefficiencies in the way things are done can be removed. A company can restructure its
processes, so that different functions (such as accounting, shipping and manufacturing) work
more closely together to get products produced. An organization can align itself to a single plan,
so that all activities, all across the world, are smoothly coordinated. Information and work
practices can be standardized, so that the terminology used is similar, no matter where you work
in the company. Getting down to brass tacks, a company could do a lot more work for a lot more
customers without needing to employ so many people [9].

Enterprise resource planning (ERP) system offer distinct advantages in this new business
environment as they lower operating costs reduce cycle times and (arguably) increase customer
satisfaction [lo].

ERP system involves many advantages as well as many disadvantages. Following are the few
common advantages and disadvantages of ERP system.

1.2. Advantages
There are many advantages of implementing an EPR system; here are a few of them [7]:
1. A totally integrated system
2. The ability to streamline different processes and workflows
3. The ability to easily share data across various departments in an organization
4. Improved efficiency and productivity levels
5. Better tracking and forecasting
 6 . Lower costs
7. Improved customer service

Rashid et.d discusses several benefits of ERP which are as follows [l 11:

What benefit How

Reliable infornnt'
c 1011 BCCCSS Conitwn DBMS, consistent and accurate
data. itiiprovcd reports.
Avoid data and operations redundancy Modules access same data from the central
database, avoids multiple data input and
update operations.
Delivery and cycle time reduction Minimizes retricuing and rcporring delays.
Cnst reduction Time savings, improved control by
cnterprisc-wide analysis of organizational
decisions.
Easy adaptability Chatlgcs in b~~siness proccsscs casy to
adapt and restructure.
Improved scalability Structwed and modular design with "add-
ons."
Iniprovccl n~ainrcnance Vendor-supptcd long-:-rcrt~i contract as
part of tl~csptcm pl.ocursmcnr.
Global outreach Extended modules such as CRM and SCM.
E-Commerce. +business Inrwnct cotilnlcrcc. collaLwmtivc culturc.

1.3. Disadvantages
While advantages usually outweigh disadvantages for most organizations implementing an ERP
system, here are some of the most common obstacles experienced:
Usually many obstacles can be prevented if adequate investment is made and adequate training is
involved, however, success does depend on skills and the experience of the workforce to quickly
adapt to the new system [7].
1. Customization in many situations is limited
2. The need to reengineer business processes
3. ERP systems can be cost prohibitive to install and run
4. Technical support can be shoddy
 5. ERP's may be too rigid for specific organizations that are either new or want to move in a
new direction in the near future.

Rashid et.al also discussed several disadvantages along with the suggestion in order to overcome
these [l 11:

Disadvantage How to overcome

Time-consuming Minirnizc scnsitivc issues. internal politics
and raiscgencral consensus.
Cost nu:: vary from thousands of dollars to
millions. Business praccss rccngincrring
cost nulg be cutrcnicly high.
Conformity of the modules Thc architecture and components of the
selected system should conform to the
business processes, c u l t m and strategic
goals of the organization.
Vendor dcpcndaicc Single vendor vs. n~ulti-vcndor
consideration, options for '-best of brecds."
long-term conimittcd support.
Features m d complexity ERP system may hare too many features
and modules so the user needs to consider
careklly and implement the needful only.
Scalability and glolxtl ouncach Look for vcndor in\csttrlcnt in RGrD, long-
tcrnm commitment to product and services.
considcr In ternct-cniiblcci ~~wtcrns.
Extended ERP capability Consider middle-ware "add-on" facilities
and cxtended n;odules such as CRM and
SCM.
 ERP Implementation Issues in PTCL

Chapter: 2
History & Evolution of Enterprise Resource
Planning

International Islamic University Islamabad

This chapter includes a brief history and evolution of ERP. In order to clearly understand ERP
system it's important to discuss the historical background, evolution. According to Woodpigeon
(2005) Enterprise Resource Planning, or ERP, is the name given to a type of computer
application now prevalent in many different organizations across the world. ERP systems
primarily support business operations - those activities in an organization that support the selling
process, including order processing, manufacturing, distribution, planning, customer service,
human resources, finance and purchasing. ERP systems are function-rich, and typically cover all
of these activities - the principal benefit being that the same data can easily be shared between
different departments. ERP systems are used in many industries, ranging from healthcare, to
manufacturing, and government [9].

Figure 4
Source: [12, l I]

2.1. Evolution of ERP

The evolution of the systems dates back to the year 1960 as per ERP history. The systems in the
yesteryears were designed to assist the manufacturing process.
The first software that was developed in this process happens to be MRP (material Resource
Planning) in the year 1975.Tbis was followed by another advanced version namely MRP2 which
is the acronym for Manufacturing Resource planning. None of them yielded the benefit of ERP.
These softwares were helpful in manufacturing process. Their benefits did not extend to other
Sectors. ERP was developed as multifaceted software that g~aduallystretched its limits into other
areas like human resource, finance, marketing and so on. Moreover ERP offered operational
convenience and large reduction in costs coupled with other benefits when compared with earlier
soft wares. MRP solutions attained more fame. In fact it became a hallmark of the manufacturing
setups. The MRP solutions did not render the expected results due to excessive costs and
practical work problems. In addition it also called for a huge pool of technical expertise in terms
of manpower and machines [13].Now we will discuss ERP evolution in detail.

Following figure presents a brief overview of ERP evolution with respect to different years.That
how ERP evolved through many years and what is its current status.

1970s Material Requirements Planning (NIRP)

Figure 5

Source: The Evolution of ERP Systems:A Historical Perspective by Rashid eta1

The focus of manufacturing systems in the 1960's was on Inventory control. Most of the s o h a r e
packages then (usually customized) were designed to handle inventory based on traditional
inventory concepts. In the 1970's the focus shifted to MRF' (Material Requirement Planning)
systems that translated the Master Schedule built for the end items into time-phased net
requirements for the sub-assemblies, components and raw materials planning and procurement.
In the 1980s the use of computers in business generally fell into two very different and often co-
existing camps. On one hand were the big mainframe monoliths - large powerful computers that
performed calculations such as MRF" and managed the financial records. This software was
generally home-built, IUII by specialists with a lot of technical knowledge, and difficult to
change. On the other hand were the PCs - computers so small and powerful that they could fit
comfortably on desktops. This level of computing was more democratic - every manager in
every department could write up or buy applications that would help them manage their piece of
the business. Mainframes were not good at providing relevant, timely information in an easy-to-
use format. PCs could not store huge databases of corporate information or simultaneously serve
multiple users. And because there was no easy way to connect the two on a timely basis, it lead
to a massive information management problem - how to co-ordinate all the data in all the
databases around a company.

What were needed were systems that could tie together all the information stores in a company,
while making the best use of desktop technology.

The result was ERP - a marriage of MRF' I1 (Manufacturing Resource Planning) systems and
clientlserver technologies. MRP II was a model for bringing together all the major processes of a
business under a standard computerized planning system2. Clientlserver refers to the technical
means by which a small, user-friendly computer (the client) could communicate with, and extract
information from, a large data-processing system (the server).A number of software companies,
such as SAP, Baa% and JD Edwards, were in the right place at the right time. By repackaging
their business software as ERP, they were able to capitalize on a business world that was hungry
for new IT-driven solutions.

ERP became a huge money-spinner almost overnight, spurred on by legions of IT consultants

who marketed it as the perfect solution for every company's woes. The feverish demand to adopt
ERP was worsen by the latest management fad - Business Process Re-engineering, and also the
prospect of major problems with existing systems during the change-over from the year 1999 to
2000 - the so-called Y2K bug. Author further describes in his 2005 analysis that the total ERP
business is measured in tens of billions of dollars annually, and the principal ERP vendors, such
as SAP and Oracle, earn revenues comparable with those of Microsoft [9].

Table 1: Following table give us a brief description of each system evolved through many years.

Tieline I System Description

1960s I Inventory Inventory Management and control is the combination of information
Management & technology and business processes of maintaining the appropriate level of
Control stock in a warehouse. The activities of inventory management include
identifying inventory requirements, setting targets, providing replenishment
techniques and options, monitoring item usages, reconciling - the inventory
balances, and repdrting inventory status.
Materials Requirement Planning (MRP) utilizes software avplications for
scheduling production processes~IkfW&nerates schedules foithe opemtions
and raw material purchases based on the production requirements of fnished
goods, the shucture of the production system, the current inventories levels
and the lot sizing procedure for each operation.
Manufacturing Requirements Planning or MRP utilizes software applications
for coordinating manufacturing processes, from product planning, pam
purchasing, inventory control to product distribution.
Enterprise Resource Planning or ERP uses multi-module application software
Planning (ERP) for improving the performance of the internal business processes. ERP
systems often integrate business activities across functional departments, from
product planning, parts purchasing, inventory control, product distribution,
fulfillment, to order hacking. ERP software systems may include application
modules for supporting marketing, finance, accounting and human resources.

Source: [14]

As we have discussed earlier that MRP was evolved in 19603 is evolved fiom the 1960's need
to manage demand and ordering. It did not look at timing, only need. MRP I1 was developed in
the 1970's to bring both demand and time phasing of the demand into the planning process. At
the same time, Accounting Management solutions where gaining strength. ERP, developed from
earlier MRPII systems, were also integrated with financial applications to provide a complete
solution to a company for managing their inventory, cash and people resources.l960s Enterprise
Resource Planning (ED)is born in the early 1960s from a joint effort between J.I. Case, the
manufacturer of tractors and other construction machinery, and partner IBM. Material
Requirements Planning or MRP is the initial effort. This application software serves as the
method for planning and scheduling materials for complex manufactured products.
The following table gives us a year wise detail that how each system evolves in different years.
Starting from 1970 it gives us step by step detail to the year 2005.

Description
Initial MRP solutions are big, clumsy and expensive. They require a large technical staff to support the
mainframe cornputem on which they run.

Five engineers in Mannheim, Germany begin the company, SAP (System analyze und
Programmentwicklung). The purpose in creating SAP is to produce and market standard software for
integrated business solutions.

Richard Lawson, Bill Lawson, and business partner, John Cerullo begins Lawson Software. The founders
see the need for pre-packaged enterprise technology solutions as an alternative to customized business
software applications.

In the manufacturing industry, MRP (Material Requirements Planning) becomes the fundamental concept
used in production management and control.

Jack Thompson, Dan Gregory, and Ed McVaney form ID Edwards. Each founder takes part of their name
to create the company moniker. Lany Ellison begins Oracle Corporation.

Jan Baan begins The Baan Corporation to provide financial and administrative consulting services.

Oracle offers the first commercial SQL relational database management system.

JD Edwards begins focusing on the IBM Systed38 in the early 1980s. MRP (Manufacturing Resources
Planning) evolves into MRP-I1 as a more accessible extension to shop floor and distribution management
activities.

Baan begins to use Unix as their main operating system.

Baan delivers its f i s t software product ID Edwards focuses on the IBM Systeml38.

Oracle offers both a VAX mode database as well as a database written entirely in C (for portability).

Baan shifts the focus of their development to manufacturing.

ID Edwards is recognized as an industry-leading supplier of applications software for the highly successful
IBM AS1400 computer, a direct descendant of the Systed38.

PeopleSoft is founded by Dave Dufield and Ken Moms in 1987

PeopleSoft's Human Resource Management System (HRh4S) is developed.

 Baan software is rolled out to 35 countries through indirect sales channels. The term ERP (Enterprise
Resource Planning) is coined in the early 1990's when MRP-II is extended to cover areas l i e Engineering,
Finance, Human Resources, and Project Management.

PeopleSoft sets up offices in Canada. This leads the way to their presence in Eumpe, Asia, Africa, Central
and South America, and the Pacific Rim.

Baan grows to more than 1,800 customers worldwide and over 1,000 employees.

ID Edwards has more than 4,700 customers with sites in over 100 countries. Oracle has 41,000 customers
worldwide (16,000 U.S.). PeopleSoft software is used by more than 50 percent of the human resources
market. SAP is the world's largest inter-enterprise software company and the world's fourth largest
independent sofhvare supplier overall. SAP employs over 20,500 people in more than 50 countries. To
date, more than 2,800 of Baan's enterprise systems have been implemented at approximately 4,800 sites
around the world.
911 1 occurs creating a drop in demand for new ERF' systems

Most ERP systems are enhancing their products to become "Internet Enabled" so that customers worldwide
can have direct access to the supplier's ERP system.

Services Oriented Architecture (SOA) becomes a standard that ERF' vendors work towards. This s o h a r e
architecture allows different systems to communicate between one another.

Industry consolidation occurs: Oracle - E-Business Suite, ID Edwards, Peoplesoft and Seibel
Microsoft-Navision,Axapta,Great Plains, and Solomon
Infor - Baan, Mapics, and a slew of other products
Sage - Best Software is acquired
The consolidations continue to occur and the key players (SAP, Oracle, Infor and Microsoft) continue to
build out their products. The next phase of ERP systems will be the merged products, includimg Oracle's
Fusion and Microsoft's project green's end product.

Some: [I51

Enterprise Resource Planning (ERP) is the evolution of Manufacturing Requirements Planning

(MRP) I1 in 1980s, which was mainly related to Manufacturing Industry and was designed to
control manufacturing process and planning the required production with efficient output. Where
as MRP is the evolution of Inventory Management & Control conceived in 1960s, which was
mainly designed for management of Stocks in any particular industry. ERP has expanded kom
coordination of manufacturing processes to the integration of enterprise-wide backend processes
like production planning and scheduling of delivery. In terms of technology, ERP has evolved
kom legacy implementation to more flexible tiered client-server architecture.
The early systems built around MRP provided integrated Master Production Scheduling, Stock,
Purchasing and WIP modules - in other words, the fundamental requirements for driving MRP -
together with Sales Order Processing (a module which allowed customer orders to be entered and
passed for picking, packing and dispatch.)

Integration with the financial ledgers was something to come along fairly closely behind. Thus a
purchase invoice could be matched against the Goods Received Note generated within the
purchasing module and the invoice price compared with that on the purchase order as part of the
approval process. If the business were using standard costing and the price varied from the
standard set for the item this would be noted in the general ledger as such - where we have added
•’500to inventory at the same time as only paying •’400we have a favorable variance and hence
additional profits. Corresponding features were built in between sales orders and sales invoices -
dispatch downdated our inventory record and thus our inventory value and generated an invoice
for the price as defined on the sales order. The difference was order margin. Later the systems
allowed a more sophisticated interface with shop floor production recording systems and the
automatic calculation of recovery variances.

Before ERP was introduced, the departments within an institution would each have their own
computer networks. For instance, the Human Resources department would have their own
network of computers, while the financial department might have a separate network.
Each computer system would be comprised of information that was directly related to that
department The personal information the employees might be listed, and this would generally be
combined with a reporting structure. The Financial department would be responsible for storing
information that was related to the payroll of the employees, and it would also deal with the
financial aspects of the company.

Each department would be dependent on specific information that would allow them to
communicate with each other. A number of processes would have to take place in order for
information to be transferred from one department to another. In most cases, one department may
not have been interested in the various aspects of another department. While this may have
seemed logical at first, it gave rise to a number of problems. If the two departments didn't work
together on specific issues, it could lead to complications that could disrupt the operations of the
company, thus leading to a loss in profits or the productivity of employees.

The introduction of ERP solved a number of these problems. It did this by taking the data from
multiple applications, and once this data was collected, it could make the organization operate
more efficiently. A standard was created. The number of software packages that a company used
could be greatly reduced. In addition to making the company more efficient, it also allowed the
company to save money on the cost of software and frequent updates. To fully understand
Enterprise Resource Planning, it is first important to understand the concept of Best Practices.
When an ERP system was utilized by a company, the company had to decide if the software
would be customized or if they would simply modify that existing procedures.

The next important part of ERP is called implementation. In order for an ERP system to function
properly, it must have a great deal of software written for it. Adding a complex system such as
ERP to a company takes considerable resources. In most cases, a company would need to use
programmers, analysts, and end users in order to make sure it functioned correctly. While the
introduction of the Internet has greatly sped up this process, it can still take time to set up. If
professionals are not used to set up the ERP system, the process can become exceptionally
expensive.

The costs involved with ERP have only allowed it to be adopted mostly by multinational
corporations. However, it is possible for medium sized business to use it. If a company uses the
services of a professional and ERP system can be implemented in about six months. There are a
number of similarities between ERP systems and logistics automation and supply chain
maintenance. In some cases, these elements can be used to extend the capabilities of ERP. The
process of setting up ERP is very important. In most cases, a company will have to hire an ERP
vendor. Consultants are commonly used as well. The consultation process of ERP will generally
be comprised of three categories, and these are top level architecture, process consulting, and
technical consulting.
The systems architect is the individual who will be responsible for dealing with the flow of data.
The business consultant will analyze the existing processes of the company, and they will
compare those ERP processes. This will modify the ERP system in a way that makes it useful to
the organization. The technical consulting will handle the programming. The software will need
to be altered in a way that allows it to be useful for the company. A number of sources have
stated that the most challenging part of ERP is customizing it to suit the needs of the
organization that wishes to utilize it. Because of these challenges, it can be quite costly. A
number of ERP systems available on the market today were not originally designed to be
modified. This is why "best practices" must be used when the system is actually implemented
P61.

Now we will discuss briefly about each system:

2.2. MRF' 1

2.2.1. Introduction
MRPl is the predecessor of enterprise resource planning application. ERP has become the talk of
the day not only with regards to management and information systems but also for the whole
business.

MFWl the acronym of material resource planning was the first business application that set foot
in the ERP family. The credit of computerizing the business processes solely goes to
MRPLMFWl fimctioned with the objective of increasing the business profit by enriching the
business. It is important to know the problems faced by companies before understanding how
Material resource planning solved them. MFW software was a benefit to companies facing
troubles in production. M W planning facilitated the functions of the software.

2.2.2. Predicting the demands in advance

Companies were able to turn raw material into finished products easily even without any
technical backups. Companies could not engage in mass production schedule for fear of decline
in the customers demand. Hence they suffered fiom some limitations like not being able to
predict the demand properly. If they produced more and the demand was loss the surplus
amounted to loss. On the other hand if they engage in lower production scale when the demand is
really high it will affect their business and potential loss. There seemed to be no end due to these
discrepancies.

