A Study on Use of ERP Software with reference to Revenir Development Systems Aurangabad (India)

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1 A Study on Use of ERP Software with reference to Revenir Development Systems Aurangabad (India) Prof Archana.A.Borde Asst.Prof Sinhgad Institute of Business Administration & Computer Appplication. Lonavla India archanaborde.sibaca@sinhgad.edu Prof Ajit Kumar Borde Asst.Prof ASM S Institute of Business Management & Research, Chinchwad India ab@asmedu.org ABSTRACT: The Paper aims to understand the importance of ERP software in business development. It gives theoretical concepts a practical shape in a field of applications. It gives an idea of dynamic & versatile professional world as well as an exposure to the intricacies & complexities of corporate world regarding ERP Software. The research was carried out for Revenir development system in Aurangabad which was mainly conducted to tap the potential market for ERP solutions in manufacturing and retail sector. As a part of this research a thorough study was done to first understand what is ERP solutions and how is it beneficial to the this sector so that the target market could be made aware of this. The use of ERP has been growing with a high speed. All the other sectors like IT, construction, telecommunication etc have been using this software. Manufacturing sector is one of the few sectors which are not well acquainted with this concept. So this research included to know how many people are aware of this concept in this sector and for those who are not aware, to make them aware of this concept and tell them ERP s advantages, also to find customers who want install or replace existing ERP as potential customer for company. Key Words : ERP, Solutions, Potential Software Introduction Enterprise Resource Planning (ERP) is an integrated computer-based system used to manage internal and external resources, including tangible assets, financial resources, materials, and human resources. Its purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. Built on a centralized database and normally utilizing a common computing platform, ERP systems consolidate all business operations into a uniform and enterprise-wide system environment. Software solution that addresses enterprise needs taking the process view of an organization to meet the organizational goals by tightly integrating all functions of an enterprise. Facilitates company-wide integrated information systems covering all functional areas. Performs core corporate activities and increases customer service augmenting corporate image INCON X

2 An ERP system can either reside on a centralized server or be distributed across modular hardware and software units that provide "services" and communicate on a local area network. The distributed design allows a business to assemble modules from different vendors without the need for the placement of multiple copies of complex and expensive computer systems in areas which will not use their full capacity Components/ modules of ERP Transactional Backbone Advanced Applications Management Portals Financials Customer Relationship Mgmt Management Portal Dashboard Distribution Supply Chain Mgmt Software Purchasing Manufacturing Distribution Warehouse Mgmt System Decision Support System Human Resources Product Lifecycle Mgmt These modules can exist in a system or utilized in an ad-hoc fashion. Many organizations do not have sufficient internal skills to implement an ERP project. This results in many organizations offering consulting services for ERP implementation. Typically, a consulting team is responsible for the entire ERP implementation including. Selecting, planning, training, testing, implementation, delivery of any customized modules. Examples of customization includes creating processes and reports for compliance, additional product training; creation of process triggers and workflow; specialist advice to improve how the ERP is used in the business; system optimization; and assistance writing reports, complex data extracts or implementing Business Intelligence. ERP with e-commerce ERP vendors were not prepared for the onslaught of e-commerce. ERP is complex and not intended for public consumption. It assumes that the only people handling order information will be your employees, who are highly trained and comfortable with the tech jargon embedded in the software. But now customers and suppliers are demanding access to the same information your employees get through the ERP system things like order status, inventory levels and invoice reconciliation except they want to get all this information simply, without all the ERP software jargon, through your website. E-commerce means IT departments need to build two new channels of access in to ERP systems one for customers (otherwise known as business-to-consumer) and one for suppliers and partners (business-to-business). These two audiences want two different types INCON X

