erc final report - group f

8/11/2019 ERC Final Report - Group F

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INCREASING EFFICIENCY

THROUGH ERP - Beroe

Group F

1.NITISH KUMARSUMAN

2.RAMESH KUMAR P

3.SHELKE SHAILESH

SHASHIKANT4.SRISHTY BARLA

5.TAMARAISELVI A


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Increasing Efficiency through ERP - Beroe Page 1

Table of ontents

Executive Summary .............................................................................................................. 2

Information Systems Present in Beroe ................................................................................... 3

ERP Portal ........................................................................................................................ 3

Knowledge Management System: ..................................................................................... 3

Document Management System: ....................................................................................... 3

Bloomberg Knowledge Portal: .......................................................................................... 4

Analysis of Existing Information Systems ............................................................................. 4

Merits of the System ......................................................................................................... 4

Limitations of the current system....................................................................................... 4

Risks of the current System ............................................................................................... 4

Future Challenges.............................................................................................................. 5

Plans of the Company for the next Five Years ....................................................................... 5

ERP Drives Companys Vision ............................................................................................. 5

Vendor Selection ................................................................................................................... 5

ERP Vendor Evaluation .................................................................................................... 7

Evaluation Process ........................................................................................................ 7

Key Evaluation Criteria ................................................................................................. 8

ERP Package Selection: Business Drivers ..................................................................... 8

ERP Package Selection .................................................................................................. 8

Performance based on Selection Criteria ........................................................................ 9

Choice of Consultant ............................................................................................................. 9

Implementation Planning .................................................................................................... 10

Change Management Plan ................................................................................................... 11

Operation/Maintenance Plan ............................................................................................... 12

Conclusion .......................................................................................................................... 13

Sources of Information ........................................................................................................ 14


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Executive SummaryBeroe is the procurement consulting company specializing in sourcing, supply chain

visibility, financial risk analysis, and environmental impact. Beroe is based in Chennai and

has around 500 employees worldwide. They have offices in USA, India, China, Argentina,

and South Africa. Their customers include over 170 of the Fortune 500. The objective wouldbe to study the existing ERP solution, and recommend appropriate ERP solutions along with

implementation strategies to meet the current and future IT and business objectives of the

company.


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Information Systems Present in BeroeFollowing are the different software used by the company:

1. ERP Portal

2. Knowledge Management System3. Document Management System

4. Bloomberg Information Portal

ERP Portal

Existing ERP solution used by the company: Cloud ERP provided by Insite

The company uses a cloud ERP solution provided by the vendor Insite. ERP system used by

the organization is predominantly a HR payroll management system with cloud

implementation and accessed through web browser. It acts as the interface between all the

employees and HR department of the organization. Following are the key modules /

functionalities of the ERP system:

Employee database: Enables employees to store their basic personal and

professional details in a centralized database

Leave Planning: This module manages the leave application by employees and

approval process by the managers.

Performance Appraisal:

Career Planning and Development

Monitoring Work Timings Resource Requesting Platform

Resignation Process

Knowledge Management System:

The company uses a cloud ERP solution provided by the vendor Insite. KMS is effected

through on-premise implementation with local installation in all the PCs/laptops in the office

premises. It enables the company to retain the organizational knowledge in a centralized

location, which can be referred by any employee at any point of time. This ensures

knowledge volatility risk of the organization is reduced, as the key knowledge gathered by

the employees during work is captured by the system.

Following are the key functionalities of the knowledge management system used by the

company:

Uploading the documents and information along with meta data

Searching for desired information using keywords

Document Management System:

Company uses a centralized disk storage system partitioned on the basis of various teams inthe organization. Through this arrangement, employees can store their documents in the


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respective folders assigned to their team and can also retrieve documents stored in folders to

which access privileges are granted by the IT administrator.

Bloomberg Knowledge Portal:

Being a consulting firm, Bloomberg knowledge portal acts as the key repository of external

information and is highly critical for the running of its business. The portal basically

consolidates information from multiple global research portals and provides the information

desired by the employees on a single touch point.

