Werabe University

Institute of Technology
Department of Information Systems

Course Title: Enterprise System

Prepared and Compiled by: Negash K.

May, 2023

Werabe University, Ethiopia

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Contents
CHAPTER 1: INTRODUCTION TO ENTERPRISE SYSTEM ................................................................ 1
1.1 Business process and business process integration ....................................................................... 6
1.2 Business process integration (BPM) ............................................................................................. 8
1.3 Cases for implementing enterprise systems .................................................................................. 9
CHAPTER 2: BUSINESS REQUIREMENT ANALYSIS ....................................................................... 10
2.1. Business requirement analysis (BRA) ........................................................................................ 10
2.2. Selecting an ERP system............................................................................................................. 14
1.4 Challenges associated with the implementation of global enterprise systems applications........ 17
CHAPTER 3: ORGANIZATIONAL CHANGE ........................................................................................ 20
3.1. Organizational change................................................................................................................. 20
3.2. Organizational change management ........................................................................................... 20
3.3. Strategic alignment ..................................................................................................................... 22
3.4. User commitment ........................................................................................................................ 23
3.5. Communication ........................................................................................................................... 24
3.6. Training ....................................................................................................................................... 25
3.7. Job Redesign ............................................................................................................................... 26
3.8. Governance of Processes and Data ............................................................................................. 28
3.9. Chapter Three Review Questions ............................................................................................... 29
CHAPTER 4: IMPLEMENTATION OF ENTERPRISE SYSTEM .......................................................... 30
4.1. Post Implementation Issue .......................................................................................................... 30
4.2. Enterprise System Processes ....................................................................................................... 31
4.3. Order processing ......................................................................................................................... 32
4.4. Purchasing ................................................................................................................................... 35
4.5 Production Logistics ................................................................................................................... 36
4.6 Accounting .................................................................................................................................. 37
4.7. Planning and Controlling ............................................................................................................ 38
4.8. Chapter Four Review Questions ................................................................................................. 40
CHAPTER 5: HUMAN RESOURCE FUNCTIONS WITH ERP ............................................................. 41
5.1 Human Resource Functions ........................................................................................................ 41
5.2. How enterprise systems support business ................................................................................... 42
5.3. Chapter Five Review Questions .................................................................................................. 44

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 CHAPTER 1: INTRODUCTION TO ENTERPRISE SYSTEM
Introduction

An enterprise system is a packaged application that supports and automates business processes
and manages business data. They come with pre-implemented and customizable modules that
reflect best practice for common business operations. Enterprise systems are complex in nature
and often require help from the original equipment manufacturer (OME), consulting firm and/or
value added reseller (VAR) which adds customized features, training, and maintenance services.
The term enterprise system is often used synonymously with enterprise business application or
with the more restricted term enterprise resource planning (ERP) system.

Enterprise systems closely mirror the typical operations of large corporations. ERP systems are
fully integrated, enterprise-wide business applications with not only a complete set
of traditional modules such as accounting, human resources management,
sales and distribution, and manufacturing, but they also provide:

 Supply chain management

 Data warehouse, and
 Customer relationship management

There are enterprise system transactions that automate or support traditional manual tasks like
creating purchase orders, verifying invoices, and generating various reports.

Evolution of ERP

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Goals of ERP

1. Cost reduction in general:

Cost reduction is one of the most cited goals for initiating an enterprise system. Company‘s aim
for process automation and the removal of redundant processes. ERP systems can also cause
storage cost reductions, and lower administrative expenses.

2. Supervision improvement for management:

The implementation of an ERP system can lead to improvements on the senior management level
in various ways. An ERP system enables control and monitoring throughout all levels of the
organization and throughout all departments. Senior management can get ―real-time‖
information on all business aspects.

2. Improvement of customer services :

Customer service representatives have easy and complete access to customer data within one
system. Representatives can access all relevant data quickly without switching between several
legacy systems. They can coordinate with customer needs more efficiently and react or reply to
customer requests more smoothly.

4. Increasing the ability to respond / react:

The ERP system enables easy access to all of the company‘s data. Reaction times for customer
requests and to changing market conditions or unexpected incidents can be improved and
enhanced.

5. Improvement of product differentiation

A well based strategy for product differentiation can be necessary to ―survive‖ market
challenges. Since an ERP system integrates of the enterprise, companies‘ products or solutions.
All functions and departments can offer customer specific.

6. Quality improvements and reduction of quality improvements are enabled through

measurement of performance and monitoring done using the ERP system. Cycle times: the
enhanced which can be this is because the system provides all necessary information in ―real-
time.‖ Therefore, a reduction of cycle times can also be achieved.

7. Resource management improvement

Important goals of ERP system implementation are improvements in

resource management, information management, and decision support. The enterprise can
increase its productivity, flexibility, and efficiency at the business process level in the field of
resource management.

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8. Increasing employee productivity

An ERP system can reduce cycle times and avoid data exchange errors. Processes are
reengineered and can be performed much faster. Communication is and the group as a enabled.
Improved whole as both within the ―real-time‖ the company monitoring is enterprise systems

9. Increasing the satisfaction and skills of employees:

The implementation of an ERP system always requires extensive training and education of
employees. Thus, their technological skills are improved. An ERP system makes processes
quicker and can support employees in their work.

10. Supporting the company‘s growth

Since ERP systems are highly scalable, they can support the company even if its growth is
exploding. Therefore, it is vital to choose a system that fits the company very well and can easily
be adapted.

ERP environment

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Reasons for not adopting enterprise systems

 Lack of feature-function fit: between a company‘s needs and the packages available in
the marketplace.
 Company strategic flexibility - many ERP systems are not easy to change once they are
configured and installed.
 Availability of alternatives- for increasing the level of systems integration, data
warehousing, middleware, etc.

Examples of enterprise system

1. Customer relationship management (CRM)

Developed to address the need to raise a sales department‘s productivity and provide an effective
way to increase sales. A company learns more about its customers‘ needs and buying behavior
combines the above information with market information to enhance the quality of the
company‘s marketing strategy CRM system include integration with other systems and
accessibility via mobile devices, allowing employees to update and compare data and to access
information from any client site or other location. CRM supports mass e-mail communications
and automates the sales process workflow to improve employee productivity.

2. Supply chain management

A supply chain is the collection of people, tasks, equipment, data and other resources required to
produce and move products from a vendor to a customer. It refers to the management of supply
chain activities in an effective and efficient way to provide a company with a strategic
advantage. Information flows allow supply chain partners to coordinate their strategic and
operational plans as well as the day-to-day flow of goods and materials through the supply chain.
The physical flows include the manufacture, transport and age of goods or mat enterprise
systems

3. Enterprise resource planning

The enterprise resource planning system integrates software applications, such as purchasing,
finance, human resources and inventory management. Each of these applications that processes.
Modules execute consists of end-to-end multiple business ERP applications support not
only various operational and administrative tasks, such as the creation of an account
payable or a time sheet, they may also be customized to support a number of different industries

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Benefits of enterprise systems

Dimension Benefit definitions (all consequences of es use)

Operational benefits Operational benefits are usually reflected in cost reduction,
cycle time reduction, productivity improvement, quality
improvement, and improved customer service.
Managerial benefits Improved management decision-making, e.g., improved
allocation and control of organization‘s resources, monitoring
of operations, performance improvement and support for
strategic decisions.
Strategic benefits Support for strategic action such as business growth, alliance,
globalization, innovation, product differentiation, and external
linkages.
It infrastructure benefits Reduced it costs, increased capability for quick and economic
implementation applications, and enablement
organizational flexibility.
Consequences of ES use that make an organization more
Organizational benefits focused and cohesive, better at learning, and better at
executing its chosen
Strategies.

Characteristics of enterprise system

1. Integration- enterprise systems promise ―seamless integration of all the

information flowing through a company‖ it is extremely important to note that achieving this
integration depends on ―configuring‖ (setting up) the system in particular ways.

2. Best practices- enterprise systems are built to support generic business processes that may
differ quite substantially from the way any particular organization does business

3. Evolving -enterprise systems are rapidly changing. They are changing architecturally. Service
arrangements are also changing.

The following issues are also characteristics of enterprise system

 Their complexities both in terms of business data

 The way they affect the organization‘s business practices and
 The way they affect individual work tasks.

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1.1 Business process and business process integration
Business process (BP): is a collection of linked tasks which find their end in the delivery of a
service or product to a client. A business process has also been defined as and tasks that, once
completed, will organizational goal. A set of activities accomplish and a business process is a
series of steps performed by a group of stakeholders to achieve a concrete goal. Business
processes are, essentially, the building blocks of any organization. The process must involve
clearly defined inputs and a single output. These inputs are made up of all of the factors which
contribute (either directly or indirectly) to the added value of a service or product.

These factors can be categorized into management processes, operational processes and
supporting business processes.

 Management processes govern the operation of a particular organization‘s system of

operation.
 Operational processes constitute the core business.
 Supporting processes such as human resources and accounting are put in place to support
the core business processes.

