Introduction

Enterprise Resource Planning (ERP) systems are core software programs used by companies
to integrate and coordinate information in every area of the business. The Enterprise Resource
Planning (ERP) is originated as an extension of MRP (Material Requirements Planning; later
Manufacturing Resource Planning) and CIM (Computer Integrated Manufacturing). It was introduced
by research and analysis firm Gartner in 1990. These systems can now be found in non-manufacturing
businesses, non-profit organizations and even in governments.
The following table summarizes the evolution of ERP:

1960

Inventory Management and Control (IMC)

1970

Material Requirement Planning (MRP)

1980

Material Resource Planning (MRP II)

1990

Enterprise Resource Planning (ERP)

2000

Extended ERP (Integration and Collaboration outside the window)

ERP software supports the efficient operation of business processes by integrating tasks
related to sales, marketing, manufacturing, logistics, accounting, and staffingthroughout a business.
Ideally, ERP delivers a single database that contains all data for the software modules, which would
include:

Manufacturing: Engineering, bills of material, scheduling, capacity, workflow management,

quality control, cost management, manufacturing process, manufacturing projects,
manufacturing flow.

Supply Chain Management: Order to cash, inventory, order entry, purchasing, product
configuration, supply chain planning, supplier scheduling, and inspection of goods, claim
processing, and commission calculation.

Financials: General ledger, cash management, accounts payable, accounts receivable, fixed
assets.

Project management: Costing, billing, time and expense, performance units, activity
management.

Human resources: Human resources, payroll, training, time and attendance, benefits.

Customer relationship management: Sales and marketing, commissions, service, customer

contact and call center support, Data warehouse and various self-service interfaces for
customers, suppliers, and employees.

Access control - User privilege as per authority levels for process execution

Customization - To meet the extension, addition, change in process flow.

Like every other segment of the IT industry, the ERP industry is evolving rapidly. The industry
has clearly differentiated between very large enterprises and the small and medium business sectors. It
is the second segment that is seeing rapid growth and the emergence of new players in the ERP

business. ERP vendors are classified as Tier I, II or III depending on the kinds of clients they service.
The three groups are very distinct and the size and complexity of their solutions are also very distinct.
In general, the Industry classifies a Tier I ERP vendor as one that sells extensively to the Tier I
market a market that has companies with annual revenues exceeding $1 billion. These companies
are invariably multinationals with a presence in many different geographic regions. Naturally enough,
Tier I ERP products have a high cost of ownership due to their complexity and costs of
implementation and support. While there have been several Tier I vendors earlier, mergers and
consolidations have shrunk the list considerably. The list of Tier I ERP vendors is now very small and
consists of just two entries SAP and Oracle.
Tier II vendors sell ERP products that suite mid-sized companies that have revenues in the
range of $50 million to about $1 billion. The products of Tier II vendors are specifically built to
handle this market and cater to a single or multiple locations of deployment. Naturally, Tier II
solutions are easier to manage and support and cost correspondingly less as well. Often, Tier II
solutions are confined to a specific industry vertical. This group sees considerable competition and is
comprised of about 20 well-known companies.
Tier III ERP solution providers target companies that have revenues of $10 million to $50
million. Solutions provided by these companies are simple to implement and support and have
correspondingly lower cost of ownership. Many ERPs in this group are single location installations
and built for a single vertical. While they are easy to manage and deploy, the risk is that a company
could soon outgrow the solution and hence some kind of migration path must be kept in mind when a
small but rapidly growing company selects a Tier III solution.

The market of ERP is dominated by SAP, Oracle, Sage, Infor and Microsoft in that order and
together they command a 53% market share.

Worldwide ERP Market Share, 2013 Market Share

SAP; 24%
Others; 37%
Yonyou; 1%
Oracle; 12%

Totvs; 2%

Sage; 6%
IBM; 2%
Concur; 2% Kronos; 3% Microsoft; 5% Infor; 6%

Public-sector organizations are unique because of additional government regulation and public
accountability. Because ERP software is standardized for universal best business practices, it is
sometimes difficult for public-sector organizations to implement. The rise in popularity of ERP
software and the evidence of continued ERP implementation in the public sector make it important for
PSU leaders to understand the concerns and advantages of implementing ERP software.

Review of Literature
Introduction
ERP systems have been adopted by many businesses since 1990. ERP has transformed
organizational computing by integrating business processes, sharing common data across the entire
enterprise, and producing and accessing information in a real-time environment.
The primary goal of ERP has been to improve and increase information flow within an
organization. This is achieved by integrating departments and functions across a company onto a
single computer system that serves the needs of all of the different departments. Integration and the
sharing of a common database eliminate departments having to duplicate effort by keying the same

information into different computer systems. Single entry of information also minimizes the risk of
errors.
Despite proposed benefits, many companies have had significant problems implementing ERP
systems. ERP systems are notoriously complex, and installing the software often forces organizations
to change their internal processes. These problems have caused many companies to abandon their
ERP initiative or implement the system in limited capacity. Prior to ERP software implementation,
processes may not have been efficient but they were simple. ERP forces departments to integrate and
communicate across departments.
The rise in popularity of ERP software and the evidence of continued ERP implementation in
both the public and private sectors makes it important for school district leaders to understand the
concerns and advantages of implementing ERP software.

History of ERP
According to Gumaer (1996), accounting was one of the first business applications to be
computerized. The first manufacturing software applications were limited generally to inventory
control and purchasing and were the by-product of accounting software and the desire by accountants
to know the value of inventory. The need for software specifically designed for manufacturing
operations led to the development of material requirements planning (MRP), and subsequently,
manufacturing resource planning (MRPII) packages.

Material requirements planning software converted the master schedule for products into timephased requirements for raw materials. The master schedule was used for planning and procurement.
This software later evolved into manufacturing resource planning. In the early 1990s, manufacturing
resource planning was further extended from production planning to cover other areas such as
finance, human resources, and project management. Many manufacturing resource planning
applications have evolved into ERP software.
Although ERP vendors still use the same basic model as manufacturing resource planning for
the manufacturing portions of their systems, ERP represents the application of newer information
technology to the manufacturing resource planning model. These technology changes include the
move to relational database management systems, the use of a graphical user interface, and
client/server architecture. ERP software also expanded the scope of manufacturing resource planning
to include other business areas, such as accounting and human resource management.
Prior to ERP, businesses traditionally compiled, stored, and shared information on mainframebased computing systems. These systems could handle huge amounts of data, but were usually
expensive, rigid, and offered limited integration with other systems. As a result companies began
moving to a client-server computing architecture. Using a server linked to a network of personal
computers disburses computing power across a company and provides users with access to
companywide information. At the time of the present study, many school systems were still using
mainframe systems for both their business and student functions.
Most ERP systems have been supported by client/server architecture. Miranda (1999) stated
that the benefits of client/server architecture were (a) the elimination of a legion of manual logs and
computerized databases, (b) process improvement opportunities permitted by single point of data
entry, and (c) the ability for electronic workflow and web based technologies.

Definitions of ERP
Many different definitions of ERP software were found in the literature. On the most basic
level, ERP is a complex software system that ties together and automates the basic processes of a
business.
ERP systems are nothing more than generic representations of the ways a typical company
does business. ERP attempts to integrate departments and functions across a company onto a single
computer system that serves all of the different departments particular needs. ERP software is a set of
applications that automate finance and human resources departments and helps manufacturers handle
jobs such as order processing and production scheduling. Komiega (2001) defined ERP as the
combination of software, hardware, and business processes, optimized to define a common solution
for all aspects of a companys business from order entry to invoice and everything in between.

Industry Specific Applications

Initially, most ERP systems were designed for manufacturing companies which produce
physical products. Companies that do not produce physical items found it difficult to implement and
use ERP systems earlier. To minimize this difficulty, most ERP vendors now offer industry-specific
solutions for non-manufacturing companies such as public sector and utility organizations.

