On Course code: 409 Course title: Management Information Systems (MIS) Topic: Enterprise Resource Planning (ERP) Systems.

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1 On Course code: 409 Course title: Management Information Systems (MIS) Topic: Enterprise Resource Planning (ERP) Systems. SL. NO. Submitted to: Mr. Mohammed Abu Jahed Associate Professor Department of Management Studies University of Chittagong Submitted by: JOYSTICK GROUP Member s Name Exam Roll Contact Information 01 Md. Ruhul Amin Mollah 2006/ Comments 25%; Completing Literature review, Questionnaire, industrial visit, project prepared. 02 Md. Omar Faruk 2006/22 omar.faruk @gmail.com %; industrial visit, editing, Questionnaire, collecting raw materials. 03 Maman-Ar-Rashid 2006/ Rafiqul Islam 2006/97 Rafique.mgt@ hotmail.com O % industrial visit, Questionnaire, Editing, collecting raw & others 18% industrial visit, Questionnaire, Editing & others 05 Khin Khin Than 2006/ % industrial visit, Summarizing, Raw collection. 4 th year BBA (Final Term) University of Chittagong. Date of Submission: 05 th February, 2011.

2 On Course code: 104 Course title: Managerial finance Topic : Social responsibilities of business firms. Submitted to: Mr. Mizanur Rahman Chowdhury Lecturer Department of Management Studies University of Chittagong Submitted by: Group name: Synergy (2+2=5) SL. No Member name ID. NO. 01 Md. Rakibul Bari O2 Md. Refat Qarim O3 Md. Saiful Islam First year BBA (Mid Term) University of Chittagong.

3 Preface First of all we would like to be grateful to the almighty Allah, the merciful and the benevolent, who has enabled us to complete this Project. Practical knowledge is vital for every B.B.A Students. Nevertheless, we have to confess that the real Business Tempo is much more complex than the theoretical knowledge. The business world is going to be more critical in this new millennium & the practical situations. This project related to Enterprise Resource System (ERP) 0f any leading manufacturing industry or any service providing concern helps us to get practical knowledge. The study is conducted Enterprise Resource System (ERP) 0f NAVANA GROUP (Especially Navana real estate Ltd.). So, Such Project provides us the opportunity to see and analysis in the various sectors ERP in Industry. It also puts the real business environment in front of us and intensifies our intention to face the global challenges of a business concern being as a part of its management.

4 Acknowledgement It s difficult for us to thank all of those marvelous people who have contributed something of them to this project. There are of course some very special people who cannot go without mention. At the very beginning we pay gratitude to the coordinator of the Project, MR. Mohammed Abu Jahed, for his continuous guidance, important advice, encouragement and suggestion during the preparation of the a this Project program. We pay honor & Gratitude to MD.Nurul Islam, Md.Mas-Ud Sayeed and Mr.Shamsuudin Ahmed of Navana Real estate Ltd. we acknowledge with deep gratitude to the Department Management Studies, University of Chittagong for giving us the opportunity to perform our project paper in 4 th year BBA.

5 Executive summary There is an increasing need to implement a total business solution which supports major business functionalities of an enterprise. Enterprise Resource Planning (ERP) software is Designed to meet this need, and has been adopted by different organizations worldwide. Implementing an ERP system was thought complex, expensive, and time-consuming. Many organizations do not achieve success in their ERP implementation projects. Enterprise resource planning (ERP) systems can be regarded as one of the most innovative developments in information technology (IT) of the 1990s. With the growing interest of many organizations in moving from functional to process- based IT infrastructure, ERP system has become one of today s most wide spread IT solution. While ERP systems have traditionally been used by capital intensive industries, such as manufacturing, construction aerospace, and defense, they have recently been implemented in the finance, education, insurance, retail, and telecommunication systems. Enterprise resource planning (ERP) software provides a coherent integrated electronic business management environment, frequently controlling all logistics and billing for an enterprise. Many companies are now reliant upon these systems for their daily operations; maintaining and adopting them in parallel with their business as it evolves, adding new suppliers and customers. The process of managing the development of the ERP software requires detailed knowledge of systems. ERP systems often become unique to an enterprise and may have a huge amount of money being invested in their development. The value of knowledge management especially for the management and operation of ERP system is becoming evident. Managing ERP system knowledge has been identified as a critical success factor if a firm, its suppliers and logistics providers are to retain control of their business and not be controlled by their systems.

