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Erp Development

ERP Development

Introduction

Managerial Information Systems (MIS) are systems dedicated to monitoring and controlling an organization. Literature about the experience of developing MIS in the context of R&D organizations is very scarce. In Brazil the only case so far identified in the literature is the EMBRAPA case. a top Brazilian R&D organization in the agriculture field. This case reported that the design of MIS is affected by impulsive factors (e.g.: innovative conceptual design, managerial sponsoring, performance and lack of integration of the preexisting information systems, strong external information demand for the R&D activities and communication between coordination and users) and restrictive factors (e.g.: innovation perception as a threat or reworking efforts, concurrence with other information systems being implemented, lack of managerial sponsorship, size of the developing team, negative attitude due to previous information systems experiences and complexities introduced by the system (Castro, Lima, Carvalho, & de Bacarin, 2000).


The aim of this paper is to describe and analyze 10 years of experience developed by a Brazilian nuclear R&D Institute in the design and implementation of a special category of MIS known as Enterprise Resource Planning (ERP). This system manages the activities of more than 1,000 workers and 700 students and is named Planning and Managerial Information System of the IPEN (SIGEPI). It has been developed to support the management of the Master Plan of the Nuclear and Energy Research Institute (IPEN).
This article is organized with the following structure: the first section presents a brief literature review related to the management information systems implementation and the contributions of the present study; the second section presents the case of IPEN this experience will be described in terms of how this system was developed, which features were implemented, the main difficulties faced during the development stages and recent developments; the third section analyses the experience related to the three critical factors (strategic, project design and implementation and behavioral) and presents recommendations for similar developments and the last section presents the conclusion and the final remarks derived from the case.