Analysis of Existing Information Systems

Merits of the System

Following are some of the merits of the current model of information system adopted by the

organization:

Lower cost as against a full-fledged comprehensive ERP system Simplified software architecture

Cloud model for ERP reduces the overall spending on software for the organization

Knowledge Management system enables retaining organizational knowledge as

employees move out of the company

Bloomberg knowledge portal consolidates the information from multiple research

agencies which saves employees time in searching separately in individual research sites

using tedious secondary search techniques

Document storage architecture provides selective access of folders to employees and

managers at different level of hierarchies

Sales, Marketing and Finance functions of the company can work independent of the

software architecture

Limitations of the current system

There is no software used by Sales and Marketing team, leading to redundancy in

some sections of work for the team

There is no software to support core operations of the company. For example, designs

for powerpoint files are created redundantly across functional teams and time periods.

Automated design template software would be very useful

Finance domain staff are still using excel software to manage invoices raised by theanalysts for payment to the external experts contacted as part of their research and there is a

delay in making payment to the experts, as it is not automated. Sometimes, payments are

forgotten and are not made until reminded by experts, which leads to their dissatisfaction

Communication with external and internal stakeholders is mostly done through email,

leading to inefficiency and redundancy

Risks of the current System

There is security risk for the ERP system, as it is deployed in cloud implementation

No competitive differentiation, hence, new entrants can offer same services at reduced

cost with the help of automation of several operational aspects


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Future Challenges

No automation and high amount of routine work being performed across organization

may lead to employee dissatisfaction leading to employee retention problems

Due to increasing expansion of the organization across different countries and

continents, decentralized software architecture does not allow the organization as a whole tocapitalize on information synergies

Plans of the Company for the next Five Years Rapid growthAchieve revenues of more than $100 million by 2019

Introduce IT systems to assist core operations of the company

Software to customize the pre-defined powerpoint templates, which can be used by the

analyst for their work

Enroll an automated communication system, which will enable the employees to connect to

their information providers in a systematic manner and also help automate redundant

communication messages

Expansion to 2 other cities in India

Expansion to Bangalore and then to Delhi

Shift to client-site operation model

Enable a few specialized analysts from different domains to work in clients site on a yearly

model

Expansion to 3 different continents across the globe

Expansion across Europe, South America and Asia Expand across China, UK, Argentina,

Germany, etc.

ERP Drives Companys Vision Use of ERP software will increase the operational efficiency, which will drive the

vision of the company

Reduction of time spent in redundant communication messages sent by the analyst to all their

information providers

More effective graphic representations for the powerpoint lead to creation of more effective

presentations by the client

Use of ERP solution will lead to better control and coordination, as the company

expands across the globeThis will set the foundation for further expansion across the globe in future

Vendor SelectionBeroe is a Small cap company so criteria for selection of a ERP vendor will be different from

that of a Large cap or even Mid Cap company. The general payback period of the ERP

system is upwards of 25 months so the cost implication of the selection of a vendor will be

very critical for Beroe.


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The factors that are to be taken into consideration for selection of the ERP system. The

factors are

Cost

Customization

Real Time changes Ease of implementation

Maintenance

Flexibility

User friendliness

Systems Requirements

Training

Integration with other present systems

Vendor credentials

Reporting and analysis

These above factors need to be assessed to determine which ERP system will be useful for

the company. Based on the requirements of the company Vendor selection needs to be

performed. As is always advisable initial shortlisting needs to be done before and the number

of prospective vendors needs to be brought to below 5. It is considered that more choices

create more difficulty in selection so in the initial shortlisting process many companies need

to be removed from the list and the final number of vendors that is to be considered for

selection has to be reduced to 5.