Benefits of Implementing ERP

ERP Software is the enabling technology that allows an organization to automate a particular
aspect of its business. The goal for any enabling technology is to allow an organization to more

readily achieve its business mission. ERP users can achieve their business mission and gain
competitive advantage from the way they implement the ERP system and exploit the resulting data.
Al-Sehali (2000) identified seven benefits of an ERP system: (a) easier access to reliable
information, (b) elimination of redundant data and operations, (c) reduction of cycle times, (d) cost
reduction, (e) adaptability in a changing business environment, (f) Year 2000 enabled, and (g) Euro
enabled. Organizations usually implement ERP software to accomplish one or all of the benefits listed
above, hence the motivations for implementing an ERP system.
An ERP system provides access to consistent data throughout the organization. Because ERP
software uses a shared database management system, there is easier access to information by all
departments within an organization. All departments enter information into the same database and
thus all departments have access to the same information. This allows decisions to be made from an
enterprise point of view, accessing information from all departments, rather than separate departments
making a decision and then coordinating the information manually. One of the primary benefits of an
ERP system is that it allows for global visibility of information across the company.
Using a single database also reduces redundancy within an organization. Because the modules
are integrated, there is no need for repetitious data entry between departments. Once data are entered
by one department they can be accessed through the system by other departments. This eliminates
redundant tasks within the organization. This also allows for standardization throughout the
organization. The two of the three major reasons why companies undertake ERP are to standardize
manufacturing processes and to standardize human resource information.
For many organizations, ERP also reduces cycle times. Cycle time refers to the amount of time
necessary to complete a business transaction from inception to completion. Time reductions are
achieved by minimizing delays in flow of information between business units. ERP systems allow

information to be communicated more quickly, via the shared database, than a nonintegrated system.
A shorter communication time between departments can decrease the time required to complete
business transactions such as an order.
Cost savings is another benefit that can be achieved by implementing ERP software. An ERP
system can reduce or eliminate general administration costs associated with the support and
maintenance of multiple business systems. Running interfaces between different business systems in
order to share information can be expensive because of the programming and data storage issues
involved.
One of the biggest gains from ERP packages is that they force a company to institute a proven
set of business processes. In addition, ERP systems also allow companies to turn on and off
functionality as needed to adapt quickly to changes in their business, whereas a customized
application has to be rebuilt. ERP systems are designed to respond quickly to new business demands
and can be changed to respond to the changing environment. Most ERP software vendors purport
flexibility as one the advantages of the software.
New processes can be caused by technology, such as the move from client-server architecture
to Internet architecture, or by changes in the business environment, such as the current emphasis on
supply chain management and customer relationship management. ERP vendors are constantly
evolving to meet the changing business demands and to allow the organization to move nimbly and
adapt quickly to changes in the business environment.
The summaries of benefits sought of ERP based on review of literature are as follows:

Enhanced company operation through streamlining, improving and controlling business

processes of major importance such as procurement, customer offers, customer complaints,

equipment maintenance, marketing campaigns and others significant activities

Cost-reductions and time-savings in all the above mentioned business processes.

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Ability to manage service related personnel and related costs through the use of the resource
management module of the system. In the past, the company could allocate only the
productive resources cost to each company activity. Now by taking advantage of the resource
management (timesheets) module of the system, the enterprise is able to manage the cost of

the service personnel (engineering, R&D departments, etc.) involved.

Upgraded use of the companys already operating quality management system, which was not
supported by an information system. The use of the proposed ERP system enabled the
enterprise to avoid much paperwork, to reduce personnels occupation times with quality

management issues and to provide report insight to the management.

Flexible and efficient production planning by implementing the manufacturing management
(scheduling) module of the system. Project delivery times and idle times were reduced
significantly, productivity was raised, more precise delivery time assessment incurred stock

level minimization and customer satisfaction improved.

Facilitated communication and data transfer of critical information for the whole enterprise.
Now employees have instant access to real-time data, documents and reports that concern their

duties. View of information flow is fully customized according to each user position.
Finally, the company exploited the abilities to control sales and promotion activities through
the system, received quantitative data about the results of each promotion technique and
managed to increase sales department efficiency.

Here are some areas to look for possible ROI and cost saving:

Reduce inventory through better visibility and efficiency

Savings through the reduction in duplicated efforts
More efficient operations allowing for increase in ability to process transactions (added

capacity)
Reduction in non-value added activities (lean processing)
Higher utilization of employees (less transactional, more analytical)

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Improvement in decision making through more accurate and real-time data

Drawbacks of ERP
ERP systems have evolved and have become very complex, offering a lot of useful features for
all areas of a business operation, but there are also drawbacks. Following are the main drawbacks of
ERP system.

Cost
Usually, ERP solutions are very expensive and only large companies can afford them.
Introducing an ERP system may also require additional acquisitions or modifications in the internal
infrastructure of the company, so the implementation costs can rise considerably. Also, training of the
employees will also be mandatory, which means further expenditure in order to have an effective
working ERP system.

Time
The implementation of an ERP system is not a particularly time-consuming task, but training
employees to correctly and effectively use the ERP system can be. They need to be well informed
about the features and procedures, otherwise the whole ERP system will prove to be inefficient and
the investment of money and time will be in vain.

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Efficiency
Even though an ERP system should improve efficiency if implemented and used correctly, the
training and adaptation period immediately following implementation could be rocky as the
organization adjusts to the new ways.
Customization
ERP systems are either not very customizable, or customization involves a lot of time and
money. Few systems are ready to use out-of-the-box. Some systems may also require other software
programs, a fact that might make the processes more complicated or even impossible in some cases.
Data Integrity
Integrating an ERP system with other software might need the software to be modified. As a
result of integration, security breaches and data leaks might appear. The effects of such data leaks can
be disastrous.
Implementation Critical Success Factors
Successfully implementing ERP the first time requires a structured methodology that is
strategy-, people-, and process-focused. The major critical success factor for ERP implementation
was top management support and involvement. If an implementation does not have top management
support, the implementation can fail to meet desired expectations. Other factors relevant to a
successful implementation are managing change, having a clear understanding of the objectives ERP
is to serve in the company, providing adequate training, and reassuring employees of job security.

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According to Bingi, et al. (1999), there are 10 critical issues that contribute to the success of
an ERP implementation: top management commitment, reengineering, integration, ERP consultants,
implementation time, implementation costs, the ERP vendor, selecting the right employees, training
employees, and employee morale.

Top Management
Top management support, was instrumental in explaining ERP implementation success. Top
management must take an active role in leading the ERP implementation. The success of a major
project like an ERP implementation completely depends on the strong, sustained commitment of top
management. This commitment when transferred down through the organizational levels results in an
overall organizational commitment.
Management must be involved in every step of the ERP implementation. Some companies
make the grave mistake of handing over the responsibility of ERP implementations to the technology
department. This risks the entire companys survival because of the ERP systems profound business
implications. An overall organizational commitment that is very visible, well-defined, and felt is a
sure way to ensure a successful implementation.
If top management is not strongly committed to the system, and does not actively participate,
the implementation has a high likelihood of failure.

Reengineering
Implementing an ERP system involves reengineering the existing business process to the best
business process standard. ERP systems are built on best practices that are followed in the industry.
The cost and benefits of aligning with an ERP model could be very high. Research shows that even

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the best ERP application package can meet only 70 percent of the organizational needs. In order to
accomplish the remaining 30%, an organization has to change its processes to conform to the ERP
package, customize the software to suit its needs, or not be concerned about meeting the balance.
Automating existing redundant or non-value added processes in the new system can cause an
implementation to fail. An ERP system will clearly change the normal mode of operation within and
between functions, but it will also change many social systems throughout the organization. If people
are not properly prepared for the significant changes that need to take place, the natural reaction will
be resistance to change which may sabotage the entire implementation.