Literature Review

Management systems can be classified into managerial support systems (MSS), management information systems (MIS) and decision support systems (DSS). The first one is dedicated to long term planning; the second and the third ones are dedicated to a shorter time period and they function as a monitor and control of the organization; the third one is specifically dedicated to non structured problems (Laudon & Laudon, 1999).
A special category of management information systems is that one dedicated to integrating an organization's business processes. Different names of the software packages for these management systems can be found in the literature: enterprise information system (EIS), enterprise resource planning (ERP), enterprise-wide information systems (EWIS), enterprise systems (ES) (Looman & McDonagh, 2005).
ERP is a packaged software solution that seeks to integrate the complete range of a business process and function in order to present a holistic view of the business from a single information technology architecture although some experts have some difficulty arriving at a complete definition of ERP they tend to think that ERP is'in the eye of the beholder' (Klaus, Roseman, & Gable, 2000).
The main features of ERP-software are the provided business solutions, which support the core processes of the business and administrative functionality and purport all business functions of an enterprise. ERP supports recurring business processes like procurement, sales order processing or payment processes and is not focused on less structured irregular processes like marketing, product development or project management. An ERP can target multiple industries with very different characteristics. Some suppliers can provide specific solutions for the communication, federal government, financial services, healthcare, higher education, manufacturing, public sector, retail, service industries, transportation and utilities sectors (Klaus, Roseman, & Gable, 2000).
In the past, companies first decided how they wanted to do business and then chose a software package that would report their proprietary processes - often rewriting large portions of the software code to ensure a tight fit; with the enterprise systems, though, the sequence is reversed and the business often must be modified to fit the system (Davenport, 1998).
After studying more than 50 businesses with enterprise systems, Davenport suggested that "the companies deriving the greatest benefits from their systems are those that, from the start, viewed them primarily in strategic and organizational terms. They stressed the enterprise, not the system" (Davenport, 1998).
An EIS implementation process frequently does not succeed as expected. A survey conducted in December 2000 called 'EIS Post Implementation Issues and Best Practices' among 117 firms across 17 countries concluded that only 34 per cent of the organizations were 'very satisfied' with their EIS investments (McNurlin, 2001).
The ERP system is considered a standard software package and all standard software targeting an anonymous market must, during the process of system deployment, be tailored to the specific requirements of the individual enterprise (Klaus, Roseman, & Gable, 2000). This aspect associated with the relatively low satisfaction level mentioned earlier may explain the importance many studies have attributed to the identification and classification of an ERP implementation success and/or failure factors.
Loonam and McDonagh reviewed the literature between 1999 and 2001 and identified some of the most frequently cited and highly critical EIS implementation success factors: a) Top Management support; b) The importance of a project champion to drive project implementation and his role in the change management; c) User training and education; d) Management of expectations: an organization should be realistic about what can be expected from the EIS system; e) Project Management: involves aspects like proper management of the scope and alignment of its objectives with the overall mission and strategy; f) Steering Committee (a core of 'superusers' typically middle-level employees or managers that will be affected by the EIS project); g) Use of consultants to assist in getting the project up and running; h) Business Process Reengineering: involves aligning the implementation of an EIS with the rethinking or the redesign of the organizational business processes; i) Dedicated resources involves the proper allocation of resources human, financial and time and the attention to the management scope; j) Change management: involves all human, social-related and cultural change techniques needed by the management to ease the transition (Looman & McDonagh, 2005).
In 2006, Muscatello and Chen (Muscatelo & Chen, 2008) surveyed 206 members (81% with more than 500 employees) of four USA associations (the American Production and Inventory Control Society; the National Association of Accountants; the American Productivity and Quality Center and the Institute for Supply Management) in order to identify critical factors of ERP implementation. Some of these factors are similar to those identified by Loonam and McDonagh, thus, for the present study the following factors were considered: a) The decision to implement an ERP system is being made at a cross functional executive level which includes inputs from all functional business areas; b) willingness to use consultants to supplement their Information Technology staff if the skill set is not internal; c) activate employees communication: how they fit into the new ERP-environment and what their concerns are.
Finally, the ERP design and implementation may also be affected by the decision of outsourcing it or not. This decision may be influenced by the following factors: a) internal production costs versus market acquisition costs comparison; b) transactions costs; c) financial slack: organizations with financial slack may build an internal technology infra-structure; organizations without it may outsource it; d) strategic dependence on the supplier; e) contract profile orientation: open contract and partnership versus detailed contract and price oriented and f) organizational strategic objectives. These objectives can be classified into three categories: (i) information technology improvement, (ii) information technology business impact and (iii) commercial exploitation bases on information technology (Bergamaschi & Reinhard, 2008). The Master Plan In 1998, the CNEN (National Nuclear Energy Committee) started and developed a two step planning process named "Rethinking the CNEN".The objective of the first phase was achieved, which was the outline of the mission, vision and other strategies, but, two years later, the second step addressed to identify its main stakeholders and to unfold the planning process to the CNEN's research and technology institutes was discontinued.
In 1999, after the internal analysis of an independent evaluation of the first Managerial Report written in reference to the Excellence Criteria of National Quality Foundation, the deficiencies of the planning process became clear: "we cannot go ahead with half strategic planning. Without it (a strategic plan), we will continue to spend energy without the synergy of our internal actions" (IPEN, 1999).
By the end of 1999, a wide managerial participation program was developed, which resulted in the first Master Plan of the IPEN in 2000 (IPEN, 2000). With the accomplishment of this process, the creation of the first Master Plan resulted in many changes or in new activities:
Reorganization of the technical activities in alignment with the recently defined IPEN's mission;
Definition of the Global Strategic Objectives and organization of a hierarchical and nested structure of Programs, Subprograms and Activities according to the Federal Government Plan (PPA)
Definition of a new organizational structure based on Research Centers;
Definition of three macro processes: 1. Research, Development and Engineering; 2. Teaching 3. Products and Services;
Different emphasis on one or more of these macro processes from one Research Center to another according to their internal strategies;
Definition of quantitative results indicators for each of these macro processes as well as goals for some of them;
Organization of an annual follow-up process named Master Plan Seminars.
The first Master Plan Seminar was held in December 2000 and since then it has been repeated annually. At that time the event was organized in 109 technical presentations that demanded 5 whole days to succeed. All the presentations had to be made in 15 minutes by an Activity coordinator following a predefined Power Point template where the qualitative and quantitative results accomplished in 2000 should be presented. Since then, many modifications have been introduced to the process, and some of them will be described later.
Almost at the same time, in 2000, the section responsible for structuring and implementing the IPEN's Master Plan also initiated the study of the Balanced Score Card methodology. Initially the idea was to understand this methodology and its implication for the IPEN's strategy formulation process. The BSC is quite easy to be understood and in the next year a Strategic Map for the IPEN was already developed, proposed and approved by the IPEN's Top Management Team. The development of this Strategic Map and its respective "Board Panel" helped to identify which processes should be monitored and stressed the need to integrate the data coming from the support processes.

