ERP or enterprise resource planning refers to a systematic process and the software packages, which is used by the business organization to manage their business operation on daily basis. ERP is associated with the manufacturing, accounting, project management and procurement (Lasisi et al. 207). ERP system involves in reducing the data duplication and keeps the integrity of data. In the recent years, the use of ERP is crucial for managing the daily activities of the business industries. The impact of ERP on the modern business is unavoidable. This study deals with the implementation of ERP in the context of Mesfine Industrial Engineering or MIE.
MIE is a metal construction and electrochemical engineering complex, which is situated in Ethiopia. However, MIE had five systems before the implementation ERP project. Such systems were not effective in providing accurate data and managing the performance assessment. MERLIN was an important system of this organization, which was associated with the manufacturing, evaluation of the resources, managing logistic, and inventory system. One of the major drawbacks of this system is the poor communication between the individual’s sites. However, in the business operation effective communication is crucial to make the process easier (Chugh et al. 2017). CCA is another system, which monitors the transaction. These systems have different databases and file types, which highlights the disadvantages of these systems. In order to overcome these challenges, MIE has implemented ERP system. This system is more effective than the old systems in order to maintain the business operation effectively.
In the section 1 I reveal the executive summary of the entire report based on the current problems and the recommendations. In section 2 I will give a brief introduction of the ERP and its importance in the context of MIE. In section 3, I will develop a problem statement based on the current challenges regarding the business operation in the context of MIE. Therefore, the significance of ERP will address in this section. In section 4, mentoring process of the identified problem will be discussed.
ERP or enterprise resource planning is associated with the wide information system of the organization. ERP facilitates the flow of the information regarding the business in an organization. On the other hand, coordination is made by ERP between the different organizational resources (Fischer et al. 2017). This system supports various functions such as manufacturing, inventory management, shipping, invoicing, distribution, accounting and the logistics management. On the other hand, marketing, human resource management, quality control, production and sales are also managed by the ERP systems. As per the given scenario, it has been found that Mesfine Industrial engineering or MIE is an electrochemical engineering complex and a metal construction established in Ethiopia. This organization used five systems to manage their business operation, which was expensive and difficult to maintain and improve. On the other hand, ERP is widely accepted due to its cost-effective nature (Schneider 2017). The software, which is associated with the logistics management, is costly. Thus, implementation of ERP will be helpful for MIE to reduce the operation cost.
The popular business organizations are always hungry to improve their position in the global market and to gain competitive advantages by enhancing the customer experience (Chaudhary 2017). ERP provides such opportunities to the business industry. According to the given scenario, the old systems of the logistics management of MIE were unable to give accurate and accessible data. Therefore, such old systems did not allow the organization to make a quick decision and assess the performance of the organization. Therefore, ERP system is effective to provide accurate data regarding the business operation. MERLIN was one of the effective systems of MIE, which was involved in the evaluation of logistics, resources, and inventory of the organization. Poor communication was the major drawback of such old system. Hence, this was a major challenge for this organization to manage their operation effectively. ERP makes an intact communication among the individual’s site associated with a business operation. However, the progress report of the work can be tracked properly by ERP, which is difficult by using MERLIN system.
Corporate cost accounting or CCA was another major system of MIE that they had used to manage the transaction, pipeline inventory and inter-site transport. However, such software systems of MIE had different file format and different databases. On the other hand, such legacy did not allow MIE to establish an online communication with their customers, partners, and the suppliers. ERP enhances the intra-organizational communication and wide collaboration between the different operational departments (Ali and Miller 2017). In a business, different software is used for the different processes. This makes difficulties and error in the operational system. Hence, ERP software integrates the different system and the entire system relies on the single database. On the other hand, ERP provides a holistic view to the business executives regarding the business operation by providing accurate data. ERP reduces the difficulties in the accounting tasks and reduces the manual handling (Chaudhary 2017). In the case of MIE, they need to carry out manual handling in CCA system. Hence, implementation of ERP will be effective for this organization, as the employees do not need to depend on the paper-based invoices. Hence, to meet the current challenges of the operation system in MIE implementation of ERP is required.
According to the given scenario, MIE has decided to implement an ERP project to meet the challenges that they have been facing during their business operation. However, this organization has got support from Syscorp, which is an external consulting organization. A team is developed by including specialists of the Syscorp. Microsoft Dynamics Sl consultant is associated with Syscorp and they provide talented people to manage the project of ERP in the context of MIE. However, major problems are faced by this organization during the implementation of ERP project. Cultural problem is one of the major problems that the organization has faced during the conduction of ERP. The project team expected a high acceptance of this new system in those areas where the changes are required. However, it is important for an organization to get a positive response when implementing a new change within the organization (Badewi et al. 2017). In the given scenario, some functions are not got positive appreciation what the old system has got. In order to resolve this project team has broken the traditional segregation and department of OBUs. Therefore, training and cultural changes are implemented to enhance the acceptance regarding this system.
The business problem is another major barrier to the implementation of ERP project in the context of MIE. However, Microsoft Dynamics SL needs a rigid structure to carry out their business properly. On the other hand, for the implementation of ERP, many participants from different cross-functional workshops are come. Those understand that they need to cooperate with the business procedure of Microsoft Dynamics SL. As a result, the business procedures of MIE has been changed that they used to follow. Changes in the existing operation of a business often take place while implementing a new system (Garg et al. 2017). Hence, the change in the working practice of MIE is one of the major problems during the implementation of ERP. The specialized team has achieved this certain change by implementing business process re-engineering process. This process includes four steps. In the first step drawing and mapping of the present system has been done and in the second step, issues are identified. In the third step the issues of the new system are identified and in the fourth step, re-mapping is taken place.