2.2.3. Purchasing Raw materials

The question of allocating raw materials and scheduling their purchase turned out to be another
headache. If companies were unable to predict sales it would neither be logical to expect them to
decide the exact quantity of raw materials required for production. If they bought excess it was a
mere waste .on the other hand deficit purchase affected sales.

2.2.4. Need of MRPl

Dr Joseph Orlicky invented MRPl in the year 1960.This system comprised a computer that
helped to compute the exact quantum of raw materials and sales. This point proved to be the start
for integrating IT with manufacturing Systems. Ever since they have become inseparable after
advancements in the name of MRPII and ERP while the latest one being ERPII.MRP planning is
the root of MRP software.

2.2.5. Nature of functioning

MRPl works like a simple mathematical formula. If all the inputs are fed in one end and the
calculations are applied the'outpt is received at the other end. Input here reefers to the quantity
of raw materials and expected demand along with minute details of resources like Period,
optimum production capacities and the current level of stocks. This will be processed by the
system .It will then let the user to know the steps that should be taken for achieving the said
production limits and there ends the troubles. MRP software solved all the problems related to
production. MRP planning was helpful to a great extent in this aspect.

2.2.6. Applications
MRP's application in the working environment is wide in nature. It just doesn't limit to
production. It can calculate each and everything related to production. The functioning of MRPl
is quiet diverse and it can be put to use in many industries [13].
MRP I1 stands for Manufacturing Resources Planning, a computer modeling technique for
analyzing and controlling complicated Manufacturing operations. When the manufacturing data
has been collected (parts, assemblies, resources) the lead time and cost of every component can
be predicted under any manufacturing conditions. As soon as an order is received the workload
on the manufacturing organization and the delivery time can be calculated. MRP I1 systems also
keep track of customers, suppliers and accounting functions. Inventory can be purchased and
assemblies made "Just in T i e " . The records kept by an MRP system highlight inadequacies
such as overloaded production centers and delays by suppliers. The effect of new orders, changes
in capacity, shortages, delays and a myriad of other disturbances are calculated and tracked with
confidence.
The major effects that an MRP II system will have on a manufacturing operation will be:
- Reduced inventory.
- Accurately predicted delivery times.
- Accurate costing at every stage of the manufacturing process.
- Improved use of manufacturing facilities.
- Faster response to changing conditions.
- Control of every stage of production [I 71
 Diagram demonstrating how Manufacturing Resources Planning works

How MRP II works

Figure: 6
Source: [I71

MRP was in existence right from the year 1960. MRP I1 otherwise referred to as manufacturing
resource planning enabled to overcome the setback of MRPI the acronym of material resource
planning. The analysis of MRP 1 reveals that it is made on the basis of finding out the quantum
of materials that have to be given in order to gain the said optimum productivity levels
depending on other parameters like production capacity and factors. The MRP systems were in
existence before ERP technology was invented. MRP I1 was developed with all the features of
MRP I .There were also some other elements in addition to those contained in MRPI.
2.3.1. Key Elements
In addition MRP I1 boasts of the following four elements. These give the added advantages and
differentiate MRP I from MRP 11.

23.1.1. Significant feature

The significant feature of MRP Il is the fact that the lay man in the industry will be able to
realize its effects and hence be able to comment on the working. Any process is bound to achieve
progress if and only it receives valuable criticism from reliable sources and more so preferably
from end user. MRP I1 capitalizes on this advantage mainly .This response is not restricted to a
particular section of employees. Everybody will be asked to pass their opinion .The response will
therefore include all the views. This will help greatly in correcting the progress from one process
to another. This is deemed to be effective as it gathers the response and the necessary corrections
are made then and there. Still the MRP Systems cannot out beat ERP Technology.

23.1.2. Allocating reserves

The system of MRP helps to maintain a neat agenda for the manner in which the resources are to
be allocated without any confusion. This means everybody will know what is expected from
them within the fixed deadline. Any discrepancy between the actual time taken and the one
allotted is likely to affect the effectiveness of this operation.

2.3.1.3. Matching the requirements

MRP helps in deciding the ideal software requirements of the company. It is either calculated on
the basis of minimizing investments or purchasing products that render benefits for a particular
time or selecting sets of products based on the coincidence of factors among them.

2.3.1.4. Software extension programmes

MWII buy itself composes of a numerous software program. These software programs aid in the
functioning of the business. They have been manufactured with the intent to benefit the company
in all possible ways. There is lot of calculations involved with regards to these softwares.
23.1.5. Popularity
MRP I1 has not yet lost popularity in spite of the intervention of ERP.Many organizations still
consider it as a part of the manufacturing process. MRP systems are still in vogue in many
industries and the manufacturing sector deserves special credit in this aspect.

2.3.1.6. Conclusion
The success of MRP 2 is to be determined by a set of factors. Firstly there should be cent
percentage accuracy in the calculations that are performed. These calculations determine the
success of MRP 2 so as its workings. The technique adopted to follow the operations is another
factor that decides the success of MRP.

2.4. ERP
2.4.1. Introduction
ERP definition will help to understand what ERP is all about. ERP expands Enterprise Resource
planning. The crux of ERP lies in the word enterprise. ERP software solution gives an all the
added advantages.

In Short ERP is a platform that facilitates the database control in a company. The working
mechanism of ERP is simple and easy to understand. ERP aims to unite the data processed in
various departments and division of a company. The central unit referred as the platform controls
the entire system. It aims at providing connectivity in order to access the information from all
faculties. The benefit of ERP is largely felt nowadays when operations are becoming global in
the true sense.

2.4.2. Pre-ERP period

Prior to the intervention of ERP the computer systems themselves did not provide for a self
regulated mechanism to route the official information prudently. They were considered superior
when compared with the process of handling data manually. They did suffer fiom several
setbacks. ERP software solution helps to remove all the drawbacks.
There was a lack of uniformity with regards to transferring data from one machine to another in
the sense each machine has its own capabilities and limitations that were suitable and exclusively
confined to their respective departments at the maximum. This meant enormous chances for the
information to be strayed way or misinterpreted to the extent ofspoiling the purpose. Besides all
this there was really no clue of what, where and how things are taking place in the systems. The
benefit of ERP overcomes everything.

The corporate atmosphere was in no way different fiom a state's bureaucratic set up with all the
uncanny essence of red tapism as far as data processing was concerned. No doubt this cast a spell
on the fortunes and the company's profits.

2.4.3. How ERP facilitates?

ERP is a boon that helped in performing functions in a meaningful manner .This is evident from
ERP definition. When a customer places an order the company officials get to immediately
access all details that are needed to fulfilling the same. They don't have to get the level of stock
by contacting the department in charge of inventory. Neither do they have to get in touch with
the finance department to know the monetary transactions between the customer and the
company till date. Nor do they have to get to know the transportation issues fiom the logistics
department.

All that they need is available with the click of a mouse. This is what ERP does.
With the intervention of ERP it becomes equally easy for the other departments of the company
to check the information regarding the order. Similarly it is not necessary for departments to
keep working on it all through to know their chance or in other words discharging their
respective area of work in the whole process. On the contrary ERP intimates them as soon as it is
their chance. ERP software solution is the one step answer

2.4.4. Feasibility of ERP

When it comes to the question of implementing ERP in any organization there are certain issues
that need to be discussed and analyzed systematically. Change is inevitable, but to advocate and
enforce it all on a sudden will only land in a mess. Therefore the primary step will be to verify
the necessity for implementing ERP in any organization. If the results turn out to be positive the
next step will obviously be to implement it with an attitude of come what may, but before that
the management in the organization needs to ensure that it will yield the necessary benefits and
not be a trouble maker but a trouble shooter. It is therefore important to understand ERP
definition before going for implementation [18].

Implementation

Implementation
Pharc

/ ERP

Figure 7 - ERP Lifecycle

Source: anonymous

Gartner Group invented the term ERP in the 1990s. In 2001, it also came up with a new term for
next-generation ERP systems focusing on integration, transformation, and collaboration in the
business value chain: ERP 11. The ERP I1 architecture has many technical and functional strata,
but one of its more important features is that it provides a means for knowledge sharing.
Interestingly, the evolution of ERP itself is a result of adding layers of knowledge-based
functionality to a Materials Requirement Planning (MRP) nucleus, which itself was a
 metamorphosis of a simple inventory control system. MRP originated in the '70s when the
economy was based considerably on tangible assets. Over time, as the economy's emphasis
gradually shifted toward intangible or howledge-based assets, MRP I1 systems emerged,
eventually evolving in the '90s into ERP systems with more complex and integrated business
modules for the entire organization, not just the manufacturing function. [50]

An ERP system is a set of business applications or modules, which links various business units
of an organization such as financial, accounting, manufacturing, and human resources into a
tightly integrated single system with a common platform for flow of information across the entire
business. With the use of the Internet as a business medium, organizations can use the expanded
version of ERP, ERP 11, to connect their internal business systems with the systems of customers
and suppliers. The purpose of ERPERP I1 is to enhance an organization's competitiveness by
improving its ability to generate accurate and timely information for managerial decision
making. [37]

Conventional ERP systems are characterized by their focus on increasing intra enterprise
business process flexibility, transparency, effectiveness, and efficiency. Although these systems
have improved order fulfillment tremendously, they fall short of addressing interenterprise
business process complexities associated with supply chain collaboration. This goal requires a
collaboration-based "ecosystem" that compels valued customers and shareholders to share
pertinent business knowledge. Such a system is prescribed by Gartner as ERP 11, which it defines
as "a business strategy and a set of industry-domain-specific applications that build customer and
shareholder value by enabling and optimizing enterprise and intra enterprise collaborative
operational and financial processes" (Research Note SPA-12-0420).
)
- This definition transforms the traditional back-office ERF' system from internal transactional
system into a complete value network system that incorporates front-office functionalities for
various customer communities. Integrating the front and back office enables an "information
visibility" strategy that pushes the right information to the right people at the right time through
"
the right communications channels. For instance, using Vendor Inventory Management (VIM)
techniques, a supplier can connect to factory ERP modules of another company to determine
how many parts are still in the stock. Furthermore, a retailer that wants to h o w order status can
log into the company's ERP through a secure, Web-•’riendly system and verify the processing
stage, specifications, invoices, agreements and any related information that may help in future
ordering. In other words, ERP II is a competitive strategy that integrates a centralized, core ERP
system with highly specialized solutions such as supply chain management (SCM), CRM and
knowledge management O(M).

Figure: 8 Major ERP XI architecture components

Source: [50]

SCM and CRM sub domains that were previously standalone applications restricted to in-house
transaction management, such as advanced planning and scheduling (APS) and partner
relationship management (PRM), are also components of ERP I1 architecture.

In essence, with an ERP I1 implementation, the company is morphed into a social community
that combines, synthesizes, and diffuses domestic and exoticJoreign knowledge. Domestic
knowledge exists within the organization and circulates among its employees, while exotic
knowledge is external to the organization, and is mainly contributed by customers during the
specification of their requirements. In ERP 11, the company's supply chain process is integrated
with the supplier's supply chain system, and hence it isn't limited to planning, materials,
manufacturing, and product distribution but extends to retailer shelves and direct customer
feedback. [50]

According to leon the future of the ERP is very bright. Today the internet allows us to reach
more people in more places in a time frame that was previously inconceivable. Where it once
took mature companies thirty, forty, even fifty years to penetrate new, international markets,
today a tiny start-up can established a global presence on the Web virtually overnight. He
furthers says that ERP forms a foundation for successfully meeting ow e-business needs. But in
today's internet age. ERP systems alone will not do.ERP systems have to be integrated with the
internet, WWW and technologies like SCM,CRM,business intelligence, etc. this integrated ERP
is named ERPD by the Gartner group. The need for speed and flexibility has been just one by
1
product of Internet Age.

' ERP Demystified(Sec0nd Edition)-Study guide by Alexis Leon (2008)

 ERF' Implementation Issues in PTCL

Chapter: 3
ERP Modules

International Islamic University Islamabad

 Figure: 9

In this section we will discuss some of the modules of ERP. Understanding ERP modules is
very important in order to successfully implement ERP in an organization.

According to Rashid et.al (2002) different ERP vendors provide ERP system with some
degree of specialty but the core modules are almost the same for all of them. Some of the
core ERP modules fo-md in the successful ERP systems is the following [l 11:

Accounting management
Financial management
Manufacturing management
Production management
Transport management
Sales and distribution management
Human resource management
Supply chain management
Customer relationship management
E-business
Now we will briefly discuss each module:

3.1. Financial management

The finance module extracts financial transactions from the sales and manufacturing areas
and posts them to the general ledger 1191.
This module of the software will take care of all accounts related entries and their impact on
the whole system. How the finance comes and how it is been utilized. Total flow of money
(Cash/Bank) and total expenditures will be reflected here. As an after effect of this, the
management will be able to take their important financial decision, Budgeting etc. They can
come to know about company's financial position at any point of time. All sorts of important
financial reports i.e. Trial Balance, Trading Nc, Profit & Loss Nc, Balance Sheet, Debtor's
Balance, Creditors Balance, CashEIank Fund position and many more are covered in this
module.

The Accounting Module is completely Transaction based unlike journal based. This implies
most of the accounting functions are handled through relevant transactions in other Modules
there by saving lot of time. The Module contains complete functionality required for any
Accounting Department right &om vouchers to the Balance Sheet and Profit and Loss
Account.

Budgeting and Variance Analysis between Budgeted and Actual figures helps in controlling
the Enterprise Expenses and Income efficiently. The Module also includes Cost Centers,
which is completely flexible in terms of defining Cost Centers and their components. Cost
Allocations for General Overheads can also be done on a predefined basis and required
outputs could be generated for analysis purposes. Outstanding of Payables and Receivables
with Ageing Analysis of both debtors and creditors are some the features of this module.
Overall the module takes care of complete functions of any Accounting department.

3.1.1. Overview
The function of this module starts with accounts creation. External departments like
marketing or purchase will create some of those accounts. Apart from regular voucher entries
this module will help the authority as well as other departments by providing financial
figures. Final accounts will be generated from this module. Documents like Receivable and
Payable statements are generated from this module. This module bridges between Sales &
Procurement processes.

Funds manipulations for a concern are important factor and some times it is treated as blood
for an organization. So in this regard, sources of funds and application of funds are to be
taken care of, by defining Balance sheets, Schedules, General and Sub-Ledger, party and
customer masters etc. Also the various input transaction such as Voucher Entry, Creditmebit
entry, Cash/Bank receipts, CashBank Payment, Bank Reconciliation statements, Bill
verification etc. Then finally different types of financial reports, which can be of various
types according to specified company standard [20].

3.2. Manufacturing management

Some businesses build their products from parts and raw materials. These products can range
from the assembly of a few standard parts to products with thousands of parts requiring
weeks of engineering. Manufacturing (which is actually a group of sub-modules) controls the
process by which this is done. Not every ERP package has a Manufacturing module although
all the large ones do.

Manufacturing is divided into discrete and process manufacturing. Discrete manufacturers

make solid items such as flashlights or cars using Bills of Material. Process manufacturers
make liquids or chemicals using formulas or recipes. Manufacturing can also be divided into
Make-To-Stock or MakeiEngineer-To-Order.

Manufacturing has a Maintain Module Information function that handles the parameters and
data tables for the sub-modules.

Here is an incomplete list of the sub-modules in Manufacturing:

Bill of Materials
Master Production Schedule
Advanced Planning and Scheduling
Shop Floor Control
Quality
Now we will briefly discuss each sub-module:

3.2.1. Bill of Materials

A bill of materials @OM) lists the quantity of raw materials and parts that are required to
manufacture a product. Often the BOM includes the quantity of operations (cutting, welding,
machining, etc.) that is required as well. Each line on a BOM can itself be a BOM.

Normally an Engineering Change Order (ECO) is required to change a BOM. This keeps a
complete track of the changes made to the BOM and may come with an effective date.

Bill of Materials has the following functions:

Maintain Bill of Materials

Show WHERE-USED

3.2.2. Master Production Schedule

The Master Production Schedule represents the business's high-level decisions about what is
to be produced during a given time period. It states what finished goods are to be produced by
date and in what quantity. It is based on customer orders and forecasted demand over a
planning interval (months or even years). The Master Production Schedule is used to drive
the rest of the Manufacturing module.

Master Production Schedule has the following functions:

Maintain Schedule

3.2.3. Advanced Planning and Scheduling

Advance Planning and Scheduling (APS) creates a detailed schedule of what is to be

produced taking into account the capacity of the machines involved in the operations. It
reviews inventory and issues planned purchases orders based on the lead times in the raw
materials item records.

Advanced Planning and Scheduling has the following function:

- Re-schedule Production
3.2.4. Shop Floor Control

Shop Floor Control implements the plan created by APS. It issues work orders to individual
work centers, requests raw materials from Inventory and, when the finished items are
complete, issues stocking requests to Inventory for them. It records the actual time used to
complete the tasks so accurate costing can be done, errors can be corrected and realistic
standards maintained. Shop Floor Control feeds hours of operation for machines to Service
Management so that maintenance can be scheduled.

Shop Floor Control has the following functions:

Print Work Orders

3.2.5. Quality

Delivering a quality product gives an enterprise a critical competitive edge. Quality helps
users define quality standards, manages the physical testing of items, and issues Quality
Alerts if standards are not adhered to. Quality is an integral part of IS0 9000 certification
(IS0 9000 is a quality standard issued by the International Standards Organization). [21]

3.3. Production management

This module facilitates management and monitors flow of activities associated with the
Production1 Manufacturing Unit from the planning of Jobs to the stage when the finished
product is ready to sell. Module covers 'make-to-order' item whose configuration based on
buyer specification as well as pre-specified 'assemble-to-order' items [22].

3.3.1. Production Planning & Control

Flexible configurable bill of process, Scrap, recovery & rework accounting.

Suitable discrete as well as process manufacturing with make to stock as well as
make order based planning provision.
0 Provision for open integration with AutoCAD as well as other automation.