A process requires objective a series of actions to achieve a certain bpm processes are continuous
but also allow for ad-hoc action. Processes can be simple or complex based on number of steps,
number of systems involved etc. They can be short or long running. Longer processes tend to
have multiple dependencies and a greater documentation requirement.

Attributes of business process

There are 4 essential attributes that constitute an ideal business process:

1. Finite – a good business process has a well-defined starting point and ending point. It also has
a finite number of steps.

2. Repeatable – a good business process can be run an indefinite number of times.

3. Creates value – it ultimately aims at translating creation of value into executable tasks and
does not have any step in the process just for the sake of it.

4. Flexibility – it has an in-built nature to be flexible to change and is not rigid.

When there is any scope for improvement that is identified, the process allows that change to be
absorbed within itself without operationally affecting its stakeholders as much.

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Steps in business process

Step 1: define your goals

 What is the purpose of the process? Why was it created?

 How will you know if it is successful?

Step 2: plan and map your process

 What are the strategies needed to achieve the goals?

 This is the broad roadmap for the process.

Step 3: set actions and assign stakeholders

 Identify the individual tasks your teams and machines need to do in order to execute the
plan.

Step 4: test the process

 Run the process on a small scale to see how it performs.

 Observe any gaps and make adjustments.

Step 5: implement the process

 Start running the process in a live environment.

 Properly communicate and train all stakeholders.

Step 6: monitor the results

 Review the process and analyze its patterns.

 Document the process history.

Step 7: repeat

 If the process is able to achieve the goals set for it, replicate it for future processes.

Advantages of business process

The need for and advantages of a important in large organizations. Business process are quite a
process forms the lifeline for any business streamline individual activities, making sure that put
to optimal use.

An advantage of BP includes:

 Identify what tasks are important to your larger business goals

 Improve efficiency
 Streamline communication between people /functions/ departments
 Set approvals to ensure accountability and an optimum use of resources

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  Keep chaos from creeping into your day-to-day operations
 Standardize a set of procedures to complete tasks that really matter to your business

1.2 Business process integration (BPM)

Business process integration (BPI) is the synchronization of a company‘s internal operations
with those of its other divisions and its trading partners by connecting disparate systems in real-
time. Bpi allows for automation of business integration of systems and services, and sharing of
data across numerous applications. Bpi allows for the automation of management, operational,
and supporting processes this businesses an edge over competitors as they less time concerned
about the challenges of and more time and energy on driving new

Steps for implementing BPM

1- Identification of business processes

The first step in implementing bpi is to identify processes. With processes identified, automated
and optimized, you need to define a way to share them with other organizations. Documentation
is the next step.

2- Process documentation

The traditional way of sharing a process is through documentation. Typically printed or pdf
documents (and even word) are created specifying all the details of the process, the person in
charge, tasks and decision making. Some bpm tools, such as heflo, do the documentation
automatically.

3 – Collaborative modeling of newly integrated processes

Everyone who has access to the process models can make changes and create new process
diagrams from the existing ones without losing the previous ones. One can even capture one
process from one organization (already modeled in the tool) ―copy and paste‖ into another and
integrate it quickly. In addition, everyone can make comments and suggestions in the processes
as others model and adjust them.

4 – Implementation

As the tool also automates the processes, implementation is very agile and can be accompanied
by all the organizations involved. A request made by one company can trigger a process in the
other that triggers the suppliers in a third company, and so on.

5- Monitoring and continuous improvement

The BPI process provides for the creation of KPIS to track processes. Thus, together, companies
and organizations can assess whether integrations are having the desired effects and provide the
necessary adjustments and improvements to the processes.

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Types of business process integration (bpi)

There are 3 different types of BPI:

1. Process trigger – event happening in a certain system triggers a process in your BPI, as
with the onboarding example.
2. Pull – the data is automatically transferred from any given system to the BPI, allowing
for participants in the process to make use of it.
3. Push – transferring the data from the BPI to a different system. So for example, if the
process in question is hiring, it could be the transfer of the successful candidate‘s data to
the HRM system.

Business process management

Automation: automation can make a business more efficient, it cannot be only used to provide a
competitive advantage. Simply automating a bad process does not make it better. Organizations
that are serious about improving their business processes will also create structures to manage
those processes. Business process management (BPI) can be thought of as an intentional effort to
plan, document, implement, and distribute an organization‘s business processes with the support
of information technology.

Streamlining: the optimization of business process with in organization. Streamlining has a

better impact on efficiency and productivity, but it cannot warranty a competitive or sustainable
advantage. It is a good strategy for process that are essential to the company business process
management will provide several key benefits to an organization, which can be used to
contribute to competitive advantage.

Business process reengineering: organizations look to manage their processes to gain a

competitive advantage. Companies should ―blow up‖ their existing processes and develop new
processes that take advantage of the new technologies and concepts. BPI is fully understanding
the goals of a process and then dramatically redesigning it from the ground up to achieve
dramatic improvements in productivity and quality.

1.3 Cases for implementing enterprise systems

A business case is a structured proposal for business change that
is justified in terms of expected costs and benefits.

A business case provides a mechanism for justifying and guiding the project and helps to answer
questions such as

 Which requirements are most relevant for the desired benefits?

 Which design decisions contribute the most value

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 CHAPTER 2: BUSINESS REQUIREMENT ANALYSIS
2.1. Business requirement analysis (BRA)
Is the process of discovering, analyzing, defining, and documenting the requirements that are
related to a specific business objective? It's the process by which you clearly and precisely define
the scope of the project, so that you can assess the timescales and resources needed to complete it
.a good business requirements analysis helps you to get what you want. Bra leads you to better
understand the business needs, and helps you break them down into detailed, specific
requirements that everyone agrees on. It's usually much quicker and cheaper to fix a
problem or misunderstanding at the analysis stage than it is when the "finished product" is
delivered.

Business requirement

A requirement in the context of business analysis is simply a statement provided by a stakeholder

about what they believe they need in order to solve a particular business problem or respond to a
specific business need. Once this requirement has been raised by the stakeholder, it is the
business analyst‘s role to further define, analyze, validate and prioritize the requirement
statement. The requirement statement should be included within the business analysis context of
requirements management. In real life, the stakeholder will typically state their business problem
or need and then provide a whole range of individual requirements throughout the requirements
management process managed by the business analyst.

Guide to business conducting your own requirements analysis

1. Identify key stakeholders

Identify the key people who will be affected by the project.it is essential that you know who has
the final say on what will be included in the project's scope, and what won't. Identify who will
use the solution, product, or service. Your project is intended to meet the end user needs, so you
must consider their inputs. Make sure that your list is complete.

2. Capture stakeholder requirements

Ask each of these key stakeholders, or groups of stakeholders, for their requirements from the
new product or service. What do they want and expect from this project? You must understand
the different perspectives and gather the different requirements to build a complete picture of
what the project should achieve.

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Methods to understand and capture these requirements

A. Using stakeholder interviews

Talk with each stakeholder or end-user individually. This allows you to understand each person's
specific views and needs.

B. Using joint interviews or focus groups

This helps you understand how information flows between different divisions or departments
when using the above two methods, it's a good idea to keep asking "why?" for each requirement.
This may help you eliminate unwanted or unnecessary requirements, so you can develop a list of
the most critical issues.

C. Using "use cases―

This scenario-based technique lets you walk through the whole system or process, step by step,
as a user. It helps you understand how the system or service would work. This is a very good
technique for gathering functional requirements, but you may need multiple "use cases" to
understand the functionality of the whole system. You can use existing use cases as a starting
point for developing your own use case.

D. Building prototypes

Build a mock-up or model of the system or product to give users an idea of what the final
product will look like. Using this, users can address feasibility issues, and they can help identify
any inconsistencies and problems. You can use one or more of the above four techniques to
gather all of the requirements. For example, when you have a complete list of requirements after
your interviews, you can then build a prototype of the system or product.

3. Categorize requirement : to make analysis easier, consider grouping the requirements into
these categories

1. Functional requirements – these define how a product/service/solution should function from

the end-user's perspective. They describe the features and functions with which the end-user will
interact directly.

2. Operational requirements – these define operations that must be carried out in the background
to keep the product or process functioning over a period of time.

Fundamental steps of BRA: a business requirements analysis is an overall comprehensive

declaration of what the project is supposed to achieve. This is a step-by-step procedure to
discover, analyze, and document the essential requirements connected to a business project.
There should be complete agreement about what the clients/end users/stakeholders want and
what you are trying to achieve through the project.

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The following are the steps for an optimal business requirement analysis for any project to be
successful:-

1. Know your stake holders

Learn all about the sponsors/clients/stakeholders/end users of the project. It is essential to

identify the sponsors who may have authority to change any decision. Their views and needs
will have a strong influence on the process. Also you should know about the intended end-users.
Their input is essential. Stakeholders and end-users may be from within the company or
outsiders.

2. Know stakeholders‘ requirements

You should compile an exhaustive list of the requirements of each stakeholder and end-user.
Give an exact picture of the limits and extent of the project to keep the requirements within the
range and pertaining to the project alone. You can hold individual interviews as well as group
discussions (requirements workshops) to discuss the requirements. It is essential that the
exact requirements of the stakeholders are established. Build a prototype of the project to give an
exact idea of the final results of the product or project to stakeholders.