6 Table of contents Page no. Topics Introduction 01 Supply Chain Practice 02 Key elements of Supply Chain and their roles 03 ERP Software in Navana Group & Current ERP practices ERP selection criteria & Technical requirement for ERP Implementation phases & factors 08 Performance of ERP in Navana group ERP environment in Navana Group 09 Future Impact of ERP on NAVANA Supply Chain, Recommendation & Conclusion. 10 Raw materials Next pages

7 Introduction Units of Navana Group Product & Services Management Automobiles Ltd. (Automobile Assembling Unit) Aftab Automobiles Ltd. (Paints Unit) Aftab Automobiles Ltd. (Bus Body Unit) Aftab Automobiles Ltd. (Battery Unit) Aftab Automobiles Ltd. (Furniture Unit) Navana CNG Limited Navana Real Estate Ltd. Navana Construction Ltd. Navana Computers & Technologies Ltd. Navana Computers & Technologies Ltd (Software Unit). Biponon Limited Navana Interlinks Ltd. Navana Taxi Cab Co. Ltd. Navana Electronics Ltd. Navana Distributions Ltd. Navana Textiles Ltd. Navana Battery Ltd. Navana Electronics Ltd. Navana Petroleum Ltd. Navana Furniture Ltd. Navana Logistics Limited Automobile Assembling Automobile Manufacturing (final stage of developing) Paint Manufacturing, Marketing & Sales Battery Manufacturing, Marketing & Sales Furniture Assembling, Marketing & Sales Automobile Marketing & Sales Real Estate Development Construction Computer Hardware &Accessories Medical & Scientific Equipment, Sales & Marketing Project Marketing Taxi Cab Sales & Marketing IPS, UPS, Stabilizer Manufacturing, Sales & Marketing Ata, Maida, Suji, Salt Sales & Marketing Composite Textile Mill comprising Acrylic Spinning Unit, Yarn Dying Unit (acrylic & cotton) and Sweater Unit. Chairman & Managing Director ShafiulIslam Kamal Director: Monwarul Islam Saiful Islam Shumon Sakhawat Hossain Md. Shahidullah Mahmood Jan Chowohury NAVANA GROUP (previously Islam Group) was established in 1964 by the Group s founder Mr. Jahurul Islam and had an auspicious step into the business under an

8 exclusive distributorship agreement with TOYOTA of Japan to market Toyota cars in the then East Pakistan. It was indeed a great honor for the Chairman Mr. Jahurul Islam and the Vice Chairman Mr. ShafiulIslam Kamal (now Chairman of NAVANA GROUP) who are entrusted in the business community as pioneer in the business arena of the country. An overview about Navana Group: Supply Chain Practice: Supply Chain Management (SCM) is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers (Harland, 1996).Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point of origin to point of consumption (supply chain).another definition is provided by the APICS Dictionary - SCM as the "design, planning, execution, control, and monitoring of supply chain activities with the objective of creating net value, building a competitive infrastructure, leveraging worldwide logistics, synchronizing supply with demand and measuring performance globally." Navana Group has its supply chain department. It performs functions by following the chain as follows:

9 Fig: Supply Chain of Navana Group Key elements of Supply Chain and their roles: Elements Importance/Role *Focus on what customer & market demand *Resource Management *Internal sourcing (what and which plants) *Outsourcing to capable suppliers *Capacity Management *Workload schedules

10 Production *Equipment plans (acquisition/maintenance) *Order Management *Quality control Supply *Partners in the Supply Chain *Assessing core/strategic competencies *Identifying capable suppliers *Making sourcing decisions *Relationship management *General Procurement inventory *How Much Inventory and Where to Store It *Analysis of fluctuations in demand *Identification of optimal storage locations in support of *Customer demand *Identification of optimal stock levels by location *Establishing inventory ordering policies location *Strategic placement of production plants, distribution and stocking facilities *Understand customer markets *Perform locating decisions for production and stocking facilities *Lightweight/market driven near the end-user *Heavy industries near raw material source *Evaluation of tax and tariff issues and transportation accessibility ERP Software in Navana Group: Navana Group is using ERP system for integrating the key processes of it through oracle software that enables information to flow seamlessly throughout the organization. At first Navana real estate used ERP software from IBCS-PRIMAX Software (BD) ltd. It started planning the use of Oracle ERP software at the end of 2008 and purchased the software at the beginning of Oracle ERP software is designed on Oracle App framework, which works on their own database, which is equipped with many advanced features and it has strong functioning. Oracle database is known for its high efficiency and speedy installation. Navana Group is

