Enterprise Resources Planning Systems - Case Study Example

Enterprise Resource Planning Systems Esfahan Steel Company (ESCo), Iran Name Institution Date Table of Contents Enterprise Resource Planning Systems 1 ETA ASCON & STAR Group 3 Introduction 3 Before implementation of ERP system 3 Implementation of ERP system 5 ETA Ascon & STAR group implemented an ERP system in 2005. The company chose SAP ERP application including mySAP and mySAP-CRM applications for implementation. According to AMEinfo. (2005), the company expects the publication to improve its customer relation procedures after implementation. The applications were implemented through a series of partnerships. Larsen & Toubro Infotech Ltd and Satyam Computer services limited were partners of the company in the implementation of the system. Partners came together to implement a training program for three thousand offices from all the companies. They instigated company navigators three from the company. In a span of nine months, the group implemented the human resource unit, financial accounting unit and controlling unit in the eighty companies or more. 5 After implementation of SAP ERP 6 Benefits of ERP 6 Updated IT system 6 Adequate Information 6 Faster accounting activities 7 Improved business processes 7 Conclusion 8 References 9 AMEinfo. (2005). ETA - ASCON & ETA STAR Group selects SAP ERP to support business performance. The ultimate middle East usiness resource. 9 ETA ASCON & STAR Group Introduction ETA Ascon & Star Group Company is a local company in the UAE located in Dubai dealing in construction and engineering services. It is a multinational Middle East company that has been in operation for 32 or more years. Operating in the engineering, construction and operations industry, the company offers hospitality, healthcare, and travel and leisure services other than contracting, manufacturing, shipping and engineering services. ETA Ascon & Star group is among UAE construction giants. Although it was not the first company to implement ERP system, the company is currently bearing fruits of its implementation since 2005, and recorded 5.34 billion US dollar revenue in 2007. One of the company’s objectives is to upgrade its IT system that was outdated. This paper discusses the state of ETA Ascon & Star Group Company before and after implementation of ERP system in and processes of implementation. Before implementation of ERP system The company’s operations were based on an outdated IT system that was home grown. As a result, the organisation was facing a number of challenges that could be eliminated or minimized by implementation of a new upgraded IT system. Available opportunities would also be explored through integration of the system in the business operations. The company aimed at upgrading the system into a modern system that is also convenient. It also focused in availing organisational information online for stakeholders within and outside the organisation. ETA looked forward o get rid of islands of information which were piled in its operation areas. The business enterprise could also be viewed online in a consolidated manner through the new proposed system (SAP,2008). This indicates that information of the business was not accessed online in a consolidated manner. Business processes in ETA Ascon & star group were not adequate and therefore implementation of the system gave the business an opportunity to improve these processes. There was also insufficiency in the visibility of customer credit exposure. This meant that a new integrated system would ensure that extension of such visibility is ensured. Treasury management was another area of insufficiency in the company as a result of the old IT system. Implementation of the new system is expected to enable and improve the treasury management of the company. A member of the board, Rahman Arif identified that the management of the company had inadequate and untimely information on the enterprise compiled in one unit. ETA Ascon & Star Group management has set objectives that the ERP system is required to achieve. The Company aims at rationalizing the IT system across its board. The management also identified the need for the company to incorporate an information system horizontally and vertically across the organisation. From the company’s objectives, the system was insufficiently integrated in all units of the organisation and across the board. Working capital management, treasury and banking was another area of opportunities that were not explored. The company therefore intended to take advantage of future opportunities in such areas. This also included project management opportunities in the industry that the company is operating in (AMEinfo, 2005). Implementation of ERP system ETA Ascon & STAR group implemented an ERP system in 2005. The company chose SAP ERP application including mySAP and mySAP-CRM applications for implementation. According to AMEinfo. (2005), the company expects the publication to improve its customer relation procedures after implementation. The applications were implemented through a series of partnerships. Larsen & Toubro Infotech Ltd and Satyam Computer services limited were partners of the company in the implementation of the system. Partners came together to implement a training program for three thousand offices from all the companies. They instigated company navigators three from the company. In a span of nine months, the group implemented the human resource unit, financial accounting unit and controlling unit in the eighty companies or more. Template approach was used in the implementation process. The process was broken down to a three-phase implementation procedure throughout the enterprise. SAP ERP application was the most appropriate application since it was considered to have sufficient universal practices that apply to functions across multiple industries. The application also solves current and future problems that the enterprise is exposed to. ETA Ascon and Star group considered SA ERP application since it is fully integrated and provides online and real time availability of the organisation’s information. This will in turn meet the organisation’s objective of availing the enterprise’s information online in a consolidated manner (SAP, 2008). After implementation of SAP ERP Benefits of ERP Updated IT system The company has experienced a number of success factors since the implementation of ERP system. The benefits were seen since six months after clearing the second phase of implementation. This includes its efforts towards transforming the traditional information systems to adopt new ones like mySAP and mySAP-CRM applications. Its information is available online for stakeholders and interested parties of the company. The company considers installation of the system as an investment and project to which human, physical and financial resources were injected. ERP proved to be successful in the organization in different aspects. The senior management was improved. The top management currently provides leadership, and necessary resources for project management. Adequate Information ETA Ascon and Star group had islands of information all over in its operation units. The company chose SAP ERP systems to rationalize its IT system in the general organization. The management of the company was able to acquire sufficient information in a time and which was consolidated. The weak business processes and coverage of credit of to clients was also inadequate that led to the research for anew information system booster. The new system was to improve the previous information which was inadequate for working capital and treasury requirements. Implementation of the system was expected to boost the enterprise ability to take care of future opportunities across the industry and within the business unit. Faster accounting activities ERP has ensured that all the organization functionalities are linked in project management and availability of readily documented information to authorized department personnel. Vertical integration through units and horizontal integration across the units has been facilitated through the implemented SAP ERP. The company experiences high speed processing in the accounting function. The financial module implemented in the finance department has improved traditional manual organization finance unit into an automated data entry unit with fast operations and efficient management. Repetition in performance and data entry has been reduced, saving the company previous human errors and redundancies. The cycle times have also been improved. ERP has improved transparency in the department that was previously not clear to the stakeholder through effective cash management. Financial inflows and outflows are adequately updated and tracked through the system, thus reducing possible fraud and misappropriation of funds currently experienced (SAP, 2008). Improved business processes Supply chain management is advanced compared to previous supply management procedures which could only handle a limited number of suppliers and raw materials. Pull based material requirements planning system has ensured adequate management of resources and supplies in the organisation. Oracle’s supply chain management module has facilitated payroll improvement and time change management strategies. Staff in the supply management department is also updated on quantities and organizational projects. Supplies are tracked from the main source to production and distribution. The unit is working in cooperation with finance department concerning organization’s supply chains. ERP is working well with manufacturing functionality since it was first established for the manufacturing environment. The company employed pull based purchase and production and uses material resource planning methods (AMEinfo,2005). Conclusion Implementation of SAP ERP system has indicated change in the business and general operations of ETA ASCON and STAR Company. The ERP process started with planning and objective setting by the company. Material resource planning technique has helped in allocation of materials by the supplies management unit and production plans in relation to organization’s demand. Enterprise asset management function has acquired a better risk management procedure. The accounts department has benefited more from the system in terms of speed and timely operations. References AMEinfo. (2005). ETA - ASCON & ETA STAR Group selects SAP ERP to support business performance. The ultimate middle East usiness resource. SAP (2008). ETA ASCON & STAR GROUP: SAP ERP helps tame growth challenges for UAE Costruction Giant. SAP AG Read More