3. Classify the requirements

With so many requirements on the agenda, it will make better sense to group the requirements
under various categories. There can be 3-4 types, such as:

 What requirements identify with functions and components the end-users are expecting?
 What requirements identify with the operational activities that need to be done?
 What requirements identify with the technical details needed for smooth functioning?
 What may be needed for the successful completion of the project?

4. Analyze the requirements

You should determine whether the compiled list of requirements are clear in their purpose and
are pertaining to the project or the process. List all the requirements with regard to priority and
relevancy to the project. Also try to predict the impact of any changes proposed. Solve the
ambiguous and conflicting details that have come up. The final list of requirements must be
clear, unambiguous, concise, feasible, and relevant to the project.

5. Document the requirements

Once the requirements are completely known and the stakeholders/end-users are clear about

 What they want from the project

 What they are going to achieve, and
 They have seen the prototype and are satisfied

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It is time to create a document that will combine all the details and get it signed by all
stakeholders/end-users and the project manager. This will be the rule book for the project. All
stakeholders, end-users, project personnel, and developers should be given a copy to apprise
them of the project goals.

Types of requirements in business analysis

the business requirement is a high level statement describing what is required from the business‘s
perspective. In some contexts or projects there may be overlap between the business
requirements statements and that of individual scope statements.

1. Stakeholder requirements

Stakeholder requirement example 1: ―we need a family house with four bedrooms so that each
child has their own bedroom ―stakeholder requirement example 2: ―we need the house to have
two separate bathrooms to ensure the parents have their own bathroom separate from the children
―stakeholder requirement example 3: ―we need the house to be protected against future bush fires
so that we don‘t have to fear losing our house again‖

These examples are requirements, which are describing ―what‖ the family needs the new house
to have. It is important to understand here that this type of requirement, the stakeholder
requirement is not stating how they want these requirements to be implemented; they are simply
stating what is required.

2. Solution requirements

Solution requirement example 1: ―i want my bedroom to be painted pink so that everyone will
know it is my room‖ – stakeholder who raised this requirement is the little girl. Solution
requirement example 2: ―i want my bedroom floor space to be at least 30 square meters so that i
can practice my skateboard tricks in the bedroom‖ – stakeholder who raised this requirement is
the teenage boy in the family. Solution requirement example 3: ―every bedroom must have an
air-conditioning unit implemented so that the family can stay cool during the summer‖ –
stakeholder who raised this requirement is the father in consultation with the architect. Solution
requirement example 4: ―the house must have fire resistant insulation in all the walls of the house
to prevent significant fire damage.‖ – stakeholder who raised this requirement is the builder who
is adhering to a regulatory requirement. The solution requirements describe how the
stakeholder wants to implement their stakeholder requirements.

3. Transition requirements

A transition requirement describes a requirement that must be in place for a certain phase or
period of time. In this example, the requirement to have the floor protect during the moving of
furniture into the house is an example of a transition requirement. In the context of a system, a
transition requirement could be that additional support staff must be available during the first
month after the system have been implemented to assist with additional support queries that may

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be received. Example: - the floors in the house must be covered with sheets to protect the carpets
when the moving company moves the furniture into the house.

2.2. Selecting an ERP system

ERP software is a suite of integrated applications that automates and streamlines key business
processes. It serves as a centralized data repository and provides workflow automation and real-
time insights. ERP software also comes with capabilities for ensuring compliance with industry
and regulatory standards, improving customer service and analyzing the financial health of your
organization. A good enterprise resource planning (ERP) system should have an impact on every
single part of your business. These highly sought after enterprise applications help manage
activities including planning, research and development, purchasing, supply chain management,
sales, and marketing.

There are multiple decision points and numerous factors.

 Where to begin?
 What are the primary selections criteria that you and your team need to know before you
start?

Here are six key selection criteria to guide you as you try to determine the best erp system for
your business:

1. Company goals and objectives

The primary reason to change to a new ERP system is to support your company‘s goals.
Every company has different objectives some examples might be:
 Growth goals: can i double my business with the resources that i have?
 Efficiency goals: can task and process redundancy? So that each element needs to
occur just once, and multiple tasks can be folded together?
 Speed to market goals: can i bring my product to market faster, satisfying all
regulatory requirements, and thereby gain market share faster?
2. Functional software requirement
Sure, all companies share general operations: accounting and marketing, for example. But
in terms of function, your specific industry will dictate the details. The needs of your
company will govern the features that are most important to you. Be mindful of all the
functions that occur in an average business day, and aim to review all the areas on the list
even if your current processes are currently being done ―outside of the system‖ on
spreadsheets or whiteboards. This is the one time when it‘s good to sweat the small stuff.
3. Underlying technology and future scalability
Software functionality dominated when choosing a new system. But technology moves
too fast. The cost of changing an ERP system includes much more than the price of the
software, it includes business disruption, training, and lost time.
Choosing a system that is based on newer technology will give you more longevity in the
long run and will make a better investment.
4. Budget and resources

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 There is a big variation in the price of ERP software. The highest priced system may be
five times the cost of the least expensive solution. There is a reason for this. Processes is
something that businesses go through every day in order to accomplish their mission. The
better their processes, the more effective the business.
5. A team you trust
 Who will implement this system?
 Who will manage this project?
 Who will support it when needs and/or processes change?
The choice of people, both internal and external, is probably the most critical to the
success of selecting an ERP system. In a study done by deloitte & touche, businesses
looking for a new system were asked to name the top ten criteria they used for their
selection. Those who were buying their first system were tallied separately from
businesses buying their second. Responses were ranked in order of importance. One
would think second-time buyers would be ―smarter‖, if for no other reason than they have
the experience first-time buyers lack. It stands to reason their rankings would be a better
guide to what really matters when researching and selecting an erp system. Therefore, a
quality consultant is a critical factor – after all, anyone can sell the product, but can just
anyone support your needs? Partner with a consulting company that has long term
customers
6. Define the process
This is the part everyone dreads. Meetings, demos and research tend to generate more
questions than answers. A team approach may help the process, but it could also slow
things down. It‘s best to decide who‘s in on the decision making team before you get
started. Consider the needs of the all the stakeholders and don‘t let anyone group
overshadow the needs of the rest of the organization. Accounting / finance, distribution,
manufacturing, it, human resources, procurement, sales, marketing and executive
management all have different views as to what they think is critical. Listen to the
various groups but don‘t get too bogged down with any one individual‘s needs. These can
usually be accommodated.

Key considerations for enterprise system selection

More importantly, decision makers need to follow the right approach in the selection process. An
awareness of these key considerations can help you make the right system choices and significantly
increase the chances of a successful implementation.

1. Identify your business process needs

The challenge for most organizations is determining whether to implement a single, integrated system
with all the needed functional features built in, or have separate applications for each of these business
process areas. In other words, should you implement a single integrated system or implement separate,
best-of-breed systems for accounting, human resources (HR), payroll, customer relationship management
(CRM), and financial planning?

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The advantage of the best-of-breed approach is each system will focus on the set of functional features
it‘s specifically built to handle with more depth than an integrated system. On the flip side, you have to
deal with integration issues and challenges related to multiple systems, databases, and vendors. The
industry trend is moving away from disparate systems towards a single, integrated deployment. It‘s driven
by cloud-based systems—known as enterprise resource planning (ERP) systems—which offer more depth
around accounting, CRM, HR, and basic budgeting and analytics features on a unified platform.

2. Determine your ERP tier

To select the right integrated platform, you need to understand erp tiers and determine which tier is best
suited for your organization.

Tier 1 systems

Tier 1 systems have deeper capabilities. They focus on large enterprise and upper mid-market entities
with revenue in excess of $500 million.

Tier 2 systems

Tier 2 systems have modest capabilities and focus on mid-size organizations with revenue ranging from
$20 million to $250 million. On average, they cost between $50,000 and $500,000. Variations in cost
depend on an organization‘s needs. Tier 2 systems are usually implemented within a three to six-month
timeline.

Tier 3 systems

Tier 3 systems have more restricted capabilities.

They‘re the least expensive; total ownership cost usually ranges from $20,000 to $50,000. The
implementation timeline ranges from six weeks to three months. Will be determined more by the
complexity of your process requirements and strategic outlook than your revenue bracket.

3. Consider cloud deployment

Another key consideration for organizations is deployment method—how an ERP system is situated,
accessed, and maintained. There are three ways an ERP system could be deployed.

On premise model

In the traditional on premise model, ERP systems, servers, and infrastructure are situated and maintained
in-house, requiring dedicated it personnel to maintain the system and perform periodic upgrades.

Hosted deployment

Responsible for maintaining their application hosted on the service provider‘s servers. They must perform
periodic upgrades of their system and maintain their application, as they‘re renting servers and disaster
recovery services.

Cloud-based deployment

All customers can share the same application instance and access it via web browser anywhere.

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 The upgrade process and all database maintenance are also completed by the vendor.
4. Determine whether an industry-specific solution is right for you

Whether to choose a system that‘s adaptable and configurable for a broad swath of industries,

Horizontal systems: are adaptable, configurable, and comprehensive. They aren‘t specific to a particular
industry, so they have broad appeal.