11 enjoying the following advantages and facing some disadvantages as follows using this software: Advantages Disadvantages 1. Integration of web enabled features in ERP application 2. Security of database 3. It can adopt changes in legal standards fast 4. Customization is easy 5. Report is exceptional 6. Gives a high ROI 1. User interface of Oracle ERP is not very attractive 2. Oracle forms cannot be connected to other databases and it is a major disadvantage of oracle systems. 3. Oracle follows certain rules of standard legacy systems and it cannot be used for changed rules. Current ERP practices: There are some vendors which are operating and proving services in the market. These are described below: SAP R/3 is software from SAP. SAP is a world's leading provider of business software. SAP software runs in more than 120 countries worldwide with more than customers. SAP solution is transforming your business process into a best-run business. SAP services are so good; they provide superior services and supports. Advantages: easy 1. It has many levels of features and functionality, and any kind of industry finds it to adopt SAP functioning. 2. It is appropriate for large business organizations, multinational companies and government sector, which follow complex business plans. 3. It provides appropriate solution for work flow and back office processes. 4. It offers extremely flexible ERP solution as it defines business plans at many stages and the companies buying the software can easily define their rules in SAP's architecture. 5. It provides automation at three levels, which helps in automating business processes and workflow. Disadvantages: 1. It appears complex for easy business processes and implementation of SAP is a very tough procedure. 2. It gives a highly professional service to business organizations, but the cost of software and implementation is very high. 3. It has too much flexibility, which increases the risk factor.

12 4. Maintenance of enterprise software is very expensive. 5. Its deployment may take many years for completion. ORACLE applications are designed for the most complex business requirements. They provide comprehensive business and industry solutions, enabling organizations to significantly improve performance, seamlessly integrate Web services into heterogeneous application environments, and a broad choice of technology infrastructure. Advantages: 1. There are two types of user interface.one has the web features and it is called Oracle Self Service Application and the Oracle Forms are most popular for core financial transactions. The forms are easy to use. 2. Integration of web enabled features in ERP application 3. Oracle database comes with a high security feature 4. It can adopt changes in legal standards fast 5. Oracle has a good record of providing fast customization and installation. 6. Oracle reports give one a wide range of choices on many parameters and one can generate any kind of report for any situation in minutes. 7. It has high efficiency as compared to any other database and return on investment is also high. Disadvantages: 1. User interface of Oracle ERP is not very attractive. 2. Oracle forms cannot be connected to other databases and it is a major disadvantage of oracle system. 3. Oracle follows certain rules of standard legacy systems and it cannot be used for changed rules. NET SUITE: The Company Net Suite was formed in 1998 and after providing initial solutions in accounting software, the company ventured into providing fully integrated ERP solutions. Net Suite is used mainly by small businesses and many customers of Sage shifted to Net Suite in search of better ERP software. The company was founded as Net ledger and it initially made accounting software that worked on Oracle 8i e-business suite. The company launched Oracle Small Business Suite and in 2004, the company's ERP got independent identity that was named NetSuite. Advantages: 1. It provides convenient accounting software. 2. It provides web based solution in ERP and one can find many modules such as finance, marketing, payroll, customer relationship management and other modules.

