Published on March 15, 2014
ERP IMPLEMENTATION 1 ERP IMPLEMENTATION Farouq Umar Idris CIS300 05/10/2013 Submitted to: Alka Khurana
ERP IMPLEMENTATION 2 ABSTRACT Because of the benefits that ERP can bring, and the long period during which those benefits may manifest themselves, ERP implementation is always a strategic investment for an organization. Increased productivity, reduced operating expenses, improved information flow and enhanced performance management are some of the benefits that an organization can realize by implementing an appropriate ERP solution. On the other hand, huge unanticipated costs, enormous opportunity costs due to extended project timelines, and minimal ROI are some of the tribulations that an organization can get into without informed selection and well-planned implementation. Thus, the first and foremost thing is to identify whether your organization needs an ERP solution at all. We have listed below some of the business conditions that can help you make the decision. If an organization is experiencing one or more of the following business conditions, it is time to seriously consider implementing an ERP solution or replacing the current one:
ERP IMPLEMENTATION 3 1.0 INTRODUCTION MIS (Management Information system) provides information that organizations require to managed themselves efficiently and effectly.Management information system are typically computer systems used for managing five major component: 1. Hardware 2. Software 3. Data(information for decision malking) 4. Procedures(design, development and documentation) 5. People(individuals, groups and organizations) Management information system are different from other information system. In the sense that they are used to analyze and facilitate strategic and operational activities. Actually (management information system )MIS the term is commonly used to refer to study of how individuals, group and organization evaluate, design, manage and utilize system that generate information efficiency and effectiveness of decision making, including decision support system and expert system. In most business organization today they have MIS department along side departments of accounting, finance, management and may marketing. MIS plays a major role in DSS that (Decision support system), it is a computer based system application program capable of analyzing an organizational or business data and then presents it in a way that helps the user to make business decision.
ERP IMPLEMENTATION 4 It is basically an informational application which depends on the information already input while answering given query. For example a decision support system could provide: 1. Comparative sales figures for one week or one month and the next 2. Project revenue figures based on new product sales assumptions. Usually the DSS is used by all levels of people in the business organization. Top level management use DSS for strategic decision, middle management uses for tactcal decision while the first line supervisors use deploy it for day-to-day operational decisions.
ERP IMPLEMENTATION 5 2.0 ORGANISATIONAL STRUCTURE Above is the organizational structure, where the managers answer to the directors (operations and technical) where both the directors will answer to the CEO and the CEO to the board of directors. We will be working with every single manager in the company where we will assign two people from out company to study how they run their daily operations. Our representatives gathered all necessary information that we need in building the new ERP software and presented the following report on how the company operates; Admin Board of directors CEO Director Director Legal ITAccounts Customer relations Human resource
ERP IMPLEMENTATION 6 3.0 CURRENT SYSTEM 3.1 IT Department The first thing we observed in the department was the way they handle their data. Data handling was done in such a way that files were stored randomly whenever an existing customer makes a transaction instead of updating his already existing data, a new one is built making the entire database bulky and with that, it is impossible to keep track of the customer’s previous transactions. Registration forms have too many unnecessary details to be filled. This alone discourages customers to make enquiry or purchase an item from the company. Manual entry and storage of data in the database is done in the company. They keep only hardcopy of their records which as a result makes them not updating the e-database they are having. When our people asked why this is done, some of them replied; “most of us are computer illiterates” and the computer literates staff said “the computers in the company are very slow, outdated and tend to crash twice or trice every week resulting to loss of data”. This is a very serious thing as they are not having a backup for the entire database. On their server computer where they store the entire database, everyone in the department have access to it. The company’s database is the treasure of the company and shouldn’t be accessed by everyone except those that are having clearance from the top management. Due to the insecurity of the database, the company has countless times report cases of loss of data from the server computer.
