INTERNATIONAL JOURNAL OF INFORMATION TECHNOLOGY & MANAGEMENT INFORMATION SYSTEM (IJITMIS)

INTERNATIONAL JOURNAL OF INFORMATION TECHNOLOGY & MANAGEMENT INFORMATION SYSTEM (IJITMIS) International Journal of Information Technology & Management Information System (IJITMIS), ISSN ISSN 0976 6405(Print) ISSN 0976 6413(Online) Volume 4, Issue 2, May - August (2013), pp. 31-39 IAEME: www.iaeme.com/ijitmis.html Journal Impact Factor (2013): 5.2372 (Calculated by GISI) www.jifactor.com IJITMIS I A E M E ERP IMPLEMENTATION ISSUES IN HIGHER EDUCATIONAL INSTITUTES WITH SPECIFIC REFERENCE TO PUNE REGION Dr. K. Nirmala 1, MS. Rupal Choudhary 2, Jai Ram Choudhary 3 1 (Dr. D. Y. Patil Institute of Management & Research, Pimpri, Pune, India) 2 (Dr. D. Y. Patil Institute of Management & Research, Pimpri, Pune, India) 3 (Software Development Cell, Dr. D. Y. Patil Vidyapeeth, Pimpri, Pune, India) ABSTRACT Enterprise Resource Planning (ERP) systems are the integral information solutions that cater to the information needs throughout any organization. This paper attempts to explore and identify issues affecting Enterprise Resource Planning (ERP) implementation in context to Higher Educational Institutes in Pune region. The issues covered include the development of a strong foundation for ERP such as a clear definition of requirements, a comprehensive project plan, a strong project team, back-filling the organization, and the commitment of leadership. Also discussed is the importance of the contract with vendors, including options of fixed cost versus time and materials approaches. The expected costs and benefits of ERP are discussed. Recently there has been a wave of interest in implementation of ERP software. The question of implementation of ERP has remained largely unexplored. In this research we seek to contribute to our understanding of the critical success factors of ERP implementations and how these factors can be put into practice to help the process of project management in ERP implementations. The findings are expected to be a valuable contribution to the Educational Institutes that are planning to implement the ERP system. Keywords: Enterprise Resource Planning (ERP) systems, Implementation, Information, Higher Educational Institutes. 31

1. INTRODUCTION The term Enterprise Resource Planning was coined in the early 1990s. ERP is a software solution that integrates information and business processes to enable information entered once into the system to be shared throughout an organization. While ERP had its origins in manufacturing and production planning systems, the scope of ERP offerings expanded in the mid-1990s to include other "back-office" functions such as order management, financial management, asset management and human resources management. The range of functionality of ERP systems has further expanded in recent years to include more applications, such as grants management, marketing automation, electronic commerce, student systems and supply chain systems. Surprisingly, Higher Educational Sector which should have been in the fore-front in ERP implementation has lagged behind. Customized software have been used by the Colleges since a long time. Library and Finance are the two departments leading the race. But increased competitiveness and availability of options is now slowly forcing this sector to go for ERP implementation. Application of Information and Communication Technology (ICT) is gaining focus and being considered as a key factor in quality assessment of educational Institutes. ERP is also being considered for being ahead of the rest in this highly competitive and fast growing market. An ERP implementation impacts the motivation, training and competence of the existing staff. 2. OBJECTIVES 1. To find out the various issues arising during implementation of ERP systems in various Educational Institutes in Pune region. 2. Designing of various strategies based on the above issues to make successful ERP implementations. 3. LITERATURE REVIEW ERP for Educational Sector is defined as an integrated, customized, packaged software-based system that handles the majority of the organization s system requirements in all functional areas such as student management, faculty management, library management, hostel management, finance, human resources, admissions, examinations and results. It has a software architecture that facilitates the flow of information among all functions within an organization. It sits on a common database and is supported by a single development environment. Lucas (1981) defined implementation as the whole process of introducing a system into an organization, from conception of an idea, to analysis, design, installation and operation. Olson and Davis (1984) defined implementation as preparing an organization to receive an information system for its effective use. Sauer (1993) sees implementation in terms of reducing the uncertainty around the problematic relationships amongst the Information System, the project organization responsible for delivering the system, and the system's supporters. Extensive research has showed that people are a major factor in detecting the performance of an ERP implementation in an enterprise. Turnipseed et al. (1992) found that 32