13 3. In the finance module, it offers accounting, general ledger, account payable, accounts receivable, billing, budget management, sales and estimates, jobs and others.4. There are other modules in NetSuite such as sales, human resource management, payroll, inventory, purchase, scheduling, check writing and others. 5. The company promises to deliver software on time and the implementation is fast. 6. The main strength of NetSuite lies in its accounting software, which has been praised by most of its customers. The ecommerce solution provided by NetSuite is also attractive. Disadvantages: 1. It provides low flexibility as compared to some of the other top ERPs available in market. 2. Functionality of the NetSuite ERP is limited mainly to accounting software. 3. The CRM product of NetSuite was launched with a bang, but it is not very strong as compared to the major market players. 4. The functionality of modules of NetSuite are limited to a few areas of enterprise resource planning and hence, it mainly suites the needs of some mid size businesses. The software mainly aims to acquire QuickBooks and catch the customer. 5. It was also criticized because it did not have a secure data centre and the software did not have a strong back up data centre. The company has been using the data centre of third party on its units. Advantages: MICROSOFT is designed to provide business solutions to commercial organizations. It helps to automate finance, supply chain and customer relationship. The solution is designed on Microsoft Office Structure and it uses Microsoft SQL Server for data storage. The user interface of the software resembles Microsoft office programs, which makes it user friendly and easy to operate. 1. It provides low cost solution, which works on a robust database system. 2. The software speeds up the business processes and increases productivity of a company. 3. Microsoft SQL server allows from one to thousand users to access the database at one time and this is a big advantage of it over other ERP systems such as SAGE. 4. It is known for precision and accurate reports. 5. The software can be easily integrated to third party software without losing efficiency.

14 ERP selection criteria: There are some criteria, on the basis of which organization can adopt or select ERP system. These are given below: SL. Criteria SL. Criteria No. NO. 1 Systems reliability 15 Increased organizational flexibility 2 Functionality of the system 16 Enhanced Decision Making 3 System flexibility 17 Reduced cycle times 4 Advanced technology 18 E-business enablement 5 System interoperability 19 Business process improvement 6 Operating system 20 Enabler for desired business independency processes 7 Connectivity 21 Increased customer satisfaction 8 Availability of a industry 22 Improved innovation capabilities focused solution 9 Organizational fit of system 23 Enabling technology for CRM, SCM, etc. 10 Internationality of software 24 Costs expended 11 System usability 25 Short implementation time 12 Integrated and better quality of 26 Vendor reputation information 13 Incorporation of business best 27 Vendor support practices 14 Improved service levels/quality 28 Market position of vendor (Adapted from article of Bemroider et al, 2009.) Technical requirement for ERP: 1. A software architecture integrating all functions of a business. 2. A common database 3. Powerful, user-friendly GUI (Graphic User Interface) 4. Client-server architecture 5. Functional consultant 6. Technical consultant 7. Data security protocols 8. Information technology infrastructure 9. Programming, logistics, human resource and SCM 10. Web development

15 11. Testing tools, system configuration and tools for the protection of data etc. Implementation phases & factors: We have found 20 critical factors under the head of 8 implementation phases. These are given in the following table: Phases Initiation Adoption Adaptation Acceptance Routinization Infusion Factors 1. Architecture choices 2. Clear goals and objectives 3. Partnership with vendor 4. Top management support 5. Careful selection of package 1. Top management support 2. Project team competence 3. Use of steering committee 4. Partnership with vendor 5. Dedicated resources 1. Interdepartmental communication 2. Interdepartmental cooperation 3. Project team competence 4. Dedicated resources 5. Use of vendors tools 1. Interdepartmental communication 2. Interdepartmental cooperation 3. Top management support 4. Project team competence 5. Education on new business processes 1. Interdepartmental communication 2. Top management support 3. Interdepartmental cooperation 4. Vendor support 5. User training on software 1. Interdepartmental communication 2. Interdepartmental cooperation 3. Top management support 4. Vendor support 5. Partnership with vendor (Source: Adapted from Somers and Nelson, 2001) Performance of ERP in Navana group:

16 1. Quality and Efficiency: ERP creates a framework for integrating and improving NVANA Company s internal business processes that result in significant improvements in the quality and efficiency of customer service, production and distribution. 2. Decreased cost: Navana reports significant reduction in transaction processing cost and hardware, software and IT support staff compared to the non-integrated legacy systems that were replaced by its new ERP system. 3. Timely decision support: ERP provides vital cross-functional information on business performance quickly to managers to significantly improve their ability to make better decisions in a timely manner across the entire NAVANA GROUP. 4. Navana s agility: Implementing ERP system breaks down many former departmental and functional walls of Navana s business processes, information system and information resource. This results in more flexible organizational structure, managerial responsibilities and work roles and therefore a more agile and adaptive organization and work-force that can more easily capitalize on new business opportunity. ERP environment in Navana Group: Navana Group has positively managed ihe following environment for ERP implementation and continuation Organizational Environment: Top management support Company-wide support Business process reengineering Effective project management Organizational culture IT consultant opinion User Environment: Education & training User involvement User characteristics System Environment: ERP software suitability Information quality System quality Adaptation of ERP Software ERP vendor Environment: ERP vendor quality ERP cost Vendor performance

