CHAPTER III RESEARCH METHODOLOGY. between market leaders and followers, successful companies and sick industries, is the way in

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1 CHAPTER III RESEARCH METHODOLOGY 3.1 Statement of the Problem To survive, thrive and beat the competition in today s brutally competitive world one has to manage the future. Managing the future means managing information. Today, the difference between market leaders and followers, successful companies and sick industries, is the way in which companies make use of information about business environment. Companies generate huge amounts of data, financial data and details about customer, purchase details, employee data, and so on. Only an organization that makes the best possible use of this information can succeed. In this age of information explosion collecting, collating, summarizing and refining huge amounts of data including integration of all functions has been made possible by ERP.. In order to manage data so that high quality information is provided to decision makers at the right time it is important that information is accurate for real time decision making. Hence ERP is a tool for judicial use of resources and make decisions on real time information. This aspect is more important for the Indian Army Logistics system as it has to always provide results in time under the resource crunch scenario. Almost all defenceorganizations in world are turning to some sort of ERP packages as a solution to their information management problems. ERP packages if chosen correctly, implemented judiciously and used efficiently have the ability to raise efficiency of the organisation dramatically. The Indian Army in the process of automation has initiated Project LOGINET to automate all functions of its logistics on ERP platform. As part of this the Corps of EME has launched project EMERALD as pilot project to LOGINET. 130

2 Many companies fail in this because of incorrect selection of a package, inappropriate implementation and efficient or ineffective usage. The most crucial factor that decides the success of an ERP package implementation is how the employees use the system. The ERP implementations have been plagued with Delays, Cost Overruns, Non Deployment and Not conforming to desired results. These aspects are not acceptable to us and the emphasis is to find ways to overcome these challenges. Even the best ERP systems can fail if the employees are not interested in using it or using it wrongly or inefficiently. To receive total and complete employee support and participation, EME of Army must make it a point to educate its employees about the potential benefits and provide them the requisite training. In view of this complexity the researcher will make an attempt to study the ERP process in depth and try to find impediments for the successful adoption and implementation of ERP system for Corps of EME in order to address the challenges that are likely to be met in implementation of this flagship program. 3.2 OBJECTIVES OF THE STUDY The broad objectives of this research work are:- 1. To study the evolution, growth and need of ERP and its roadmap to success. 2. To examine the various existing ERP technologies in use worldwide for integrated management to improve the efficiency of an enterprise. 3. To indentify the factors enabling smooth implementation of ERP in India with specific reference to the Indian Army and Corps of EME in particular. 4. To analyze the categorical difference between different management level about ERP implementation. 131

3 5 To analyze the impact of size of the organization and approach toward ERP implementation on critical success factors of ERP implementation. 6. To suggest remedial measures for successful implementation of ERP software in Corps of EME. 3.3 Purpose of Study Various studies have brought out the fact that ERP enhances the functioning of an organization many fold. It not only makes the organization effective, it also makes it cost effective and responsive in real time. Its advantages have made it a preferred approach to automation. Further the Indian Army s logistics system is a complex system with many different agencies involved. There is a need to integrate its functions to make it cost effective an responsive in the modern day scenario. The Indian Army has undertaken a big step towards this and a pilot project to automate the Corps of EME (the equipment maintenance arm ) has been initiated. It also became clear that more than 50% ERP implementation efforts have been delayed, had cost overruns and some had to abandon the project. The main cause explained is the faulty implementation. The researcher has taken up this study to identify these challenges in the implementation of ERP and find solutions to ensure smooth implementation of ERP in The Corps of EME. 3.4 Research Methodology The canvas of this present study shall cover a wide range of aspects of ERP like ERP packages, technologies, modules, vendors and consultants, ERP implementation methodologies, training and education, resistance by employees and future directions and 132

4 trends. It involves an in-depth study of the all the aspects of ERP and its affiliated functions both in the open market and in the Defense department with specific reference to the challenges in implementation. All the aspects will be analysed and evaluated on the platform of Corps of EME. To reach the specific issues after the inn depth study of literature, case studies and practical examples the questionnaire technique of survey is used to reach the conclusions. It was realized that to reach practical conclusion survey is required from the higher management of the Army and from the industry which has gone through the process of implementation of ERP Sample size For survey within the forces it was decided that views of higher management and top management would be taken to arrive at logical conclusion. Hence two long one year courses were decided. For higher management HDMC (Higher Defence Management Course) where officers who have excelled in higher middle management appointments and are ready for higher appointments are selected and detailed was decided. The strength of the course is 125 and we got 112 valid responses. For top management NDC (National Defence Course) where officers who have excelled in higher management appointments and are ready for top appointments are selected and detailed was decided. The strength of the course is 36 and we got 24 valid responses. A one day workshop to include presentation and demonstration was organized to acquaint the participants with automation and ERP 3.5 HYPOTHESIS Based on the objectives of this study and the need to find solutions for successful implementation of ERP system in an organization like Corps of EME the following factors need to be hypothesized. Some studies have indicated that organizations that make greater 133