Integration
True integration, moving away from departmental independence and creating dependent,
effective, cross-functional processes should be a primary goal for successful ERP implementation.
Functional silos (departmental independence) define the organizational boundaries where information
flows, and often cooperation stops. ERP must be fully integrated into daily business operations in
order for an organization to realize the full benefits. If enterprise integration is to have any chance of
complete success, it will be due, to a large extent, to the removal of traditional cross-functional
barriers.
With tight integration, companies must also be aware of the potential risks of the errors.
Organizations should have mandatory training classes to educate employees about how transactions
flow through the system and how errors affect the activities and departments within the organization.
If inaccurate data is entered into the common database, the erroneous data may have a negative
domino effect throughout the enterprise. Inaccurate data can lead to errors in payroll and materials

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management. If a company with inaccurate data just forges ahead under the assumption that data
errors will be corrected when they are spotted, the ERP will lose credibility.

ERP Consultants
Finding the right ERP Consultant and keeping them through the implementation can be a
major challenge. ERP implementation demands multiple skills functional, technical, and
interpersonal. Consultants with specific industry knowledge, such as public sector, are fewer in
number. The success or failure of the project depends on how well the organization can manage
consultants and the necessary knowledge transfer between consultants and internal employees .

Implementation Time
The extent of customization required to meet the needs of a specific type of business
contributes to the implementation time. This customization takes a long time, depending on the
specific requirements of the business. The length of implementation is affected to a great extent by the
number of modules being implemented, the scope of the implementation, the extent of customization,
and the number of interfaces with other applications.

Implementation Costs
The total cost of implementation could be 3 to 5 times the purchase price of the software and
can equate to 50% of the total implementation project costs. The implementation costs increase as the
degree of customization increases. The cost of hiring consultants can consume a large portion of the
overall budget for the implementation. Retaining skilled employees can be expensive as well.
Employees could double or triple their salaries by accepting other positions; thus, an organization may

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have to be prepared to increase the salaries of project team members. Project managers must remain
cognizant of the implementation costs and seek to minimize these costs.

ERP Vendors
Selecting a suitable ERP vendor is extremely important in a successful ERP implementation.
Finding a company with financial stability is essential when implementing an ERP. In addition,
organizations must consider the vendors market focus, track record with customers, vision of the
future, and with whom the vendor is strategically aligned.
In addition to finding the right ERP vendor, companies must also have realistic expectations of
the capability of the ERP system. A fully integrated system requires not only an effective information
system, but also the corporate philosophy to support it. A company must know what to realistically
expect from the vendor when implementing ERP software.
Since ERP systems force customers to re-engineer their current business practices to fit the
ERP model, selecting the wrong ERP vendor could result in an unwilling commitment to architecture
and applications that do not fit the organizations strategic goals. Selecting the wrong vendor causes
the organization to either completely overhaul all business processes or to add modifications to their
system which are difficult to manage and strongly discouraged by ERP vendors. Excessive
organizational change and system modifications have a negative effect on achieving a return on
investment.
Some of the biggest ERP system implementation failures have occurred because the new
softwares capabilities and needs are mismatched with the organizations existing business processes

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and procedures. An ERP system that is not designed to meet the specific business needs of the
company can cause tremendous problems.

Selecting the Right Employees

Companies implementing an ERP system must be willing to dedicate some of their best
employees to the project for a successful implementation. Often companies do not realize the impact
of choosing the internal employees with the right skill set. Internal resources of a company should not
only be experts in the companys processes but also be aware of the best business practices in the
industry. Internal resources on the project should exhibit the ability to understand the overall needs of
the company and should play an important role in guiding the project efforts in the right direction.
Lack of proper understanding of the project needs and the inability to provide leadership and guidance
to the project by the companys internal resources is a major reason for failure of ERP projects.

Training to Employees
Training and updating employees on ERP is a major challenge. People are one of the hidden
costs of ERP implementation. Without proper training, about 30 to 40% of front-line workers will not
be able to handle the demands of the new system. The people at the keyboard are making important
decisions about commitments of the company. They need to understand how their data affects the rest
of the company. Some of the decisions front-line people make with an ERP system were the
responsibility of a manager in former systems. It is important for managers to understand this change
in their jobs and encourage their frontline people to be able to make those decisions themselves.
Top managers and all system users must be fully educated so they understand how the ERP
system should be integrated into the overall company operation. All users must be trained to take full

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advantage of the systems capabilities. A failure to educate and train all relevant personnel will
guarantee implementation problems.

Employee Morale
Employees working on an ERP implementation project work long hours. The stress of
implementation coupled with regular job duties could decrease their morale. Leadership from upper
management and support of project leaders should seek to boost the morale of these team members.
People may be fearful of changes brought about by any new system, especially one as
pervasive as an ERP system. They may fear that the new system will make their jobs more difficult,
reduce their importance, or even cost them their jobs. Subsequently, ERP systems may create a great
deal of uncertainty in some people as to whether or not they will be able to perform their jobs as well
as they did under the old system.
The negative effect of morale can even cause fear in veteran employees. Because people must
create new work relationships, share information that once was closely guarded, and make business
decisions they were never required to make, employees can become intimidated by the new ERP
software. These kinds of changes are marked by resistance, confusion, redundancies, and errors,
unless managed properly

Implementation Failure Factors

According to White paper on Implementing ERP in public sector enterprise: Nine Sure way
to Fail Success of Bearing point, following the mistakes which every PSU may avoid at the time of
implementing ERP to avoid implementation failure.

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Assuming there is a natural consistency for ERP

If we brought together all the agencies, divisions and departments and asked how many
wanted to implement standard business processes across the enterprise, what do we would hear? Dead
silence. At least, that is what has happened in other public-sector organizations that undertook large
ERP implementations. The agencies tend to be strongly opposed to losing control of administrative
operations and each can justify why its unique mission merits special attention.
While agencies do differ in important respects, they share many business requirements. All
have to manage a budget, recruit people, distribute payroll, generate purchase orders and so on. ERP
solutions provide a standard, uniform way of performing these functions, so the enterprise can reduce
duplication, produce meaningful information and cut administrative costs.
How can the public sector reap these benefits? Since there is no natural constituency that puts
the needs of the enterprise ahead of its own, you have to build one. Someone at the very top of the
organization must have the vision, understand the benefits and get the message out.

Treating technology as a the key challenge to success

The technical challenges of implementation are a simple matter compared with the human
challenges. In fact, where implementations have failed, 70 percent of the reasons stem from neglect of
the human side of the equation, the Gartner Group reports. Among the causes:
Inadequate training and preparation.
Little or poor change management.
Lack of communication.
Low levels of user involvement.
Adversarial relationships with private-sector partners.

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 Poor project management.

That is why change management is such a critical factor in successful implementation.

Skimping on the front end Preparing for implementation

There is no way around it. Planning and preparing for an ERP project is a complex and
resource intensive undertaking. But if we do not invest in these activitieswhat we call Phase Zero
- we are setting ourselves up for problems down the line, when they are more difficult and costly to
address.
One of the key steps in planning is evaluating how we do business today. This involves not
only the procedures outlined in business manuals but the processes people are using in practice. We
have to determine how the work is actually being done; otherwise, we will be taken by surprise when
we develop the system.

Trying to everything at a once

All-at-once approach to systems implementation is extremely risky. For public-sector
organizations, where go live must be a success, phased implementation is a better way to go.
Implementing waves of functionality-specific modules serve multiple purposes:

Early successes build support and momentum.

Problems can be corrected before moving on.
Training activities can be staged to make efficient use of resources.
Phased implementation puts a reasonable load on the help desk and support staff.

ERP solutions can also be implemented in waves of business units. First, identify the most
eager agencies and include them in the first group, then adjust to ensure heterogeneous representation.
Since ERP projects affect large numbers of people, and few organizations have the capacity to train
everyone at once, the phased approach can spread out the burden on training bandwidth. When ERP

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is implemented in waves, the members of the first group can serve as mentors to prepare and train the
next wave.
We would do much better by concentrating on getting the system up and running with the
basic functionality initially. By keeping it simple, we can declare success, get people on board and
add more features as we move forward.