17 Future Impact of ERP on NAVANA Supply Chain: 1. Speeding up the whole manufacturing process 2. Better and systematic inventory handling 3. WIP (work in progress) control 4. Quick processing of information 5. Accessing the status of the goods on a click of a button 6. Reduce process cycle time Recommendation: o Ensure good feedback mechanism to evaluate the results. o Hold regular training and appraisal sessions in the organization. o Look into the future capabilities of the enterprise and take radical decision for transformation. o Hire experienced consultant. o Ensuring continuous and frequent communication. o Develop new job description and organization structure o Determine the skill gap between existing and envisioned jobs. o Assess training requirement for the required staff. o Make a balanced IT team for monitoring activities. o Top executive should play the role of champion (A. k. Gupta, P. 230) Conclusion: From the analysis and findings we can say that Enterprise Resource Planning is the latest high end solution. The ERP solutions seek to streamline and integrate operation processes and information flows in the company to synergize the resources of an organization namely men, material, money and machine through information. To keep pace with competitive world NAVANA GROUP has implemented ERP systems to provide information seamlessly in various units and departments. Though the implementation of ERP system is complex and expensive, it can provide enormous benefit in the long run.

18 REFERENCES BOOKS: Hofstede, G (1991) Cultures and Organizations: Software of the Mind. New York: McGrawHill. O Leary, D.E (2000) Enterprise Recourse Planning Systems: Systems, Life cycle, Electronic Commerce and Risk. Cambridge University Press, New York Bowersox J, Donald, David J, Closs, Cooper, M Bixboy. Supply Chain logistics. Calcatta: Chand Publication. O Brien, James A, M, Management Information System McGrawHill, Hill publishing co. ltd. Gupta. A. K, Management Information System, S. Chand and Company Ltd, New Delhi. Laudon, Kenneth C, Laudon, Jane P, Management Information System: Managing The Digital Firm JOURNALS: Akkermans, H and Helden, K.V (2002), Vicious and virtuous cycles in ERP implementation: a case study of interrelations between critical success factors. European Journal of Information Systems, Vol.11, Issue 1, pp Billah, A B M Mamun, Puttee, Collen and Ali, Yousuf, consideration of critical success factors for Enterprise Resource Planning Systems Implementation in context of Bangladesh (2009),MICS.Paper 342. Parry, Glenn and Graves, Andrew(2008) 'The importance of knowledge management for ERP systems, International Journal of Logistics Research and Applications, 11: 6, Tan, Chee-Wee and Pan, Shan, "Erp success:the search for a comprehensive framework" (2002). AMCIS Proceedings. Paper Bernroider, Edward W.N., Sudzina, Frantisek and Pucihar, Andreja criteria for assessing enterprise resource planning (ERP) systems: Preliminary results from multiplebempirical (2009), Journal of an Open, Effective and Representative esociety. 22 nd Bled Conference 9:14 p

19 Koch, Christian; Olsen, Martin; & Tambo, Torben, How little do we need to know about Enterprise Resource Planning (ERP)? -A critical review of information systems research on ERP Journal of Strategic information Systems, 24:9, Sasovova, Zuzana; Heng, Michael; and Newman, Michael, "Limits to Using ERP Systems" (2001). AMCIS 2001 Proceedings. Paper Hossain, Mohammad Monowar and Jahed Mohammad Abu, Factors influencing on the adjustment of ERP system during implementation (2010), Global Management Review, 4:3. Srivastava, Mukesh; Betsy J and Gips, Chinese Cultural Implications for ERP Implementation (2009), journal of technology management & innovation. vol.4, issue 1,pp Al-Mashari, Enterprise Resource Planning (ERP) systems: a research agenda Journal of industrial Management and Data System. Vol.103, issue 1, pp Web Sources: Navana real- estate Ltd. Www. navana real- estate.com ERP Evaluation Survey Questionnaire. Address: ec91 How ERP Systems Must Meet the Challenges of Automotive Suppliers. Articles on ERP. Organizational Culture Impact in ERP Implementation in China. Available from

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