erp implementation

ERP IMPLEMENTATION 1

ERP IMPLEMENTATION

Farouq Umar Idris

CIS300

05/10/2013

Submitted to:

Alka Khurana


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:


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.


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.


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 IT Accounts Customer

relations

Human resource


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.


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


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.


We discovered that the legal department had been struggling with tracking contracts and

security; they were some security risk from unencrypted email.


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.


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.


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.


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.


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


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


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


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


STAFF_ID NUMBER PRIMARY KEY

GENDER TEXT -

STAFFNAME TEXT -

ADDRESS TEXT -

PHONE NUMBER NUMBER


WAREHOUSE

CUSTOMER TABLE


WH_ID NUMBER PRIMARY KEY


ITEM TEXT -

QUANTITY NUMBER -

STATUS TEXT -


CUSTOMER_ID NUMBER PRIMARY KEY

ADDRESS TEXT -

PHONE_NUMBER NUMBER -

NAME TEXT -


ORDER TABLE

CUSTOMER CARE


ORDER_NO NUMBER PRIMARY KEY


QUANTITY NUMBER -

CUSTOMER_NAME TEXT -


TRANS_TYPE TEXT -

DATE DATE/TIME -


INCOMING NUMBER -

OUTGOING NUMBER -

PHONE_NO NUMBER -

DATE DATE/TIME -

CUSTOMER_NAME TEXT -


SALARY

ADMIN


ID NUMBER PRIMARY KEY

STAFF_NAME TEXT -

AMOUNT NUMBER -

DEPARTMENT TEXT -

STAFF_ID NUMBER FOREIGN KEY


ID NUMBER PRIMARY KEY


TRAN_ID NUMBER FOREIGN KEY


ORDER_ID NUMBER FOREIGN KEY


OVER VIEW OF THE DATABASE

When the design is finished, the database should be organized like this;


The view of the table should be like this;


Above is the transaction table showing how a transaction should be saved when entered from

item table.


Above is the relationships within the database showing the entire tables and how there are

related to one another.


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.


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


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

erp implementation

Technology

decision support system

business decision

current system

business organization

expert system

strategic decision

new erp software

business data