Vertical systems: are pre-built custom solutions specific to certain industries such as: food and beverage,
life sciences, construction, and professional services.

5. Adopt the right system selection approach

Selection approach should follow a structured process designed to provide all the information. You need
to make a rational, factual, risk-aware decision based on your process needs. Use a stage strategic plan to
implement new technology.

1. Request for proposal (RFP) once your strategic plan is in place, develop a vendor shortlist and
create a RFP document.
2. Vendor demonstrations organize scripted vendor demonstrations and develop a scorecard for
measuring performance against your functional requirements and also score nonfunctional criteria
3. Comparative analysis based on the facts gathered from the RFP responses, the demonstration
sessions, the total cost of ownership estimates, and your own research and reference check on the
vendors.

1.4 Challenges associated with the implementation of global enterprise systems

applications
ERP systems have been widely adopted, momoh et, stated that post-implementation challenges are still a
rising concern. Furthermore, the ERP implementation process is a lengthy process and requires a
continuous change in the organization. According to huang et al, ERP implementation may result in
―complex technical organizational, cultural and political issues that make the integration process a very
challenging task‖. Additionally, ERP systems have to deal with today‘s unpredictable business
environment, expanding markets, and growing costumers‘ expectations.

While ERP systems providers strive to integrate all processes of a firm, their packages are usually missing
some essential functionality. The transition process from a traditional system to the ERP may require re-
engineering of some of the business processes at the organizational level. The long-term implementation
process of ERP systems can be a source of employees‘ fatigue and dissatisfaction. Additionally, most
organizations mistakenly expected to get the benefits too early before completing the whole
implementation process.

1. Project management:

ERP implementations entail multiple phases: discovery and planning, design, development, data
migration, testing, deployment, support and post-launch updates. Each phase brings critical tasks, and all
elements need to stay on track, which requires meticulous project management. Additionally, successful
ERP implementations require participation from all the groups that will be involved in developing and
using the system. That can be incredibly challenging, because each department is juggling its ERP project

17
responsibilities with multiple other priorities.

2. Project planning:

Organizations often underestimate the time and budget necessary for a successful implementation. One of
the most common causes of budget overruns is scope creep—when a business adds capabilities or
features to the system that weren‘t part of the original plan—and another is underestimating staffing
needs, according to statista. Developing a clear and realistic plan from the start can help to avoid those
issues. A realistic project plan that acknowledges possible speed bumps and minor cost overruns and
addresses them in advance will simplify that decision-making process and keep the project on track.

3. Data integration:

One of the key advantages of ERP is that it provides a single, accurate source of data for the whole
organization. A key step in ERP implementation is data migration, which typically involves moving data
from multiple older systems into the ERP database. But first, you have to find all of your data. This may
be much more challenging than you expect. The information may be spread far and wide across the
organization, buried in accounting systems, department-specific applications, spreadsheets and perhaps on
paper.

4. Data quality:

Once the organization has located all data sources, it can start thinking about migrating it to the ERP
system. But that may involve a serious data hygiene exercise. Because multiple departments interact with
the same customers, products and orders, organizations often have duplicate versions of the same
information in their systems. The information may be stored in different formats; there may be
inconsistencies, like in addresses or name spellings; some information may be inaccurate; and it may
include obsolete information such as customers or suppliers that have since gone out of business.

5. Change management:

An erp implementation involves more than just switching to a new software system. It typically means
overhauling business processes to take advantage of the efficiency and productivity improvements
possible with the new solution. This requires a shift in mindset and a change in everyday work processes
for many employees, which presents typical change management challenges. Resistance to change can be
a formidable roadblock; getting buy-in from leadership and stakeholders across departments very early in
the implementation process is crucial to a successful implementation communicate the features and
advantages of the new ERP to all stakeholders throughout the implementation process, especially end
users on the front lines. And make sure all users receive comprehensive training and support to help
smooth their paths to adoption of the system.

6. Cost overruns:

ERP projects are infamous for sailing past budgets after the implementation kicks off. Many
organizations underestimate the amount of work required to move to a new business system, and that
results in spending more money than expected. These cost overruns often show up in a few different
areas. When internal resources run low, businesses frequently use a software vendor‘s services team or
third-party consultants more than planned. This is especially true if the solution requires significant

18
customization to meet your company‘s needs to avoid blowing up the budget, companies should consider
these and other overlooked expenses, and budget more than they think for them. Coming in under budget
is always preferable to the alternative.

7. Continuous improvement:

An ERP implementation is not a one-off effort that ends when the new system goes live. The solution
must continue to evolve to support new business demands and technology. The project team needs to
continue to manage the project after deployment, fixing issues and supporting new requirements as they
come up. Once implemented, business often use ERP systems for more than a decade, so it‘s imperative
to perform a periodic review to assess whether the system is still meeting the organization‘s needs.
Older on-premises systems can be harder to upgrade than leading cloud-based systems, which
automatically make new features and innovations available to users. An outdated ERP system can begin
to hinder the business, so it‘s worth periodically assessing whether it‘s better to stay with the current
system or begin the extensive project of finding a replacement.

ERP implementation risk:

 Failure to redesign business processes to fit the software: ...

 Lack of senior management support. ...
 Insufficient training and reskilling of end-users. ...
 Lack of ability to recruit and retain qualified systems, developers

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 CHAPTER 3: ORGANIZATIONAL CHANGE
An organization is a group of people who work together, like a neighborhood association, a
charity, a union, or a corporation. Group or business, or act of forming or establishing something.
It can also refer to a structure for classifying things or to a system of arrangement or order.

3.1. Organizational change

Organizational change is the movement of an organization from one state of affairs to another. A
change in the environment often requires change within the organization operating within that
environment. Organizational change can take many forms. It may involve a change in a
company‘s structure, strategy, policies, procedures, technology, or culture. The change may be
planned years in advance or may be forced on an organization because of a shift in the
environment. Organizational change can be radical and swiftly alter the way an organization
operates, or it may be incremental and slow. In any case, regardless of the type, change involves
letting go of the old ways in which work is done and adjusting to new ways. Therefore,
fundamentally, it is a process that involves effective people management.

3.2. Organizational change management

Organizational change refers to the actions in which a company or business alters a major
component of its organization, such as its culture, the underlying technologies or infrastructure it
uses to operate, or its internal processes. Organizational change management is the method of
leveraging change to bring about a successful resolution, and it typically includes three major
phases:

 Preparation
 Implementation, and
 Follow-through

Causes organizational change

Many factors make organizational change necessary. Some of the most common faced by
managers include: new leadership at the helm of the company or within its departments shifts in
the organizational team structure, the implementation of new technology, the adoption of new
business models.

Types of organizational change

1. Adaptive changes

Adaptive changes are small, incremental changes organizations adopt to address needs that
evolve over time. Typically, these changes are minor modifications and adjustments that
managers fine-tune and implement to execute upon business strategies. Throughout the process,
leadership may add, subtract, or refine processes. One example of an adaptive change is an
organization that upgrades their computer operating systems from windows 8 to windows 10.

2. Transformational changes
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Transformational changes have a larger scale and scope than adaptive changes. They can often
involve a simultaneous shift in mission and strategy, company or team structure, people and
organizational performance, or business processes. Because of their scale, these changes often
take a substantial amount of time and energy to enact. Though it's not always the case,
transformational changes are often pursued in response to external forces, such as the emergence
of a disruptive new competitor or issues impacting a company‘s supply chain.an example of a
transformational change are the adoption of customer relationship management software (CRM),
which all departments are expected to learn and employ.

Why is organizational change management important?

Organizational change is necessary for companies to succeed and grow. Change management
drives the successful adoption and usage of change within the business. It allows employees to
understand and commit to the shift and work effectively during it. Without effective
organizational change management, company transitions can be rocky and expensive in terms of
both time and resources. They can also result in lower employee morale and competent skill
development. Ultimately, a lack of effective change management can lead the organization to
fail.

Key steps to effective organizational change management

1. Clearly define the change and align it to business goals

It might seem obvious but many organizations miss this first vital step. It‘s one thing to articulate
the change required and entirely another to conduct a critical review against organizational
objectives and performance goals to ensure the change will carry your business in the right
direction strategically, financially, and ethically. This step can also assist you to determine the
value of the change, which will quantify the effort and inputs you should invest.

2. Determine impacts and those affected.

Once you know exactly what you wish to achieve and why, you should then determine the
impacts of the change at various organizational levels. Review the effect on each business unit
and how it cascades through the organizational structure to the individual. This information will
start to form the blueprint for where training and support is needed the most to mitigate the
impacts.

3. Develop a communication strategy.

Although all employees should be taken on the change journey, the first two steps will have
highlighted those employees you absolutely must communicate the change to determine the most
effective means of communication for the group or individual that will bring them on board.the
communication strategy should include a timeline for how the change will be incrementally
communicated, key messages, and the communication channels and mediums you plan to use.

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4. Provide effective training.

