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ERP IMPLEMENTATION ISSUES IN HIGHER EDUCATIONAL INSTITUTES WITH SPECIFIC

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ERP IMPLEMENTATION ISSUES IN HIGHER EDUCATIONAL INSTITUTES WITH SPECIFIC Powered By Docstoc
					   INTERNATIONAL JOURNAL OF Management Information System (IJITMIS), ISSN
 International Journal of Information Technology & INFORMATION TECHNOLOGY &
 0976 – 6405(Print), ISSN 0976 – 6413(Online) Volume 4, Issue 2, May - August (2013), © IAEME
              MANAGEMENT INFORMATION SYSTEM (IJITMIS)

ISSN 0976 – 6405(Print)
ISSN 0976 – 6413(Online)                                                  IJITMIS
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)              ©IAEME
www.jifactor.com




      ERP IMPLEMENTATION ISSUES IN HIGHER EDUCATIONAL
     INSTITUTES WITH SPECIFIC REFERENCE TO PUNE REGION

              Dr. K. Nirmala1, MS. Rupal Choudhary2, Jai Ram Choudhary3
          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.




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International Journal of Information Technology & Management Information System (IJITMIS), ISSN
0976 – 6405(Print), ISSN 0976 – 6413(Online) Volume 4, Issue 2, May - August (2013), © IAEME

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
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International Journal of Information Technology & Management Information System (IJITMIS), ISSN
0976 – 6405(Print), ISSN 0976 – 6413(Online) Volume 4, Issue 2, May - August (2013), © IAEME

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

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International Journal of Information Technology & Management Information System (IJITMIS), ISSN
0976 – 6405(Print), ISSN 0976 – 6413(Online) Volume 4, Issue 2, May - August (2013), © IAEME

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  % respondents
                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% respondents 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
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International Journal of Information Technology & Management Information System (IJITMIS), ISSN
0976 – 6405(Print), ISSN 0976 – 6413(Online) Volume 4, Issue 2, May - August (2013), © IAEME

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                         % respondents
          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              % respondents
              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.

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International Journal of Information Technology & Management Information System (IJITMIS), ISSN
0976 – 6405(Print), ISSN 0976 – 6413(Online) Volume 4, Issue 2, May - August (2013), © IAEME

                                          TABLE 6
                     CHALLENGES IN UPGRADING INFRASTRUCTURE (N = 11)
    Challenges in Upgrading infrastructure                      % respondents
    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                     % respondents
              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    % respondents
             Software was modified                            83%
             Add-ons developed                                33%
             Living with the shortfall                        17%

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International Journal of Information Technology & Management Information System (IJITMIS), ISSN
0976 – 6405(Print), ISSN 0976 – 6413(Online) Volume 4, Issue 2, May - August (2013), © IAEME

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                                               % respondents
 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.

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International Journal of Information Technology & Management Information System (IJITMIS), ISSN
0976 – 6405(Print), ISSN 0976 – 6413(Online) Volume 4, Issue 2, May - August (2013), © IAEME

        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.




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International Journal of Information Technology & Management Information System (IJITMIS), ISSN
0976 – 6405(Print), ISSN 0976 – 6413(Online) Volume 4, Issue 2, May - August (2013), © IAEME

9. REFERENCES

[1.] Turnipseed, D. L., Burns, O. M., & Riggs, W. E. (1992). An implementation analysis of
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[2.] Mainwaring, J. (1999). Training - the key to ERP implementation. Manufacturing
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[3.] Gefen, D. (2002). Nurturing clients's trust to encourage engagement success during the
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[4.] Dave Swartz,& Ken Orgill (2000). Higher Education ERP: Lessons Learned
[5.] Bingi P., Sharma M., Godla J. “Critical Issues Affecting an ERP Implementation”,
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[6.] José Esteves, Joan Pastor, Josep Casanovas “Measuring Sustained Management Support
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[7.] Davenport, T.H., 2000. Mission Critical: Realizing the Promise of Enterprise Systems.
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[8.] T.R. Bhatti,2005 “Critical Success Factors for the Implementation of Enterprise
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[9.] Vinod Kumar, Bharat Maheshwari, Uma Kumar, 2003 “An investigation of critical
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[10.] Glenn Stewart, “Organizational Readiness for ERP Implementation”
[11.] Ike C. Ehie, Mogens Madsen, 2005 “Identifying critical issues in enterprise resource
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[12.] A.T. Chatfield, K.V. Andersen, Playing with LEGO: IT, coordination and global supply
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[13.] N. Venkateswaran and Dr. V. Mahalakshmi, “Csfs of ERP Implementations in Large
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[14.] http://www.erpcentral.com/
[15.] http://www.erpfans.com
[16.] http://www.erphub.com
[17.] http://www.erpassist.com




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