3.3.2. Implementation wise Workflow

0 MRr-I
m - n
Production Monitoring and Control
 Production Data
Product Configuration
Product Costing
Technical Documents
Project Monitoring
Rough Cut Capacity Planning
Capacity Requirement Planning
Manufacturing Order Processing
Production Statistics 62 Costing
Supports discrete, repetitive process and mixed-mode environment & continuous as
well as batch process manufacturing
Supports co-product and by-product manufacturing
Component availability checking and ability to substitute items
Detailed labor, WIF' and Sub Contract tracking with variance calculations
Daily productions scheduling by item, site and production line
Finite loading and forward scheduling for production line schedules
Optional pick list for stocking point-of-use in discrete or repetitive environments
Quality test results prompted at selected production operations
Cumulative Item Cost and Work Center Productivity reporting
Product Structures and routing effective dates
Scrap factors for use by Materials Requirements Planning (MRP)
Product structure routing copy
Option to include yield in cost
Cumulative lead time calculations
Where-used Inquiry
Product Change Control System [23]

3.4. Transport management

A Transportation Management System (TMS) is a software system designed to manage
transportation operations.
TMS are one of the systems managing the supply chain. They belong to a sub-group called
Supply chain execution (SCE). TMS, whether it's part of an Enterprise Level ERP System or
from an integrated "Best of Breed" Independent Software Vendor(1SV)has become a critical
par! of any (SCE) Supply Chain Execution and Collaboration System in which real time
exchange of information with other SCE modules has become mission critical.

Transportation Management Systems manage three key processes of transportation

management:

3.4.1. Planification and Decision

Th4S will define the most efficient transport schemes according to given parameters, which
have a lower or higher importance according to the user policy: transport cost, shorter lead-
time, fewer stops possible to insure quality, flows regrouping coefficient and so on.

3.4.2. Transport follow-up

TMS will allow following any physical or administrative operation regarding transportation:
traceability of tmnsport event by event (shipping from A, arrival at B, customs clearance...),
editing of reception, custom clearance, invoicing and booking documents, sending of
transport alerts (delay, accidenf non-forecast stops.. .)

3.4.3. Measurement

TMS have or need to have a Logistics KPI reporting function for transport

Various functions of a TMS:

Planning and optimizing of terrestrial transport rounds

w Transportation mode and carrier selection
Management of air and maritime tmnsport
Real time vehicles tracking
w Service quality control
w Vehicle Load and Route optimization
Transport costs and scheme simulation
Shipment batching of orders
Cost control, KPI (Kev performance indicators) reporting and statistics
 Typical KPIs include but not limited to:
1. % of On Time Pickup or Delivery Performance relative to requested
2. Cost Per Metric -mile; km;Weight; Cube; Pallet

More examples of Transportation Management System KPIs

3.4.4. What Can You Expect from Implementing TMS?

"Through the implementation of TMS,companies on average can expect to lower freight

budgets by 5 percent to as high as 25 percent in first y e w depending on mode mix and
existing adherence to bestpractices." - Global Logistics & Supply Chain Strategies.

3.4.5. Efficiency and productivity in daily operations

TMS systems enable companies to centralize the logistics function, providing
support across their entire organization. This aggregation can increase purchasing
power and contract negotiations with carriers.
Adhering to and enforcing business rules and processes to ensure proper
execution.
Order processing is automated through the point of load costing, carrier selection,
tendering, carrier'acceptance and shipment visibility.
0 TMS systems improve carrier communications through EDI, Internet portals, and
the use of email.
0 Access to data through standard reports and additional report writers for
customized reporting and tracking of data such as Freight accruals, fuel surcharge,
and accessorial charges.
0 Automated electronic reconciliation improves the speed and accuracy of freight
bill audit and payment.

3.4.6. Redwed costs through carrier selection compliance and optimization

Automated carrier rating and selection of lowest cost carrier and tracking of
service levels
0 Monitoring carrier performance, contracts, and balancing load distribution
Visibility to loads for load planning and consolidations increases savings potential
YIELDS of 5 to 15%
3.4.7. Improved customer service levels through consistent and expected delivery
a Improve customer service levels by monitoring on time performance
a Tracking of shipments and identifying service failures, thus improving overall
supply chain Tracking the temperature history of a cold chain visibility
Tracking the temperature history of a cold chain [I]

3.5. Sales and distribution management

The Sales & Distribution modules provide easy-to-use functionality for order entry, shipping,
invoicing, sales analysis, and supply chain planning. These modules help you quickly deliver
superior customer service through flexibility, information access, and accurate f'ulfdlment of
customer needs.
0 Sales Quotations
Sales Orders/lnvoices
Available to Promise Enforrement
Customer Schedules Sales Analysis
Consignment Inventory Supply Chain Planning

3.5.1. The key features of the module include

Multiple-site support for centralized sales order processing

Customer item numbers for sales orders and invoices
a Commission splits by line item, margin-based commissions option
Supports non-stock items and drop shipments
Sales tracking by customer type and channel
Automatic credit hold and manual order hold
a Consolidated invoices or one invoice per shipment
a Single transaction to create invoice and retrieve inventory
0 Automatically updates installed base
ED1 support, including purchase order acknowledgment
Multiple sales orders per invoice
a Flexible pricing by brand, geography, volume, and rebates
Discounting by quantity, product lines, and across combined orders
Automatic best-price calculation
 Repricing option
Intrastate data collection and reporting
Multiple scheduled order lines for a particular item number
Supports container and line charges to SaledScheduled order lines
Handles invoicing and payments for consigned inventory

3.5.2. Sales Quotations

Allows the user to create responses to customer request for quotes (RFQs), and
maintain historical information on sales quotations to customers.
Create sales orders by releasing Sales Quotes to Sales Orderdlnvoices.
Enables a widloss analysis on sales quotes that resulted in an order and those that
did not.

3.5.3. Sales OrdersAnvoices

Pmvides a variety of functions for processing customer sales orders and invoices.
Extends and expands on the sales process.
Enables users to create price lists that accommodate a wide range of pricing
situations, allowing for best pricing. Sales orders and invoices can either be
received electmnically using ED1 or can be entered manually. In addition,
advance shipment notices (ASN) can be sent to the customer using EDI, fax, e-
mail or other methods.
0 Allows users to input customer orders, release packing lists to shipping, print
invoices, and maintain sales histories.
Interfaces with Sales Analysis, Inventory Control, and Material Requirement
Planning (MRP) to provide a constant stream of data to facilitate accurate
distribution, manufacturing, and sales management.
Transfers posted invoices automatically to Accounts Receivable for aging,
payment maintenance, and integration with General Ledger.
3.5.4. Enterprise Material Transfer

Advanced features of Sales Ordershvoices include support for international shipping

requirements and EMT (Enterprise Material Transfer).

EMT supports the automatic translation of sales orders into purchase orders.
EMTcan transmit purchase orders to secondary organizations that use different
databases where ED1 technology is installed.
Provides better inventory utilization and eliminates many non-value added activities
throughout the supply chain.
Effectively moves materials across national borders and automatically generates
necessary legal and financial data at each entity.
Automatically kanslates sales orders (SOs) into purchase orders (POs) within an
entity saving time throughout the order fulfillment process.

3.5.5. Available to Promise

Controls order processing of items based on project availability.

Works with other areas of MFGE'RO such as Master Scheduling and Planning
functions that enable users to determine how to process orders for items that may
be in short supply.
Provides an effective tool to control inventory processing.

3.5.6. Customer Schedules

Provides the capability to process customer releases using a set of scheduled

shipment dates and quantities rather than discrete sales orders.
Supports reko-billing, a price changing practice common among automotive
suppliers and many commoditydriven markets where the cost of raw materials,
not the process cost, causes prices to fluctuate.
3.5.7. Sales Analysis

Provides the means to monitor salesperson productivity and effectiveness at

maintaining margins, while providing visibility on sales by product line or by
item.
Provides visibility on ranking of items by sales, margin, or quantity.
Integrates Sales Analysis with Sales Ordednvoices.

3.5.8. Consignment Inventory

Enables you to defer invoicing and payment of inventory until the materials have
been consumed. This module is comprised of both Customer Consignment
Inventory and Supplier Consig~lentInventory.
Enables you to plan, order, ship, track and report customer-consigned material,
while deferring invoicing and accounts receivable (AR) transactions.
Enables suppliers to continue to track inventory after the materials has shipped
and resides at the customer's facility.
Alleviates the need for suppliers to buy back excess material sent to the customer
at the end of the consignment period.
Supports the same activity from the point of view of the receiving company.
Extends the purchase order process by providing new transactions to receive
material and identify it as consigned.
Allows the consigned items to be visible for planning while transactions delay the
standard AP process until material is consumed. When items are consumed in a
manufacturing process or because they are shipped to other sites or customers, the
receiver becomes available for vouchering.

3.5.9. Supply Chain Planning

Available as an additional module, Supply Chain Planning consists of:

Distn'bution Requirements Planning @RP)

Enterprise Operations Management (EOM)
Linked Site Costing 1241
3.6. Human resource management
HR (Human Resources) is another widely implemented ERP module. HR module streamlines
the management of human resources and human capitals. HR modules routinely maintain a
complete employee database including contact information, salary details, attendance,
performance evaluation and promotion of all employees. Advanced HR module is integrated
with knowledge management systems to optimally utilize the expertise of all employees. [14]

In other words Human Resource Management Systems (HRh4S, EHRMS), Human Resource
Information Systems (HRIS), HR Technology or also called HR modules, shape an
intersection in between human resource management (HRM) and information technology. It
merges HRM as a discipline and in particular its basic HR activities and processes with the
information technology field, whereas the programming of data processing systems evolved
into standardized routines and packages of enterprise resource planning (ERP) software. On
the whole, these ERP systems have their origin on software that integrates information fiom
different applications into one universal database. The linkage of its financial and human
resource modules through one database is the most important distinction to the individually
and proprietary developed predecessors, which makes this software application both rigid and
flexible'.

Further more Human Resources handle all aspects of managing employees except for paying
them, which is done by Payroll. It oversees recruitment and hiring, handles training, manages
benefits, handles compliance with government regulations and ensures terminations are
handled properly. Like Payroll, Human Resources are often very country-specific. Only high-
end ERP packages have a Human Resources module.

3.6.1. HR Modules
Core HR
Learning Management
Payroll
Benefits
HR Intelligence
 Self-service'- Employees can see their pay, accrued benefits and basic
information via the web and update some portions of it (name, and address
for example)

3.6.2. Human Resources has the following functions

0 Maiitain Employee Information
Find an Employee
Generate Organization Chart
Print Labels
Change Employee Number
Maintain Module Information [21]

3.7. Supply chain management

The supply chain is, of course, the primary processing mechanism of every manufacturing
company. But in today's competitive, cost-conscious global environment, it's more than that:
The multifaceted, multi-company, multinational structure of the supply chain makes it the
most complex management challenge found in any enterprise. Supply chain management
(SCM), a critical part of any enterprise resource planning (ERP)system, no longer means just
making sure that the right materials and resources move to the right place at the right time.
Today, it also means ensuring that the sequences of events involved in producing goods and
distributing them to customers are tuned optimally to satisfy customers, minimize costs and
maximize profit.

In the last few years, more and more manufacturing and service companies have entered
international markets and globalized their supply chains. As a result, the traditional concept
of a domestic company - that is, a single company operating within a single country, even
though it may export some products - no longer fits today's midsize or large businesses. The
business processes and IT systems companies use to manage their operations need to reflect
this fact.

Most companies have an ERP system in place to handle their transactional processes, but
such a system often is not enough to address critical global issues involving supply sources,
manufacturing plants, service centers and markets. ERP systems typically are designed to
support complex business processes occurring in a uniform, integrated environment. This is
especially true for companies that installed their ERP systems before going global.
Globalization can have serious impacts on key business processes, and SCM and ERP
systems must evolve to address the needs ofan international company [25].

3.8. Customer relationship management

One of the most dynamic information technology (IT) topics of the new millennium is the
area of customer relationship management (CRM). AT the core, CRM is an integration of
technologies and business processes used to satisfy the needs of a customer during any giving
interaction. More specifically, CRM involves acquisition, analysis and use of knowledge
about customers in order to sell more goods or services and to do it more efficiently. It is
important to note that the term "customer" may have a very broad definition that includes
vendors, channel partners or virtually any group or individual that requires information from
the organization.

In IT terms, CRM means an enterprise wide integration of technologies working together

such as data ware house, website, intranetlextranet, phone support system, accounting, sales
,marketing and production.CRM has many similarities with enterprise resource
planning(ERP) where ERP can be considered back-office integration and CRM as front-
ofice integration. A notable difference between ERP and CRM is that ERP can be
implemented without CRM. However, CRM usually requires access to the back office data
that often happens through ERP-type integration. [26]

E-business stands for "electronic business," which involves communications and doing
business electronically through the Internet. E-business is defined as "the use of
electronically enabled communication networks that allow business enterprises to transmit
and receive information" [27; 281. It can significantly improve business performance by
strengthening the linkages in the value chain between businesses (B2B) and Consumers
(B2C). Besides increasing efficiency in selling, marketing and purchasing, E-business
achieves effectiveness through improved customer service, reduced costs and streamlined
business processes. Furthermore, e-business creates a strategic, customer-focused business
environment for shared business improvements, mutual benefits and joint rewards.
Companies use the Internet to implement customer-relation-management (CRM) and supply-
chain-management (SCM) capabilities, which enable them to link their operations seamlessly
with customers and suppliers.

By definitions and by their respective functions, traditional ERP systems take care of internal
value chain (i.e., within a company) whereas e-businesses establish the value chain across the
market and the industries. More and more companies construct their systems' architectures
by integrating ERP systems with e-business. They use Web-based interface (corporate
portals) with outside entities plus add-on modules such as CRM, SCM, etc. in the integration.
In a traditional business process, after a customer order is received, the order information
flows from department to department through order entry, manufacturing, warehousing,
distribution and fmance until the product is delivered to the customer and the payment is
received.

The key elements of the value chain have been controlled by separate and disparate
information systems that could not communicate with one another. Not only did the
companies not take an integrated view of their own business processes, but they also had an
equally vague understanding of how their systems relate to the systems of their suppliers,
competitors, business partners, distributors and customers. Hence, these transactions are
typically canied out with minimal or no shared business processes. In recent years, there has
been a revolution in systems planning and design. Management takes an integrated company-
wide view of its IT investments and choices, and implements an ERP system that integrates
the core business processes of an entire company into single software and hardware system.
Customers, suppliers and business partners are consciously included in the business process,
systems operation and systems development.

An ERP system is analogous to the internal technological hub of a company. When fully
implemented as an integrated suite, it can be thought of as a company's central repository.
The five major processes in a typical ERP
Systems are: finance, logistics, manufacturing, human resources and sales/ marketing. The
focus of ERP systems is on the efficiency and effectiveness of the internal process. It offers a
way to streamline and align business processes, increase operational efficiencies and bring
order out of chaos. E-business is focused on efficiency and effectiveness of external, cross
enterprise processes. While ERP technology supports business strategy, e-business opens the
door to new strategic opportunities, which forces ERP to take one step further - to move
from the single ERP system model to the extended ERP system model.

The Web technology provides the bridge between companies and their business partners to
make E-business possible, while e-business makes the ERP system more transparent and
outward. Instead of thinking about ERP within a company, we may view the ERP system
along the value chain of companies in the same industry, or across industries. Companies are
now turning their anention outward to engage in business with customers, suppliers and
business partners through the use of the Internet and Web-based technologies. ERP
functionality has to move onto the Web because that is where most of the core business
processes are being camed out.

The earlier example on the flow of a customer order and the steps in the process flow across
the boundaries of the companies would now be handled by a number of different companies
behaving as if they are one. If a corporation decentralizes autonomous business units, they
need to be able to access and share data between departments, managers and employees. With
ERP systems, a transaction only needs to be entered once.

The system can process the transaction across different software modules, resulting in highly
comprehensive and integrated information that can be used for decision-making. While an
ERP system can be viewed as a repository for data, information and knowledge, and it
extends beyond functional boundaries by redefining enterprise wide processes, a Web-
enabled ERP system forces companies to look at processes that span multiple enterprises.

When e-business is integrated with ERP, the whole extended system provides a vision of
business processes that span multiple businesses and enterprises. In the most ideal case,
companies should be able to connect disparate platforms, applications and data formats
across the value chain, including not only suppliers, but also customers as well. Furthermore,
Companies should retain the flexibility to change and add functions to applications as
business needs evolve. Companies need to be able to adapt their ERP systems to the
emerging world of e-business. [28]
 ERP Implementation Issues in PTCL

Chapter: 4
Literature Review

International Islamic University Islamabad

There are many articles on ERP and its implementation, pointing out many factors
and issues related to its 1mplemetation.ERP is a complex system .Therefore
Implementation process of ERP includes many complexities and issues, which can
either be behavioral and technical. Also ERP presents companies with the opportunity
to standardize and automate business processes throughout the organizations,
thus increasing productivity and reducing cycle time 1281. Above in all vendors of
ERP SAP has been recognized as the leader with more than 50 percent of the market.
Mashari & Zairi reports on a case study of a failed implementation of SAP Rl3,
combined with business process reengineering (BPR) efforts at a major Middle
Eastern manufacturing company. Both situational and contextual climates of
implementation are described and analyzed.

Authors give several failure factors of implementation of SAP Rf3.

Following are the roots of failure of the project of Middle Eastern company discussed
by the authors:
Increased anxiety in early days of BPR efforts.
Creeping shift in focus.
Underestimating potential of communication.
Neglecting progress and performance management.
Ineffective management of consultant.
separating IT from business affairs-technical mind-set
Lack of readiness in IT function.

Authors also pointed out other problems that conbibuted to the failure of the project;
these were pointed out by interviews, and can be summarized as follows:
Underestimating the human resources elements in change.
Low level of commitment from the redesign teams member
Insufficient resources, especially manpower and finance.
Lack of cultural preparation for change and
Inability to anticipate and manage risks adequately.[29]
Bendoly and schoenherr has done the study which is one of the first works to
demonstrate the link between ERP and B2B benefits solely through the use of
objective secondary data. Using established operational gains theory as a foundation,
the article analyzes the history of ERP use and its impact on gains from business-to-
business (B2B) purchasing technologies. According to them managers seeking to
benefit from B2B economics should ensure that they possess an adequate IT
infrastructure (e.g. ERP) to realize all such potential gains [30].