With the change message out in the open, it‘s important that your people know they will receive
training, structured or informal, to teach the skills and knowledge required to operate efficiently
as the change is rolled out. Training could include a suite of micro-learning online modules, or a
blended learning approach incorporating face-to-face training sessions or on-the-job coaching
and mentoring.

5. Implement a support structure.

Providing a support structure is essential to assist employees to emotionally and practically

adjust to the change and to build proficiency of behaviors and technical skills needed to achieve
desired business results. Some change can result in redundancies or restructures, so you could
consider providing support such as counseling services to help people navigate the situation.to
help employees adjust to changes to how a role is performed, a mentorship or an open-door
policy with management to ask questions as they arise could be set up.

6. Measure the change process.

Throughout the change management process, a structure should be put in place to measure the
business impact of the changes and ensure that continued reinforcement opportunities exist to
build proficiencies. You should also evaluate your change management plan to determine its
effectiveness and document any lessons learned.

3.3. Strategic alignment

The term ―strategic alignment‖ consists of the words ―alignment‖ and ―strategy‖. Strategy
represents ―objectives‖, ―plan‖ or ―planning‖. The strategy consists of information
technology/systems strategy which is the main choice emphasizing the implementations and uses
of technology-based information systems in a company vantage will be attained, leading the
banking sector to survive and thrive despite fierce competition. Alignment is coordination
achieved when the company information technology/systems strategy is derived from the
organization strategy comprising:

 Content linkage: referring to the consistency of business plan and information

technology/systems plan,
 Timing linkage: referring to whether the information technology/systems plan is
developed after, along with, or before the business plan is made,
 Personnel linkage: referring to different participants‘ involvement degree in the
planning of business and information technology/systems area.

Benefits of using strategic alignment

1. Time saving

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2. Team motivation

3. Helps with market maneuverability

3.4. User commitment

Commitment is dedication to a particular organization, cause, or belief, and a willingness to get
involved. People who are committed to an organization or effort truly believe that it is important,
and they show up, follow through, and stick with it. The more people who are committed to your
organization, the greater the momentum you can generate to get the job done.

Why do you need to mobilize and sustain commitment?

Several reasons it is important:

The more committed people there are, the more effective they are in influencing others. People
who are committed are the ones who don't take discouragement seriously -- they don't give up.
People cooperate at a higher level when they share commitment. If people are committed to an
effort for a period of time, they will learn what they need to know to be more effective.

Commitment grows when people:

 Work together
 Feel successful at what they do
 Make decisions together
 Work through conflicts
 Support one another's leadership
 Have fun and play together
 Hold each other to high principles
 Appreciate and respect one another
 Challenge one another to take the next step
 Experience a victory together
 Learn from mistakes and setbacks
 See their leaders model commitment

How can you mobilize and sustain commitment?

 Work on an issue that is important to them

 Benefit the community
 Meet and spend time with like-minded people
 Expand their skills
 Be a part of a team
 Learn how to lead
 Rise to a challenge
 Meet high standards
 Accomplish something significant

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3.5. Communication
The root of the word ―communication‖ in latin is communicare, which means to share, or to
make common (weekley, 1967). Communication is defined as the process of understanding and
sharing meaning (pearson & nelson, 2000).is the relationship that involves interaction between
participants. To understand is to perceive, to interpret, and to relate our perception and
interpretation to what we already know.

Communicatingchange
given that organizational change is often difficult to implement, it‘s important to consider
the management skills required to cultivate success. Effective communication, in particular,
plays a vital role in making organizational change possible. There are two questions you need to
address when communicating change:

 Do our employees have the motivation to change?

 Are our employees equipped with the ability to change?

Both of these pieces are incredibly important. One without the other can jeopardize attempts at
organizational change. When communicating change, you should focus on increasing motivation
and the company‘s ability to adapt.

Steps in communicating changes

1. Share a vision

One of the best things you can do when communicating change is share a vision of how the
organization can benefit from the transition. Individuals need to know the change is both good
for them and the company overall. A way to craft that vision is by answering these questions:

 How will the organization operate once the change is made?

 What will employees experience as a result of making the necessary transitions?
 Will there be tangible results? What will those results look like?
 Will there be a sense of accomplishment? What will that feel like?
 What will the rewards be, both for the individuals and your organization as a whole?

2. Tell a story

The vision—where you want to be as an organization—is part of a larger story that involves you
and your business. Telling a story enables everyone to envision where the company needs to be,
but also where it currently is and how to transition. If you consider covid-19 as an example, you
might position your organizational change story much like a heroic tale. Social distancing is an
immediate threat to your business, which you must rise to meet as an organization. It won‘t be
easy, but you have a plan which includes a, b, and c. Communicating change in this manner can
allay some of the fear and uncertainty your employees may be feeling, while simultaneously
rallying them around common goals.

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3. Make those in your organization the heroes

Does your change communication strategy focus on telling the members of your organization

 What to do and what they need to change?

 Does it inspire and enable them to be change agents as well?

4. Chart the path

Equip those in your organization to become leaders in your change communication. Once you
reach a shared vision, one that your employees believe is good for the company. It‘s your role to
show the path that will get them there.

3.6. Training
When your intervention is training, it should have a good learning design. You should have a
learning experience that hooks them in emotionally, provides meaningful challenges and
appropriate feedback, with aligned (and minimal) content. And, of course, sufficient practice.
Then you need the full suite of support. Reactivating the learning if it‘s not used often, training
the managers to provide coaching and support, and ensuring appropriate stretch assignments.
Evaluate the progress and deciding whether it‘s working or needs tuning. Ultimately, you want to
have data documenting the success of the initiative. You want to be able to demonstrate that
you‘ve taken an approach, made it work, and the benefits are amassing in the organization.

Training has specific goals of improving one's

 Capability,
 Capacity,
 Productivity and
 Performance

Categories of training methods

On-the-job oriented training methods: trainee learns by observing and handling the job, this
method is also termed as ‗observing, and copying‘ or ‗learning by doing‘ or supervisor gives
instructions to an employee how to perform his job.

Simulation methods: the trainees are required to enact defined roles on the basis of oral or
written description of a particular situation.

Knowledge-based method: in this method, the trainer provides knowledge to the trainee‘s
usually from prepared notes.

 Lecture
 Conferences/seminars
 Programmed instructions

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Experiential methods: is to help an individual understand one and others. This is done through
attitudinal change. Helps an individual understand the dynamics of human relationships in a
work situation, including at times his managerial style.

There are three main types of training carried out in the workplace.

 Induction: is offered to new employees when they join an organization and usually includes:
• Health and safety information
• Specific training on any duties/skills required to do the job
• Company policies such as holiday entitlement and absence procedures
• Introduction to colleagues
 On-the-job: is training that is undertaken in your place of work. Businesses can carry out several
different types of on-the-job training:
• Coaching: the experienced member of staff or ‗coach‘ will support the employee
through the learning process by passing on their knowledge and skills.
• Role play: role play involves acting out a scenario to see how an employee would
perform under certain conditions. This will allow the employee to practice
appropriate ways to deal with situations that may occur in the workplace.
• Job rotation: members of staff can be rotated or moved through different jobs within
the organization so they acquire a range of skills from each department or job role.
• Shadowing: is when an employee observes another employee working to gain a
better understanding of how they do their job.
• Demonstration: is when an employee watches a task or a particular process being
carried out and then attempts the task/process themselves.

 Off-the-job: is training that is undertaken outside the place of work. This training can take
place at many locations such as colleges or training centers.
• Colleges are formal places of learning where employees can take a specific course.
This may be through: day release, evening ,classes distance learning
• Training centers is a location specifically designed for training. Staff is sent to
training centers to learn new skills.

3.7. Job Redesign

Restructuring the elements including tasks, duties and responsibilities of a specific job in order to
make it more encouraging and inspiring for the employees or workers is known as job
redesigning. During times of change, job redesign ensures that organizational needs are filled by
proficient employees. Job redesign can involve something as simple as adding a single job
function or it can be as complex as completely overhauling the position.

Job redesign can also involve the addition of new tasks to provide employees with variety and
challenges. This can contribute to increased employee satisfaction in workplace
experience. The process can also be purposed to holistically balance the tasks and abilities of a
group of employees.

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Advantages of job redesign

 Creates the best match between an employee‘s abilities/experience and a position

 Establishes lean organizational efficiency
 Increases employee productivity and workplace satisfaction
 Increases employee retention

Job redesign process

1. Revising the job content:

Job redesigning process involves recollecting and revising job-related information to determine
the inconsistency between person and the job.

2. Analyzing job-related information:

Once the job analyst is through with recollecting and revising the job content, analyzing the
discrepancies is the next step. It is done to determine the hindrances in performing job-related
tasks and duties and investigate why an employee is not able to deliver the expected output.

3. Altering the job elements:

The next step is to amend the job elements. It may include cut back on extra responsibilities or
addition of more functions and a higher degree of accountability. The basic aim of altering the
job content is to design a job in such a manner that encourages employees to work harder and
perform better.

4. Reformation of job description and specification:

After altering the job elements, a job analyst needs to reform the job description and
specification in order to make sure that the worker placed at a particular place is able to deliver
what is expected of him.