3 of information from your ERP system. Consumers want order status and billing information, and suppliers and partners want just about everything else. Traditional ERP vendors are having a hard time building the links between the Web and their software, though they certainly all realize that they must do it and have been hard at work at it for years. The bottom line, however, is that companies with e-commerce ambitions face a lot of hard integration work to make their ERP systems available over the Web. For those companies that were smart or lucky enough to have bought their ERP systems from a vendor experienced in developing e-commerce wares, adding easily integrated applications from that same vendor can be a money-saving option. For those companies whose ERP systems came from vendors that are less experienced with e-commerce development, the best and possibly only option might be to have a combination of internal staff and consultants hack through a custom integration. Advantages In the absence of an ERP system, a large manufacturer may find itself with many software applications that cannot communicate or interface effectively with one another. Tasks that need to interface with one another may involve. ERP systems connect the necessary software in order for accurate forecasting to be done. This allows inventory levels to be kept at maximum efficiency and the company to be more profitable. Integration among different functional areas to ensure proper communication, productivity and efficiency Design engineering (how to best make the product) Order tracking, from acceptance through fulfillment The revenue cycle, from invoice through cash receipt Managing inter-dependencies of complex processes bill of materials Tracking the three-way match between purchase orders (what was ordered), inventory receipts (what arrived), and costing (what the vendor invoiced) The accounting for all of these tasks: tracking the revenue, cost and profit at a granular level. Critical factors for successful ERP implementation Implementing an ERP system is not an inexpensive or risk-free venture. In fact, 65% of executives believe that ERP systems have at least a moderate chance of hurting their businesses because of the potential for implementation problems. It is therefore worthwhile to examine the factors that, to a great extent, determine whether the implementation will be successful. Numerous authors have identified a variety of factors that can be considered to be critical to the success of an ERP implementation. The most prominent of these are described below. INCON X

4 1. Clear understanding of strategic goals.,2.commitment by top Management,3.Excellent project management,4.organizational change Management,5.A Great Implementation team,6.data Accuracy, Extensive Education and 7.Training,Focussed performance measures,8.multiissues. Benefits of ERP implementation: Deloitte Consulting (1998), and discussed in O Leary (2000), that investigated the rationales and benefits for why firms choose to implement ERP. That study broke benefits into two broad categories: Tangible Benefits (Table 1) and Intangible Benefits (Table 2). Deloitte Consultant s (1998) study was based on interviews with 62 client firms of the Fortune 500. As part of a large- scale project, client firms were asked which tangible and intangible benefits had been realized. The results in Tables 1 and 2 present the percentage of the firms that indicated which benefits would be realized, allowing for multiple responses for each firm. Objective of the Study The Study was mainly focused to study the awareness & potential of ERP software in Aurangabad District.it also gave an Insight into the after Sales Service & post purchase behavior of Organizations towards ERP Software for Renevir Systems Scope of the Study In order to conduct any study it has to be seen whether it is going to solve any of the problems related to the product, service or the organization as a whole. Similarly this study of use of ERP in construction companies is quite an important thing for REVENIR INCON X

5 DEVELOPMENT SYSTEM LTD because it will help organization to grow the business in manufacturing and retail sector. The study will also benefit the customers as the researcher is providing all the information about ERP to them. They will come to know how an ERP solution can integrate all their business activities and help them to easily coordinate all these activities. Research Design A sampling design is a definite plan for obtaining a sample from a given population. It refers to the technique or procedure the researcher would adopt in selecting for the samples. Sample design is determined before the data is collected. The Study was based on both primary & secondary data.incase of primary data collection structure questionnaires were circulated among the users of ERP software for Renevir Systems. Secondary data was mainly collected from company records and website. The data was then categorized into various groups and then researcher deduced the pattern of relationship that existed among the data groups. For this, editing was done to assure that the data was accurate, consistent with other facts gathered. Sampling Plan The Universe: The universe consists of the all the manufacturing sector in Aurangabad: hence the universe can be geographical area of Aurangabad. Sampling unit: Sampling unit is the customer who is already using ERP system and also who would like to install ERP system in his company. Sampling Size: The sample size consisted of around 37 respondents. It included the manufacturing Units in Aurangabad only using the Software for Renevir Systems Sampling instrument: Questionnaire: Questionnaire was used as an instrument for primary data collection. Sampling Method: Sampling is intended to gain information about population and the population is targeted constitutions. Survey Method was used for this study. A schedule was to collect information through Questionnaire and personal interviews from the customers. Sampling technique: Simple random sampling In a simple random sampling ('SRS') of a given size, all such subsets of the frame are given an equal probability. Each element of the frame thus has an equal probability of INCON X