A technical problem is a common problem while establishing a new project (Zerbino et al. 2017). However, the new system requires previous data of the old system. In the given scenario, MIE has faced problem in data accuracy in their old system. During the implementation of the ERP the new system needs retrieval of the previous data. Hence, a screened stored format of the data is required in the respiratory of the new system. Reduction of the data duplication is required while implementing a new system in MIE as it is the major concern of such business. On the other hand, for this organization, the old system needs to be kept running until the new system is properly established. In order to maintain both old and new systems, the IT department has faced difficulties. This major issue has encountered during the implementation of ERP project.
ERP implementation process of MIE includes different stages. In phase one, the project is organized in a proper way by carrying out an intensive study. An outline plan of the entire project and costing is developed along with specific goals and objectives. In the first step of any project, a clear objective should be established and the roles and responsibilities of the employees are evaluated (Ali and Miller 2017). MIE has developed the project objectives in the first stage as the success of the entire project depends on the project goal. Phase two is associated with the development of business blueprint. In this stage, the organization carries out the review process of the information system, develop new policies and the business prototype (Shao et al. 2017). In this phase, the core structure of the project is detected. Identification of the entire project structure is crucial for the employees to develop their vision regarding the project operation. In the context of MIE, integrated program management is undertaken in this phase in order to develop the project-related research.
Phase three highlights on the environment development during the implementation of ERP project. Physical implementation of the architecture and the organizational system occur in this phase besides the changing of the work-related practices (Parhizkar and Comuzzi 2017). In the context of MIE, the environment development process includes two stapes. The first step is associated with the transformation of an old legacy system and shop floor data management. Improvement of the manufacturing system is a crucial part of environment development in ERP project. Inventory management and order management are associated with the second steps of environment development. Microsoft Dynamic SL has taken the entire responsibility of ERP planning in MIE thus, they need to develop the environment to get a positive response regarding the new system. In phase four a small scale pilot is associated to run the new system. A clear demonstration regarding the process, principle, data transfer, functions of hardware and software system are got from the pilot (Dezdar 2017).
Phase five focuses on the user training process. However, during the implementation process of ERP, it is crucial for an organization to develop the concept of the user who is access the new system. This will give the user a clear idea about the feature of the system that is essential for the success of the project. However, if the user is not capable to access the system properly then the effectiveness of the system will be failed (Shao et al. 2017). In the context of MIE training will be helpful to enhance the experience of the end user in the system. Phase six and seven highlights on the final preparation and go-live in context of ERP implementation. In these two phases, the organization needs to give a final touch up to their project make it available to the user domain. Microsoft Dynamic SL has prepared their ERP project and has followed the love process to enhance its accessibility.
Risk analysis method or RAM is crucial during the implementation of ERP within an organization. In the context of MIE, they have undertaken risk analysis method based on the organizational context. Risk identification during the project allows an organization to get an idea about the risks that may encounter during the project (López, C. and Salmeron 2014). As a result, the organization can develop a solution based on this risk. In the context of MIE, failure can occur if the organization fails to align the goal with the changing environment during the implementation of ERP. On the other hand, lack of proper hardware and infrastructure during the implementation is another major risk in this project. Syscorp is associated with the MIE to facilitate the ERP process. Hence, if these two organizations fail to support the new system after its implementation then the project will be failed. However, it is necessary for an organization to monitor the new system by making collaborative work with its partners. On the other hand, resistance can occur from the management of an organization towards the implementation of the new project (López, C. and Salmeron 2014).
In the context of MIE, the management can take the ERP implementation as the new IT system rather than the change in the business operation process. This will create a big barrier to the success of this ERP project. On the other hand, it becomes difficult to make a bridge between the old system and the new system (Garg et al. 2017). Therefore, for MIE implementation of a new project may leave an impact on their annual account by increasing the cost of a business operation.
CAM or characteristics analysis method is an effective approach that has been adopted by the business organization to divide the ERP projects into different sub-projects (Katerattanakul et al. 2014). MIE has adopted CAM in order to identify the recommendations for the successful management of ERP project. CAM analysis allows the management of MIE to give special attention to the aspects that need to be improved for the implementation of ERP. Therefore, communication management, human resource management, purchase management, risk and time management are done by CAM analysis. This helps the organization to outline the cost of the entire ERP implementation and reveal the risks that are associated with this project. As a result, a successful management of ERP in the MIE has been done by CAM analysis.
Conclusion
The above study reveals the challenges associated with the old operation system in the context of MIE. On the other hand, issues and risks that are occurred during the implementation of ERP are also discussed in this section. It has been found that, lack of accuracy in data, poor accessibility of data, lack of online communication are the major problems that MIE has faced in their old system. These major challenges led this organization to implement ERP system to improve their logistic process. However, it has been observed that high cost is another challenge of the old system. Therefore, ERP is a cost-effective method. On the other hand, technical cultural and business problems are taken place during the implementation of ERP. Moreover, lack of infrastructure, proper monitoring and high budget of the project highlight on the risk associated with ERP project. Integration of consolidate disparate system and elimination of obsolete report in ERP project will be helpful for MIE. However, multiple disparate systems are error-prone. However, the competitors of MIW will generate new functionality in ERP system in every year. Thus, a consolidate system will be helpful for them develop their ERP system. On the other hand, preparation of the daily report of the ERP system will be effective for MIE to eliminate the obsolete report and enhance the accuracy of data while other industry can face issue to due to the obsolete report in their system. Such elimination of the obsolete report will be helpful to retrieve the data from the old system and store it in the new system.
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