Providing the bare minimum support for users

Users expect and will tolerate some problems: unfamiliar screens, forgetting what they
learned, not knowing how to do things the new way, and lower productivity in the early days. What
they will not tolerate is lack of support -they expect a help desk.
Training is a similar matter. While everyone agrees that training is important, it is how we
conduct training that determines what users learn and remember, as well as their attitude to the
project. The natural tendency is to teach the transaction: for example, how to enter an invoice. But
training should be providing complete understanding of business process, including how we move
from purchase to payment.
Finally, do not waste money on reproducing large binders of useful information. Users will not
read it. Instead, they want short, easy-to-scan documents that cover how-to basics.

Underestimate the resources required

Every organization underestimates what it will take to implement an ERP solution. While the
budget people carefully calculate the direct cost-software, tools, hardware and consultants but they
overlook many indirect costs. Take personnel, for example. An implementation will consume much

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more staff, among a much larger group, than those dedicated full-time to the project. Most
organizations make the mistake of assuming that the project staff will be able to do everything it did
before the ERP implementation project started. In fact, the rest of the staff will have to take on those
responsibilities. The best thing we can do is set realistic expectations early on, letting managers and
staff knows what is ahead, so they can prepare to help.
Defining requirements also takes a huge staff toll. Few clients realize that they will need a
requirements workshop for each business process that will be affected by the new system. There can
be up to 50 business processes, and each workshop will take one-half to two days and involve roughly
20 peoplewhich adds up to thousands of staff hours.
And this does not take into account training -another element that takes people away from
their day-to-day responsibilities. Whether it is computer based or instructor-led classroom training, we
can expect each employee to require two hours, two days or two weeks of training. It adds up in ways
that few executives imagine.

Overestimating how many Best Practices will be adopted

Every ERP solution includes industry best practices- basic business rules for managing
finances, human resources and procurement, for example, that have been proven over time. But when
evaluating an ERP package, it is important to be realistic. The real issue is not how many best
practices are built into the package, but how many your organization will actually implement, and
how many compromises will be decided to make.
Sometimes there is a reason for not making a change, for legal or contractual reasons or the
precedents of the past. In most cases, however, changes to the basic package are not necessary.

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To accommodate the familiar, the organization must write a complex user exit or program to
replicate current processes. And every time we modify the software to create a user exit, we slow
down the project, add costs and impact future upgrades. In other words, changes quickly increase our
total cost of ownership. To get the highest return on our investment, we need to evaluate the options
carefully, avoid modifications wherever possible and set realistic expectations for payback.

Taking myopic view of the project

ERP implementations are complex, highly visible and vital to an organizations success. It is
easy to get buried in the business of drafting requests for proposals, evaluating responses and
implementing the selected solution. But leaders must keep an eye on the big picture as well, and this
means paying attention to external factors that will impact the project.

Budget health:
An ERP project is a multiyear undertaking, crossing budget cycles. It is essential that funding
be committed for the duration of the project.
Administrative changes:
In government, there may be a change in leadership and structure over the course of the
project. The project design should take such timelines into account, building in the major

functionality before the administration changes.

Labor contracts:
Determine when contracts are renegotiated and be aware that the ERP implementation may
quickly become a focus for employee unions.

By considering the long term and planning ahead, we can create a plan that overcomes these
bumps to produce a successful implementation.

Let the Deadlines Slip

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Business units, agencies, departments, divisions and programs will always have reasons why
they cannot meet the project deadlines. But once we start to let the schedule slide, we create a climate
where it will happen again and again.
This is why it is so important to treat milestone dates as sacred. While we should never
compromise on quality, we must create a sense of urgency throughout the project. We accomplish this
by requiring all milestone changes to be justified and approved by the steering committee, a group of
high-level executives committed to the projects success.
We can help accelerate the process by giving project team leaders the authority to make daytoday decisions without an elaborate approval process.

ERP Implementation in the Public Sector

A public-sector ERP system implementation is often more complex than a private-sector one
because there is often a Gordian knot of regulations, boards, commissions, and agencies that must be
disentangled to complete the project. In addition, there tend to be lots of turf wars. One of the barriers
to implementation of ERP technology in small and mid-size PSUs is the cost of system
implementation. Many ERP vendors provide special software licensing programs for this market.
Some small PSUs have been unable to take advantage of ERP software because of the expense.
In selecting ERP software, public sector organizations usually compare their existing
processes to best practices and focus on creating minimizes software modifications.
Public-sector organizations may have specific requirements not applicable to private
organizations. In addition, the cost of implementing an ERP system also may make it prohibitive for
public-sector organizations to implement. If an ERP vendor only designs software for the public
sector then he may not be following universal best business practices. However, transporting business

25

practices to the public sector may not be desirable or even possible. Some also may point out that the
greater burden of accountability in the public sector is entwined in processes that appear cumbersome
or redundant to those from the private sector.
Despite the barriers to implement, at the time of this study, many public-sector organizations,
had implemented an ERP system. i.e NTPC, ONGC, IPCL, OIC, BSNL etc.
Brief of ERP Project implemented in BSNL
Project Objective
The objective of ERP system is to improve the information flow to facilitate better decision
making leading to overall improvement in the performance of the organization by way of
improvements in information transparency productivity, cycle time & financial performance. This
project is aimed to provide effective and efficient business processes which will aid in better decision
making and thereby improved operational efficiencies.
HCL is the System Integrator (SI), who along with E&Y as the Business Process Re-engineering
(BPR) partner & SAP as the Software Solution Provider (SSP) is implementing this project. The
project is being executed in two parts. Firstly, as a proof of concept (POC) the ERP Application is to
be implemented in seven units of BSNL, namely, Corporate Office, Karnataka Circle, Maharashtra
Circle, Southern Telecom Region (STR), Western Telecom Project (WTP), Telecom Factory Mumbai
and ALTTC Ghaziabad. Secondly it would be rolled out in the rest of 42 units of BSNL during the
second phase of the project.

26

Data center
The application has been hosted in a centralized server located at Data Centre (DC) Hyderabad
with Disaster Recovery (DR) site at Kolkata for the project. These data centers are co-located with
CDR data centers at both the locations.
There are three categories of servers. Development server is the server in which the
application is developed. Quality server is used for testing the developed application and also for
providing training. Production server in which the application will finally reside for the end user for
live data to day transactions. The end users will be interacting with the production server only.

ERP Center/ Core team

The ERP center is located at ALTTC campus, Ghaziabad. The ERP Core Team comprise of
about 125 officers of the rank of GM, DGM, AGM/DE/CAO, DM/SDE/AO, AM/JTO/JAO who had
developed/ customized the SAP software, as per business needs of BSNL and re-engineered Business
Process recommended by E&Y and approved by BSNL. The ERP centre will be the backbone of the
ERP project in terms of know how training & other help required, in ERP solution and take necessary
action for addressing the problem with the ERP solution. Circles implementing ERP or working on
ERP, having any problem may approach ERP core team/ centre for appropriate action as per the
change management procedure.
ERP solution
The currently developed solution of ERP comprise of eight modules which are
a) Finance And Management Accounting

-FICO

b) Materials & Inventory Management including E-Procurement

-MM/ SRM

27

c) Human Resources Management & Administration, Payroll

-HCM/ESS/MSS

d) Plant & Equipment Maintenance

-PM

e) Sales and Distribution

-S D

f) Project Management

-PS

In addition, following two modules are planned to be developed which are

g) Business Information System, Business Intelligence & Analytics

-BIS

h) Enterprise Strategy Management

- SEM

Project Execution overview

a) AS-IS -The existing processes of BSNL were captured and documented.
b) BPR

-Business Process Re-engineering. The consultant evaluates the existing practices and

compares with the best industry practices. Finally the consultant submits it recommendations.
These recommendations are discussed in details with the BSNL Sr. Management for
acceptance.
c) BBP

-Business Blue Print. A final document is prepared covering the re-engineered process

which is accepted and approved by BSNL for solution design in ERP.

d) Solution development -As per the final BBP, the solution in the SAP is developed. This is very
different from the computerization of the existing processes. While implementing SAP, the
biggest advantage is the seamless integration of the business processes. The views of the SAP

28

experts are that one should make maximum efforts to adopt the SAP practices without any or
minimum modification. This way the best benefit of SAP is obtained.
e) Testing

-The solution developed is tested. First the individual modules are tested. After

that the integrated modules are tested.

f) Collection of data

-BSNL Data is the most important element. The better is the data the

better results are obtained.

g) Training

-Trainings are given to the end users on how to work on the solution developed.

h) Go-live

-A typical terminology used in ERP project indicating the start of usage of the

system by the end-users.