The factors that needs to be considered for the vendor selection are Vendor reputation

Alignment to business function

Support of Top Management

Cost

Training and Support, User Friendliness

Past experience and Implementation plan

Technical expertise

Level of customization offered

Business process reengineering support

Vendors business history

If these factors are classified in terms of priority for a Small Cap company like Beroe then

these can be put under three heads of Major Moderate and Minor importance

Major Moderate Minor

Vendor Reputation Past Experience User friendliness

Alignment with

business function

Training and Support Technology

Cost Implementation planand Duration

Vendors businesshistory


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Support of Top

management

Level of customization

Technical expertise

According to the above criteria the following five ERP vendors have been shortlisted for

Beroe

Syspro ERP- It is a South Africa based company and offers Microsoft.net based

integrated supply chain , ecommerce, CRM and planning and scheduling. It

includes financial, distribution and manufacturing. It has even started to offer

SaaS products

NetSuite ERP- It is a real time dashboard integrating business data across

departments with ability to be able to offer personalization for each employee. It

offers a web based ERP. Its market share is 2% in the Global ERP market.

Visibility ERP- With a market share of around 1% it offers and ERP solution for

management, CRM, quotes, projects, costs, MRP, product manufacturing,financial and supply chain integration. It has also offered its product now on

apples iPad

Intutive ERP- It incorporates CRM, BI and ecommerce features in addition to its

manufacturing stronghold. It incorporates established manufacturing and

accounting practices and standard business cycles. It is based on Microsoft.net

Activant ERP- Specially catering to small and medium businesses activant has a

strong presence in retail and distribution. It has a market share of 1% in

manufacturing segment ERP

ERP Vendor Evaluation

After identifying the list of vendors which would meet the companys requirements based on

feasibility study the next step is to evaluate all the vendors and select the most appropriate

vendor for the firm and the ERP package. The ERP packages can vary based on the features,

technology, architectures and platform. The evaluation committee should be made up of

various representatives of the user community like the project managers, technical leaders

and staff.

Evaluation Process

It involves doing a high level evaluation of the vendors. An evaluation criteria can beprepared based on the business needs. The companys needs can be listed down as items

and categorized vital-essential-desirable. A request for information (RFI) is given to the

vendors to get the information about their product and offerings. A review of this

information from the vendors would help to identify the vendors which match closely

with the business process and requirements of the company. Help from consultants can be

taken. The vendors can be cross questioned and even asked to give a demo of the product.

The next step is the bidding process wherein the company requests for bids(RFB) after

giving the details about the type of ERP system the company wants with specific

functionality , hardware, software, training requirements and contract related issues. The

vendor selection process can be distributed within the firm based on expertise. The office


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staff can evaluate the functionality, IT staff can evaluate technology and the contract staff

can evaluate the contract and pricing. No vendor can meet all requirements of the form

and hence the objective must be to get the best fit. Learnings can be drawn from other

companys experiences.

Next step is to determine the TCO (Total Cost of Ownership) including the maintenanceand upgrades cost. It can serve a good financial tool for evaluation of the vendors.

Key Evaluation Criteria

Multi-language, multi-currency support and installation in different countries with local

presence since the company operates in different geographies (USA, India, China,

Argentina, and South Africa)

Cost of the package with all the necessary modules should be less than $4,00,000 (the

average TCO for a 50 million$ company is $3,84,295)

ERP Package Selection: Business Drivers Increase the operational efficiency, which will drive the vision of the company

Reduce the time spent in redundant communication messages sent by the analyst to all

their information providers

More effective graphic representations for the PowerPoint which can lead to creation of

more effective presentations by the client

Better control and coordination, as the company expands across the globe

This will set the foundation for further expansion across the globe in future

ERP Package Selection

Considering the merits and demits of the available options and based on the requirements of

the company the most suited option for the company is NetSuite.

etSuite

The company makes cloud-based SaaS integrated business management software. The

company launched NetSuite OneWorld in 2008: a software for global businesses. It has

modules for accounting and Enterprise Resource Planning (ERP), Customer Relationship

Management (CRM), ecommerce and professional services automation. Users can access the

software via a Web browser and pay a monthly subscription price.