As we have discussed earlier that ERP is a complex system, so that its implementation
process is also a difficult and complex process. Gargeya and Brady made a study on
success and failure factors of adopting SAP in ERP system implementation. This
paper aims to investigate and analyze common circumstances that occur within most
ERP projects, and determines the areas that are key to success versus those that
contribute to failure. Finding identifies six common factors that are indicative of
successful or non-successful sap implementations. In this article companies that
implemented sap between 1995 and 2000 period were analyzed. It has been found that
the lack of appropriate culture and organizational (internal) readiness as the most
important factor contributing to failure of sap implementation in I5 companies.

The presence of project management approaches and appropriate culture and

organizational (internal) readiness are the most important factors contributing to the
success of sap implementations in 29 organizations 121. As we have discussed earlier
that ERP is a complex system and it has many issues related to its implementation,
both technical and behavioral .In order to control behavioral issues there must be
emphasis on change management strategies; which leads to a successful
implementation of ERP. Resistance by employees during the implementation of ERP
is one of the most important issues which can cause many social problems.

Aladwani describes an integrative process oriented approach for facing the complex
social problem of workers resistance to ERP. According to him top management
commonly faces the unwanted attitude from potential users. It includes many reasons,
so top management proactively deals with this problem instead of reactively
confronting it. Author also suggest a integrated, process oriented conceptual frame
work in order to assist the top management with the complex organizational problem
of workers resistance to ERP implementation. This frame work is consisting of three
phases: Knowledge formulation, Strategy implementation, and Status evaluation.

Aladwani concludes that to overcome user's resistance to change, top management

has to:
Study the structure and needs of the users and the causes of potential
resistance among them;
w Deal with the situation by using the appropriate strategy and techniques in
order to introduce ERP successfully; and
w Evaluate the status of change management eff0rts.D 11

According to Spathis and constantinides ERP system offer distinct advantages in this
new business environment as they lower operating costs, reduce cycle times and
(arguably) increase customer satisfaction. There study examines the motives for
companies adopting ERP systems, also what are benefits and problems encountered.
The main is to evaluate the usefulness of ERP systems in meeting company needs in
this demanding business environment; that is the success of ERP system in improving
management process. According to author many researchers have identified a number
of problems associated with ERP applications as well as critical success factors in
ERP implementations. However this study further examines those problems in the
Greek environment attempting to relate those problems to the manager's perceived
success of ERP. The survey results confirm that the benefits derived &om companies
adopting ERP systems have fulfilled individual's expectations but not that strongly.

Major benefits derived iYom ERP:

Increased flexibility in information generation
Improved quality of reports
Integration of application
Early maintenance of database.

Authors further say that collaboration within the organization and between the
organization and the ERP provider appear as a critical success factors in ERP
applications. In addition the importance of top management support, including
employee training/participation must not be underestimated [lo].

According to (Bingi et.al, 1999) implementing an ERP cause's massive change that
needs to be carefully managed to reap the benefits of an ERP solution. Authors also
describes that the critical issues that must be carefully considered to ensure successful
implementation include commitment from top managemenf reengineering of the
existing process, integration of the ERP with other business information systems,
solution and management of consultant and employees ,and training of employees on
the new system.

Further authors say that ERP is so complex and it takes several years and millions of
dollars to roll it out. They say that implementing any integrated ERP solution is not as
much a technological exercise but an "organizational revolution and extensive
preparation before implementation is the key to success. Author pointed out several
issues in their paper which are as follows [32]:
Top management commitment
Reengineering
Integration
ERP consultants
Implementation time
 Implementation cost
ERP vendors
Selecting the right employees
Training employees
Employee morale

It is generally a misleading perception that implementing an ERP system will improve

organizations functionalities overnight. the high expectation of achieving all-round
cost saving and services improvements is very much dependent on how good the
chosen ERP system fits to the organizations functionalities and how well the tailoring
and configuration process of the system matched with the business culture, strategy
and structure of the organization [I I].

R.Appuswamy conversed in his paper that the process of implementing ERP solutions
is ridden with risk and affects process and the people. In his paper, the experience
encountered by some companies and their approach to this difficult implementation
process is discussed in some detail. Author describes change management as a
primary issue along with hardware, people and process & managing the transition [6].
ERP penetration is far better in developed countries rather than developing
countries, because implementation issues are much intense in developing countries.

Huang & palvia (2001) conducted a little research to compare the implementation
practices of ERP in developed vs. developing countries. Their research shows that
ERP technology faces additional challenges in developing countries related to
economic, cultural, and basic infrastructure issues. This article identifies the range of
issues concerning ERP implementation by making a comparison of advanced and
developing countries.
Huang & palvia proposes a frame work in order to understand ERP practices around
the globe. Following is a framework for ERP.

An author asserts that the implementation of ERP is affected by hvo broad categories
of factors: national/environmental and organizationaYinterna1, each of which
comprises five variables. This is described above in a figure. Further on the basis of
this framework authors compare both developed and developing countries [3].

In developed countries ERP acceptance is much greater that developing countries.

Several factors from the framework were significant in ERF' implementation in
developing countries. We can apply these factors in case of Pakistan and identify
problems and issues concerning ERP implementation in the country like Pakistan.
Rajapakse & Seddon has done a study on ERP adoption in Asia. Although there are
many other factors involved in low ERP adoption in Asia but there main emphasis is
on national culture of Asian countries which is different from the west. According to
them the ERF'adoption rate in developing countries in Asia is very low.

Apart fiom Obvious differences in relative wealth of organizations in Western versus

most Asian countries, the literature suggests that national cultures of the Asian
countries, which are quite different to the culture of the Western world-the birth
place of ERP-may be one reason for such low adoption rates in developing countries
in Asia. This paper explores and confirms that view by contrasting dimensions of the
cultural practices embedded in ERP software and the national cultures in Asia. The
analysis is grounded theoretically on Hofstede's dimensions of national cultures. The
cultural differences identified by Hofstede are explored through six case studies
carried out in Sri Lanka, a developing country in Asia. The case studies reveal a clash
of cultural forces between the culture embedded in Western ERP products and the
culture of Asian ERP adopters.

Authors further says that the business practices incorporated in western based ERP
reflects US and European culture and that when such systems are implemented in
developing countries in Asia, problems may be experienced due to mismatch between
cultural assumptions and practices embedded in the software and those in the client
organizations.[33]

Besides national culture organization's inner culture is also very important in ERP
implementation success. As Thavapragasam describes in his paper that the literature
suggests that the organizational culture is often over-looked while implementing ERP
systems. Therefore, this research paper is written to address the notion of cultural
influences on user satisfaction with ERP implementation. Due to the diverse nature of
ERP systems, the author is only concentrating on factors influencing at the post-
implementation stage of ERP life cycle in a large Australian University. This
interpretive study involves student administration staff as users and applies the
theories developed by Hofstede's work on national culture dimensions to assess the
users' satisfaction and subsequently address the importance of user satisfaction
factor as a success measure for ERP implementation.[34]

Ramayah & chiun lo article "impact of shared beliefs on "perceived usefdness"

and "ease of use" in the implementation of an enterprise resource planning system"
seeks to examine the impact of shared beliefs concerning the benefits of enterprise
resource planning (ERP) among executives and engineers in the northern region of
Malaysia. Respondents comprise managers in the departments of production control,
production, materials, engineering and information technology, and executives within
the organization, who are aware of the ERP implementation. A questionnaire was sent
to managers in 113 manufacturing organizations. A total of 69 responses was
received, all of which were used in the analysis. The findings support the notion that
systems or technologies, which are perceived to be easy to use and understand, will be
viewed as more useful from the end-user's perspective. In addition, perceived ease of
use (PEU) was found to mediate partially the effects of shared beliefs concerning the
usefulness of the ERF' system. [35]

Data quality is another very important factor in ERP implementation process but it
has not been given that importance which actually it deserves. Very few papers have
written on this important factor. According to Hongjiang Xu (et.al) data quality is a
critical issue during the implementation of an ERP. Data Quality @Q) issue can have
a significant impact on an organizations information system. So that it's very
important to understand data quality issues to ensure success in implementing ERP
systems. In this study sap is used as an example of ERF' system and describes a study,
which explores data quality problems with existing system and identifies critical
success factors that impact data quality.

A frame work is developed with the help of study which was applied on two large
Australian organizations. The findings of this study suggest that the importance of
data quality needs to be widely understood in implementing an ERP. According to
authors little research has been conducted on DQ issues in relationship to ERP
systems, there is a need to examine whether the DQ issues is one of the reasons that
drive organizations to reach a decision to implement an ERP and what the critical
success factors are to ensure DQ during implementation.[36]
 ERP Implementation Issues in PTCL

Chapter: 5
ERP vendors

International Islamic University Islamabad

ERP came into being with effect from 1990 though the fact remained that many people are of the
opinion that ERP existed fiom the year 1960 in the form of MRPl and MRP 2. In fact MRP I1
was more or less an ERP except for its inability to coordinate departments other than marketing.
The whole period from the year 1960 is denoted as the age of ERP. The benefit of ERP was
slowly felt from this stage onwards. [13].

There are many factors involved in ERP's successful implementation and proper vendors
selection is one of the important factor. Companies choose vendors for various reasons. Some
choose a vendor with a superior corporate image or being a market leader. Others predominantly
look at the functionality and the quality of the products and services offered for evaluating ERP
vendors. However, selecting the appropriate vendor is a long and important process. The best
approach to vendor selection is to form a study team. Individuals who are familiar with various
business processes as well as information technology and management representatives should be
on the team. If needed, outside consultants may be hired on an advisory position to aid the team
in the selection process. There are different approaches to vendor selection. Some of these are:

Limit the study to one or two vendors and their products and services. This reduces the
time required for the study. The main disadvantage of this approach is possible
elimination of the best system.
Make a detailed study of all vendors. This reverses the advantages and disadvantages of
the previous approach.
Make an overall survey and then limit the choice to one or two vendors. This is probably
the best approach. It is a compromise on the first two approaches.

Once the potential candidates are identified, the team invites proposals from them and makes the
final selection. Management at this point should be in position to negotiate the contract for
delivery and implementation schedules. [37]

According to Rashid et.al (2002) five dominating ERP software suppliers are SAP, Oracle,
PeopleSofI, Baan and J.D. Edwards. Together they control more than 60% of the multibillion
dollar global market.
Each vendor, due to historic reasons, has a specialty in one particular module area such as:
Table: 3
SAP logistics
Baan manufacturing
Oracle financials
PeopleSofi human resources management

There are also about 50 established and a few more newly emerging smaller and midsize ERP
vendors including third-party developers competing for the ERP market. The result is stiff
competition and feature-overlapping products difficult to differentiate. Due to keen competition
for control of the profitable ERP market share, the vendors are continuously updating their
products and adding new technology-based features. Long-term vision, commitment to service
and support, module features, specialty, experience and financial strength for R&D is considered
the major vendor qualities for product selection and turnkey implementation. [I 11
Following figure presents the market share of 5 major vendors and other small vendors of ERP in
year 2000':

I I' Baan 12%

JD Edwards 5% oracle 18%

Source: Mabert et al. (2000);Coffey et al. (2000); Everdingen et aI. (2000)

Figure: 12

We will now briefly describe five giants of ERP in the year 2000 specified by Rashid eta1 in
their paper "The evolution of ERP systems: A Historical Perspective".

-
' The soum of this data is :EnterpriseResource Planning-An integfati~creview by Shchab et.al(2004)
5.1. SAP AG
SAP AG ("Systeme, Anwendungen, und Produkte in Datenverarbeitung"),or Systems,
Applications and Products in Data Processing, was started by five former IBM engineers in
Germany in 1972 for producing integrated business application software for the manufacturing
enterprise (SAP, 2001). Its first ERP product, W2, was launched in 1979 using a mainframe-
based centralized database that was then redesigned as clienthewer software W3 in 1992.

System W3 was a breakthrough and by 1999 SAP AG became the third largest software vendor
in the world and the largest in the ERP sector with a market share of about 36% serving over
17,000 customers in over 100 countries. In 1999 SAP AG extended the ERP functions by adding
CRM, SCM, sales-force automation and data warehousing. SAP has also invested significantly
in its R&D sector with the result of newer versions of W3 3.1, 4.0, 4.6 including Internet
functionalities and other enhancements. SAP'S Internet-enabled ERP solutions are provided by
the recently launched ERP product called mySAP.COM. SAP has the broadest ERP
functionality, capacity to spend significantly on R&D, strong industry-focused solutions and
long-term vision.

5.2. Oracle Corporation

Oracle (Oracle, 2001), founded in 1977 in the USA, is best-known for its database software and
related applications and is the second largest software company in the world after Microsoft.
Oracle's enterprise software applications started to work with its database in 1987. It accounts
for $2.5 billion out of the company's $9.3 billion in 1999, which places Oracle second to SAP in
the enterprise systems category with over 5,000 customers in 140 countries. Oracles ERP system
is known as Oracle Applications, having more than 50 different modules in six major categories:
finance, accounts payable, human resources, manufacturing, supply chain, projects and front
office. Oracle has other strong products in the software field including DBMS, data warehousing,
work flow, systems administration, application development tools (APIs), and consulting
sewices.

A notable feature of Oracle is that it is both a competitor and a partner to some of the industry
leaders in the ERP market such as SAP, Baan and Peoplesoft because of the use of Oracle's
5.4.The Baan Company
Founded in 1978 in The Netherlands, Baan (Baan, 2001) started with expertise in software for
the manufacturing industry and by 1997 claimed an ERP market share of roughly 5%. Bann's
revenue in 1998 was roughly $750 million and while facing a slight slowdown in 1999 started
growing again in 2001 with sales up 12% at •’7,23lmillion and operating profit of •’926 million.
Baan has more than 15,000 customer sites all over the world and more than 3,000 employees.

Baan believes that "the Internet is the ultimate enabler" and "Internet technologies help
companies become order-driven and customer focused by enabling collaboration across the
'value chain.' Suppliers, distributors, manufacturers and customers can work together to deliver
the right product at the right price." ERP solution areas that Baan covers include finance,
procurement, manufacturing, distribution, integration and implementation, planning, sales,
service and maintenance, business portals, collaborative commerce and business intelligence.
Bann's flagship product is Baan ERP (formerly called Triton, then Baan IV), launched in 1998.
One innovative product from Baan is the Orgware tool that can cut implementation cost
sipdicantly by automatically configuring the enterprise software. Baan's ERP software is best
known in the aerospace, automotive, defense, and electronics industries.

5.5. J.D. Edwards & Co

J.D. Edwards was founded in 1977 in Denver (cofounded by Jack Thompson, Dan Gregory and
C. Edward McVaney) with long experience of supplying software for the AS1400 market. J.D.
Edwards' flagship ERP product called One World is "capable of running on multiple platforms
and with multiple databases ... [and] revolutionizes enterprise software by liberating users from
inflexible, static technologies" (JD Edwards, 2001).

The product includes modules for finance, manufacturing, distributionllogistics and human
resources, quality management, maintenance management, data warehousing, customer support
and after-sales service. J.D.Edwards' revenue jumped to $944 million in 1999 from $120
million in1992, having more than 5,000 customers in over 100 countries. The One World system
is considered to be more flexible than similar competing products and within the reach of smaller
DBMS in their ERP systems. Oracle has integrated its ERP solutions with the Internet and has
introduced several applications in the electronic commerce and Internet based commerce areas.
Oracle's Internet hfktructure is created around two powerful products: Oracle9i Database and
Oracle9i Application Server. Another significant feature of Oracle is its OSBS, or Omcle Small
Business Suite which provides consistent financials, payroll, inventory control, order entry,
purchase orders, and CRM functionality-all delivered as a Web service. Oracle also offers an
easy-to-activate Web presence that helps companies to sell their goods via the Internet.

5.3. Peoplesoft Inc

PeopleSoft is one of the newest ERP software firms started in 1987 in Pleasanton, California,
with specialization in human resource management and financial services modules. PeopleSoft
quickly managed to offer other corporate functions and attained revenue of $32 million in 1992.
Enterprise solutions fiom PeopleSoft include modules for manufacturing, materials
management, distribution, finance, human resources and supply chain planning. SAP AG and
Oraclewith longer experience, stronger financial base and worldwide presence-are the main
competitors to PeopleSoft. Many customers comment that PeopleSoft has a culture of
collaboration with customers, which makes it more flexible than its competitors. One of the
strengths of PeopleSoft are the recognition by its customers that it is flexible and collaborative.

The flagship application PeopleSoft8 with scores of applications was developed by PeopleSoft
with an expenditure of $500 million and 2,000 developers over 2 years as a pure Internet-based
collaborative enterprise system. "Our revolutionary eBusiness platform is the fist open XML
platform to offer scalability and ease of use for all users. PeopleSoft 8 requires no client software
other than a standard Web browser, giving you the ability to securely run your business anytime,
anywhere" (Peoplesoft, 2001). "Ow e-Business applications and consulting senices enable true
global operations-managing multiple currencies, languages, and Business processes for more
than 4,400 organizations in 109 countries"(PeopleSoft, 2001). PeopleSoft with about 10%
market share is the third largest ERP vendor after SAP AG and Oracle.
enterprises. J.D. Edwards' Internet-extended version of One World was launched recently as One
World Xe ("Xe" stands for "extended enterprise"). [l 11

As we have discussed that till 2000 Top ERP vendors was different. After 2000 ratings were
changed, Top positions were taken from some vendors except SAP and Oracle. These were at
their same positions. According to Gartner Dataquest (which is an information technology mearch and

advisory firm hcadquartmd in Stamford, Connecticut and was h o w as The Gartner Group until 2001) in 2005
the largest vendors o f ERP by their revenues were [38]:

1. SAP
2. Oracle Applications
3. The Sage Group
4. Microsoft dynamics and
5. SSA Global Technologies
Table: 4. Market share 2005 according to Gartner ~ataquest'
Revenue Market share
Vendor
(million $) (%)

1 SAP 4726 28.7

2 Oracle Applications 1674 10.2

3 The Sage Gmup 1221 7.4

4 Miemsoft Dynamics 616 3.7

5 SSA Global Technologies 464 2.8

The largest vendors rmrtdwide in 2005 according to Gartner Dataquest

5.6. AMR Research Releases ERP Market Report Showing Overall Market Growth
of 14% in 2004
AMR Research released its annual report on the state of the Enterprise Resource Planning (ERP)
market. The Market AnaZyfix Report: Enterprise Resource Planning, 2004-2009 revealed that
ERP market revenues increased 14% in 2004. The report indicates that approximately one-third
of the growth in the overall market was due to fluctuations in currency exchange rates.