Benefits of ERP envisaged in BSNL

a) Visibility of inventory across units and better control over inventory position and cost.
b) Reduced inventory holding cost and better & informed purchase decision.
c) Efficient and on-time asset management
d) Visibility and information on assets across organization for better utilization and / or
commercial exploitation.
e) Effective AMC tracking and vendor management
f) Better Budget and Funds management and control
g) Consolidated finance and accounts view for the entire organization on the click of the mouse.
h) Profit center accounting (LOB wise) and cost control and management across BSNL Units.

29

i) Better management of Projects

j) Faster Bank reconciliation and automated check printing
k) Centralized & Integrated IT systems leading to high transparency, visibility of information and
data accuracy.
l) Centralized Operations leading to Standard and optimal procedures
m) Consolidation of Tax Service Tax, TAN etc
n) Switch over to e Procurement from existing Manual Tendering process

User Access Network for ERP

It has been decided that use of CDR network will be made wherever it is available. Thus 95 %
of the users will get covered in this. For balance locations, provision of LAN/ router need be planned
see Annex-1 for details. The non territorial circles should get connected to territorial circles wherever
possible.
ERP Users
There shall be two types of users viz
a) Executives it is expected that about 50% of the executive staff shall be involved with working
on CORE ERP system in terms of correction / modification / updating / approval / forwarding
notification.
The staff working at customer service centers and involved in selling of Mobile inventory
(RC, Top up) and the staff dealing with franchise / DSA will also use CORE ERP system. For

30

using core ERP system the executive / employee will requires installation of SAP client on the
PC.
b) All other employees shall use the Employee Self Service (ESS) Licenses of ERP which will
enable the employee to do individual transactions viz. Apply leave, GPF etc.
Similarly Manager Self Service (MSS) would be used by Managers to provide approvals of
the ESS applications. ESS and MSS work on Internet Explorer / Browser.
Training
The training to be divided into following categories:
a) Filling up data templates using Mantis
b) End user training to learn to transact business transactions through SAP.
c) Senior management training on BSNL processes and reports in SAP.
d) Post go live trainings / workshops.

It is planned to provide training to power trainers of circle (RTTCs, Circle HQ) in ALTTC /
BRBRA TTC so that these power trainers can train the remaining staff of their circle.
Data collection for ERP
a) IT tool MANTIS is being used for this purpose. It will be made available on internet.
b) Brief about Mantis:

Mantis is an IT tool, a software, which is mainly used for activity escalation and
forwarding. A document can also be attached with the issue.

31

The activity escalation property of the software is being utilized for uploading data
templates and follows the route: SSA -> Circle -> HCL -> Core team -> HCL -> Final
upload.

Hence the starting is done by creating an activity by the core team, module wise. The core
team will create the activity and intimate which blank template is to be downloaded.

c) SSA / Circle team to study the activity created in Mantis and according download the required
template from ERP portal.
d) SSA / Sub regions to fill up the data template as per the instruction / guidelines.
e) The SSA will then upload the template in the ERP Portal (Mantis) and forward to circle team
in Mantis. Circle team after validating the data should forward it to HCL.
Support levels
There will be about two Power user of each module. The Power user will be responsible to
solve day to day issues and to escalate the same to the next level if required.
a) SSA/Unit Level Power Users

L1

b) Circle Level Power Users

L2

c) Central Level Power Users (Core team at ERP centre)

L3

Interfaces
a) ERP- Sancharsoft Interface: - The Retail sale to the end customers will be done from
Sancharsoft. The retail sale data will be fetched from SancharSoft to ERP through an Inbound
Interface at the end of the day. The sale to Franchisees/ DSAs etc will be done through ERP.

32

b) ERP- Pyro Interface:- The order for C-Topup sales will be created in ERP and
Franchisee/CSCs C-Topup account will be credited through an outbound interface between
ERP and Pyro System. Day end sale data of CSCs will be fetched from Pyro system to SAP
through inbound interface between Pyro & ERP
c) CDR ERP for refund to the customers. For printing refund cheque only customer-wise
details will not be maintained in ERP.
d) HR Package - This will be completely taken over by ERP.

Summary
It may be concluded from this review of literature that many factors contribute to a successful
ERP implementation. Most of the researchers agreed on the benefits of ERP systems and the critical
factors necessary for a successful implementation. In addition, researchers agreed that the absence of
the critical factors and the failure to properly prepare for the ERP implementation, can contribute to
the failure of an ERP software implementation.
In regard to the benefits sought through implementation, researchers agreed that ERP software
allows for increased communication within an organization. Many organizations seek to implement
ERP systems in order to achieve easier access to reliable information, elimination of redundant data
and operations, reduction of cycle times, and cost reductions.

33

In regard to critical factors for a successful implementation, researchers consistently cited top
management support as the most critical factor for successful implementation. The research indicated
that project managers must carefully monitor implementation activities to ensure that the critical
factors are present during the ERP implementation. Monitoring and remaining cognizant of these
factors can enable organizations to have a successful implementation.
ERP implementation in the public sector has been limited due to the high cost to implement.
However, some public sector organizations such as ONGC, HPCL, IOCL have successfully
implemented ERP software. Many of the factors that are required for successful implementation in the
private sector are also required in the public sector. Also, many of the public sector organizations
implement ERP software seeking the same benefits as private sector companies. However, managing
the critical factors during the implementation in the public sector may be more difficult because of the
increased government regulation and public accountability.

Research Methodology

Introduction
In this chapter, the methodology and procedures used to conduct this
study are described.
This chapter divided into two sections. The first section contains statement of
problem and second section contains details regarding research methods
adopted for the study.

34

Statement of Problem
Objectives
The purpose of this study was to determine the following:

The benefits sought from implementing ERP.

The extent to which critical factors were present during the ERP software implementation.
The level of satisfaction with the performance of implemented modules among the ERP users.

Importance of the study

The implementation of ERP software has been continuing to grow in the private as well as in
public sectors. Thus, it is important that organizational leaders have information to make intelligent
decisions regarding implementation of ERP. It is also important that organizational leaders understand
the issues with which they could be faced while implementing ERP. This study extended to determine
the factors affecting ERP implementation this knowledge will allow organization leaders to make
more informed decisions while implementing ERP. Also, this study aims to find out the expected
benefits of the ERP implementations which may cause the public sector undertakings to implement
ERP. It was intended to provide data that would assist organizational leaders in making informed
decisions when implementing ERP by supplying information as to the concerns and satisfaction with
ERP implementation. Information from this study may be useful in determining how well the needs
and expectations of other organizations have been met when implementing ERP.

Limitation of study
1. This study is delimited by subjective opinions obtained from the employees of BSNL from
those states where ERP is implemented. Employees of BSNL from other States are not
included in study.

35

2. The study is also delimited by opinions obtained from the employees of BSNL who are using
FICO, HCM, MM, PS & PM modules of ERP as other modules yet not implemented in
BSNL.
3. BSNL being 100% owned Government Company and involved in service industry having
different working culture compared to other Public Sector Undertaking. Hence, the
conclusion of this study may not directly applicable to all other PSUs.

Assumptions of study
It was assumed that the survey instrument developed would permit the assessment of ERP
users perceptions regarding the advantages, and concerns of implementing ERP systems and that all
respondents conveyed their honest opinions.
It is also assumed that the perceptions of users of other modules of ERP which are not
implemented in ERP are same as that of users of ERP modules implemented in ERP.

Research Method
Research Method
The purpose of study to report the effects of ERP implementation in PSUs
which is based on survey of BSNL employees and as the researchers have no
control on variables, Survey based Descriptive Research method used.

36

Population
The population for this study consisted of those individuals who were using
ERP in Public Sector Enterprise in India

Sampling unit
BSNL, a Public Sector Enterprise in India which has implemented various
modules of ERP software recently is used as a sampling unit.