5. Reshuffling the job-related tasks and duties:

Next is to reallocation of new or altered tasks and functions to employees. It may be done by
rotating, enriching, enlarging and engineering the job. The idea is to motivate the performers
while increasing their satisfaction level.

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 1.job redesign process

3.8. Governance of Processes and Data

Recognizing data governance as a priority, more organizations are hiring chief data officers and
forming data governance councils to define data polices to promote data quality and usability.
But implementing data governance can be complex. Programs that focus only on organizational
structure and operating models or, conversely, attempt to survey data structure and semantics
from the bottom up may need additional support to develop the socialization, championship, and
resources required to ensure sustainability. Today‘s organizational data environments are
complex. Organizational teams must manage numerous systems and platforms for transaction
processing, operational processing, business intelligence, reporting, and analytics. Some
organizations cope with this growing complexity by implementing practices to organize,
manage, govern, and facilitate their use of data assets across business function and technological
boundaries.

A data governance program is meant to establish an ongoing practice to coordinate the definition
of policies and standards and also enforce their compliance.

The objectives of instituting a data governance program are :

1. To define and agree to policies, standards, and rules that governs all aspects of the data
lifecycle;

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2. To develop the procedures for operationalizing compliance with policies and standards and put
those procedures into production; and

3. To continuously monitor compliance and take action when policies are not observed.

What is data governance and why does it matter?

Data governance (dg) is the process of managing the

 Availability,
 Usability,
 Integrity and
 Security of the data in enterprise systems, based on internal data standards and policies
that also control data usage.

Effective data governance ensures that data is consistent and trustworthy and doesn't get
misused. It's increasingly critical as organizations face new data privacy regulations and rely
more and more on data analytics to help optimize operations and drive business decision-making.

3.9. Chapter Three Review Questions

1. Recognize how organizational process often spans different functional area?
2. Describe the role of Enterprise system in carrying out processes in an organization?
3. What is process and data governance, why it‘s a big issue in ERP software development
and why does it matter?
4. Clearly define communications technology's which organization uses to communicate
with others?

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 CHAPTER 4: IMPLEMENTATION OF ENTERPRISE
SYSTEM
4.1. Post Implementation Issue
To assess the readiness of an ERP process, all planned tasks and activities must be completed so
that project management runs smoothly without disturbing the Go-Live date. Go-Live is the
most important thing to assess the success of projects or business processes where companies
have used ERP software regularly and become the basis for employee work steps in doing their
work. Several processes must be considered in an ERP implementation project, such as worker
preparation, post-production support processes, continuous monitoring, and training during the
readiness and stabilization process. Post-implementation is very important in determining the
success of the system in the long term. Support in post-implementation itself is divided into
several parts and processes:

1. Readiness check review in this process there is a detailed report and executive summary
for senior management.
2. ERP Training is provided to all workers on systems and data usage through real-world
examples.
3. Transfer of knowledge and skills this plan or phase is intended to ensure that all materials
and knowledge from the training are delivered properly and can be implemented into the
project quickly, effectively, and efficiently.
4. Go-Live Support, this support process is carried out when users need help using the
system or there are errors and problems with the new system. IT staff will monitor its
processes and infrastructure and ensure that the required response times and backups are
appropriate
5. Data Validation, this process must be carried out periodically to ensure the system used is
by the plan and the data entry process has been followed correctly.
6. Data Correction, the ability to identify bad data and correct it will be part of the
stabilization process. An automatic bulk update process should be available and used to
correct data.
7. New features, this process needs to be planned and managed as updates are released. The
best timing for implementing the upgrade needs to be discussed with the user.
8. Additions and improvements, errors and bugs are often found and reported to vendors for
improvements or solutions. Vendors also have teams to reproduce errors and resolve
issues.
9. Evaluation and review, conducting an evaluation will ensure that the system settings are
following user expectations and there are no obstacles to completing the work. Provides a
feedback mechanism to users and provides a way to catch problems early before they
cause significant problems.
10. Maintenance plan, ERP system will require proper scheduled and implemented
maintenance. Along with system maintenance, functionality will also be developed
internally to ensure proper maintenance and update plans.

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 4.2. Enterprise System Processes
Many ERP software applications are important to companies because they help them implement
resource planning by integrating all of the processes needed to run their companies with a single
system. An ERP software system can also integrate planning, purchasing inventory, sales,
marketing, finance, human resources, and more. ERP software can integrate all of the processes
needed to run a company. ERP solutions have evolved over the years, and many are now
typically web-based applications that users can access remotely. An ERP system can be
ineffective if a company doesn't implement it carefully.

Enterprise resource planning uses a centralized database for various business processes to reduce
manual labor and to simplify existing business workflows. An ERP system typically contains
dashboards where users can look at real-time data collected from all across the business to
measure productivity and profitability. For example, an ERP supply chain solution might receive
a customer order and then automatically send that information to the distribution center that is
most efficiently positioned to complete the order in a timely manner. Depending on the solution
that you select, your ERP may be able to look at inventory levels, shipment times and other
factors to decide which distribution center would be most productive and cost-effective in
completing an order.

1. Customer Relationship Management

Customer relationship management systems were developed to address the need to raise a sales
department‘s productivity and provide an effective way to increase sales. With CRM functions,
such as sales opportunity management, a company learns more about its customers‘ needs and
buying behavior and combines this information with market information to enhance the quality
of the company‘s marketing plans and sales forecasts. Other attributes of the CRM system
include integration with other systems and accessibility via mobile devices, allowing employees
to update and compare data and to access information from any client site or other location.
Equally importantly, CRM supports mass e-mail communications and automates the sales
process workflow to improve employee productivity.

2. Supply Chain Management

A supply chain is the collection of people, tasks, equipment, data and other resources required to
produce and move products from a vendor to a customer. Supply chain management refers to the
management of supply chain activities in an effective and efficient way to provide a company
with a strategic advantage. These activities may include product development, material sourcing,
production and logistics as well as the information systems that coordinate these activities.
Information flows allow supply chain partners to coordinate their strategic and operational plans
as well as the day-to-day flow of goods and materials through the supply chain. The physical
flows include the manufacture, transport and storage of goods or materials.

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 3. Enterprise Resource Planning

The enterprise resource planning system integrates software applications, such as purchasing,
finance, human resources and inventory management. Within an ERP system, the integrated
software modules, such as sales, quality management and accounts receivable, communicate and
share data. Each of these modules consists of multiple applications that execute end-to-end
business processes. For example, the sales module includes the applications necessary to create
and manage sales contracts; sales orders, sales invoices and sales order pricing. ERP applications
support not only various operational and administrative tasks, such as the creation of an account
payable or a time sheet, they may also be customized to support a number of different industries,
including oil and gas, retail and banking.

4.3. Order processing

A critical element of order fulfillment, order processing is the workflow that ensures customer orders are
properly prepared and delivered to the right place. Depending on the scale of a business‘s operations,
order processing can happen in a distribution center or warehouse where pickers, sorters An order
processing system captures order data from customer service employees or from customers directly,
stores the data in a central database and sends order information to the accounting and shipping
departments, if applicable.

Order processing systems provide tracking data on orders and inventory for every step of the way.
Customer satisfaction is a key to long-term success in business, and fulfilling customer orders reliably
and accurately is a key to customer satisfaction. Order processing systems help ensure that all of your
customers' orders are filled on time, since automated systems can reduce errors in order processing. This
can enhance the customer experience and maximize your company's profitability. It can also improve
your cost efficiency on stock and packers work in sync toward order fulfillment, or it can be done by a
single person or small group.

Traditional vs. Modern Order Processing

 Traditional order processing: systems are fully manual, utilizing hand-written notes with
manual filing systems and reminders. In a one-person shoe repair company, for example, the
proprietor may write orders by hand, in person, on an order log sheet. These can easily lead to a
lot of mistakes and employee burnout.
 Modern order processing systems: are largely technological in nature. A designer hat boutique
with outlets in multiple countries, for example, is likely to accept orders online, where they are
captured by a specialized order processing software package and sent automatically to a third-
party manufacturer in another country. The manufacturer may then attach the order sheet to the
product when shipping it to the hat shop, or it may ship the hat directly to the customer using
shipping information from the system

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 System Advantages

 Having a solid order processing system in place creates a win-win situation for
businesses and their customers.
 Customers experience more reliable deliveries and accurate order fulfillment.
 Businesses can maximize their profitability by not misplacing or misreading orders,
not to mention the long-term revenue boost that comes from consistently satisfying
customers.

System Disadvantages

 Highly technological order processing systems can be costly to implement and maintain,
possibly requiring additional information technology personnel to ensure that the system
functions smoothly at all times.
 Technological solutions are generally hands-off in nature, since a large number of processes
occur in the background of software programs, requiring no input from employees.
 Because of this, however, it can be much more difficult to track down problems in
technology-driven systems than with simpler, manual systems where an employee can
personally recall each step in the process.