The Source of this data is http.Jlcn.wikipcdiaorglwikini~t~of~EW~vcndon

The report revealed several trends that affected the ERP market in 2004, including:

The ERP market is entering another major technology transition phase. Service Oriented
Architectures (SOA) may have the same disruptive effect that other technologies have had
on the market, such as the emergence of client-server systems had in the 1990's.
The pace of acquisitions shows no sign of slowing down. Oracle's purchase of Retek and
vendors like Sage Group, SSA Global, Infor Global Solutions, and Epicor have all been
very active in the M&A space and have grown more rapidly than the overall ERP market.
The midrange ($50M - $1B in annual revenue) and SMB (less than $50M in annual
revenue) markets continue to be a major focus area for many of the ERP vendors.
Midrange solutions and channels are critically important for penetrating China, India,
Eastern Europe, and Latin America.
ERP buyers have moved away &om large, upfront purchases. Now most tend to license
user seats and functional ERP modules incrementally as they deploy a product. Along with
widespread discounting, this has led to smaller average deal sizes. [39]

5.7. Vendors of popular ERP software include (sorted roughly according to

worldwide ERP related revenue3
'able: 6
I I
Vendor Revenue (Nativecurrency) Revenue
(million I)

SAP 9.4 billion EUR 12401.4

Oracle Applications
I 14.38 billion USD

lnfor Global Solutions I 2.1 billion USD I 2100.0

The Sage Group 935.6 million GBP 1832.0

McrcsoR Dynam.ct (Formerly 44.2 billion USD

M,uosofl Busmes Solutions)

The source of this data is hnpJI/m.wikipcdiao~wik~istfoffERPERPvendm

 While the ERP market has grown in revenue, consolidation continues to change the industry. In
1999, the top five vendors (J.D. Edwards, Baan, Oracle, PeopleSoft, and SAP) in the ERP market
accounted for 59% of the industry's revenue. AMR Research expects the top five vendors in
2005 (SAP, Oracle, Sage Group, Microsoft, and SSA Global) to account for 72% of ERP
vendors' total revenue. While many ERP vendors struggled in 2004, SAP AG increased overall

revenues by 17% and license revenues by 20% - without any acquisitions. SAP'S ERP market
share increased to more than 40%. Oracle nearly doubled the size of its application business
through the acquisition of PeopleSoft, but AMR Research expects SAP to finish 2005 with more
than twice the revenue and market share of the combined Oracle-Peoplesoft.

5.6.1. Report Findings and Analysis

The report delivers revenue and growth rates for the top ERP players as well as
growth forecasts through 2009. ERP vendors ranked by 2004 ERP license revenue
can be seen in the chart below. The top ten ERP vendors by revenue include the
following companies:

( Table5 ERP Vendors ranked by 2004 ERP revenue(incl.est'05 growth)

1 I I ! ! I I I I I
'Oracle acquired PmpleSofl on Dcccmkr 28,2004. Source: AMR mrenrch 2005
 Unit 4 Agresso 352.6 million EUR 465.2 2005

Lawson SoRware
I 390.776 million US0
I 390.8 1 2006

Epiwr 384.1 million USD 384.1 2006

%ma 1.907 million NOK 305.5 2005

Industrial and Financial

Systems (IFS)
I 288 million US0

QAD 225 million USD 225.0 2006

NetSuite 67.2 million USD 67.2 2006

ABAS SoRware 45 million EUR 62.6 2006

Ramm Systems 2.648 million INR 60.1 2006

SNAG 14.2 million EUR 18.7 unknown

While ERP is a technological innovation in itself its efficiency is multiplied by several times
with the help of latest inventions. Nowadays ERP is tuned to make use of the internet. This is to
make sure that the buyers anywhere can have access to the database of the seller by a mouse
click and that too by sitting anywhere in the world. This has become the mantra in the 21st
century. The latest ERP tool which is becoming the order of the day is ERP II. SAP ERP History
and ERP history are vital in understanding the origin of the subject matter. [13]

5.8. Conclusion
We have discussed several vendors of ERP in this section. Till 2000 ERP top 5 vendors were
SAP, Oracle, Peoplesoft, BAAN and JD Edwards. But when we look at 2005 report it shows that
top 5 vendors were SAP, Oracle Applications, The Sage Group, Microsoft dynamics and SSA
Global Technologies.SAP still holds Top position in ERP world with the largest market share.
Not only in developed countries but also in developing countries SAP is implemented in
different organizations. Pakistan is one of the developing country in which SAP is so much
popular.ERP (SAP based) is widely implemented in many organizations of Pakistan. Here in our
study our target organization is Pakistan telecommunication company @TCL).which is
implementing ERP (SAP based). Oracle is also an important and popular vendor internationally.
Vendors like JD Edwards and PeopleSoft did not resist their positions as TOP vendors.

In 2003 PeopleSoft acquired JD Edwards and in 2004 oracle had acquired PeopleSoft. Along
with these vendors there are now a huge numbers of vendors which are small in size and doing
fine in market.ERP is getting more and more famous day by day despite of the fact that it is a
complex and expensive system and required a huge investment to carry out the implementation
process. After implementation organization has to face many other issues which can be technical
regarding ERP's maintenance and working or it can related to users regarding their intension to
use' ERP system. We have emphasized on behavioral aspect of ERP implementation issues. So
that we could find out the under lying problems which can keep ERP system to be a successful
implementation in our target organization.
 ERP Implementation Issues in PTCL

Chapter: 6
ERP Implementation- Issues & success
factors

International Islamic University Islamabad

ERP is a complex system. Its implementation may cause many problems .These problems can
be of technical or behavioral. Technical issues are related to the technical staff and top
management must be involved to look after the behavioral issues. Among these issues most
important is employee's resistance towards the change. When implementing an enterprise
resource planning (ERP) system, Top management commonly faces an unwanted attitude
from potential users-for many reasons they resist the implementation process. So
management should therefore proactively deal with this problem instead of reactively
confronting it [32]. ERP implementation can bring in enormous benetits for successful
companies -or it can be disastrous for organization that fails to manage the implementation
process. We must ask ourselves two critical questions "how can ERP systems be
implemented successfully" and "what are the critical success factors of ERP implementation"
[40]. The implementation of ERP packages has created an opportunity to re-engineer
business process within and beyond organizational scope [41].

Implementing an ERP causes massive change that needs to be carefully managed to get the
benefits of an ERP solution .critical issues that must be carefully considered to ensure
successhl implementation include:

commitment from top management,

reengineering of the existing processes,
integration of the ERP with other business information system,
selection and management of consultant and
Employee training of employees on the new system.

Above mention issues are quite common and critical in implementing ERP. Implementing
ERP is quite costly. Companies could spend hundreds of millions of dollars and many years
implementing ERP solutions in their organization. Once ERP implemented going back is
extremely difficult; it is too expensive to undo the changes ERP brings into a company. There
are several failed attempts, and companies lost not only the capital invested in ERP packages
and millions paid to outside consultants, but also major portion of their business [32].

As we have discussed earlier that ERP systems are quite complex and difficult to implement,
but it acquires so much importance in organizations in order to gain more profits and
efficiencies.ERP system is now implement in many organizations of Pakistan .but here our
emphasis will be on Pakistan Telecommunication Corporation limited (PTCL).we have done
a study in order to figure out several implementation issues faced by our target organization.
Our main emphasis is on behavioral issues faced by the management.

Aladwani (2001) defines it in a way that ERP system is an integrated set of programs that
provides support for core organizational activities such as manufacturing and logistics,
finance and accounting, sales and marketing and human resources. An ERP system helps the
different parts of the organization share data and knowledge, reduce costs, and improve
management of business processes.

But along with its benefits ERP includes many problems. ERP is a complex system. Its
Implementation may cause many problems. These problems can be of technical or
behavioral. in this study ow main emphasis is on behavioral aspects of these problems. The
change brought by will affect employee's behavior. Some accept the change but most of them
show resistance against it. When implementing an enterprise resource planning (ERP)
system, top management commonly faces unwanted attitudes ffom potential users-for many
reasons they resist the implementation process. [3 11

6.1. Case studies

One of the best ways to understand the value and drawbacks of ERP implementation is to
learn lessons from other companies, so in order to understand clearly about the ERP
implementation and issues we will quote some case studies:

6.1.1. Case study: Bianco Group controls costs with ERP implementation

The Bianco Group of businesses is a well-known and well-trusted South Australian family-
owned company that is growing rapidly. With diverse lines of business, including building
supplies, steel products, concrete products and equipment hike, Bianco is expanding its
operations nationally and has made inroads into new emerging powerhouse markets such as
China.

The Bianco Group, a growing business, controls costs and supports business growth with an
Intentia manufacturing ERP implementation supported by IBM Global Business Services.

6.1.1.1. Business need

The Bianco Group did not have an ERP system to support its manufacturing operations. It
was therefore difficult to drive continued improvements in process and labor efficiencies. The
company was growing and expanding rapidly, through both acquisitions and increasing
business volumes, and it wanted to implement an ERP system to reduce costs and support the
business growth. The Bianco Group selected the Intentia system to install, and it engaged
IBM Business Consulting Services to support the implementation.

6.1.1.2. Solution
The IBM team delivered training on manufacturing principles, used activity-based costing to
determine standard costs, and provided program and change management services. The team
worked with Bianco subject matter experts and in-house system contractors to complete
phase 1 of the ERP rollout successfully within the set time h e , and Bianco is currently
adopting and applying similar principles and teachings to the phase 2 rollout. Recognizing the
value of external partners, Bianco has now also engaged IBM Global Business Services to
provide supplementary guidance and support in business resiliency.

6.1.1.3. Results
While no hard measurements are yet available, Bianco has estimated potential savings in the
range of 15 to 20 percent.
Other benefits to the operation include:
Training on manufacturing principles which enable a better understanding of
where improvements can be achieved
Greater appreciation of the hue costs associated with manufactured products
Program and project management services which provide a basis to identifying
interdependencies between projects and the ability to track the Business
Improvement Program as a whole
Change management services which enable the ability to identify and plan
change impacts on processes and staff as a result of the ERP solution
Current business continuity engagement will allow Bianco to pursue its growth
agenda with the confidence that the business has a sound continuity and
resiliency plan in place.[42]

6.1.2. Case study: ERP in Rolls-Royce

This case study is taken from a paper which has discussed implementation of ERP (SAP) in
company Rolls-Royce. It focuses on business and technical as well as cultural issues at the
heart of the Rolls-Royce implementation.
Rolls-Royce has a large complex business process and the project has had to assess the
effects throughout the whole business, which is equivalent to ten medium sized companies
pulling together as one. This has caused administrative difficulties, particularly in the first
phase of the projecc whilst setting the strategy and overall direction. Rolls-Royce decided to
make these radical changes to their business, in response to increased orders from the market
place, and also from the fact that ERP has become a standard solution world-wide within the
Aerospace and Defense industry.

The introduction of SAP R/3 at the facility in the USA was a major factor in influencing the
UK implementation. Rolls-Royce produces a range of quality world class turbine engines,
and has recognized that they must change in order to compete effectively with their
competitors. Accurate information systems and direct communication with suppliers are vital
when offering customers a committed promise to deliver. Rolls-Royce has understood the
business, cultural and technical difficulties of such a large project, and has developed a solid
core implementation team. The team has used the specialist skills of consultancy specialists.
The partnership with EDS has produced a sound architectural framework for the project, thus
allowing Rolls-Royce to concentrate its efforts on manufacturing turbine engines.

A project of this size would never run smoothly and difficulties have occurred throughout the
implementation and will no doubt occur in the future. The company has taken a different
approach to IT systems but has not let the project become just another IT system. The core
implementation teams have taken into account the needs of both the managerial and end-user.
The following list contains just some of the problems encountered:

Matching the process to the software configuration.

Training people to accept change, and getting them to do business in a totally new
way.
Teaching employees to use modem IT equipment.
Equipment not delivered on time, or delays in technical equipment installation.
Data clean up has been particularly time consuming as many legacy systems have
been involved.
 Training the behavior of SAP users such as MRP Controllers and Capacity
Owners.

6.1.2.2.Activities taken place

Many activities have taken place, which have been vital to the overall success of the project,
such as:
Bridging the legacy systems and cleaning up suspect data has given the company
more t ~ s int its management of information.
Training senior management, particularly the executive group, who are responsible
for the overall direction of the company and are not technically orientated.
Managing effective relationships and leading teams in both technical and non-
computer based environments.
Manufacture simulation exercises.
Transactional training.
Shop floor communication with line workers was an exercise that occurred during the
implementation of suite 3. This required line workers to attend workshops to learn
new PC skills in order to book work.

SAP guarantee that newer versions of their software will upgrade SAP reports, whilst
specially created reports will require re-writing of the software. The future of the project will
eventually lead to the need for a Data Warehouse. A Data Warehouse is an integrated
collection of data. The data is stored centrally and is extracted from operational, historical
and external databases. The data is first screened then edited and finally standardized for
future retrieval. The data is stored in a logical user-friendly format. It allows non-technical
users to create database queries allowing the simple retrieval of management information for
business intelligence and managerial decision making.

The database continually absorbs new data and integrates it with the previous data The full
benefits of the project will not be fully experienced or achieved until the system becomes
executive and has a period of stability, for at least a whole year. Once the system has become
stable and users have had time to adjust to new working practices the benefits of lower IT
cost will become visible. An immediate benefit that will be achieved by the system will be
the ability to promise and then deliver to the customer on time. This was something that the
older systems could never achieve, as they often used due dates that were in the past. SAP
can only use current information.

The ability to deliver on time will improve customer satisfaction and also improve customer
Confidence, which should lead to an increase of orders in the future. The system will also
improve the relationship in the supply chain, as transactions will be made easier via the use of
Electronic Communications. The sustainability of enterprise information systems @IS)
during the post-implementation period needs to be looked into. There is a lack of clear
understanding about the strategic needs and requirements for sustaining the effectiveness of
large-scale information systems after a period of relative stability following initial
implementation. Sustainability management of EIS is therefore a very important research
dimension that needs to be explored to maximize the benefits of an expensive information
system investment such as ERP. [43]

6.1.3. Case study: Lucas County, Ohio-Helping Lucas County, Ohio prepare for
ERP implementation
Lucas County sets the stage for ERP success with Cherry Road Technologies

Lucas County, Ohio, which spans an area of 340 square miles in northwest Ohio and has
more than 455,000 residents, needed to upgrade its financial and HCM systems. County
officials wanted the integrated control that advanced Enterprise Resource Planning (ERP)
software can bring. But they definitely wanted to avoid the horror stories of delayed or failed
implementation they had heard about in taking on such a complex challenge. And they
needed to work within a limited budget. So Ed Ciecka, County Administrator, Keith
Fournier, Director of Information Services and Dan Bridge, Director of Payroll for Lucas
County made a smart business decision.

They searched for an experienced team of consultants who could help them assess their
readiness and develop a comprehensive implementation plan. Based on Cherry Road's long
history of working with public sector organizations and its proven management consulting
and ERP implementation skills, Lucas County selected Cheny Road for this consulting
engagement.
6.1.3.1.Assessment: determining what needs to be done

Stage one in any successful ERP implementation is a careful survey of the current
organization and infrastructure. Implementers need a roadmap of what needs to be changed to
leverage the capabilities of the new system. And that is precisely what Cherry Road
recommended for Lucas County.

In conjunction with the Strategic Implementation Plan, Cherry Road provided an in-depth
analysis of the Lucas County IT organization and staff, and then followed up with detailed
change organizational development recommendations. Other components of the Strategic
Implementation Plan action items addressed redesigning internal business processes as well
as project implementation requirements, best practices concerning time management, scope
management, quality management, risk management and technical in6astructure.

6.1.3.2. ERP vendor selection: an impartial methodology

Based on their proven implementation methodology and extensive public sector experience,
Cherry Road provided Lucas County with a valuable, thorough approach method for ERP
system selection. Totally vendor neutral, it enables Lucas County officials to evaluate
systems capabilities and costs based on their unique needs. And it provides the information
and tools to make logical and prudent decisions about their organization and ERP selection.

6.1.3.3.Best practices: reinforcing the recommendation

To augment the detailed recommendations delivered in the Strategic Implementation Plan,

Cherry Road Technologies leveraged its strategic partnership with The Gartner Group to
assist in defining best practices for ERP implementation - further supporting the SIF' with
Gamer's broad industry knowledge regarding ERP trends and best practices for ERP. With
this knowledge, Lucas County can be confident they have the plan they need for optimal
results.

6.1.3.4.The result: a comprehensive plan and the confidence to execute it

As a result of Cheny Road Technologies Strategic Implementation Plan, Lucas County

gained the advantage of Cheny Road Technologies long history of ERP implementation
success, superior ERP skill and management consulting expertise to assess their ERP
decision. The result was that County also gained a clear, actionable, step-by-step plan that
encompasses organizational development, process transformation, change management and
ERP implementation. They now know what needs to be done, and what changes and
resources will be required to do it. Overall, Lucas County officials complement Cheny Road
flexibility and the value of its practical, useful solutions. [44]

6.1.4. Case study: Analyzing ERP failures in Hershey

This case study tells us about the failure implementation of ERP and pointed out its causes.
There are many chances of errors in an ERP implementation. These errors are not negligible
and could damage ERP implementation process.

If one were to analyze an ERP failure story it will be obvious that these mistakes cost the
bounty in the long run. The pathetic issue is that many bigger companies also failed to be
cautious and paid the price later and that too heavily. The following study shows how things
got messed up due to process failure in an organization, after ERP's intervention.