Sample size
A sample of 384 ERP users of BSNL was taken for this study.

Sampling Method
Convenient Sampling was used to select samples for the survey from all
modules of ERP which were implemented in BSNL. Also, at the same time snow
ball sampling used get required number of response for each module.

Research Questions
The following research questions will serve to guide this study.
1. What were the benefits sought in the implementation of ERP software in
public sector organizations?

37

2. To what extent were critical factors present during the ERP

implementation?
3. To what extent were the respondents satisfied with performance of the implemented ERP
modules?
Data Source
The study was based only on Primary Data. Primary Data was collected via
a structured survey instrument designed by the researcher. This instrument was
based on the review of literature on ERP system implementation. The instrument
developed, was reviewed and modified based on feedback from ERP users.
This survey instrument was composed of three parts which included:
expected results and benefits, implementation critical factors for success and
level of satisfaction of each module implemented.
Part 1 of the survey instrument addressed Research Question 1 by asking
questions regarding the benefits sought and realized by implementing the ERP
software. Respondents were asked (a) expected and realized (b) expected but
not realized, (c) not expected but realized, or (d) not expected and not realized
the stated benefits.
Part 2 of the instrument addressed Research Question 2. This section asked
the respondents to indicate if the stated factors were present during their
implementation (Yes, Somewhat, No).
Part 3 of the survey addressed Research Question 3 by asking questions regarding the level of
satisfaction with each module implemented.

38

Data Collection
The survey instrument was prepared in Google forms and the link to fill up
the survey was sent via email to ERP users in BSNL. The e-mail explained the
purpose of the survey and the importance of participating in the research
project. Reminder mail was also sent to non- respondents to further encourage
participation and to maximize the response rate.
In order to analyze the first research question, that sought to find
information regarding the benefits sought in the implementation of ERP software,
Part 1 of the survey instrument was analyzed for frequencies of responses.
In order to analyze the second research question that sought to find
information regarding the critical success factors present during the ERP
implementation the Part 2 of the survey instrument was analyzed for
frequencies of yes, somewhat and no responses.
In order to answer the third research question that sought to find information regarding the
modules implemented and the level of satisfaction with those modules, responses to Part 3 of the
survey instrument were analyzed for frequencies of responses. The responses to the level of
satisfaction were coded using 4- point scale (Very Unsatisfied = 0, Unsatisfied = 1, Satisfied = 2, and
Very Satisfied = 3). Lastly, the mean values of the four groups were compared to determine the
module which giving maximum and minimum satisfaction to its users.

39

Data Analysis
Introduction
This chapter provides an analysis of the data gathered in this research
study. The chapter is divided into four major sections: Introduction, Research
Question 1, Research Question 2, Research Question 3 and Summary.
The purpose of this study was to determine the following: (a) the benefits
sought from implementing ERP (b) the extent to which critical factors were
present during the ERP software implementation and (c) the level of satisfaction with
the performance of implemented modules among ERP users.
The data for this study were collected through survey of BSNL employees
who were using ERP. A survey was sent to about 1000 employees via electronic
mail directly or indirectly from the researcher. A total of 408 surveys were
received and out of that 384 suvery were usable.
Table 1 presents the breakdown of ERP module wise responses received.
Graph 1 given below shows the weightage of each module in useable
survey received.

40

ERP Module wise responses received Responses Received

25%

26%

25%

24%

FICO
HCM
MM
PM & PS

Above graph clearly shows that responses received from all the four
modules were nearby same. It means, equal weightage given to each of module
of ERP implemented in BSNL for the research study.

Research Question 1
What were the benefits sought in the implementation of ERP software in public sector
organizations?
In order to provide an answer to Research Question 1, respondents were asked to indicate in
Section A of the survey instrument if they had/had not expected and/and not realized the stated
benefits. Respondents were requested to indicate whether they had expected and realized, expected
but not realized, not expected but realized, or not expected and not realized the stated benefit. The
results, displayed in Table 2, provides the frequencies of responses for each of the stated benefits,
sorted in descending order by the benefit which received the highest Expected and Realized
responses.

41

The results indicate that easier access to reliable information (297, 77.34%) and increased
standardization of processes (282, 73.44%) had the highest number of positive responses (expected
and realized).
The benefits of realized a return on investment (161, 41.93%) and software that is easily
adaptable to business changes (153, 39.84%) received the highest number of expected but not realized
responses.
In addition, 5.99% (23) of the respondents indicated that they did not expect, but realized,
redesigned business processes.

Graph 2 below shows the mean value of various benefits with respected to expected/not
expected and/but realised/not realised.

Mean Value of various benefits expected/not expected and/but realised/not realised

3%
30%

10%
57%

42

Expected and Realised

Expected but Not
Realised
Not Expected but
Realised
Not Expected and Not
Realised

The mean value shows that 57% expected benefits realised while 30% expected benefits
unrealised. Also, 3% unexpected benefits are realised while 10% benefits neither expected nor
realised.
The results were further analyzed for expected and not expected benefits by combining the
number of responses for expected and realized and expected but not realized. The responses for
not expected but realized and not expected and not realized were also added together. The results
appear in Table 3 sorted by the benefit which received the highest number of expected responses.

Graph 3 below shows the mean value of all benefits expected or not expected

43

Mean value of benefits

4950.00%; 13%

Expected
Not Expected
33450.00%; 87%

Above Graph shows that 87.05% benefits were expected while 12.89% benefits were not
expected by responders.
However, at least 79.17% (304) of the respondents indicated that they expected to realize each
of the stated benefits. The benefits of easier access to reliable information, increased standardization
of processes and the ability to produce better reports with the information I need, received the highest
number of expected responses, (375, 97.66%), (354,92.19%) and (353, 91.93%) respectively. The
benefit which received the most not expected responses were realized a return on investment (80,
20.83%), software that is easily adaptable to business changes (69, 17.97%) and Improved customer
(internal/external) relationship or supply chain management (65, 19.93%)
The results were also analyzed for realized versus not realized benefits responses. The
responses of expected and realized and not expected but realized were combined. The responses to

44

expected but not realized and not expected and not realized were also combined. Table 4 displays the
results, sorted in descending order by the benefit which received the highest number of realized
responses.
Graph 3 below shows the mean value of benefits realised and not realised.
Mean value of benefits

15340.00%; 40%
23060.00%; 60%

Realised
Not realised

Above Graph shows that 60.05% benefits were realised whether there were expected or not
while 39.95% benefits not realised whether they were expected or not.
Overall, the benefit which received the highest number of realized responses was Easier
access to reliable information (300, 78.13%). The benefits of Increased standardization of processes
and Redesigned business processes both received 77.08% (296) of the responses as having been
realized through the ERP system implementation.

45

Benefits which received the highest number of not realized responses were Realised a return
on investment (229, 59.64%) and Software that is easily adaptable to business changes (219,
57.03%).
Research Question 2
To what extent were critical factors present during the ERP implementation?
In order to provide an answer to the second research question, respondents were asked to
indicate the extent to which stated critical factors were present during their implementation (Yes,
Somewhat, or No). The results, displayed in Table 5, sorted in descending order by the factor which
received the most yes responses, show the frequencies and percentages of responses for each of the
critical factors.
The critical factor, Top management was kept abreast of project status (320, 83.33%) and the
implementation had top management support (287, 74.74%), received the highest number of yes
responses. The critical factor, the organization was prepared to manage change (161, 41.93%) and
the ERP software was modified to meet our needs (152, 39.58%) received the highest number of no
responses.

Research Question 3
To what extent were the respondents satisfied with performance of the implemented ERP
modules?
In order to answer the third research question, respondents were asked to indicate the extent to
which they were satisfied with the performance of the stated ERP modules by indicating they were
Satisfied, Very Satisfied, Unsatisfied, or Very Unsatisfied. The results displayed in Table 6 show the

46

frequencies of responses for each of the stated modules. The table is sorted in descending order by the
module which received the highest percentage of Very Satisfied responses.
The results were analyzed for responses received for Satisfied and Unsatisfied responses by
combining the number of responses for Very Satisfied & Satisfied and Unsatisfied & Very
Unsatisfied. Table 7 displays the results, sorted in descending order by the responses received the
highest number of Satisfied & Very Satisfied in percentage.
The users of FICO Module were most satisfied users of ERP as it received the highest number
of very satisfied & satisfied response (84.69%) while the users of MM Module are most unsatisfied
users of ERP in BSNL (28.87%).