ERP IMPLEMENTATION 7 They don’t have a database administrator (a database administrator is someone who is responsible for working with systems analyst in the department and programmers to define the physical and logical views of the data to be manipulated by computers & computer operators. 3.2 ADMINISTRATIVE DEPARTMENT The top management are complaining about staff leaving their sits without any important reason and when asked they will say they need to get in contact with their colleague from another department that was why they had to go out and also were complaining about the inability of them to monitor when their staff logs in or out of the company. The network the company operates on is an open network which can be accessed by competitors or hackers. No firewall to protect online transactions which is risky to the company and their customers. 3.3 HR DEPARTMENT Based on our research and observation of the company, we discovered that they lack a unified system that would incorporate all the functions and processes in HR department. Their previous system was based on many different software for different processes, there were so many front and back end systems running separately, that eventually wreak havoc on the process that was meant to ensure smooth running of the company. The processes that were running became too much for their main system to handle hence causing it to malfunction, causing it to hang overtime, sometimes it would give wrong data as result. The second thing we observed was that, they did not have easy access to their own information in the department, it was taking them longer time to retrieve a single record. They had to always input data manually, which was not helping to achieve more. Basically the HR
ERP IMPLEMENTATION 8 department was not able to pull out information of some of the number of staff in the company. There was not adequate information on the projected growth in sales in the company, actually it seemed like without the HR department functioning well the company was not growing in any way. Now we believed that it was because of the fact that the IT department was not adequate and equipped themselves, because if they were they would have advised the company to take action. And we also discovered that some of the working staff in HR department was not trained properly to handle equipment. And so they needed to be re-train them. They were facing problems in capturing exact figures and receiving mismatch data. The major problem was that the system the used in HR department was so outdated. They had some solutions at hand, but when it was taken to the board of directors, it was not approved so their only option was to keep on updating, when initially the system was meant to be changed for good. So they set out find software vendors that would come and eventually update the system for the HR department only, which was wrong because if they don't change the entire system, everything was going to crash. It turned out to be a routine that every time they updated their system, it crashed after a month which embarrassing for the company, which eventually shots down the HR department for usually a month. Legal Department: We observed that the legal department was not on the right track, insufficiencies handling paper document from law firms, wasted time copying, routing, filling and finding document, time re-entering data from paper billing into legal department database. Also we discovered that there was lack of IT support for a new Legal department technology, it was difficult installing new software in their current system. That is their current system was not compatible.
ERP IMPLEMENTATION 9 We discovered that the legal department had been struggling with tracking contracts and security; they were some security risk from unencrypted email.
ERP IMPLEMENTATION 10 4.0 New system 1. Assign a database administrator; this individual will be responsible for working with system analysts in IT department and programmers to define the physical and logical views of the data to be manipulated by computers and computer operators. 2. The implementation of customer ID to automatically update customer details in the database hourly or by continuously clicking on refresh submission to update it as more data are entered. 3. When an interview was conducted in the admin department of the company, it was observed that they were having problems about monitoring the junior staff in the office. So we integrated an RFID system for marking attendance and monitoring where about of the employees in the company as well as their log in and out information. RFID (Radio- frequency identification) is a non-contact wireless use of radio-frequency electromagnetic fields in transferring data, for the purposes of identifying (automatically) and tracking tags attached to objects. 4. A chat application within the ERP will also be implemented to allow the staff to communicate with each other without moving around in the office. 5. A VPN (virtual private network) was also incorporated to their network to add more security to the entire system they operate on. 6. The use of manual entry will be stopped. Training the staff to use the software in data collection will be in place in order to have an organized data in the database and also to avoid loose of data.
ERP IMPLEMENTATION 11 To achieve the above mentioned new system plan, ERP software needs to be designed and implemented in the company. The ERP software will integrate these systems together into a single database. With one source of information that contains accurate, real-time data, helps staff make better decisions more quickly and frees up their time to work on more high-value exercises like helping the business grow even faster.
ERP IMPLEMENTATION 12 5.0 DESIGN PHASE One of the major problems the company is facing is the system configuration they are having (computer system configuration). We suggest the following configuration for each system in the IT department which will be used for data collection. Hardware Processor : Pentium IV 630MH (minimum) RAM : 4GB Hard Disk : 500GB (minimum) Monitor : 15” Color monitor Key Board : 122 Keys Software Operating System : Windows NT, Windows 98, Windows XP.
ERP IMPLEMENTATION 13 And other departments in the company can use the following configuration Hardware Processor : Pentium III (minimum) RAM : 2GB Hard Disk : 150GB (minimum) Monitor : 15” Color monitor Key Board : 122 Keys Software Operating System : Windows NT, Windows 98, Windows XP. The software will be designed to integrate all operations carried out in all departments (i.e. HR, account, Admin, IT, and customer care). It will be operating on a basis of daily transaction where it will be updating the company’s database every twenty minutes (set as default but could be changed by user) and automatically making a back-up on the company’s server where certain protocols will be assigned on the database backup. Access to the server will be limited in such a way that only those with security clearance will have access to it.