Steps in Order Processing Workflow

1. Order placement: When the business receives a customer order, order details (including
items, item quantities, shipping details and delivery addresses) are typically sent to an order
management system. If the company has several fulfillment centers or warehouse locations,
the OMS will automatically determine the appropriate warehouse location to ship from,
based on the delivery address and item availability. This helps reduce transit times and
delivery costs. In some instances, one order with multiple items may be fulfilled from several
warehouse locations to ensure faster delivery. For example, if one fulfillment center does not
stock a certain item or that item is out of stock, the customer may receive two shipments
from two different locations so they do not have to wait for items to be re-stocked.
2. Picking Inventory: The process of collecting a specified quantity of items from inventory to
satisfy customer orders. Order picking must be a highly controlled process because it directly
influences the productivity of the overall order processing workflow the sooner orders are
accurately picked, the sooner they can be packed and shipped. To efficiently pick orders,
organizations generally employ different picking strategies, including but not limited to:
Piece picking, where each picker collects the necessary products for one order at a time.
Zone picking, where each picker is responsible for picking items within a zone of the
warehouse. All items are collated in the end. Batch picking, where order pickers collect
products for several orders simultaneously, in batches. Picking can be done manually by
using picking slips and spreadsheets, or automatically using barcodes and scanners, or even
picking robots or machines.

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3. Sorting: This is when picked items are separated according to their destination. If zone or
batch picking strategies is used, for instance, each item must be sorted into its respective
order before it can be packed and shipped. Sorting is an essential step toward accuracy and
customer satisfaction because it‘s the perfect time for workers to ensure all ordered items are
present and in good condition for shipping.
4. Packing: The process of protectively packing items into appropriate shipping boxes. The
packing process also includes weighing the packages and labeling them with recipients‘
addresses and any necessary delivery instructions. Whether items are packed in custom
packaging or plain corrugated shipping boxes, it‘s important to prioritize dimensions and
weights that can be easily handled and are cost-effective.
5. Shipping: The process of transporting orders to their final destination. Orders can either be
shipped directly to the customer, or they might first be consolidated with other orders going
to nearby locations to cut costs and minimize the total number of shipments. If orders are
consolidated, multiple orders are usually shipped with the same carrier and then forwarded to
specific locales as necessary. When shipping, it‘s important to use a reliable tracking system
so you and your customers can monitor orders. Once items are delivered, businesses often
follow up with customers to ensure satisfaction or answer any questions regarding the
product purchased. If the order processing steps are carried out effectively meaning all items
are delivered accurately, timely and safely customers are more likely to be satisfied.

2. Order Processing Workflow

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 4.4. Purchasing
A purchasing system is a component of inventory management that can help businesses monitor
and manage inventory. With a purchasing system, you track the goods and services you purchase
as well as your company‘s overall inventory levels. Purchasing systems can help companies
determine what inventory to purchase, how much to buy, and when it needs to be purchased.A
purchasing system is essentially a set of processes a business can use to acquire goods and
services for the company.

Purchasing system software can help streamline the following:

 Placing purchase orders

 Managing orders and invoices
 Keeping a list of suppliers
 Forecasting future spending
 Finding purchase information (e.g., date of purchase and cost)
 Updating inventory stock levels
 Maintaining accurate records of purchases

Types of purchasing systems

1. Stockless purchase system: Supplier holds items ordered by a customer until the customer
needs them.
2. Blanket order: Company places small orders on a day-to-day basis.
3. E-purchasing: Purchasing system used for the purchase and sale of supplies, goods, and
services through the internet.
4. Rate contract method: System that helps a business establish parameters for purchasing
goods and services.
5. Capital equipment purchase: Purchasing system that requires high capital.

Purpose of Purchasing System

An online purchasing system can cut down costs, shorten the length of the purchase cycle, and
help reduce human errors. Additionally, purchasing system reports can make it easier to manage
your inventory budget and forecast what supplies you need for the future.

 Overall, purchasing systems can play a huge role in controlling what your business
spends on goods and services. Purchasing systems can help you:
 Ensure that you only make necessary purchases
 Make sure you‘re paying reasonable prices on goods and services
 Better budget for goods and services

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The significant impact of ERP software on purchase management is as follows:

1. Better Management of Purchase Orders

It is essential that your goods move from one point to another without being lost or damaged and
so is the information about them when you are moving it across different systems. ERP software
provides a centralized database that standardizes data across the organization, thereby cutting
down on time wasted over miscommunications and ensure smooth workflow at every stage of
the purchasing process. The system allows you to oversee the purchase orders and refer to
specific terms related to products being procured. It also enables you to keep track of all the
activities for achieving a more organized purchase ordering process. The improved purchase
management adds value to the business operations and improves the productivity of resources,
ultimately saving your money.

2. Improve Relationships with Suppliers

Maintaining good supplier relationships is one of the biggest tasks for your purchasing
department and requires a level of transparency. An ERP system helps you streamline
communications. It allows you to establish a balance between the market demands and your
buying process in line with your suppliers' capabilities and capacities. This encourages
transparent dealings done through a greater understanding of both parties‘ business needs,
helping you to create better relationships with the suppliers.

3. Greater Productivity Benefits To Everyone

Greater productivity means improved resource utilization and increased cost-savings. ERP
software automates the purchase management process, making it swifter and more streamlined.
Not only does ERP software reduces inventory management issues and provide a more accurate
analysis of product demands, but it also ensures that purchases done never goes missing. It is a
complete purchase management solution to assist you to manage your business costs while
improving its overall productivity.

4.5 Production Logistics

Production logistics is part of both logistics and production. As a business term, it describes the
planning, management and control of the internal storage, handling and transport processes of
purchased parts, auxiliary materials, raw materials, spare parts, operating materials and other
products that are required for production within a company. Production Logistics: Materials
Management, Distribution in Factories, Product Management, Shipping. Production logistics is
the flow of goods that includes the management of procured parts and materials, distribution
inside a factory, product management, packaging, and shipping to warehouse.

Production logistics aims to ensure that each machine and workstation receives the
right product in the right quantity and quality at the right time. The concern is with production,
testing, transportation, storage, and supply.

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Production logistics provides the means to achieve customer response and capital efficiency. The
purpose of production logistics is to ensure that each machine and workstation is being fed with
the right product in the right quantity and quality at the right point in time. The issue is not the
transportation itself, but to streamline and control the flow through the value adding processes
and eliminates non-value adding ones. Production logistics can be applied in existing as well as
new plants. Manufacturing in an existing plant is a constantly changing process. Machines are
exchanged and new ones added, which gives the opportunity to improve the production logistics
system accordingly.

4.6 Accounting
Firstly, there is a common misconception about the ERP system and accounting software. People
generally think that an ERP is just another name for accounting software, but in reality, an ERP
system is an entirely different piece of software. It does share some common features of an
accounting solution, but an ERP can provide functionality and value to your entire organization,
whereas a standalone accounting solution is really just designed to be leveraged by your finance
teams to cover basic financial requirements. On the other hand, the ERP system is a fully
integrated system that deals with the functions of accounting software along with a whole host of
other functions within a business. These include inventory and supply chain management,
customer relationship management, online selling and buying, and warehouse management. It
does not work for a specific area instead covers all areas of your business.

Accounting is the process of recording financial transactions pertaining to a business. The

accounting process includes summarizing, analyzing, and reporting these transactions to
oversight agencies, regulators, and tax collection entities. It is the process of recording all the
financial transactions of a business systematically.

Accounting Software vs. ERP software

Accounting Software

Accounting software deals with the financial and cost accounting activities of the business.
These generally include functions that tend to be owned and sat within a finance department.
Accounting software helps to speed up the collection and processing of key financial data so that
the necessary financial reports can be streamlined. This includes reports such as:

 Balance sheets
 Income statements
 Statements of cash flow
 Profit and loss statements.

In short, it can give a snapshot of all the financial operations of a business. There are various
accounting systems in the market that can help you.

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When shopping for an enterprise accounting software solution, there are many things to consider,
including:

Ease of use: A user-friendly interface is paramount when you are switching to a new accounting
system that you want your employees to adopt.

Security: Backups, encryption, and user-specific permissions are important, especially for cloud-
based enterprise accounting software solutions.

Mobile access: The cloud affords access to any device with an internet connection, which is
ideal for most of today‘s business scenarios where employees are remote, traveling, or inclement
weather keeps them home.

Customization: Each organization has different needs, so choosing a solution that will give you
some wiggle room to specifically tailor your software to your unique needs is extremely
important.

Integrated modules: Integration is of the utmost important, even if the modules happen to be
sold separately. A unified platform will make your business run smoothly.

ERP Software

An ERP system is software that covers the company‘s financial management, supply chain
management, and customer relationship management all in a single comprehensive, integrated
system. It also includes the processes that are specific to the industry in which the company is
operating. It can make your decisions fast and accurate. These days, many companies are using
ERP systems to survive in a highly competitive environment. In short, ERP accounting software
helps companies a lot in boosting their rate of productivity, transparency, scalability, efficiency,
and effectiveness.

4.7. Planning and Controlling

Planning and controlling are inter-related to each other. Planning sets the goals for the
organization and controlling ensures their accomplishment. Planning decides the control process
and controlling provides sound basis for planning. In reality planning and controlling are both
dependent on each other. Planning decides the control process and controlling provides sound
basis for planning.