Some of the advantages of NetSuite for Beroe are:

Cloud based software; offers mobility required by consultants visiting or residing on

client sites as it can be accessed from anywhere

Can be accessed across Global offices

Pay Per Use : hence low cost; suitable for a small company like Beroe

Past Customers : Qualcomm, Seimens, ESET, Igloo, CELLBikes, Coffee.org, Cord,

Blood America.Inc, DiamondFleet Managemnt

SuiteCloud Developer Network NetSuites SuiteCloud Developer Network is a Java-

based development platform for NetSuite partners and customers to customize the

software and build new applications to complement NetSuite


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It includes the SuiteApp.com solution directory and a number of developer tools

Performance based on Selection Criteria

The firm was evaluated based on its performance in the factors that needs to be considered

for the vendor selection. The performance in each factor was ranked High, Medium and Low

Major Score

Vendor Reputation Moderate

Alignment with business function High: meets the required criteria

Cost High: Pay Per Use : hence low

cost; no hardware costs

Support of Top management Unknown

Past Experience Moderate founded in 1998

Training and Support HighImplementation plan and Duration High : less duration as no need to

install hardware on client site

User friendliness High

Technology High: Cloud based

Vendors business history High: Many reputed customers

Level of customization High: SuiteCloud Developer

Network platform for

customization

Technical expertise Unknown

Choice of ConsultantCurrently ERP system is being used predominantly for HR functions. Using ERP solutions to

carry out their core activities require a new system to be implemented. Organizations go for

consultants when they lack experience in implementing ERP systems.

Consultants may be involved in all the stages of ERP implementation like Software selection

and purchasing, planning stage, Implementation stage, and Post-implementation stage.

According to Panorama consulting 2013 ERP report, the percentage of firms which useconsultants at different stages is


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Also, ERP consultant may assist in change management activities which are a major

challenge for the firms implementing ERP solution. The key benefit of using a consultant is

knowledge transfer from consultants to the firms employees, which when done correctly,

will make the firm self sufficient and get rid of the consultants sooner.

Many organizations often keep implementation consultants on staff even after the system is

deployed for support and as a safety measure in case there needs any change in the

configuration. According to experts, implementation consultants may not be best suited for

application support. Hence a service geared towards service can be hired.

Recommendations for Beroe:

As the firm has no experience in ERP implementation and the IT team at Beroe isnot efficient enough to handle it, it is advisable for them to hire ERP consultants

to do the following:

Selection of ERP package

Creating Equilibrium between system capabilities and organizational

objectives

Present and prospective system analysis and documentation

Development, management, implementation of ERP system

Imparting education and training to existing and prospective end users

Also, as implementation consultants are expensive it is advisable to hire servicesgeared towards application support as they are cheaper and are better at system

maintenance.

Implementation PlanningImplementation of full-fledged Comprehensive ERP system:

Comprehensive ERP system covering the Sales, Marketing and Operations functions may be

implemented across the organization


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Cloud Implementation:

The new ERP system should be implemented on a cloud model, as the organization is

relatively small with a strength of around 400 employees

Big Bang Implementation:Software may be implemented on a big bang basis, as the organization is relatively small with

employee strength of around 400

However, implementation in offices across different cities and countries should be done in

phased manner learning iteratively from the success and failure lessons in every successive

implementation

Vanilla Implementation:

Selection of vendor and software package should be done such that no or minimal

customization is required, as the size of the organization is still relatively small and highly

customized system may not provide sufficient returns

Change Management PlanSince the company is planning an ERP implementation which would assist and thereby

change the core operation of the company namely consulting; the changes in the organization

would be profound and require effective change management for smooth implementation.

This will require the company to be prepared for the implementation which is as important as

the project itself.