5 efforts in ERP selection will achieve greater overall success. Wei, Chien, and Wang (2005) [23] also demonstrated that a successful ERP project involves business process change management and ERP software system selection. During the initiation phase of ERP implementation, organizations should first review existing business processes and identify company demands. Based on previous investigations, this study infers that companies should consider process problems in ERP system selection. The relationship between system and business process should be close in ERP implementation. Based on this perspective, this investigation presents hypotheses 1, 2 and 3 and as follows. Hypothesis 1: Implementation of ERP projects in large organizations is governed by certain common basic critical success factors irrespective of the type of organization. Hypothesis 2: ERP project implementation in organizations like the Army is much more complex and multifarious challenge which involves some impediments that are typical to such organizations. Furthermore, it is evident that organisations should examine internal business process and modify the business process. BPR can help companies change business processes, and plays different important roles in each of the ERP implementation stages. Cardarelli, Ritu, and Mohan (1998) [24] argued that organisations should adopt BPR in ERP implementation. Davenport (1998) [6] identified BPR as the reason large enterprises implement ERP systems. 134

6 Hypothesis 3: Business processes have to be adopted and re-engineered in such a way so as to facilitate implementation of an ERP project. 3.6 Data Collection and Collation The nature of the present study is such that it requires an extensive literature review from the public information domain and also from organizations where ERP is in practice. It also involves knowledge of secondary data which shall be collected through the personal visit of the researcher to various establishments/organizations of defense/private/public sectors where ERP has been under consideration or has been implemented. Senior managements at these establishments as well as the ERP implementation authorities of EME will be interviewed and the required data collected. On the other hand secondary data will also be collected from the published reports of various companies who are using ERP solutions and the companies who are the ERP service providers. Case studies will also be consulted from the literature. Questionnaire/interview form of collection of data for getting views and opinions of researchers, industrialists, practitioners, students of ERP will also be resorted to as one of the main tools for anaysing the actual challenges and success factors in implementation of ERP. In addition, various technical libraries will be visited in order to collect the required information. Various journals and online libraries will also be consulted. 3.7 Data Processing and analysis Collected data shall be hand tabulated in accordance with the need of different chapters; also data shall be processed through computers wherever necessary. The data will be used in such a manner that will suit the objectives of the study and may draw inferences out of this study. 135

7 Keeping objectivity as the prime background while processing and analyzing collected data it will be the endeavor of the researcher to quantify as many factors as possible so as to get accurate information. For this the stastical techniques, Descriptive study was analyzed for with calculation of mean, standard deviation and Skewness & Kurtosis. Factor analysis was done to find out the most important factors for ERP implementation. Categorical difference was tested with the help of Chi square test. 3.8 Time Line: Research has been completed within given time line for the research as follows: Activity Duration Literature review structured Interviews Data collection Data analysis Conclusion and implications Writing the thesis Amendments and Revisions 6 months 3 months 5months 3 months 3 months 6 months 2 months Total 28 months 136

8 3.9 Analysis of sample size, demographic variables and Reliability test Sample for the study & Management level of respondents Frequency Percent Valid Percent Cumulative Percent HDMC Valid NDC Total There were 136 respondents classified in two categories HDMC and NDC in sample for the study. Out of 136, there was 112 HDMC and 24 NDC respondents. Sample size for Industry study Valid Frequency Percent Valid Percent Cumulative Percent Large Medium Small Total As per the analysis of the study it was found that there was 46.7% large scale, 33.3% medium scale and 20% small scale organization in the sample base. 137

9 Different Approach in implementation of ERP Frequency Percent Valid Percent Cumulative Percent Parallel Phased Valid Big Bang Pilot Total As per the analysis of the study it was found that 16.7% organization usually use Parallel approach for ERP implementation, 43.3% organization use Phased approach, 16.7% organization use Big Bang approach and 23.3% organization use Pilot approach for ERP implementation. Reliability Statistics: Table NO. 3.1 Reliability Statistics Cronbach's Alpha Cronbach's Alpha Based N of Items on Standardized Items A reliability analysis is conducted to measure the internal consistency of the measurement method. The Cronbach s Alpha is used to measure the reliability of variables. Cronbach s alpha indicates the degree to which set of items measure a single construct. According to Cooper and Schindler, 2008 it should be above 0.6. The above table shows the results of analysis and it was found that it is more than 0.6. So it is assumed to be reliable. 138