What Does Business Planning and Control System (BPCS) Mean?

In enterprise IT, Business Planning and Control System software (BPCS) is a type of enterprise
resource planning (ERP) software. Business Planning and Control System resources help with
certain kinds of supply-chain issues, as well as other types of business processes and business
planning. BPCS is also a specific proprietary type of ERP product developed by System
Software Associates (SSA), now a subsidiary of Info Global Solutions.

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The relationship between planning and control

1. Planning Originates Controlling: In planning the objectives or targets are set in order to
achieve these targets control process is needed. So planning precedes control.

2. Controlling Sustains Planning: Controlling directs the course of planning. Controlling spots
the areas where planning is required.

3. Controlling Provides Information for Planning: In controlling the actual performance is

compared to the standards set and records the deviations, if any. The information collected for
exercising control is used for planning also.

4. Planning and Controlling are interrelated: Planning is the first function of management. The
other functions like organizing, staffing, directing etc. are organized for implementing plans.

Planning is the first function and control is the last one. Both are dependent upon each other.

5. Planning and Control are Forward Looking: Planning and control are concerned with the
future activities of the business. Their combined efforts are to reach maximum output with
minimum of cost. Both systematic planning and organized controls are essential to achieve the
organizational goals.

The Importance of Planning

A) To offset uncertainty and change:

Organizational planning has two purposes: protective and affirmative.

 The protective purpose of planning is to minimize risk by reducing the uncertainties

surrounding business conditions and clarifying the consequences of related
management actions.
 The affirmative purpose is to increase the degree of organizational success.

B) To focus attention on objectives: Because all planning is directed toward achieving

enterprise objectives, the very act of planning focuses attention on these objectives. Considered
overall plans unify interdepartmental activities.

C) To gain economical operation: Planning is a function of all managers, although the

character and breadth of planning will vary with their authority and with the nature of policies
and plans outlined by their superiors. It is virtually impossible to circumscribe the area of choice
where they can exercise no discretion, and unless they have some planning responsibility, it is
doubtful that they are truly managers.

D) To facilitate control: The efficiency of a plan is measured by the amount it contributes to

purpose and objectives as offset by the costs and other unsought consequences required
formulating and operating it. A plan can contribute to the attainment of objectives, but at too
high or unnecessarily high costs.
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4.8. Chapter Four Review Questions
1. Post implementation issue of ERP system software?
2. The main functionality, role and why necessary Enterprise system processes (SCM, CRM, ERP)?
3. What are organizational specific processes and how ERP software helps it?
4. As an IT staff what you have to consider when you develop or buy ERP software and how?

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 CHAPTER 5: HUMAN RESOURCE FUNCTIONS WITH ERP
5.1 Human Resource Functions
Human resource management is a central pillar of many organizations. Human resource
departments are responsible for activities spanning a wide variety of core functions. In short,
human resource activities fall under the following five core functions: staffing, development,
compensation, safety and health, and employee and labor relations. Within each of these core
functions, HR conducts a wide variety of activities. These activities are all linked by a concern
for employee well-being and ensuring organizations treat employees in a way that provides
mutual benefit for both the employee and the organization.

Core Functions of Human Resource

Human resources (HR) professionals conduct a wide variety of tasks within an organizational
structure. The core functions can be summarized as follows:

1. Staffing

This includes the activities of hiring new full-time or part-time employees, hiring contractors,
and terminating employee contracts Identifying and fulfilling talent needs (through recruitment,
primarily)Utilizing various recruitment technologies to acquire a high volume of applicants (and
to filter based on experience), Terminating contracts when necessary ,Maintaining ethical hiring
practices and aligning with the regulatory environment , Writing employee contracts and
negotiating salary and benefits

2. Development

On-boarding new employees and providing resources for continued development is a key
investment for organizations, and HR is charged with maintaining a developmental approach to
existing human resources. Development activities include:

 Training and preparing new employees for their role

 Providing training opportunities (internal training, educational programs, conferences,
etc.) to keep employees up to date in their respective fields
 Preparing management prospects and providing feedback to employees and managers

3. Compensation

Salary and benefits are also within the scope of human resource management. This includes
identifying appropriate compensation based on role, performance, and legal requirements.

Compensation activities include:

 Setting compensation levels to match the market, using benchmarks such as industry
standards for a given job function

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  Negotiating group health insurance rates, retirement plans, and other benefits with third
party providers
 Discussing raises and other compensation increases and/or decreases with employees in
the organization
 Ensuring compliance with legal and cultural expectations when it comes to employee
compensation

4. Safety and Health

Achieving best practices in various industries include careful considering of safety and health
concerns for employees. Safety and health activities include:

 Ensuring compliance with legal requirements based on job function for safety measures
(i.e. hard hats in construction, available counseling for law enforcement, appropriate
safety equipment for chemists, etc.)
 Implementing new safety measures when laws change in a given industry
 Discussing safety and compliance with relevant government departments
 Discussing safety and compliance with unions

5. Employee and Labor Relations

Defending employee rights, coordinating with unions, and mediating disagreements between the
organization and its human resources is also a core HR function. Employee and labor relations
activities include:

 Mediating disagreements between employees and employers

 Mediating disagreements between employees and other employees
 Considering claims of harassment and other workplace abuses
 Discussing employee rights with unions, management, and stakeholders
 Acting as the voice of the organization and/or the voice of the employees during any
broader organizational issues pertaining to employee welfare

5.2. How enterprise systems support business

Technology has become one of the most important resources to operate and manage
organizations in the 21st century. It touches every facet of a modern enterprise, from customer
service to operations, to social media, and to security. In order to operate efficiently, companies
are seeking ways to improve their business processes. Increasingly, companies are looking
toward technology, such as enterprise systems, for solutions that improve their workflows and
customer service process. Enterprise systems are large-scale software packages that are able to
track and control all of the complex operations of a business. These systems are used as a central
command hub to help automate the business and make reporting and decision making easier.

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1. Store Business Data in a Usable Format

One of the most important aspects of improving the customer experience is having data stored in
a way that can be easily analyzed. As the saying goes, ―what gets measured, gets managed,‖ and
the same applies for business data.

2. Automate the Customer Service Process for Employees

Using an Enterprise Resource Planning (ERP) system can be a major benefit for companies
looking to streamline their customer service experience. ERPs allow businesses to automate
their customer service process, which helps ensure that each employee is giving customers a
consistent experience, and also ensuring that back office functions are as streamlined as possible.
Automation saves time, which can then be used towards efforts to respond to customer requests
for product information and to forecast for new products.

3. Scale Available Resources (Up and Down) as Needed

One of the lesser-known benefits of enterprise systems is their ability to scale the IT capabilities
of a business up or down as needed. This means that companies that need to store additional data
or require access to additional processing power can get that excess capacity using a cloud,
software as a service (SAAS), or an Internet-based enterprise system instead of needing to invest
in IT hardware.

4. Maximize the Reliability of IT Infrastructure Necessary for Customer Service

Another benefit of enterprise systems is their increased reliability compared to small-scale IT

solutions. This means that the systems will have greater ―uptime‖ and little to no ―downtime.‖

5. Secure Customer Data

Over the past few years, we have seen a significantly increased number of security breaches into
corporate servers. Securing customer data is not just imperative for a good customer experience;
it is an essential financial priority as well.

6. Real-Time Access to Information

Business environments are always changing, and that means that waiting months for data is
simply no longer feasible. Having access to real-time information about a business‘s operations
is a powerful feature of enterprise systems. A high level of access to data allows leadership to
assess and improve upon the company‘s processes far more efficiently than if they had to wait
months before having actionable data.

7. Reduce the Cost of Doing Business

Enterprise systems ultimately reduce the cost of running a business, which means that a company
will have more of its budget free to increase customer service capabilities or invest in other
assets that can improve the customer experience.
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8. Standardized Process

One of the greatest challenges in larger enterprises is producing a consistently positive customer
experience. One of the benefits that comprehensive and real-time data storage, in conjunction
with the use of ERPs, provides is the ability to ensure standardization of the customer experience
to a significantly greater degree than would otherwise be possible.

9. Improve Supply Chain Management

Enterprise systems can help streamline supply chain management, in large part through the use
of data about where, when, and how customers order and suppliers deliver. This again
emphasizes the importance of storing business data in a usable format.

10. Ensure Regulatory Compliance

Regulation has long been a reality of business, but over the past several years, regulations have
become increasingly stringent and enforced. One of the benefits of enterprise management
systems is that much of the data these regulations require can be collected through automated
means.
The Benefits of Managing HR with ERP

ERP software works by using a single, centralized database, and much of the day to day work of
an HR department requires access to data. A modern ERP system can aid an organization with
most HR tasks from basic workforce and payroll management to using analytics tools to track
employee performance, assist staff training and development, and support recruitment functions.
Therefore, having an ERP solution in place provides the HR capabilities organizations need to
increase the efficiency and productivity of their busy HR department.

5.3. Chapter Five Review Questions

1. What are the core function of HR
2. What is the role of SCM, CRM and ERP in business process?
3. Write benefit of ERP system software in human resource?
4. The Benefits of Managing HR with ERP?

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