6 selection: the frame is not subdivided or partitioned. Furthermore, any given pair of elements has the same chance of selection as any other such pair (and similarly for triples, and so on). This minimizes bias and simplifies analysis of results. In particular, the variance between individual results within the sample is a good indicator of variance in the overall population, which makes it relatively easy to estimate the accuracy of results. Analysis of the Study Data analysis is a process of gathering, modeling and transforming data with the goal of highlighting useful information, suggesting conclusions and supporting decision making. Data analysis has multiple facets and approaches encompassing diverse techniques under a variety of names in different businesses s science and social science domain. Marketing study and research focuses on understanding the behaviors, preferences, whims of consumers in the market place. Businesses cannot be successful if they cannot meet the demands of customers. To meet the needs, finding out what customers want from your products will be the most crucial marketing study and research activities. Analyzing survey data is an important and exciting step in the survey process. It is the time that you may reveal important facts about your customers, uncover trends that you might not otherwise have known existed, or provide irrefutable facts to support your plans. By doing in-depth data comparisons, you can begin to identify relationships between various data that will help you understand d more about your respondents, and guide you towards better decisions. Table No. 4.1: ERP USER SR PARTICULAR NO 1 ERP USER COUNT 13 Graph.No NON USER ERP 24 Table 4.1 focuses on the users and Non users of ERP. While the graph 4.1 shows that 35% are ERP users and 65%are non ERP Users. Table No 4.2: IMPLEMENTATION OF ERP IMPLEMENTED SINCE IMPLEMENTED SINCE Graph No 4.2: SR NO PARTICULAR COUNT 1 6 MONTH 1 INCON X

7 MONTH YEARS 4 4 >3 YEAR MONTH 1 Table 4.2 focuses on the duration of ERP users while graph 4.2 shows that 38% Companies are using ERP for more than 3 years.31% are those users using ERP for duration of 1 to 3years. And 23 % users are using between 6mnths to 12 years. And 8% are using since 6 mnths. Table No 4.3: No of ERP users companies Graph No 4.3 NO OF USERS NUMBER OF USERS SR NO PARTICU LAR COUNT >5 2 Table.No 4.3 shows the no of ERP users within the company. Table No 4.4: Support from implementation partner Graph No 4.4 SR NO PARTICULAR COUNT (IN %) 1 YES 2 NO Table 4.4 shows that 24% Companies are getting support from partners and 96% companies are not getting support from the Partners of Renevir Systems. From the graphical Interpretation it is clear that very few Companies are getting support from the partners. Table No 4.5: Satisfaction with existing ERP Graph No 4.5 SATISFACTION SR NO PARTICULAR COUNT NOT 1 5 SATISFIED INCON X

8 2 SATISFIED 7 3 HIGHLY SATISFIED 1 Table No 4.5 focuses on the Satisfaction level of the existing users of ERP, and the graphical interpretation depicts that 38% of Existing ERP users are not satisfied while 8%are highly satisfied and 54% are satisfied Table No 4.6: Wish to install new ERP Graph No 4.6 SR NO PARTICULAR COUNT 1 YES 4 2 NO 33 Table No 4.6 shows the Inclination of the new Users to switch to ERP and the graphical depiction shows that only 11% of the companies are willing to switchover from the existing system to ERP system and 89%companies wanted to continue with the existing system they were using. Fndings While conducting the survey it was found that most of the companies whether residential or commercial are unaware of the concept of ERP, so everything from the basic had to be educated to them. Majority of the clients were using either Tally/MS or locally developed software solution. And are also resistant about getting a new ERP installed. Very few clients were using standard ERP. Most of the organizations are not acquainted with Standard ERP software. Most of the companies are satisfied with existing software. Most of the companies said they would not be interested to install an ERP as of now but they would be interested in knowing more about it and its benefits in detail by an expert. Most of the residential companies are interested in installing a new ERP but their percentage is less. Even though many companies were of the opinion that not all their processes were addressed by their current software, but still they were satisfied with it. It was find that ERP is supposed to be very costly and maintain. INCON X

9 Suggestions Even though many companies have opted not to install ERPs for there is a potential market for ERPs here in Aurangabad as it would be the next big thing that would be required by the companies. Not many companies are of this concept so there should be more emphasis to commercialize the product. There should advertisements put on the related websites. Most of the companies were hesitant to install ERP mostly because of price, so they should be made aware by the company that how would ERP be beneficial for their business in the long run for a better growth. There is also a potential for the companies having turnover more than 1000 Crores as if they already have ERP installed then there might be need for change or modifications or advanced version or their needs might change. The unique selling proposition for ERP is that the configuration can be provided as per the requirements of the company. So the prospective companies should be made aware of this. Bibliography **** INCON X