47

Finding and Conclusion

Summary of finding

Research Question 1
What were the benefits sought in the implementation of ERP software in public sector
organisation?
This study supported and strengthened what was found in related research as to the benefits
sought in the implementation of ERP software in public sector organizations. The data from the
present study indicated that at least 79.17% of the respondents expected to achieve the stated benefits.
The greatest percentage of respondents (97.663%) expected to receive easier access to reliable
information. This would imply that organizations are implementing ERP systems with a primary
expectation of achieving easier access to accurate and current information.
The respondents answers were used to further determine if the benefits were actually realized
by organizations who have implemented ERP systems. At least 40.36% of the respondents indicated
that they had realized all of the stated benefits. This indicates that more people expected to achieve
the stated benefits than those who actually realized them.

48

The greatest percentage of respondents (78.13%) realized the benefit, easier access to reliable
information. This would imply that the primary benefit gained from implementing an ERP system is
easier access to reliable information.
The greatest percentage of respondents (59.64%) indicated that they did not realize the benefit
of Return on Investment. This may indicate that this benefit is not realized in the ERP system
implementations.

Research Question 2
To what extent were critical factors present during the ERP implementation?
The responses implied that respondents felt that most of the critical factors were present
during their implementation. The only factor receiving a high number of No responses was the
organization was prepared to manage change (41.93%).
The factor that ranked the highest, indicating that the factor was present in most of the
implementations, was top management was kept abreast of the project status (83.33%). The
implementation had top management support (74.74%), received the second highest number of Yes
responses.

Research Question 3
To what extent were the respondents satisfied with performance of the implemented ERP
modules?
At least, 71.73% users are satisfied with ERP. The responses implied that respondents were
satisfied overall with each of the modules that were implemented. FICO was the most successful

49

module of ERP while the MM was the least successful module. This shows that FICO is the most user
friendly module as well as it provides the all information and reports the users are seeking for. While,
the MM was the least user friendly in compare to the other modules of ERP.

Conclusions
Based on the finding of this study, several conclusions were formulated and are presented
below:
It was concluded that PSUs are implementing ERP systems are seeking the benefits as
identified in the literature. The benefit most sought through ERP implementations was easier access to
reliable information. It was also concluded that the benefit most often realized through ERP
implementation was easier access to reliable information.
In regard to critical factors present during ERP implementations, it was concluded that top
management was kept abreast of the implementation was the factor most often present during the
implementation. Top management support was also present during implementation. This was cited in
the literature as the most important critical factor during ERP implementation.
It was also concluded that almost all modules were successfully implemented in BSNL.
However, the FICO is the most user friendly and successful module of ERP. Therefore, when the

50

modules were implemented in phased manner, it should be advisable to implement FICO module at
first.

Recommendations
The purpose of this study was to present the perceptions of ERP users, to determine the main
benefits which motivate the Public Sector Enterprise to implement ERP.
Based on the findings and conclusions, the researchers suggestions are as follows:

It is recommended that PSUs considering ERP system implementation continue to research

ERP functionality in order to identify and achieve all the expected benefits.
It is recommended that PSUs continue to implement strong change management within their

organizations.
It is recommended that PSUs must ensure top management involvement in ERP involvement.
It is recommended that organizations hire competent consultants and skilled project team

members should be part of ERP implementation team

It is recommended that leaders within organizations, particularly public-sector organizations,
ask the ERP vendor to demonstrate the business process that the organization needs/desires in

51

order to both ensure that the vendor can accomplish the task and decrease the gap between
what is expected and what is realized.

This study has only begun to address the important and timely topic of ERP implementation in the
public sector. The following recommendations for future research in the area of ERP implementation
are made:

Conduct a study to determine the technical and business process issues that affect ERP

implementation in the public sector.

Conduct a study on the specific outcomes of ERP implementation, particularly in the public

sector.
Conduct a study on specific decision making processes and their relation to the success of the

ERP implementation.
Conduct a study using a sample of different ERP systems, to compare software systems, and
the success of their implementations in the public sector.

52

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Fitrinix (February,2011), What is ERP and why do I need it?
Gede Rasben Dantes & Zainal Arifin Hasibuan (2011), The impact of Enterprise Resource
Planning (ERP) system implementation on organization: Case study ERP
implementation in Indonesia
Gordon Baxter ( February, 2010), Key issues in ERP system implementation
Gumaer, R. (1996), Beyond ERP and MRP II.
Helmut Klaus, Michael Rosemann and Guy G. Gable ( 2000), What is ERP?, extracted from
http://eprints.qut.edu.au/40347/1/c40347.pdf
Infor (2008), White Paper:Selecting an ERP solution: A guide
Jaideep Motwani, Dinesh Mirchandani, Manu Madan & A. Gunasekaran (2002), Successful

54

implementation of ERP Projects: Evidence from two case studies

James W Turton (Septemebr, 2010), A managers view of critical success factors necessary for
the successful implementation of ERP
Jeff Kugler (February, 2008), White Paper:Four Common ERP implementation mistakes
John Lian (August, 2001), A study of prerequisites for successful ERP implementations from
the project management perspective
Joycelyn L. Harrison (2004), Motivations for Enterprise Resource Planning (ERP) system
Komiega, K. (2001). The ABCs of ERP.
L Kambarami, S Mhlanga, T Chikowore (July, 2012), Evaluation of Enterprise Resource
Planning implementation success: Case study in Zimbabwe
Louis Columbus, (Decemeber,2014), 2013 ERP Market Share Update: SAP solidifies
Market Leadership , extracted from https://lcolumbus.files.wordpress.com/2014/05/erpmarket-share-2013.jpg
Mohammad A. Rashid (2000), The evolution of ERP systems: A historical perspective
Mustapha El Masbahi (September 2013), ERP and Customization: Case study of logistics
processes integration in a telecommunications company
Niraj Prakash and Umesh Gulla (2012), Adoption of enterprise applications towards EGovernment A select case study of Municipal Corporation of Greater Mumbai
Patricia Barton (November, 2001), Enterprise Resource Planning factors affecting success
and failure
Princely Emili (2012), ERP System Success : An Integrative Framwork
Protivity (2012), ERP implementation risk: Identifying, monitoring and remediating issues
throughout the project to ensure success
Purnendu Mandal & A. Gunasekaran (2002), Issues in implementing ERP: A case study
Saima Kanwal & Dr Irfan Anjum Manarvi (Sepetemeber, 2010), Evaluating ERP usage
behavior of employees and its impact on their performance: A case of Telecom Sector
Sean W. ODonnell (2012), 5 Steps to successful ERP implementation
Shafqat Ali Shad, Enhong Chen &Faisal Malik Faisal Azeem (2009), Performance
enhancement factors of ERP projects in a telecom public sector organization of
Pakistan

55

Shari Shang & Peter B Seddon (2012), Assessing and managing the benefits of Enterprise
systems: The business managers perspective
Tawhid Chtioui (2009), Understanding the impact of ERP standardization on Business
Process Performance
Thomas F. Wallace, Michael H. Kremzar (2001), ERP: Making it happen -The implementers
guide to success with Enterprise Resource Planning
Umble, E. and Umble, M. (2002), Avoiding ERP implementation failure
Vijay M. Khaparde (Decemeber, 2012), Barriers of ERP while implementing ERP
Z. Vanessa Giacoman (2013), Organizational change management in Public Sector ERP
implementations

APPENDIX A
Survey Instrument
Enterprise Resource Planning (ERP) Implementation at BSNL
Name:
Designation:
Whether are you using ERP in your routine work: Yes / No
If Answer of 3 above is No then leave the survey otherwise go ahead
4. Which functional module/area of SAP are you using for carrying out your daily transactions?
1.
2.
3.