Need for change management:

Maximise collective benefit for all involve in the process

Minimise risk of failure of implementation

Motivate the employees to adapt to the change

Facilitate smooth functioning of the organisation

During the change certain things are to be considered:

Availability of skilled employees to successfully complete the implementation

The technological environment is ever changing

Technological obsolescence

The process is lengthy and complex

It takes time to realise the benefits of the implementation

Resistance from employees

Training and reallocation of the employees

During the implementation:

When the process takes place the company needs to

Provide assistance and support

Help the employees to detect and rectify the mistakes in the new system

Creating a help desk that will address all the problems at one stop


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Conduct auditing activities

Internal communication

It is necessary to communicate about changes taking place in business processes to the

employees.Emails, newsletters and departmental meetings can be some of the effective ways

to communicate about the ERP project. The employees also should be kept updated about the

process. It is important for the management to positively emphasize about change in the

organization and the importance of adapting to change.

Training

The employees are to be trained for the new software and system. They must be able to well

equipped and capable of handling the software, this can be done by providing them proper

training. This happens before the Go-live of the project and continues after the

implementation in order to address the issues that come up later.

Resistance to change among employee due to change in roles or responsibilities. Most

people feel very much comfortable with the old legacy system and it takes a little bit of effort

to train them to adapt to the new system. It is a common challenge faced by trainers while

managing change. This can be managed by significant effort and proper planning which will

help in reducing the resistance from employees and can be dealt effectively.

Post implementation assistance

There should be proper assistance available for the employees when they face problems with

the new system. There should be post-implementation audit to track and report the progress

of the system and the problems faced. Obstacles should be identification and solution to be

provided.

Operation/Maintenance PlanBeroe has till this point been following a hybrid maintenance strategy, wherein

troubleshooting of day-to-day issues has been carried out by in-house IT team, whereas the

major issues with the software were managed by the software vendor. However, this strategy

would need to be slightly modified going forward. In-house IT team may not be able to

manage the complexities in the new ERP system. Hence, a higher degree of vendor

involvement is necessary for resolving the maintenance issues. Though some day-to-day

support issues may be managed by the in-house IT team, there should be vendor involvement

for issues with high complexities. Major updates / upgrades may be obtained from the

vendor. Following table shows for In-house maintenance is suited for which type of

organizations and the same for outsourced maintenance.


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Analysis of Available Maintenance Options:

Maintenance

OptionBest-fit Scenario Risks

In-House

Maintenance

This model is suited forlarge Organization thatwants a higher commitmentand lesser down-time toresolve maintenancerelated issues.

The buyers IT team might

take higher efforts and timeto resolve certainmaintenance issues, whichcould have been managedwith much higher ease bythe vendor.

Outsourced

Maintenance

This model is best suitedfor small organizationswhich wants to focus ontheir core capabilitiesinstead of maintenancerelated issues.

There may be lessercommitment and higherdowntime in resolvingmaintenance issues.

Recommended Operation/ Maintenance Strategy for Beroe:

Day to day IT support activities may be carried out by in-house IT team. But, if the

complexity of the support issue raised is high, quick vendor involvement is necessary.

To ensure fast resolution of support issue by the vendor, the service level agreements

should clearly specify the timeline within which various levels of support issues need

to be resolved. For example, Level 1 issues must be required to be solved in 4 hours

from the time of calling.

Major updates / upgrades should be obtained from the software vendor on a quarterly

/ yearly basis, whichever cycle is being followed by the vendor

Training may be provided to the employees in a phased manner within the first 1 year

of implementation. Initially, vendor representatives would provide training to in-

house IT team, who would then be required to pass on the lessons to employees across

the company

ConclusionHence, it is necessary to consider the type, size of firm; size of vendor; expertise of vendor;

budget of the firm; and mainly the necessity for an ERP solution in a firm. It is also important

to involve the employees in all stages of ERP implementation to avoid resistance from them

at a later stage. Consultants need to be involved at all stages of ERP implementation in case

there is no expertise available with the firm.


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Sources of InformationThe information about the company was mainly collected from the employees currently

working in the organization and based on the direct observations of our team. Additional

study about the ERP systems and industry benchmarks was carried out using secondary

search.

erc final report - group f

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