ERP Implementation Issues in SMEs: 'Microsoft Great Plains' Implementation in a BPO Organization

South Asian Journal of Management, Jan-Mar 2006 by Babu, T K Suresh, Dalal, Satish S

Success and failure of Enterprise Resource Planning (ERP) implementations are oft-discussed topics. The high stakes in implementation success have prompted much research in search of critical issues that are to be addressed in making the implementation a success. However, most research adopts a rather impersonal and external view of ERP implementations. Not discarding prior research efforts, the authors endeavor to have an internal perspective in order to gain valuable insights into the implementation woes. This article is based on the authors' personal experiences in ERP implementation in an Indian service industry (a leading multinational BPO organization). Along with a team of consultants from a reputed business solutions consultancy, the authors have participated in almost every process of the implementation. Through this article, the issues encountered during the implementation are discussed.

I. INTRODUCTION

The onset of the 1990s saw companies all over the world adopting Enterprise Resource Planning (ERP) systems (Rajagopal 2002). Although primarily developed for the manufacturing industry, the growth of the services sector has seen an emergent trend of ERP adoption in the same.

Scott and Shepherd (2002) believe that productivity improvements, competitive advantage, and customer demands are the top three business drivers for companies deciding to go in for an ERP. Rajagopal (2002) cites business process reengineering and uniform information systems as the key factors.

ERP systems are large and complex, and they often call for fundamental changes to the way organizations do business. They may also affect the organizational decision-making that underlies the processes (Holsapple 2001). Many ERP implementations have been difficult, lengthy, over budget and were terminated before completion, and, thereby failed to achieve their business objectives (Peterson 2001).

Although much research has been carried out in identifying and resolving the issues in ERP implementations, our belief is that most of it is a post-mortem analysis; from the interviews that were the primary means of collecting the information. By participating in the implementation process, the authors have attempted to observe and investigate ERP issues first-hand. The work presented is the record of the authors' personal experiences in implementing the "Microsoft Great Plains" ERP from May 2004 to February 2005.

I.I ERP DEFINED

"Enterprise Resource Planning Systems (ERP) is a set of software modules linked to a common database, and these modules can handle basic corporate functions such as manufacturing, finance, human resources, materials management, sales, and distribution (Slater 1998). Zheng (2000) defines ERP as a tool that helps companies cut costs and improves efficiency by integrating business processes and sharing common resources across an organization.

ERP integrates the various functions of an enterprise by maintaining a common database, and generates the high-level managerial reports that aids in decision-making (www.cio.com).

1.2 BENEFITS OF ERP IMPLEMENTATION

There are many reasons why a company would implement enterprise solutions: The provision of a single source of data, the potential cost reduction (maintaining old computer systems can lead to enormous costs), and the potential gain in business integration while reducing indirect costs. For example, if the sales and marketing systems have no connection with the financial reporting systems, the managerial decisions would be confined to instinct or would be based on old information than according to a detailed understanding of up-to-date product and customer profitability (Davenport 1998). Vale-rie Botta-Genoulaza (2005) identifies ERP benefits as better information quality, single system/integration, real-time accessibility, inventory reduction, productivity improvement, logistics/order management improvement, cash flow and forecasts improvement.

1.3 ORGANIZATION OF ERP PROJECTS

ERP implementation projects have been classified into three categories (www.cio.com):

1. The Big Bang-In this, companies cast off all their legacy systems at once and install a single ERP system across the entire company. Few companies attempt it because it requires the entire company to mobilize and change at once. Getting everyone to cooperate and accept a new software system simultaneously needs tremendous effort, especially because the new system will have few advocates.

2. Franchising Strategy-This approach suits large or diverse companies that do not share many common processes across business units. Independent ERP systems are installed in each unit while linking common processes such as financial bookkeeping across the enterprise.

3. Slam-dunk-ERP dictates the process design in this method, where the focus is on just a few key processes, such as those contained in an ERP system's financial module. The slam-dunk strategy is generally for smaller companies expecting to grow into an ERR Here,the goal is to get the ERP up and running quickly, by abandoning reengineering, in favor of the ERP system's predefined processes.