(Please the box whichever applicable )

FICO
HCM
MM
PM & PS

56

PART 1: EXPECTED RESULTS AND BENEFITS

Please complete the stem sentence with the statements below and answer if the benefit was 1.
"Expected and Realized" 2. "Expected but Not Realized" 3. "Not Expected, but Realized" 4. "Not
Expected and Not Realized"
BECAUSE OF IMPLEMENTING ERP SOFTWARE, MY ORGANIZATION HAS..

Benefits
A

The ability to produce better reports

B
C
D
E
F
G

with the information I need.

Overall reduced operational costs.
Easier access to reliable information.
Improved internal communication.
Eliminated redundant tasks.
Realized a return on investment.
Software that is easily adaptable to

business changes.
Increased standardization of

I
J

processes.
Redesigned business processes.
Improved customer(internal/external)

Expected
and
Realised

Expected
but Not
Realised

Not
Expected
but
Realised

Not
Expected
and Not
Realised

relationship or supply chain

management
PART 2: ERP IMPLEMENTATION CRITICAL SUCCESS FACTORS
Please indicate the extent to which the statements below are true for your organizations
implementation:
A
B

Critical Success Factors

The implementation had top management support
The implementation project team was skillful in
management

57

Yes

Somewhat

No

C
D

Critical Success Factors

The project implementation partner was skillful.
The project team was knowledgeable about ERP

and business processes

The project had the support of business unit

managers
Top management was kept abreast of the project

status
There was a clearly defined scope for the

implementation project.
End-users were involved during the

I
J

implementation.
There was effective end-user training.
The ERP software was modified to meet our needs

Our organization mapped and reengineered our

business processes to match the ERP processes.

The organization was prepared to manage change.

Yes

Somewhat

No

PART 3: SATISFATION LEVEL FOR ERP MODULES IMPLEMENTED

Please indicate your level of satisfaction with the below ERP modules implemented in your
organization:
Modules implemented
FICO
HCM
MM
PM & PS

Very satisfied

Satisfied

58

Unsatisfied

Very Unsatisfied

Table: 1
ERP Module wise responses received

Modules

Responses Received

% to responses

FICO

98

25.52%

HCM

94

24.48%

MM

97

25.26%

PM & PS

95

24.74%

Total

384

100.00%

59

Table 2
Expected and Realized Benefits of ERP System Implementation (n =384)

Benefit
Easier access to reliable

Expected and
Realised
n
297

%
77.34
%

Expected but
Not Realised
n

23

%
5.99

34

8.85%

14

%
3.65

17

4.43%

72

of processes.
Redesigned business

73.44
%

273

71.09
%

54

%
14.06

69.01
%

88

%
22.92

55.73
%

131

34.11

information I need.
Eliminated redundant

214

tasks.
Improved internal

198

127

communication.
Improved

51.56
%

%
33.07

189

49.22
%

130

%
33.85

customer(internal/external

4.17%

14

%
3.65

282

better reports with the

16

78

%
18.75

265

%
0.78

Not Expected
and Not
Realised
n
%
6
1.56%

%
20.31

information.
Increased standardization

processes.
The ability to produce

Not Expected
but Realised

%
4

1.04

35

9.11%

12

%
3.13

47

12.24

15

%
3.91

50

%
13.02

) relationship or supply
chain management
Overall reduced

181

147

38.28

0.52

54

14.06

operational costs.
Software that is easily

47.14
%

162

42.19
%

153

%
39.84

%
0.78

66

%
17.19

adaptable to business

changes.

60

Expected and
Realised

Benefit

n
143

Realized a return on
investment.

220.4
0

Mean Value

%
37.24
%
57.40
%

Expected but
Not Realised
n
161

%
41.93

114.1
0

%
29.71
%

Not Expected
but Realised
n
12

%
3.13

10.2
0

%
2.66
%

Not Expected
and Not
Realised
n
%
68
17.71
39.3
0

Table 3
Expected versus Not Expected Benefits (n=384)

Expected

Benefit

Not Expected

Easier access to reliable information.

375

97.66%

2.34%

Increased standardization of processes.

354

92.19%

30

7.81%

353

91.93%

31

8.07%

Eliminated redundant tasks.

345

89.84%

39

10.16%

Overall reduced operational costs.

328

85.42%

56

14.58%

Redesigned business processes.

327

85.16%

57

14.84%

Improved internal communication.

325

84.64%

59

15.36%

319

83.07%

65

16.93%

315

82.03%

69

17.97%

304

79.17%

80

20.83%

334.50

87.11%

49.50

12.89%

The ability to produce better reports with

the information I need.

Improved customer(internal/external)
relationship or supply chain management
Software that is easily adaptable to
business changes.
Realized a return on investment.
Mean Value

61

%
10.23
%

Table 4
Realised versus Not Realised Benefits (n=384)

Easier access to reliable information.

N
300

%
78.13%

Not realised
n
%
84
21.88%

Increased standardization of processes.

296

77.08%

88

22.92%

Redesigned business processes.

296

77.08%

88

22.92%

The ability to produce better reports

279

72.66%

105

27.34%

with the information I need.

Eliminated redundant tasks.

218

56.77%

166

43.23%

Improved internal communication.

210

54.69%

174

45.31%

Improved customer (internal/external)

204

53.13%

180

46.88%

management
Overall reduced operational costs.

183

47.66%

201

52.34%

Software that is easily adaptable to

165

42.97%

219

57.03%

business changes.
Realized a return on investment.

155

40.36%

229

59.64%

230.60

60.05%

153.40

39.95%

Benefit

Realised

relationship or supply chain

Mean Value

62

Table 5
Frequency of Implementation Critical Factors (n=384)

Benefit

Yes

Somewhat
n
%

Not
n

Top management was kept abreast of the

project status

320

83.33%

62

16.15%

0.52%

The implementation had top

management support

287

74.74%

88

22.92%

2.34%

There was a clearly defined scope for the

implementation project.

263

68.49%

97

25.26%

24

6.25%

End-users were involved during the

implementation.

224

58.33%

97

25.26%

63

16.41%

The implementation project team was

skillful in management

211

54.95%

105

27.34%

68

17.71%

The project implementation partner was

skillful.

186

48.44%

108

28.13%

90

23.44%

There was effective end-user training.

171

44.53%

111

28.91%

102

26.56%

The project team was knowledgeable

about ERP and business processes

153

39.84%

126

32.81%

105

27.34%

The project had the support of business

unit managers

137

35.68%

134

34.90%

113

29.43%

The ERP software was modified to meet

our needs

129

33.59%

103

26.82%

152

39.58%

63

Yes

Benefit

Somewhat
n
%

Our organization mapped and

reengineered our business processes to
match the ERP processes.

91

23.70%

156

The organization was prepared to

manage change.

88

22.92%

135

Not
n

40.63%

137

35.68%

35.16%

161

41.93%

Table 6
Satisfaction with Modules Implemented (n=384)

Very
Modules
implemente

Very

Unsatisfie

Unsatisfie

Satisfied
n
%
45.92

Satisfied
N
%
38.78

n
1

%
11.22

n=

FICO

45

%
29.79

38

%
43.62

4
1

4.08%
18.09

98

HCM

28

%
37.11

41

%
34.02

8
1

8.51%
15.46

7
1

%
13.40

94

MM

36

%
40.00

33

%
32.63

5
1

%
18.95

97

PM & PS

38
14

%
38.28

31
14

%
37.24

8
5

%
13.54

8
4

8.42%
10.94

95
38

Total

64

Table 7
Satisfied versus Unsatisfied with ERP modules (n=384)

Very Satisfied /

Unsatisfied / Very

Satisfied

Unsatisfied

Modules
implemented
FICO
HCM
PM & PS
MM
Total

n
83
69
69
69
290

%
84.69%
73.40%
72.63%
71.13%
75.52%

65

n
15
25
26
28
94

%
15.31%
26.60%
27.37%
28.87%
24.48%

n=
98
94
95
97
384

66