6.1.4.1. Company Profile

Hershey is a leading manufacturer of chocolates, confectionaries and beverages in United
States of America. They offer lots of delicious and lip smacking chocolates in various
assortments. The company also makes sugar flee chocolates and products suiting the
nutritional constraints of the customers. What started as a small entity by Milton.S.Hershey in
Pennsylvania has now become a very big company commanding a stake in the U.S. food
market. They are also an important player in the international scenario.

6.1.4.2.An Outline of the problem

The technical team at Hershey had been working hard to implement ERP solutions for more
than three years. They had chosen to implement SAP ERP a favorite choice of corporates
ever since SAP ventured on to the service in the year 1992. This process went on during the
peak periods when business was expected to do its best. The company had chosen to
implement ERP by using a popular method whereby the whole process was brought into
action at a stretch. The implementation and the business process which followed it proved to
be a major setback for the company. There was a heavy loss in profits and sales.

6.1.4.3. Reasons
Hershey was prompt in doing things expected by an ERP vendor. They did not resort to any
move capable of disturbing the plans of the vendor. They had extended full cooperation to the
vendor in all aspect. There was really nothing to complain from the vendor's point of view or
from the technical point of view. However the following issues led to their downfall in an
unexpected manner.

6.1.4.4. Choosing the Wrong time for implementation

This is citied to be the first and foremost reason for the disaster. The business prospects are
slated to be promising in this period. The companies cannot be expected to change their way
of business or restructure at this point of time. It is the period wherein competitors will vie in
with each other to become the market leader and as well as defeat their rivals. In other words
the company must concentrate on its core activities which will directly or indirectly reflect on
the income generated. This is not to mean that the development activities and others that are
not connected with profit making should be ignored. They should also be given due
importance. They should take place simultaneously and of course receive the proper
attention. The company will be more focused on bade activities while the amount of energy
spent on the others will be considerably low. When this is the case Hershey made a blunder
of not only restructuring the business process and changing it but it went to the extent of
spending the whole time and efforts on implementing Enterprise resource planning.

This disrupted the normal functioning of the business and as well as created lots of
confusions in the company. Since their attention was wholly diverted to ERP it was not
possible to rectify the uncertainties that emerged in the business as a result of ERP.
When they tried to do that the attention paid to ERP was low. As a result the business faced a
hagedy. Firstly they could not make good the sudden damages caused. On the process of
doing the same they were not able to concentrate on ERP which was nearing completion.
When the subsequent process were carried the company again had a rude shock because the
ERP systems were not working in full Capacity as there were some final touches which were
not done. The company would have very well avoided this trouble if only they thought of
going ahead with ERP during those occasions when the business process in the whole market
experiences a slow movement.

Any business will have such periods in all the years. Since Hershey took the right decision in
the wrong time things were totally against their favor. If something had gone wrong in the
dull period they would have very well concentrated on that and made ERP a hit if. Since the
companies can very well work on that process and pay full attention because of the slowlno
business activities any potential trouble could have been easily averted and an ERP failure
story would not have taken place.

6.1.4.5. Too much of workload

ERP is a complex process which calls for lots of maneuvering and processing in the
company. The company needs to put many efforts in order to ensure the success of this
process. As seen in the earlier paragraph the company should go ahead with the process only
after assuring that it has the necessary time and can put the necessary efforts to ensure the
success of the enterprise operation. However the company made another mistake in addition
to implementing it at the wrong time. They had also implemented many more enterprise
applications like CRM and others. The company was at the receiving end by this time. They
had already messed up by choosing the wrong time and spoiled the business prospects. They
only found that things were getting worse and not better with the simultaneous
implementation of the enterprise applications. When they were about to rectify the business
process ERP and other applications were not implemented fully. Hence when they came back
after making major changes in the business process to suit the enterprise applications
modality of operations the applications were not functioning with full vigor not only because
of the incomplete works but also due to the break in continuity.

6.1.4.6.Conclusion
The company could have avoided this menace if only they remained focused. They would
have set an example for success instead of an ERP failure story. Companies have failed to
learn from the ERF' failure story in 1998.They had performed explicably in all areas whereby
companies usually make mistakes like not cooperating with the vendor or not changing the
business process. It is therefore evident that ERP implementation is a long drawn process
which needs to be implemented carefully as even the minute mistake will spoil the hopes and
purpose of the project. [13]

6.2. Conclusive Remarks

Hence we can conclude from these case studies that now ERF' system is considered so much
important for companies' growth, they wanted to implement ERP to reduce costs and for
business growth. Companies are now well aware of ERF' benefits. Besides that many
companies are also well aware of ERP implementation process and many problems related to
it, as ERP implementation is the complex process .there are many chances of errors in
implementation process. Which are not small errors these errors may lead to a failure of ERP
implementation in any organization. These case studies pointed out many success and failure
factors which above mentioned companies had faced. Those companies who cope the
implementation process very carefully and wisely lead there organization to a successful ERP
implemetaion.but those who did not considered these factors had to face a nightmare of
failure. Top management support, right choice of vendors, cooperation with vendors, right
time of implementation, change management and many other factors are discussed in these
case studies and are very important in ERP implementation process.
 ERP Implementation Issues in FTCL

Chapter: 7
ERP implementation in Pakistan

International Islamic University Islamabad

ERP system is a widely implemented system across the world. Along with developed
countries many developing countries are also implementing ERP system to their industries
and Pakistan is one of those developing countries.

According to the press release by Media Mark (2007) with depicting consistent progress in
the information technology, Pakistan is now gradually automating particularly its
development sectors to significantly enhance quality production and ensure skilled
management, which would help the country in getting a good place in the global competitive
market
The sectors being automated under the Enterprise Resource Planning (ERP)include:
Readymade Garments,
Hosiery,
Textile Processing,
Automotive Parts & Accessories,
Surgical Instruments and
Agriculture.

Under this project the ERP software is being implemented in more than 70 industrial units of
these sectors. For further strengthening its development sector through the automation
system, the Government of Pakistan is vigorously entering into memorandums of
understanding to involve a number of national as well as international software firms. It has
also been mentioned in the press release that in 2007 in order to secure 7 per cent growth rate
and 800 percent increase in its stock market, Pakistan's key step was to build a bridge to
Silicon Valley and the country was rapidly making inroads in the international market with
stepping up its links with recognized world brands.

"Millions of rupees have been spent in automating the local industry and in the first phase 63
units have been automated across different industrial sectors using licensed ERP software.
in the current phase, close to 45 units in four industrial sectors and 10 farms from the
agriculture sector are being automated using open source as well as Microsoft technologies.
The Auto Plus is the second open source ERP launched under PSEB's Industrial Automation
Project and this ERP software is now also available on Microsoft technologies to more than
300 units'".

With tapping the fill potential of this automotive system, Pakistan would be able to compete
much bette~in the increasingly competitive global market as the initial results of this
initiative are very encouraging. According to a compiled report, the installation of the
automotive system in these units has led to improvement in their overall performance - 60
per cent reduction in time in customer response, 65 per cent slash in time and HR in the
purchase cycle, 60 per cent cut.in time and HR in accounts and 75 per cent reduction in time
and HR in the production process.

PSEB is a Government agency mandated to promote Pakistan's IT industry including

software, services, hard ware and call centers locally and globally. It has been facilitating the
IT industry through its programs in human capital, office space, marketing, company
capability development, telecom bandwidth, industry finance, public policy, strategy &
research, and facilitation. According to the Media Mark in 2007 the IT industry of Pakistan
was valued over USD 2.8 billion with an IT workforce of 1 10,000, growing at almost 20,000
a year. Also there were moie than 125 IS0 certified and CMMl rated IT firms in Pakistan
[451.

7.1. Role of Siemens Engineering Company in ERP implementation in Pakistan

When we talk about ERP implementation in Pakistan then Siemens Engineering Company of
is the name which cannot be ignored. For many years, Siemens has been active in Pakistan,
where it holds leading positions in the three application fields: Energy and Environmental
Care /Automation and Control, Industrial and Public Infrasfructures / Healthcare. The
Siemens IT Solutions and Services Group functions across all three fields. Siemens is the
country's No. 1 supplier of high-voltage grid stations, switchgear products and systems,
power distribution and power transformers, and network consultancy.
In fiscal 2007, Siemens in Pakistan scored major successes in the following application
fields:
Energy and Environmental Care
Healthcare

' Yumf Huscin, i n , g D i i r o f P a k A s t a n S o h Export B o d

 Siemens IT Solutions and Services

Siemens had signed contract with PTCL Pakistan's largest fixed-lie operator, for the
automation of all processes with SAP ERP. Siemens also signed contracts with F'unjab
Beverage and Tripack Films for SAP implementation. These projects represent a major
breakthrough for Siemens with SAP ERP solutions in the telecommunications, beverage and
process manufacturing industries. Siemens now provides solutions for more than twelve
prominent industrial sectors in Pakistan. [46]

Following is the list of companies in which SAP ERP is implemented by Siemens:

Table: 7

SAP Salutlm: F-cia4 CnwOing Mlaid M q s a m t . W u od

mbmm J","

I I
AndirmOmdof SAP Solutlm:Finmc% CaotmlEn& Hvmm Pnblic S-
SAP W3
.ik.P (PIFRAI

SAP Solubm hnanculs Cnmollrg PDdvMn Plvmlrg. M e n d s

Mugem% SJer .rdh b m Plant Munanmrr. Q d r q
M . u e s n m t d H u m -nu

S M ERP

SAP Sdution: Financial% Cmmoll'mg hbrrrials M . n a g m c n ~W5 .nd

Mbui.3". w i y M.mgemm( d Hvnurr Rssowm
I
 SAP ERP

SAP Solobaa F m m a Cwtmllmg *na W e n d

DMbm Rod~;aonP h w Matcnal w g c n u m , h ..-C
-- Agndtunl
ICI P&rW Limited SAP F
a Mun-c+ QulW Maw-L H- Rewm-s. P-d
Abu-m d H- llcromrer P-Pl - Dnclopncat
-ul

Pd4slm S M Oil (PSO) SAP B ~ S u i t r ( l s

Oil & Gu)

Nation$ Refinery Limited

SAP Solution: F i o s n d ~Gonollmg &m Manag-4

Slln nd
ad H u m Rc10yn:ct P-mrl
Dumbodor. Mlruial Msubcmm~ -
SAP ERP Mmhhatin Oil & Oar

SAP W3 Dltq"iS3

oCharudP*irtao
En@ .
SAP ERP
Limited

SAP ERP

Ncds PAi- SAP ERP

SAP ERP

SAP ERP

SAP ERP

SAP Soldm:Finmtilirand CmtmUing hfaldals MmammL S.lcr Qsmidrmd

SAP U1P md Dihbution d RDdusfim PI-% b ~ d d
 SAP %Iutinr: Finmdalr and Cmmlli M b d r Slh
d Dimiblltirn Imd Rodustion Plnmbg
I

3
SAP ERP
Oil &On

SAP Em
GeQ P h .
Em60

SAP Em
h i a t namnicr
ECC 6.0

T.-P+k Films
ECC 6.0

SAP ERP SAP So1wi-x Fimn- m d Conadling h j m SWms, Hmm Cqinf

P.L;i,m hhnpm- N m r a t Life Cjdc Mmagcnrcnr M.trriaIsMmwmrt
1-dm Supplia Relationship Mm.ganmf Sme&is E n r s p i ~
Muugcmsn~
Limild W L ) ECC 6.0nih Bwincs lnDlliga..lsvMcu I n t o d o n Wmhows.
IS+ELCO

SAP Solution: F i m u and Cmmlling Hunrm kur- bjal Syrmnr,

M I B u l r Manag-

SAP Solution: Finmddr Connolling M U a i d s Msnsgsnnf Sda &

Gimibutimr Plan Mdn-p. H m Crpiml Mrm-t B-5
Intdligmw Wiry Mmapncnf Inrcylion svith PImI DCS vmmu

SAP s01utinr: Dnslq"cnl0fM SAP b a d P m d To 3.m-1 0utlcO

d d d m ofPSO an aamr P n t i f~a d e r h k i n g The wslm m b Oll &Gs
l& PSO SYM- riL commmial b d a fadnlmcm m n .

SAP ERP
NPakiW Oil & Gu
ECC 6.0 Oil md y,

As we know that along with other industries ERP is also implemented in telecom sector of
Pakistan for example it has been implemented in Pakistan telecommunication company
(FTCL). This implementation process is not without problems. In order to get high benefits
companies have to face high risks. So o w project's main focus is also on ERP
implementation issues faced by PTCL and also our aim is to identify success factors
regarding successful implementation.
7.2. Introduction to PTCL
Pakistan Telecommunication Company Limited (PTCL) is the largest telecommunication
company in Pakistan. This company provides telephony services to the nation and still holds
the status of backbone for country's telecommunication infrastructure despite arrival of a
dozen other telcos including telecom jiants l i e Telenor and China Mobile. The company
consists of around 2000 telephone exchanges across country providing largest fixed line
network. GSM, CDMA and Internet are other resources of PTCL, making it a gigantic
organization. The Government of Pakistan sold 26% shares and control of the company to
Etisalat in 2006.

7.2.1. History

Following is a brief overview of PTCL's history:

1947 Posts & Telegraph Dept established

1961 Pakistan Telegraph & Telephone Dept.

. 1990-91 Pakistan Telecom Corporation

. 1995 About 5% of PTC assets transfemd to PTA, FAB & NTC.

. 1996 PTCL Formed listed on all Stock Exchanges of Pakistan.

. 1998 Mobile (Ufone) & Intemet (PakNet) subsidiaries established.

. 2000 Telecom Policy Finalized

2003 Telecom Deregulation Policy Announced

. 2006 Etisalat Takes Over PTCL's management

Now we will discuss history in detail from the humble beginnings of Posts & Telegraph
Department in 1947 and establishment of Pakistan Telephone & Telegraph Department in
1962, PTCL has been a major player in telecommunication in Pakistan. Despite having
established a network of enormous size, PTCL workings and policies have attracted regular
criticism from other smaller operaton and the civil society of Pakistan.

Pakistan Telecommunication Corporation (F'TC) took over operations and functions from
Pakistan Telephone and Telegraph Department under Pakistan Telecommunication
Corporation Act 1991. This coincided with the Government's competitive policy,
encouraging private sector participation and resulting in award of licenses for cellular, card-
operated pay-phones, paging and, lately, data communication services.

Pursuing a progressive policy, the Government in 1991, announced its plans to privatize PTC,
and in I994 issued six million vouchers exchangeable into 600 million shares of the would-be
PTCL in two separate placements. Each had a par value of Rs. 10 per share. These vouchers
were converted into PTCL shares in mid-1996.

In 1995, Pakistan Telecommunication (Reorganization) Ordinance formed the basis for

PTCL monopoly over basic telephony in the country. It also paved the way for the
establishment of an independent regulatory regime. The provisions of the Ordinance were
lent permanence in October 1996 through Pakistan Telecommunication (Reorganization) Act.
The same year, Pakistan Telecommunication Company Limited was formed and listed on all
stock exchanges of Pakistan

PTCL launched its mobile and data services subsidiaries in 2001 by the name of Ufone and
PalcNet respectively. None of the brands made it to the top slots in the respective
competitions. Lately, however, Ufone had increased its market share in the cellular sector.
The PakNet brand has effectively dissolved over the period of time. Recent DSL services
launched by PTCL reflect this by the introduction of a new brand name and operations of the
service being directly supervised by PTCL instead of Paknet.

As telecommunication monopolies head towards an imminent end, services and infrastructure

providers are set to face even bigger challenges. Pakistan also entered post-monopoly era
with deregulation of the sector in January 2003. On the Government level, a comprehensive
liberalization policy for telecom sector is in the offing. In middle of 2005 Government of
Pakistan had decided to sell at least 26 percent of this company to some private agency.
There were three participants in the bet for privatization of PTCL.

Etisalat, a Dubai based company was able to get the shares with a large margin in the bet.
When Government was going to privatize the company there was country wide protest and
strike by PTCL workers. They even disrupted Phone lines of some big Government
institutions like Punjab University Lahore and many lines of public sector were also blocked.
Military had to take over the management of all the Exchanges in the country. They arrested
many workers and put them behind bars. The contention between Government and
employees ended with a 30% increase in the salaries of workers.

Many big change events are happening in PTCL at the moment after its privatization. These
include the VSS (Voluntary Separation Scheme for its employees), ERP (SAP based),
restructuring, B& CC (Billing and Customer Care Software) etc. Another seemingly minor
change was change of brand identity (logo) that will present PTCL's new face afier
privatization, with greater focus on customer satisfaction and, bringing about of new
advancements in telecom for Pakistani consumers.[l]

7.2.2. ERP implementation in F'TCL

h s s Owners
I Subject-Matter Experts (SMEsl

1 sfelring & Advi&y Cornmitrees

Policies, Culture &
Regu/mions
i

Best-Practices Focus
- SAP impIemenrution fiperience a
User Croups
ASAP Merhouotugy

Figure: 13

Source ERP-A S u m s Story at PTCL Ivnc 2038 1471

We have discussed earlier that ERP (SAP based) has been implemented in PTCL and several
modules of SAP are functional. Now fist we will discuss the role of project Management
office and its functions in ERP implementation and then modules of SAP which are
functional in PTCL. [48]
7.2.2.1. Project Management Off~ce(EM
' O)

The PMO office is responsible for entire ERP implementation. Vendor management, business
partner relationships, training of all modules and the smooth transition of the new systems
across PTCL is handled by the project management team. Project progress monitoring and all
logistical issues come under the PMO.

7.2.2.1.1. Functions

The PMO ofice is performing following functions for implementations of ERP at

PTCL.

Ensure the execution of project by using standard project management methodology,

tools & techniques.
Own and execute the project plan.
Communicate with all internal and external stake-holders including the end users and
vendor.
w Maintain, open and timely communication between project leaders, project
management office, technical and application teams.
w Monitor project and manage issue identification, risks, resolution, and escalation.
Definition, implementation and modification of project roles and responsibilities.
w Manage a central repository of reusable project management content.
w Translate strategies into action plans.
w Maintain documentation repository for execution of project.
w Estimate project costs, schedules and implementation efforts.
Monitor and evaluate the project progress based on scope, time and cost.
Handle the entire process of change management.
Perform activities with strong support of senior executives.