ERP IMPLEMENTATION 14 5.1 TRANSACTION PROCESSING SYSTEM (TPS) The database will use a computerised system which will be made to perform all transactions carried out which are necessary in the daily business routine. The system will also process data obtained from all business transaction on a daily basis. This system is referred to as the transaction processing system (TPS) STAGES OF TRANSACTION PROCESSING 1. Data Entry 2. Processing 3. Database Maintenance 4. Document and Report Generation 5. Inquiry Processing
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ERP IMPLEMENTATION 16 5.2 MANAGEMENT INFORMATION SYSTEM A management information system will be added in the design to so as to; 1. It provides information for managing an organization 2. Extract and summarize data from TPSs 3. Allow managers to monitor & direct the organization 4. Provide accurate feedback 5. Provide pre-specified reports on a scheduled basis 6. Top managers make strategic decisions 7. Middle managers make tactical decisions 8. Line managers make operations decisions 9. Knowledge workers create and integrate knowledge 10. Clerical workers use and manipulate information
ERP IMPLEMENTATION 17 5.3 DECISION SUPPORT SYSTEM (DSS) The system will not be perfect without the addition of Decision support system (DSS) A DSS is an interactive information system that provides information, models, and data manipulation tools to help make decisions in semi-structured and unstructured situations 1. Support analytical work 2. Simulation and Optimization 3. Simulation model – calculates the simulated outcome of tentative decisions and assumptions 4. Optimization model – determine optimal decisions based on criteria supplied by the user, mathematical search techniques, and constraints
ERP IMPLEMENTATION 18 6.0 DATABASE DESIGN Below are the tables in the database showing how the data types were assigned to each filed and also showing which entity is taken as a primary key in its master table and a foreign key in another table. TRANSACTION TABLE STAFF TABLE FIELD NAME DATA TYPE DESCRIPTION TRAN_ID NUMBER PRIMARY KEY ITEM_ID NUMBER FOREIGN KEY CUSTOMER_ID NUMBER FOREIGN KEY ORDER_ID NUMBER FOREIGN KEY FIELD NAME DATA TYPE DESCRIPTION STAFF_ID NUMBER PRIMARY KEY GENDER TEXT - STAFFNAME TEXT - ADDRESS TEXT - PHONE NUMBER NUMBER
ERP IMPLEMENTATION 19 WAREHOUSE CUSTOMER TABLE FIELD NAME DATA TYPE DESCRIPTION WH_ID NUMBER PRIMARY KEY ITEM_ID NUMBER FOREIGN KEY ITEM TEXT - QUANTITY NUMBER - STATUS TEXT - FIELD NAME DATA TYPE DESCRIPTION CUSTOMER_ID NUMBER PRIMARY KEY ADDRESS TEXT - PHONE_NUMBER NUMBER - NAME TEXT -
ERP IMPLEMENTATION 20 ORDER TABLE CUSTOMER CARE FIELD NAME DATA TYPE DESCRIPTION ORDER_NO NUMBER PRIMARY KEY ITEM_ID NUMBER FOREIGN KEY QUANTITY NUMBER - CUSTOMER_NAME TEXT - CUSTOMER_ID NUMBER FOREIGN KEY TRANS_TYPE TEXT - DATE DATE/TIME - FIELD NAME DATA TYPE DESCRIPTION INCOMING NUMBER - OUTGOING NUMBER - PHONE_NO NUMBER - DATE DATE/TIME - CUSTOMER_NAME TEXT -
ERP IMPLEMENTATION 21 SALARY ADMIN FIELD NAME DATA TYPE DESCRIPTION ID NUMBER PRIMARY KEY STAFF_NAME TEXT - AMOUNT NUMBER - DEPARTMENT TEXT - STAFF_ID NUMBER FOREIGN KEY FIELD NAME DATA TYPE DESCRIPTION ID NUMBER PRIMARY KEY CUSTOMER_ID NUMBER FOREIGN KEY TRAN_ID NUMBER FOREIGN KEY ITEM_ID NUMBER FOREIGN KEY ORDER_ID NUMBER FOREIGN KEY
ERP IMPLEMENTATION 22 OVER VIEW OF THE DATABASE When the design is finished, the database should be organized like this;
ERP IMPLEMENTATION 23 The view of the table should be like this;
ERP IMPLEMENTATION 24 Above is the transaction table showing how a transaction should be saved when entered from item table.
ERP IMPLEMENTATION 25 Above is the relationships within the database showing the entire tables and how there are related to one another.
ERP IMPLEMENTATION 26 7.0 GANTT CHART Below is a Gantt chart showing the project milestone from start to end and in it, all the processing involved in the project are shown with their respective dates.
ERP IMPLEMENTATION 27 8.0 CONCLUSION This project shows the processes involved in designing an Enterprise Resource Planning System software for an organisation which are having too much transactions to handle on a daily basis. The main goal of designing the software is to Reduction of inventory Reduction of reorder cycle by updating records of existing customers Capture sales data and with this they will know what product sells most Improving customer service & of course reduce paper work
ERP IMPLEMENTATION 28 9.0 REFERENCE 1. Henry J. Lucas, 2008, Database management for business organisation fifth edition. 2. Alfanso Sucre, 1998, Managing business database second edition. 3. Robert Iglesias 1998, Building ERP for Organisations 2nd edition 4. Antony Atkinson 2001, System Development Life Cycle fourth edition 5. www.sqlquerry.net 6. www.w3schools.com
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