people s involvement in implementation, support for the system and the level of usage are highly correlated to the success of such a system. However, it was found that prior experience with complex information systems and the level of education and training are also important factors in perceptions of the success of this system. In contrast, Mainwaring (1999) argued that users training is the key to ERP implementation. Gefen also suggested that nurturing clients trust to encourage a successful customization is a key factor for a successful ERP implementation (2002). Visionary leadership is critical to an ERP implementation. Effective leaders within the implementation process must be able to blend strong visionary skills with effective management into one integrated whole (Morden 1997). Research also indicates that not only the leader must have a vision but that vision must also be shared by the led (Tichy and Sherman, 1994). In relation to an ERP implementation the led must share the vision of the change and benefits that will result. 4. RESEARCH METHODOLOGY 22 Colleges in Pune were approached with the questions. Majority of them are using customized software mainly for Library management and Accounting department. 4 Colleges had taken a decision to implement the ERP system and they were in the implementation phase. 2 Colleges had already implemented ERP fully in their campuses. Results presented are based on data collected from IT managers of these Colleges which were asked mainly open-ended questions around key issues and typical activities in the ERP implementation process. This approach helped us in getting top of the mind concerns and avoiding choice bias. A self administered survey and in-person/telephone interview were used to collect data. A survey approach was preferred over a case based approach because of its efficiency and empirical nature. The questionnaire was designed to capture the organizational concerns and experiences around the typical activities in ERP implementation. TABLE 1 SAMPLE DESCRIPTION (N = 22) ERP Status No. of Educational Institutes In Process of Implementation 4 Planning to Implement 5 Already Implemented 2 Currently Not Planning 11 5. FINDINGS & DISCUSSION A. Vendor selection Once the management decides to implement an ERP system for their Institute, they have to first select a vendor. There are numerous ERP Vendors out in the market. ERP solutions today often have their spearhead application. Some ERPs are better at finance, others are better at human resource, and still others may be better at student applications. The selection criteria thus become more difficult. Respondents were asked to list the criteria used to select the ERP product and its vendor. Meeting Organization Requirements and Vendor Support Service were the top 33

ranked criteria. Some of the respondents adopted systems used by their parent organization. Several respondents considered Availability of Regular Updates, System Reliability, and Ease in customizing the Software important. Surprisingly System Using Latest Technology was the least criteria in vendor selection. TABLE 2 PRODUCT/ VENDOR SELECTION CRITERIA (N = 11) Product/ Vendor Selection Criteria Functionality 72% System Reliability 54% Meeting Organization Requirements 81% System Using Latest Technology 45% Vendor Support/ Service 81% Ease in customizing the Software 54% Availability of Regular Updates 54% B. Implementation Strategy There are two types of implementation strategies; big-bang implementation and phase wise implementation. Respondents were asked about the type of implementation strategy they used. 81% of them had chosen phase wise implementation over the big-bang implementation. 19 had chosen to implement the ERP system in one go as they were not having any legacy system in their organization other then the accounting package used by the finance department. TABLE 3 IMPLEMENTATION STRATEGY (N = 11) Implementation Strategy No of respondents Phase-wise Implementation 9 Big-Bang Implementation 2 C. Implementation and success factors Respondents were asked about the major obstacles they faced in the ERP implementation project. Problems in transition to new systems, Bugs in the New System, and data conversion came up as major obstacles faced by the Colleges. Colleges also faced various problems in user acceptance of new systems, and time lag in attaining comfort levels in operating with new systems and processes Interestingly, one respondent commented that he did not see any return on investment from the new systems. The systems would only replace the outgrown old ones. In one organization where the project was managed with the support of Parent Organization employees, the respondent felt getting adequate support from parent Organization employees was a major roadblock. Measuring project success is an important aspect of ongoing project management. In information systems research, it is branded a difficult proposition because of problems in 34

defining project success (Markus et al.,2000). Success depends on the point of view from which you measure it. People mean different things when they talk about ERP success. For example, HODs often define success in terms of completing the project on time and within budget, while a user s perspective may be influenced by ease of use and work enhancements achieved. TABLE 4 ROAD BLOCKS (N = 6) Project Road Blocks Transition to new systems 83% Insufficient Training 16% Difficulties in estimating the project requirements 33% Data Conversion 83% User Acceptance 67% Time lag in attaining comfort levels 50% Bugs in the New System 67% Knowledge gap between implementers and users 50% Support & Training from Parent Organization 16% D. Training Sufficient training to the end users was considered as a most important factor for making the ERP a success in the organization. The users should be made aware of the full system. Most of the training provided focused on how to carry out an operation with the new systems. Users were not told why to use the systems. Getting the right people as trainers was the main challenge in training. The trainers were sometimes the sales people who were not able to tell why a particular step is required to be done. Office staff, in particular, was short of time for training. TABLE 5 CHALLENGES IN TRAINING (N = 6) Challenges in Training Lack of computer savvy users 33% Getting the right people as trainers 83% High turnover of users 50% Insufficient Time 66% E. Infrastructure Respondents were asked about the challenges they faced in upgrading the infrastructure to support the new systems. About 54% of the organizations deployed new infrastructure to support their ERP systems. Since the ERP systems are web-based, and the fact that most of the colleges were having a working network, they needed to invest mainly in servers. All the systems across the organization needed to be compatible with the software. Most of the respondents said that they had to purchase database systems for using the ERP system. 35