7.2.2.2. Financials and Controlling (FICO)

SAP ERP Financials provides a comprehensive financial management solution for the most
complex businesses across a broad range of industries. It is the leading enterprise software
solution for addressing critical financial functions, such as core accounting, financial and
management reporting, working capital management, performance management and, through
integration with SAP solutions for GRC, regulatory compliance.
7.2.2.2.1. Benefits

With ERP Financials, you can:

Offer a broad range of industry-specific processes.

Supports the reporting and regulatory requirements of multiple languages and
currencies.
Dramatically increase your finance department's value by streamlining and
automating labor intensive transaction processing and reporting functions.
Freeing skilled finance professionals from routine activities enables them to provide
greater value to the organization - through operational insight, strategic action, and
better understanding of drivers of value and improved performance.
Functionality for robust accounting, consolidations, reporting, analysis, financial
value chain, and treasury management. ERP Financials provides comprehensive
financial and management reporting functions with embedded internal controls,
complete audit trails, and financial process documentation delivering the highest
levels of confidence in financial reporting and regulatory compliance. ERP Financials
helps you leverage your existing application and infrastructure investment by
integrating harmoniously with them.

7.2.2.3. Human Capital Management (HCM)

Implementation of ERP HCM module will enable the company to align employees,
processes, and strategies for business success. The solution optimizes each employee's
contribution by aligning employee skills, activities, and incentives with business objectives
and the strategies to reach them. HCM will support cross functional information needs,
regulatory requirements, and best practices from more than 50 countries.

7.2.23.1. Benefits

ERP Human Capital Management provides you with the most comprehensive global HCM
solution available today. With ERP HCM, you gain the following business benefits:

Consistently achieve corporate objectives

0 Retain talented people
Proactively identify and fill talent gaps
Lower costs of compliance and employee administmtion
 Balance global and local coverage
Improve employee satisfaction
Improve decision making and manage human capital more effectively
Reduce risk
Realize return on investment
Implement value-added activities
Enable business process outsourcing

7.2.2.4. Material Management (MM)

Materials Management (SCM procurement) enables the sharing of accurate inventory and
purchasing process information across the supply chain network. Within an organization,
information is accessible online for all departments.

7.2.2.4.1. Supply Chain

According to the PTCL's ERP team this is our Mission Ultimate! Our vehicle is today's
cutting edge technology, the world class ERP Solutions.

Riding high the ERP vehicle we are about to cruise the road to introducing systematic,
dynamic and best practice Materials Management Systems and Procedures encompassing all
functions of Materials Management Operations in PTCL. We are in process of deploying the
ERP Solutions in re-engineering the Materials Management Systems as a whole; ensuring
efficient, productive and profitable operations. All MM Function Execution Systems are
being streamlined, realigned, and disciplined. ERP based Procedures and processes shall
ensure people's involvement, responsibility and accountability at all levels of Materials
Management hierarchies.

This is the first time Materials Planning and Forecasting Methods and Materials Requirement
Planning (MRP) Mechanisms shall be dynamic and real time transaction based. Introduction
of a string of Intelligent Reporting Systems and KPI Analyses covering all conceivable
scenarios of Inventory Movements and Materials Consumption Patterns, Materials Re-Order
Point Analyses, Materials Min-Max and Safety Stocks, ABC Analyses, Logistics
Management and a state-of-the-art Warehousing Management Systems shall provide for
effective tools to Management Decision Making Process.
All Materials Management policies, procedures, instructions and standards laid down in the
Materials Management Manual have been fully reflected in the respective SAP-ERP
Materials Management Modules. The System shall provide access control based globally
visible on line real time data retrieval capability enabling policy and decision makers
domesticate information on their finger tips! A full-blown development and utilization of
SAP ERP Functionalities shall revolutionaries the way the Materials Management Operations
are conducted in PTCL.

7.2.2.5. Procurement

Materials Management (SCM procurement) enables the sharing of accurate inventory and
purchasing process information across the supply chain network. Within an organization,
information is accessible online for all departments.

7.2.2.6. Network Lifecycle Management (NLM)

SAP Network Life Cycle Management module comprises of Project Systems (NLM-PS) and
Plant Maintenance (NLM-PM).

NLM-PS provides powerful project management & accounting functionality for projects of
any scale and scope, providing high level of integration between PS and other SAP
application components, such as Logistics, Accounting, and Human Resources.

NLM-PM on the other hand facilitates in planning, execution and reporting of Corrective
maintenance, heventive maintenance, Refurbishment maintenance, and Phase-NPhase-
OUT equipment processes, Inventory Management and Asset accounting across the network.

7.2.2.6.1. Benefits

ERP SAP NLM-PM is fully integrated with other modules such as Finance & Controlling
(FICO), Human Capital Management (HCM), Materials Management (MM). It provides high
level of network availability by virtue of optimum utilization of resources in operation and
maintenance of the network. Following business benefits would be achieved with the
implementation of SAP NLM-PM module:
Scheduling of Routine Maintenance Activities
Automatic Generation of Work Orders as per schedule
Generation of Maintenance Reports
 s Planning for purchase of Spares based upon Fault Rate of Modules
Visibility of Spares in spare pools of Different Regions
Availability of up-to-date Functional Location and Equipment Masters
Statistics of materials and plants ready for Phase-out
Statistics of network expansions by Phase-IN equipments
8

. Statistics of Out-of-Warranty and Under Warranty Equipments

Statistics of Extemal Services received under Contracts or without Contracts and

.. expenditure incurred on them

Optimum utilization of human and other resources in system maintenance
Statistics of repairedlunder repair modules along with expenditure details.
Network Performance Reports

7.2.3. ERP implementation plan of PTCL

Following is the SAP ERP implementation plan of FTCL [48]:

Table: 8

1 Total cost 1 2 billion rupees I

Duration Implementation 020 months (Prep: 1, A1:6, A M , B: 6, C: 2)

I
Warranty ( 12 months
I
Long tern maintenance 1 60 months
& support

Solution SAP ERP Business Suite, ECC 6.0

I
Implementation partner Siemens Engineering Company of Pakistan

Coverage PTCL, Ufone, Paknet

I
-Ftmrtionnl
-..--.-. coverave
- - . -.
-0 - I Financials.. Materials
-- - Human Resource
Manaeement. Procurement.~.
1 ~yitern,Operations & ~aintenance,
~ Projects
1
No. of users 2500
Hardware platform HP, HF' Superdomes; Database: Oracle; XP 12000 Tape Library

I
Contract type Fixed Fee; Turn Key

7.3. Conclusion
In this chapter we have discussed ERP implementation in Pakistan generally and PTCL
specifically. There are now several companies who switched to ERF' system from old
systems. Almost all kinds of industries are interested in ERP implementation. Here our
emphasis is on PTCL, which is the largest telecommunication company in Pakistan and have
implemented ERP (SAP based).our main aim is to point out the issues faced by PTCL after
ERF' implementation .Role of Siemens Engineering Company in ERP implementation in
Pakistan is very important and it is a implementation partner of FTCL. PTCL started working
with ERP modules which we have discussed above. Now for success of ERP project in PTCL
top management has to manage things well. They should take care of technical as well as
behavioral issues related to ERP implementation. Top management should keep in touch with
the employees. If employees are resisting against the new system then top management
should try to find out the reasons and should properly manage the change. Although ERP is a
risky, complex and expensive system but proper and step by step implementation process can
make it a successful project for FTCL.
 ERP Implementation Issues in PTCL

Chapter: 8
Research Methodology

International Islamic University Islamabad

8.1. Objective
ERP is a famous system and popular all around the world. Developing countries are also
interested to implement this system in their organizations and Pakistan is one of them. We have
done a study on Pakistan's largest telecommunication organization PTCL (Pakistan
Telecommunication Company limited). The study is done on ERP implementation issues which
can be technical as well as behavioral. We have emphasized on behavioral issues that affect the
overall implementation process of ERP. So that our main objective of the study is to find out
whether employees' behavior are positive or negative towards the ERP system and are they
ready to adopt the new system.

8.2. Methodology
We have conducted our study on ERP department of our target organization PTCL. Initially we
have formed a Model, which includes many factors and in our view have affect on ERP
implementation process. So in order to get the responses kom employees we had
developed a questionnaire on the basis of our model. Then we had conducted a pilot study and
applied Cronbach's a (alpha) reliability test. Items with low reliability were deleted from the
questionnaire. Questionnaire can be seen Appendix.

8.2.1. Questionnaire

It was filled by employees of ERP department who were working on different module such as:

(AM) Asset Management

(FI) Financial Accounting
(CO) Controlling
(CA) Cross Application
(HR) Human Resource
(Mh4) Materials Management
(PS) Project System
8.2.2. Research Model

Below are the variables included in our proposed model. This includes several variables these are
as follows:

8.2.2.1. Top management commitment and support

Top management commitment and support is a most important factor in ERP successful
implementation. Management must be involved in every step of the ERP implementation. Some
companies make the great mistake of handing over the responsibility of ERP implementation to
the technology department. This would risk the entire company's survival because of the ERP
system's deep business implications. It is often said that ERP implementation is about people, not
processes or technology. An organization goes through a major transformation, and the
management of this change must be carefully planned (from a strategic viewpoint) and carefully
implemented. The top management must not only fimd the project but also take an active role in
leading the change. A review of successful ERP implementations has shown that the key to a
smooth rollout is the effective change management from top. Intervention from management is
often necessary to resolve conflicts and bring everybody to the same thinking, and to build
cooperation among the diverse groups in the organization, often times across the national
borders. Top management needs to constantly monitor the progress of the project and provide
direction to the implementation teams. The success of a major project like an ERP
implementation completely hinges on the strong, sustained commitment of top management.
This commitment when percolated down through the organizational levels results in an overall
organizational commitment. An overall organizational commitment that is very visible, well
defined, and felt is a sure way to ensure a successful implementation [32].

8.2.2.2. Perceived Usefulness

This was defined by Fred Davis as "the degree to which a person believes that using a particular
system would enhance his or her job performanceV[l]. What causes people to accept or reject
information technology? Among the many variables that may influence system use, previous
research suggests two determinants that are especially important.
First, people tend to use or not use an application to the extent they believe it will help
them perform their job better. We refer to this first variable as perceived usefulness. A system
high in perceived usefulness, in turn, is one for which a user believes in the existence of a
positive use-performance relationship.'

8.2.2.3. Perceived Ease of use

Davis defined this as "the degree to which a person believes that using a particular system would
be free from effort" [I]. If potential users believe that a given application is useful, they may, at
the same time believe that the systems is too hard to use and that the performance benefits of
usage are outweighed by the effort of using the application. That is, in addition to usefulness,
usage is theorized to be influenced by perceived ease of use. An application perceived to be
easier to use than another is more likely to be accepted by usen2

8.2.2.4. Training

Training is also very important factor which plays very important role in ERP successfd
implementation. Training employees on ERP is not as simple as Excel training in which you give
them a few weeks of training, put them on the job, and they blunder their way through. ERP
systems are extremely complex and demand rigorous training. It is difficult for trainers or
consultants to pass on the knowledge to the employees in a short period of time. This
"knowledge transfer" gets hard if the employees lack computer literacy or have computer phobia
In addition to being taught ERP technology, the employees now have to be taught their new
responsibilities. With ERP systems you are continuously being trained. Companies should
provide opportunities to enhance the skills of the employees by providing training opportunities
on a continuous basis to meet the changing needs of the business and employees. [32]

8.2.2.5. Trust

Employees trust is very important factor in successful ERP adoption. Trust can be defined as
faith or complete confidence on anything including person, plan or a system. According to Earle
et.al it affects judgments of risk and benefrt; and, directly or indirectly, it affects acceptance of
technologies and other forms of cooperation3.

8.2.2.6. Attitude

In psychological term ~ttitude'is a hypothetical comtmct that represents an individual's like or

dislike for an item. Attitudes are positive, negative or neutral views of an "attitude object": i.e. a
person, behavior or event. People can also be "ambivalent" towards a target, meaning that they
simultaneously possess a positive and a negative bias towards the attitude in question. [l]

So when we talk about employees Attitude towards ERP system, we can say that it is positive
negative or neutral views of an employee about ERP system.

8.2.2.7. Communication

Employee communications is just as important as other factors. Throughout the deployment,

employees should be apprised of the status of the project, as well as how and when the rollout
will affect them. They should know the benefits of the system they are using. They should be
well aware of the process and procedures of the ERP system. Employees should h o w when they
can expect to be trained, when they will be expected to convert to the new system, and what tools
they will have at their disposal should they have problems or questions. Perhaps most
importantly, employees from each workgroup should be informed how their business processes
and day-to-day jobs will change. These types of employee communications go a long way to
help alleviate the anxiety and confusion of an ERP rollout. [49]

8.2.2.8. Data Quality

Data Quality @Q) is another variable which we have used in our model. This variable has not
been given much attention by the researchers. But in our view DQ cannot be ignored especially
when we talk about ERP implementation. According to Hongjiang XU et al, Data quality is
critical issue during the implementation of an ERP.DQ issue can have a significant impact on an

'The intlu- ofTnut and Cemfidsncc on P-Md Ri& md Gx~extiwby T.C. Earl+. M Sicgrist*', H.Gutrher"
organizations information system. So that it's very important to understand data quality issues to
ensure success in implementing ERF' system. [36]

Following is our proposed model:

8.2.3.Proposed m o d e l

Top management
commitment and support
r -

I
Perceived Ease of
Use

Training

ERP adoption
__t

..-

Communication I
Data Quality 1 -
 ERP Implementation Issues in PTCL

Chapter: 9
Analysis and interpretation

International Islamic University Islamabad

The primary objective of our research is to find out that what issues are involving in ERP
implementation process. And what affect ERP implementation has on the employee's behavior
whether it is negative or positive. With the help of our findings we will be able to see the major
issues relating to ERP implementation. The data is collected from no. of 30 respondents. With
the help of frequency tables and pie charts we will discuss our Data findings now, According to
the responses given by the employee. First we will discuss each variable according to its items
responses by the employees. Then we will conclude the overall findings in the end.

9.1. Top management Commitment and support (TMC)

Table: 9. TMCl
*
Cumulative
Frequency Pmca VdidP-ol Pant
m g l yd i w p 25 833 83.3 833
Valid diraG
2 6.7 6.7 90.0
ocvlral 1 3.3 33 93 3
2 6.7 6.7 IW.0
T d 30 lW.O IWO
-
NCI

Figure: 13

Table: 10.TMC2

Cumulative
Fnquaq Rrcerd ValidPrrtcl PaFmf
Valid mDllglyduapt I4 46.7 46.7 46.7
diipc II 36.7 36.7 83.3
"~Yhll 1 3.3 3.3 86.7
agm 3 10.0 100 96.7
mngly we I 3.3 3.3 1w.0
T d 30 IW.0 100.0
 Figure: 14

Table: 11. TMC3

Figure: 15
 Table: 12 TMC4

Figure: 16

The responses in this variable shows that employees are not satisfied with their Top
management. Responses about top management support in fust item shows high number of
employees disagreement towards Top management support for the SAP implementation project.
Likewise according to large no. of employees top management is not much concerned about
there daily tasks. Also when there is no support the there will be no motivation for employees to
do better work. Further we can also notice a disagreement of employees about top management
involvement in SAP project that top management is not taking required steps to make SAP
implementation project successfid.

