1.1 OVERVIEW OF ERP AND BPR The economic globalization has formulated new conditions in the market place. These conditions have given rise to instability and intensive competition in the business environment. There are various factors with respect to which competition in the market has an incremental growth and these factors include price, quality and selection, service and promptness of delivery. The competition has intensified more by the increasing cooperation between various countries world-wide, removal of the barriers and technological innovations. The need for organizational transformations has resulted from these changes, which further leads to the change of the entire processes and organization climate and organization structure. Such a change is characterised by an emerging Information technology, Enterprise Resource Planning (ERP). ERP system are responsible for integrating the business processes of an organization, and helps them to obtain the competitive advantages which may include enhancing productivity, customer demands satisfaction, increasing the rapid response capabilities of the customers, reduction of the cycle time, enhancing flow efficiency, and rapid generation of financial information [2]. ERP systems help in enabling the managers to control the whole business and accelerate decision making. In what way, does the top management find the need of ERP implementation and whether the top management takes ERP implementation as simple automation of the existing system or something else are the major issues with regard to ERP implementation. The implementation of ERP is not simply considered the automation of existing business processes, as it requires various changes in these business processes of the enterprise to implement the best practices possible [4]. But there are some challenges that ERP implementations have to face such as the ERP system implentations are very complex in nature, moreover, they incur very high costs and problems during and post implementation are not rare in ERPs. So, these issues force a number of organizations in the industry to reconsider their new plans in relation to this enterprise system and ERP implementation. In ERP implementation, the systems are developed and designed so that they can be used to support the organization’s business processes, thus ERP implementation and business process should have close connections. Business Process Reengineering (BPR) is a process that involves the adoption of process perspectives on a business, and represents a fundamental rethinking of organizations. BPR can be well defined as the fundamental rethinking as well as radical redesign of the business processes with the aim to achieve the an outstanding refinement of measures of performance, such as cost, quality, flexibility, accuracy, service and speed [5].
This paper addresses the issues being faced by the ERP Systems, how the problem was approached and led the search for answers to the achievement of the objectives. The subsequent are the queries that have been addressed in this research.
A system integrated approach would improve the business process and hence enable the different functions to share information. It was clearly identified that the ERP deployment would benefit the company through all these elements. In the case, benefits of ERP adoption were not quantified but improved cost and better pricing strategy were discussed to justify the ERP project financially. It can be interpreted that ERP, leading to improved cost analysis, cost control, less redundancy, optimized production and better pricing, would result in low costs and hence higher profit for the company. Financial justification for the ERP adoption can also be inferred through the fact that it would lead to resolution of several problems which the company faces
Sethi Vikram & King R. William (2008) Organizational Transformation through Business Process Reengineering,Rahul Print O Pack,India.
At the moment, Enterprise resources planning (ERP) systems had become important systems in the modern business world. The meaning of ERP itself is an integrated software package composed by a set of standard functional modules (production, sales, human resources, finance, etc.) developed or integrated by the vendor that can be adapted to the specific needs of each customer (Esteves et al. 2000).
Technology is amazing. Some people might argue technology is bad, some might argue that technology is good, but no one can deny that technological achievements of modern age are awe inspiring. It is a fact, however, that society as a whole relies heavily on technology. Everyone uses technology in their everyday lives such as cell phones, laptops, the Internet and so on. It might be said that technology is the one of the reasons people living today enjoy a higher level of comfort and higher standard of living than people living hundred years ago. However, even today, with so many technological advances, it is still possible for technology to fail. Approximately 77% of businesses rely on information systems for their success today, and when an information system fails, it causes a significant problem for that company. There are many famous information system failures throughout history such as Snap-On’s order-entry system failure which caused company to lose $50 million in the first half of 1998, or FoxMeyer’s failed implementation of ERP which drove the company into the bankruptcy. The information systems failure that is going to be focus of this paper, is the Hershey Foods Corporation’s failure at implementing Enterprise Resources Planning (ERP) in 1999, causing problems with order management and fulfillment, rendering Hershey Foods Corporation unable to fulfill many orders, which dropped company’s revenues by 12% compared to the previous year. This essay is going to look at what Enterprise Resource Planning is, how and why the implementation at Hershey Foods Corporation failed (compared to some other companies...
...ting maximum revenue for the organizations and also maintains the information of the entire department in organization separately, and makes the win-win situation for both organization and suppliers. ERP system also builds up a long relationship with the suppliers and customers which not only benefits organizations, its external and internal partners but as well as industry.
BPR is a management technique and tool emerged in the early 1990s. Some researchers debated that it has been evolved following the United States financial crisis and recession as a result of the need of the organisations to revamp its processes looking to improve its efficiency and reduce its cost. Professor Hammer is considered one of the leaders who introduce the concept of Business Process Reengineering. Hammer (1990) argued that companies that aim for dramatic improvements through boosting the performance of its processes should be reengineering them rather than directly automating them with their existing deficiencies. Since that time, BPR started to be a popular improvement tool that organisations are keen to implement to become more efficient and hence increase its competitiveness.
Emerge first in 1990, Business process Reeengineering (BPR) by article “Reengineering Work: Dont Automate, Obliterate” written by Michael Hammer and Thomas Davenport. The book “Reenginnering the Corporation: A Manifesto for Business Revolation “ by Hammer and Champy (1993) described business process reengineering as core of redesign and revise of business process to gain drastic improvements in crucial measure of performance.
“An Enterprise resource planning (ERP) systems are software systems for business management, supporting areas such as planning, manufacturing, sales, marketing, distribution, accounting, finance, human resource management, project management, inventory management, service and maintenance, transportation, and e-business”.( Haag, Cummings, Phillips, S, M, A (2007). Mangement Information Systems. New Yory, NY: The McGraw-Hill Company Inc..)
The concepts of Business Process Reengineering (BPR) was introduced by Professor Michael Hammer (Grover and Markus, 2008, Gunasekaran and Kobu, 2002, O’Neill and Sohal,1999), in the early to mid-1980s. There were many other authors who have subsequently published their own variant of BPR, authors such as Davenport/Short published their work shortly after Hammer.
described the ERP system as packaged (but customisable) software applications, which manage data from various organizational activities and provide a fully integrated solution to major organizational data management problems. They provide for both the core administrative functions, such as human resource management and accounting, as well as integrated modules which can be selected to support key business processes, such as warehousing, production and client management.
Business process reengineering (BPR) is a management approach aiming at improvements by means of elevating efficiency and effectiveness of the processes that exist within and across organizations. The key to BPR is for organizations to look at their business processes from a "clean slate" perspective and determine how they can best construct these processes to improve how they conduct business.
Michael Hammer and James Champy introduced the term business process reengineering which is also known as organisational reengineering in the early 1990s. Hammer and Champy published a book “Reengineering the corporation” which gave the world an introduction to reengineering. In 1990 Michael hammer’s article “Reengineering work: Don’t automate, Obliterate” which was published in Harvard business review was a major par in how reengineering came into the business world.
In order to be more productive and accurate, most of the companies depend on use of technology, with the help of enterprise resource planning (ERP) systems. (Olsen, and Saetre, 2007).
As all the information flows within the ERP systems so it is easy for a company to plan for the future based on its current performance. These systems enable the decision makers to make quick decisions based on accurate information as the whole information from various departments lie within the same