DEVELOPMENT OF AN EFFECTIVE MIS The demand Credibility is a fundamental aspect of an effective planning > and one basic aspect involves the management of reliable data. After the first planning evaluation cycle, the weaknesses of this process became apparent. The Power Point presentations were operating as information systems the data were collected and presented using the Power Point template and many of the problems could be easily detected: lack of a common understanding of many indicators, same information showing up in different presentations, repetition of results previously presented as well as difficulties in collecting the data and in preparing the presentation.
In order to solve these problems, the design of an information system was initiated and named as Planning and Managerial Information System of the IPEN (SIGEPI). Despite the difficulties faced in the first MIS development experience, the perception of the section responsible for the Master Plan and the Master Plan Seminar was that such a system should be preferably designed and implemented at least at the beginning of the project by internal resources of the IPEN, due to the specificities and uncertainties involved.
The Development The beginning of SIGEPI's design was inspired by another Managerial Information System developed by one of the IPEN's Research Centers, the Nuclear Engineering Research Centers (CEN). Although the scope, focus and deepness of both MISs were distinct, some functional similarities were clear: 1) same Plan-Do-Check-Action principle; 2) Easy learning capabilities offered by the MS-ACCESS software and 3). Low human resources demand: only one graduated professional from the Nuclear Engineering Research Center staff was enough to develop the whole information system.
Considering the previously failed experience and the CEN's experience, an engineer involved in both Master Plan organization and Master Plan Seminar process was allocated to design and implement the first SIGEPI-ACCESS version instead of involving someone from the System Development Section. In December 2001, six months later, the first version of the new MIS was created.
The initial expectations about this system were high: it was expected that the software would operate through their Intranet. The link to the main database was installed at least in one computer in each Research Center of the IPEN. The functionalities and procedures of the new system were formally presented to the managers and researchers of all Research Centers and the secretaries of each Research Center were trained to operate the system. An operating manual was also written to help the system users. But the promise did not come true: the screens of this version were not user friendly and to make matters worse the system did not operate properly using the Intranet. Due to these problems there was a backlash and we had to collect all the data using paper forms. All the data gathered were then inserted by the Planning Section into this SIGEPI-ACCESS version instead of being inserted by the Research Centers staff.
The development of the Balanced Score Card mentioned earlier and this initial experience brought some important insights. From one perspective, the poor data quality problem was not solved, but from another perspective we identified that some information that should have been collected and presented by the Research Center during the Master Plan Seminar was already available among the supporting sections of the IPEN. In 2001 some of the IPEN's support processes were still being carried out manually (e.g.: patent processes), others were already computerized (e.g. budget) and others were being designed and modernized in terms of computerized databases (e.g.: library services, post-graduation support services). It became clear though that all these databases could be integrated in order to have a "full" MIS system and maybe, most importantly, we learned that such a system should be used to work for the staff and for the organization and not the other way around.
The SIGEPI-ACCESS version operated until 2004, when it became clear to the top management team that there was a need to upgrade the present institutional MIS version. At that time, with all the previous experiences, we knew exactly what was necessary in terms of relational databases and information content; thus, with the support of the top management team, the system development team reengaged in the unfolding of a new and then a real enterprise resource planning (ERP).
At that point an important decision needed to be made concerning the ERP design and implementation: outsource it or not?
This concern was clearly expressed to the internal software development team. Both alternatives would receive support from the management director and the planning director. The managing director had a preference for outsourcing due to the success of an previous experience in budget system. The system analysts involved in this process were inclined to develop the new ERP by themselves despite the fact that the programming language they were familiar with was not the most appropriate, the challenge of developing such a system was very attractive, though; thus, the design and implementation did not have to be outsourced.
With the support of the manager of the System Development Section, three system analysts were fully allocated to write a web ERP version. After six months and under a lot of pressure to finish the system by the end 2004, a fully new ERP named SIGEPI-WEB was finished and implemented with many new functional and databases integration facilities (income, budget, patents, post-graduation results ongoing, concluded and interrupted master essays and doctorate thesis publications and personal educational level data). The immediate benefits were crystal clear: less data were demanded from the technical areas and the data quality reached an unprecedented level.
Figure 1, presented below, represents the data flow dynamics as well the databases integration that drives the SIGEPI-WEB ERP operation. As it can be observed, some sections (gray circles) are responsible for the data of the processes under their responsibilities. Researcher and Activities Coordinators are the data source of the information under their responsibility and supplied by themselves. The researchers need: 1) to supply what they have published to the library section using the PTC-digital (a special database designed to be integrated with SIGEPI-WEB); 2) to interact with the NITEC in order to initiate and follow a patent deposit process; 3) to inform their scholarship level changes to the Human Resources Section and 4) to sign up their students through the teaching section. The Activities Coordinators need to enter all the projects the group is responsible for, as well as the results of these projects. In a few words, the data gathering from the support processes, the data supplied by the researchers and by the Activities Coordinators allow the management of the Master Plan. erp1
Three months after the new version of the system was launched, two additional features were introduced into SIGEPI-WEB which also helped to improve the perception of the benefits of such a system:
1. Automated generation of Power Point presentations for the Master Plan Seminar: the system generates the "hard" data part of the presentation by automatically retrieving and generating the slides based on the qualitative and quantitative data inserted into the SIGEPI-WEB database. The Activities Coordinator responsible for a presentation is free to dedicate his time to the "intelligent" part of the presentation;
2. Quantitative indicators integration and aggregation: The main quantitative results of the IPEN now can be monitored by the whole work force under diverse integration and aggregation criteria and some of them in real-time: Institutional, Research Center, Program, Subprogram and Activities. Some results (e.g.: publications) were carried out by internal partnerships these partners may be connected to different Activities, Subprograms, Programs or Research Center. The same result is properly credited to each of these aggregation levels, but institutionally they are not counted repeatedly.

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