TABLE 6 CHALLENGES IN UPGRADING INFRASTRUCTURE (N = 11) Challenges in Upgrading infrastructure New Infrastructure Deployment 54% Incompatibility of new systems with existing infrastructure 18% Re-design 18% Difficulty in estimating requirements 27% F. Software configuration ERP systems are software packages, generically designed, keeping the industry-wide needs and best practices in mind. One of the major challenge an adopting organization faces while configuring an ERP system is that software does not fit all their requirements (Davenport, 1998). Even with today s state of the art technology, organizations find that not all their requirements are provided by the ERP systems they adopt. We asked the respondents about incompatibilities between the software and organizational needs. About50% were organization specific where the software did not support the way their organization worked. For example, the software did not support some of the procedures required by the AICTE and DTE. Some respondents found that ERP systems had limited reporting capabilities and it was difficult for academic users to generate customized reports. TABLE 7 LIMITATION OF ERP (N = 6) Stated Limitations of ERP Sophistication of the software 50% Needless or Unwanted Reports 33% No facility to create customized reports 67% We further asked the respondents about their strategies to meet the limitations of ERP and the incompatibilities between the software and their business needs (Table 8). Colleges took more than one strategy in many cases. About 83% of the Colleges responded that they made some modifications in the software, 33% developed add-ons, while 17% said they are living with some shortfall. A high response on making software modifications was interesting in the light of the many reported woes of modifying ERP software such as high costs, difficulties in upgrades, and increased introduction of bugs due to modifications (Davenport, 2000). TABLE 8 STRATEGIES TO MEET INCOMPATIBILITIES (N = 6) Strategies to meet incompatibilities Software was modified 83% Add-ons developed 33% Living with the shortfall 17% 36

G. Testing and quality assurance Assuring that the new systems will work well when they go live is a challenging task. Respondents were asked about the testing and quality assurance activities they carried out or were in process of carrying out. Some Colleges are running pilot tests by populating the systems with organizational data. A few Colleges also tested their systems for scalability and performance on load. Most of the Colleges are running their old systems in parallel with the new system and will switch only when the new system is tuned fully. TABLE 9 QUALITY ASSURANCE STRATEGIES (N = 4) Quality assurance strategies Complete validation/verification of data between old and new systems 75% Reconciliation of old accounts 75% Pilot Testing 50% 6. DESIGNING OF VARIOUS STRATEGIES Various strategies can be generated based upon the experience of those interviewed. The best practices can be summarized as below: A. Vendor Selection A team comprising of IT and various department heads should be created. They should be fully educated and made aware of the decision to go for ERP implementation. The team can go through demo sessions by various vendors and rank them according to their required functional and non-functional criteria. The management can then use these ranking to finalize the vendor after comparing the price factor. Not only the initial cost but also the annual maintenance cost and the cost of customizations should be considered. Try to select a system which is very close to your requirements. Customizations cost a lot and are more prone to errors. B. Implementation Strategy While interviewing with the respondents, we found that phase wise implementation is the best strategy for implementation. It was observed that while using the big-bang approach, there tend to be chaos among the users. The negative vibes of one department affect the other departments thus creating a negative impact on the whole implementation process. When the implementation is done phase-wise, extra care has to be taken for the first implementation in a department. A small department can be chosen for this. The successful implementation in this department will send positive vibes throughout the Institute, thus making the implementation a success in other departments. C. User Acceptance User involvement is one of the most cited, critical success factors in ERP implementation projects. The topic of user involvement has been the subject of research since the origin of information systems. 37

Increase the rate of user involvement in the implementation, so that the end result will deliver a better fit in relation to business processes and acceptance between the end users and the ERP system. Concern the top management about the conversion from a legacy system to a modern ERP system and assure that the ERP project would be successful. D. Training Training plays a major part in the successful implementation of the ERP system. Apart from providing training the end users, some employees of IT departments should be fully trained in the whole system. There should be always some employees in the organization who know the whole system fully. These employees will be able to train the new employees in the future. In the Colleges where there are customized software used, the Users must be made aware of their increased stake through the ERP system. In the legacy systems they were using the data fed by them for their own departmental use, but with the ERP the value of their data increases as it is being shared throughout the enterprise. There are numerous reasons and explanations available to make the users adapt to the new ERP system if previously there were no software system used. Sufficient training should be provided. 7. CONCLUSION ERP systems were initially implemented only in corporate sector. But, with the introduction of global ERP solutions the range of ERP systems broadened and being extended to education sector. In current reality, the higher educational institutes are facing lot of challenges to process, manage and communicate information in the dynamic environments. So, with context to emerging trends in global management practices it is even necessary to assess and acknowledge the implementation issues of ERP systems in higher educational institutes which are instrumental in socioeconomic transformation of any nation. Further, there is need to implement an ERP system in higher education to seek better ways to transform knowledge for effective decision making and managerial capacity building. 8. LIMITATIONS The research identifies a number of critical management challenges in the ERP implementation activities, such as training, upgrading infrastructure, project management and stabilizing ERP systems. Organizational strategies in testing and quality assurance, meeting incompatibilities between organizational needs and the ERP systems, increasing user acceptance, and resolving challenges in shakedown are also documented. A number of avenues can be recognized for future detailed research, based on organizational concerns found in this study. For example a detailed study on training, one major organizational concern identified, would ascertain how effective ERP training can be carried out. Future studies should explore ways to increase the size of the sample group and the response rate. 38

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