9.2. Perceived Usehlness

Table: 13. US1
Cwnulan'n
Flcgucncy Pwlu Valid Potent Pent
Vahd mnglyd s a p 4 13.3 13.3 13.3
&S= 12 40.0 40.0 53.3
Figure: 17

Figure: 18
- Table: 15. US3
Cum"laIi~
Frequency P-nt ValidPmnl P-nt
Valid b g l y disagree 5 16.7 16.7 16.7
di.=m 5 16.7 16.7 33.3
nevtnl 8 26.7 26.7 60.0
W= 9 30.0 30.0 90.0
m n d y w= 3 10.0 10.0 100.0
Total 30 100.0 IW.0

Figure: 19

TABLE: 16. US4

Vdid CumuYirc
Frq"eq Psrmt P-nt h"I
Valid amngly d i q s c 3 10.0 10.3 103
diugrw J 16.7 172 27.6
ncvhal 6 20.0 20.7 48.3
W II 36.7 37.9 86.2
mongly amr 4 13.3 13.8 103.0
Total 29 %.7 103.0
Vising System I 3.3
Total 30 100.0

Figure: 20
 Table: 17. US5

d i u p U.3
d 16.7 16.7 50.0
12 40.0 40.0 W.0

Figure: 21

Table: 18. USRR6

Valid
F~ymmC]r Rrtenl P w d
Valid mndydisap 4 13.3 14.3
dhgec 10 33.3 35.7
nclmal 2 6.7 7.1
W 8 26.7 28.6
m n d y a@= 4 13.3 14.3
T0t.l 28 93.3 IW.0
Mising Srjlem 2 6.7
Told 30 lW.O

Figure: 22
 Table: 19. US7

Figure: 23

Table: 20. US8

cum"^^
Frcq- P-ot VdidP-nt Pmnt
valid m g l ydrraw 5 16.7 16.7 16.7
dism 4 133 13.3 30.0
ncml 4 13.3 13 3 43.3
W I1 10.0 40.0 83.3
aonglya~ I 16.7 16.7 1w.0
T0d 30 IMO IWO
L

Figure: 24
 Table: 21. US9
Vdid Cwndativc
PIIcM Paecnt

13.3 13.8 20.7

20.0 20.7 41.4
33.3 34.5 75.9
23.3 241 IW.0
29 96.7 lW.O
3.3
30 1W.O

Figure: 25

Table: 22. US10

Cumulatim
Fqumcy Pnsmt ValidP-t Pcmm
Vdid smnglydhm 2 6.7 6.9 6.9
d * a ~ 7 213 241 31.0
remd 2 6.7 6.9 37.9
w= 13 0.3 44.8 82.8
=O@Y a P 5 16.7 17.2 lW.O
TO~~I 29 96.7 Iw.0
Muring Symm 1 3.3
Total 30 IW.0

Figure: 26
 Table: 23. US11

a P 8 26.7 27.6 72.4

mndy as= 8 26.7 27.6 IWO
Total 29 96.7 lW.O
Missing SyRcm I 33
Tml 30 1000

Figure: 27

Table: 24. USRR12

Valid OmuIa6rc
Frrqucwy Pmmt P e m Percent
Ialid mngiy d i s g a 5 16.7 17.9 17.9
diup 7 U.3 25.0 42.9
m m I 8 26.7 28.6 71.4
agrrC 3 100 10.7 a2.1
Sfmnd~ a P 5 16.7 17.9 1W.C
Total 28 93.3 1W.O
MLring Spitem 2 6.7
Total 30 1W.O

Figure: 28
 Table: 25. US13

Figure: 29

Results for this variable shows mix responses from employees. Some consider it useful and some
are not. Mostly employees does not consider SAP system Important for their job or in other
words they are of the view that their job is not difficult without SAP system and also mostly
employees thinks that the use of SAP system does not give them greater control over their work.
and at the same time a large number of employees are of the view that SAP system increase their
performance in the job, addresses their job related needs, saves time, support critical aspects of
the job, allow to accomplish more work than would otherwise be possible, increase effectiveness
in the job, improve quality of work, increase productivity and considered it overall useful. Few
employees are also of the view that SAP is not an easy system to handle.
9.3. Perceived Ease of Use
Table: 26. EOURRl
Frm"q m t
Vdid
Pamt
cumvlamc
PsEem
.
Valid mOngly dmsu 11 $5.7 39.3 393
&S= 7 U.3 25.0 643
w m l 2 6.7 7.1 71.4
am 4 13.3 14.3 85.7
m n d y as= 4 13.3 14.3 100.0
Tofa1 28 93.3 lW.O

Figure: 30

Table: 27. EOURR2

Cumulative
Frrqurncy P-nt Veiid Percent Percent
Vdid rrmnglydua~ 2 6.7 6.7 6.7
&S= 4 13.3 13.3 20.0
& 3 10.0 10.0 30.0
agroC 5 16.7 16.7 4.7
r a o d y as= 16 53.3 53.3 1w.o
T d 30 100.0 IW.0

Figure: 31
 Table: 28. EOURR3
Cvmvlnfi~
F q u w Pmml ValidP-I PmmI
Valid mongly 3 10.0 10.0 10.0
disam 6 20.0 20.0 30.0
mnml I 3.3 3.3 333
as= 8 26.7 26.7 ffl.0
mOn$Y a- 12 40.0 40.0 lW.O
Tatal 30 lW.O 1W.O

Figure: 32

Figure: 33
 -
Table: 30. EOURRS
Vdid Cllmulm'w
f~qnen~y Pcrrent Pasrm Pcrsmt
Vdid rrmngiy disape 4 133 13.3 133
7 233 7.33 36.7
ncvtrsl 4 13.3 13.3 m.0
am 7 23.3 23.3 71.3
Y&- a F 8 26.7 26.7 IWO
T d 30 lW.O IWO

Figure: 34

Table: 31. EOU6

Figure: 35
 Table: 32. EOURR7
Cumulati~
Frsymmcy P-nt ValidRmt Pacent
Valid m g l ydmpe 4 133 13.3 13.3
dhgr~e 8 26.7 26.7 40.0

Figure: 36

Table: 33. EOU8

cvmvlrtivc
Fqucnsy Pmcnl Valid Pnrenf Percent
Valid rmmgly d i r a m ( 4 13.3 13.3 \ 13.3

I mwly agne
I
Total
1 1 ; 1 ; 1 :
.I IW.0 IWO
100.0

Figure: 37
 Table: 34. EOURR9
Cwn~lative
Frequency Pasnrt Valid P m n r Pcncnt
Valid m g l y dhwTc 3 100 10.7 10.7
di%3= 15 50.0 53.6 61.3
onmal I 33 3.6 67.9
'W 5 16.7 17.9 85.7
~"XJY W U 4 13.3 14.3 IW.0
Taal 28 933 1W.O
Mirriog S m 2 6.7
Taal 30 IWO

Figure: 38

Table: 35. EOUlO

curnulati=
F~~ ~emnt ValidPmenr Pcmnt
Valid m g l y diragm 1 4 1 13.3 1 13.3 ( 13.3

Figure: 39
 Table: 36. EOUll

Cumulslivs
Frcqumcy Pcm~ Valid P-nt Pacnt
Valid saIngJydiugra I 3 1 10.0 / 10.3 1 10.3

Figure: 40

Table: 37. EOU12

Valid Cmulatin
Frsq"my Pnrrm Pmml Pacmt
Valid mngly d i w e I I 33 3.3 3.3

Figure: 41
 Table: 38. EOU13
hulatin
Frcqrmsy Pmem Valid Pmmr PC-,
Valid ma$y d u a m 4 13.3 13.3 13.3
h 4 13.3 13.3 26.7
a c a 3 10.0 10.0 36.7
a m 13 43.3 43.3 80.0
mngba m 6 20.0 20.0 100.0
Total 30 IW.0 IW.0

Figure: 42

The result for this variable shows that employees do not confuse while using sap system but they
make errors frequently when they use it. It shows that employees are not well trained and not
properly aware of S A P functionalities. Even many employees report frustration while using it.
Results also explain that they often use manual for using S A P system because of the fact that
employees are not properly trained. Therefore they have difficulty in recovering fiom the error.
Many reports that S A P is rigid and inflexible and does not find it easy to get the S A P system to
what they want it to do.

9.4. Training
Table: 39. TRGl
Curnularive
Frequens~ PsMl ValidPment P-
Valid mngly diram 5 16.7 18.5 18.5
k g r c ~ 4 13.3 14.8 33.3
O C ~
2 6.7 7.4 40.7
we 12 40.0 44.4 85.2
-ply wa 4 13.3 14.8 lW.O
T d 27 90.0 IW.0
Mising Synm 3 10.0
T0hl 30 IW.0
 Figure: 43

Table: 40. TRG2

I I I I Cumulative

Figure: 44
 Table: 41. TRG3
Cumulstivc
Frq- PaEed VdidPercont h n t
Vdid mnglydurp 2 6.7 6.7 6.7
hP 7 233 23.3 30.0
oarml 6 20.0 20.0 50.0
a5= 8 26.7 26.7 76.7
arOnglY W 7 23.3 23.3 1 W.0
Taal 30 IWO IWO
a

Figure: 45

Table: 42. TRG4

Cumulstiw
F-ncy krmr VahdP-d P-
6.7 1 6.7 1 67

Figure: 46
 Table: 43. TRGS
Valid Cumuldn
FR~YUIV P't P-1 Percrnt
Valid wn$ydurm
5 16.7 16.7 16.7
di=m 5 16.7 16.7 33.3
nnmal 4 13.3 13.3 46.7
w= 12 40.0 40.0 86.7
wngly w= I 13.3 13.3 1W.O
Total
30 IW.0 IW.0

Figure: 47

Overall the responses show that employees are satisfied with training they get regarding SAP
system. Most of the employees believe that training was very helpful for them to understand SAP
system. They realize that training is an important factor for successful ERP implementation we
can see a mix responses of the employees regarding the item that company has extensively
trained them to use SAP system. On the whole employees are satisfied with the training they are
getting.

9.5. Trust

Table: 44. TSTl

Cvm"l.tivc
Frcqwncy Pcmor Valid P-nr h m t
Val~d rtmngly d i r a p I 3.3 25.0 25.0
nCUfnl I 3.3 15.0 50.0
at== I 3.3 25.0 75.0
mongly .m I 33 25.0 1W.O
Told 4 13.3 IW.0
Mining System 26 86.7
Total 30 IW.0
 Figure: 48

Table: 45. TST2

Cmulsti=
F~sumsy P-nt VdidPassnt PaccrA
Valid srmnglydispe S 16.7 16.7 16.7
&em 5 16.7 16.7 33.3

Figure: 49

Table: 46. TST3

I I 1 I I Cumul.tivc
I Frequency ( Pnaot I Valid Pcrtcn I P-a
Valid m g l y diraw I 6 1 20.0 1 200 I 20.0
 Figure: 50

Table: 47.TST4
FrCqm Valid Cumuluiv
9 Perscot Pnant CPsrcent
Vd *@Y 17 S6.7 56.7 56.7
id dhgm

Figure: 51

Mostly employees believe that SAP system provides good functionalities but at the same time
they are of the view that SAP system is not helpll in their work. This shows employee's low
level of trust on SAP system.
9.6. Attitude

Table: 48. ATDl

Cmdatin

Vdid mmgtydlulpcc
33.3 33.3 66.7
6.7 6.7 73 3

Figure: 52

Table: 49. ATD2

Cumulative
F q u c ~ y Pervnr VdidP-l Pmn
Vdid aaongly d k p s ( I1 ( 36.7 1 37.9 ( 37.9

Missing System I 3.3

Total 30 1000

Figure: 53
 Table: 50. ATD3 3

8 16.1 26.7 533

n d I 13.3 133 66.7
W 7 23.3 233 90.0
mwgly we 3 10.0 10.0 lW.O
Tdal M 1WO IMO

Figure: 54

Table: 51. ATDRR4

Valid Cumul.rivt
Freqmy P-1 Rrrm percent
Valid rtmngly d i u v ) 2 1 6.1 1 6.7 1 6.7

Figure: 55
 Table: 52.1
I I

Figure: 56

From the result we can say that employees overall attitude toward SAP system is negative.
Mostly employees are of the view that SAP doesn't fulfill all needs of their organization. Also
mostly employees are not satisfied with the system and do not considered it beneficial in
performing their tasks. They are not comfortable with SAP and are of the view that SAP system
has no influence on their job related tasks.

9.7.Communication

Table: 53.COM1
1

....
d~ 9 30.0 31.0 41.1
mmI 4 13.3 13.8 35.2
Pgne I2 40.0 41.4 96.6
m n p l y .see I 33 3.4 IW.0
Twl 29 96.7 IWO
Missing S- I 3.1
Total 30 IWO
 Figure: 57

Table: 54. COM2

Vdid Cumulati~
Frrgnerq Papnt P-t P-t
Vdid sum& &ram 4 13.3 13.3 133
di%=C 6 20.0 200 33.3
~CLPRI 5 16.1 16.7 50.0
W 8 26.7 26.7 76.7
m g l ya m 7 13.3 23.3 lW.O
7-1 30 IW.0 IW.0

Figure: 58
 Table: 55.COM3

Figure: 59

Table: 56. COM4

cumufrtiw
Frequency P- V d i d P-l P-nl
Valid Rmngly d k p 5 16.7 16.7 16.7
d i s m 5 16.7 16.7 33.3
n a d 6 20.0 20.0 53.3
5 16.7 16.1 70.0
RmnPlY a m 9 30.0 30.0 IW.0
TDal 30 IWO 100.0

Figure: 60
Overall responses shows that employees are well aware of SAP system its benefits. Most of them
believe that SAP system is implemented on the right time in their organization. Also employees
are of the view that SAP implementation is going according to the original planning.

9.8. Quality

Table: 57.QTY1

hulatin
FrsvnEy Fmmt ValidPe-t P-nt
Valid mngly d k a m 7 233 23.3 23.3
dium 5 16.7 16.7 40.0
neuka1 I 33 3.3 43.3
w 10 33.3 333 76.7
mngly a m 7 23.3 23.3 1W.0
1061 30 1W.o IWO

Figure: 61

Table: 58. QTY2

Cumulntiv.
Fnqvency Percent Valid Percent Pant
Valid mOn& disagree 8 26.7 26.7 26.7
h g r c ~ 5 16.7 16.7 43.3
mrmd 4 13.3 13.3 56.7
w= 7 23.3 U.3 80.0
-ugly a m 6 20.0 20.0 100.0
Toral 30 IW.0 100.0
 Figure: 62

Table: 59. QTY3

Vdid Curnulatin
Fqucncy Percent Passnt P m t
Valid mngly d i r r v 5 16.7 16.7 16.7
diwm 7 23.3 23.3 40.0
wmaI 4 13.3 13.3 53.3
. P C 8 26.7 26.7 80.0
W@Yam 6 M.0 20.0 1W.O
Totrl 30 lW.0 1 W.0

Figure: 63

Table: 60. QTY4

Curnulatin
Fquemy Pcrtcnt VdidP-t Perrent
Valid mngly dLagne 5 16.7 16.7 16.7
d
L a
m 7 233 23.3 40.0
mml 6 20.0 20.0 60.0
W= 6 20.0 20.0 m.0
m g l 1-~ 6 20.0 20.0 IW.0
Total 30 IW.0 100.0
 Figure: 64

Table: 61.QTYS
Valid Cumulative
F-nq Perrm Rm?, eerrnt
Wid rrmngly d i s r w 4 13.3 13.3 133
&P= 7 23.3 21.3 36.7
IIS"~~! 5 167 16.7 51.3
a@= 8 26.7 26.7 80.0
mnd~ as= 6 20.0 20.0 100.0
TMal 30 1000 1000

Figure: 65

Table: 62. QTY6

 -Valid mongly k g r r c

neulral
Figure: 66

Table: 63. Q T

20.0
30.0
Valid P e n t

20.0
30.0
Cumulm'n
P-I

70.0
IW.0
T d 30 1W.O 100.0

Figure: 67

Employees responses about the factor quality are mix. Overall they considered it high quality
product. Some of the employees are of the view that it provides timely information; its business
functions are well defined. Most of the employees are of the view that SAP system provides
reliable and accurate information. Very rarely SAP system subject to system crashes and failure.
9.9. Intention to use
able: 64. ITU
7
Wid Itmngly
diupe 17.9 35.7
ncvbal 14.3 50.0
w= 25.0 75.0
rtmngly zso m a
TWI IWO
Missing Syaern
Total

Figure: 68

Table: 65. ITUZ

I I
(Frqutmy I Rmnl I
Vdid
Pnrenl 1
Cvmuldw
Pant
Vdid ibonglydimg~c ( 6 20.0 20.0 20.0

Figure: 69
 I
Table: 66. ITU3

Figure: 70

Mostly employees are of the view that if they will have access to SAP they will intend to use it.
Also most of the employees have access to the parts of SAP system when they need to do their
job. Large number of employees reports that they prefer to use SAP in their job. it shows
employees have intension to use SAP system.

9.10. Conclusion
The present study was conducted on ERP implementation issues in PTCL. Our main purpose
was to find out the issues related to ERP implementation and to identify that ERP
implementation has positive or negative effect on employee's behavior. Whether they accept the
change or resist against it. From the interpretation of the above variables we can conclude that
employees are not satisfied with their top management. They have many reservations against top
management. If we talk about employees perception about usefulness of SAP system it shows
mix opinions of employees, some perceived it useN and some do not .In overall opinions
employees perceived that using SAP system includes lots of effort .At one point they are saying
that they are well aware of SAP benefits and are satisfied with their training but at the same time
we find out that they make frequent errors while using SAP system. SAP system cause
frustration to them. They need to use manual for using it. It's difficult for them to recover from
errors and according to the employees SAP is rigid and inflexible system. So their claim that
they are well informed and well trained does not seem to be true. There overall attitude towards
SAP system is negative and their trust level is low. That can be because of top management's
negative influence on SAP project .This shows that ow Top management factor has a strong
impact on employee's behavior. Their negative attitude towards SAP system shows their low
motivational level. Top management plays important role in making attitudes of their employees.
If employees will not get the proper attention, incentives and uaining they will certainly become
demoralized. Ow model is also showing that Top management has influence in all other
variables. Results fiuther shows that no matter how much employees have intension to use SAP
system, if top management is not playing its proper role for example giving proper training to
employees, do not convey them benefits of SAP system and do not show concern towards their
daily tasks then it is not possible that SAP system become successful in PTCL. Otherwise
demotivation, lack of training, lack of trust and negative attitude of employees will greatly slow
down their efficiency level which would greatly affect overall implementation process and may
cause failwe of the SAP project in PTCL.

9.11. Suggestions
Ow results show that overall employee's behavior is negative towards ERP implementation.
This involves many factors for example lack of top management support and commitment, lack
of training, lack of trust. These factors in result cause negative attitude in employees towards
ERP implementation .we suggest that in order to make ERP (SAP based) implementation
successful in organization Top management should give support to their employees, play their
proper role such as they should provide them training, not just trained them to use ERP system
but should convey them that what are the benefits of ERP system. How can be this system
enhances their efficiency level as well as their organization's efficiency level. This will increase
employees' awareness about the system and help them to build positive attitude towards it. Also
Top management should be able to manage a change which this system brings in the
organization. It will help employees to increase their trust on their management .And they will be
ready to adopt ERP system as an efficient user.
9.12. Future implications
Following are the future implications for our project:
1. Currently our sample size is small i.e. n=30, which gave us limited response. so in
order to get more reliable and sigmiicant result the sample size should be greater than
30.~0that it will be much easier for the Top management to take more affective
measures in order to make ERP implementation successful.
2. We have used frequency distribution method and pie charts to show our result, but
more affective statistical techniques can be used.
 Appendix

Questionnaire

Name:

Please tick one option

Gender: Male
Female

Age: years

Qualification: Higher education

Master degree

Bachelor degree
Intermediate

Matric
 RATING SCALE

Strongly Disagree I Disagree I Uncertain 1 Agree 1 Strongly Agee

1 I 2 3 4 5

Please tick only one choice by having the above scale in mind:

1 I Our top management supported SAP implementation ~ r o i e cwell.

t
I 2 3 4 5
2 1 Top management is highly concerned with our daily f e e d ~ a c kreport.
I 1 I 7 1 I A I

I 1 2 3 I 4 5
14 ( Using SAP system improves the quality of the work I do.
 I I I I I
37 1 As I undentond it. SAP system will hove its onricipafed effects

39 As I understand it, I believe SAP system can help employees' work

I 1 2 I 3 4 5
40 1 SAP system fulfills all needs of my organization.
 I 1 I 2 I 3 I 4 I 5
47 ( SAP is implemented on right time in my organization.
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