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ABSTRACT

A very important factor for implementing BPR is the enabling role of Information Technology. Business Process Re-engineering involves changes in structure and in processes within the business environment. The entire Information Technology plays a major role in the Business Process Reengineering as it provides office automation; it allows the business to be conducted in different locations, provides flexibility in manufacturing, and permits quicker delivery to customers and support rapid and paper less transactions. In general it allows an efficient and effective change in the manner in which work is performed. The topic entitled Study on Effect of Implementation of ERP at FACT, Udyogamandal using the well known software SAP developed by SAP AG.

Towards the end of the year 2008-09, FACT,Ltd Has embarked on the implementation of an enterprise resources planning system-SAP- at the cost of Rs. 12 cores. The system was implemented to bring better integration of department, improve the efficiency of working of departments and manpower productivity in the overall improvement in the Management Information System. In the same year, an integrated Enterprise Resources Planning System SAP (System Application and Products) tailor made by M/S SAP Consulting was implemented in FACT by configuring and thereby making it a customized system which best fits FACTs business process.

The integrated system which is based on the Oracle platform helps to optimization of business proceeds of the enterprise and provides information support for speed decision making. This ERP software named SAP led stream lining of many of the important business processes and activities which resulted in eliminating some of the non value adding activities existed till then and many of the system functionalities are in the process of developing. SAP in FACT went live by November 2009.

SAP in FACT is used for processing business related activities in the areas of Sales and Distribution (SD), Materials Management (MM), Production Planning (PP), and Quality Management (QM), Human Resource Management (HR) including payroll, and also in the field of Financial Accounting (FI). With the implementation of SAP in FACT, a centralized integrated database system was used, which helped in quick processing, accessing and updating of real time data and thereby aids in timely decision making. This application had made most of the operations across the functionalities online. Tools such as SAP promote the horizontal organizational structure and are the vehicles for Reengineering the organizational structure in order to adopt the horizontal operational subsystems of the tools. It can be said that IT does not only support management, IT changes the organizational structure.

CHAPTER 1 INTRODUCTION

INTRODUCTION

DESCRIPTION OF BUSINESS PROCESS RE-ENGINEERING


Business Process Reengineering involves changes in structures and in processes within the business environment. The entire technological, human, and organizational dimensions may be changed in BPR. Information Technology plays a major role in Business Process Reengineering as it provides office automation; it allows the business to be conducted in different locations, provides flexibility in manufacturing, permits quicker delivery to customers and supports rapid and paperless transactions. In general it allows an efficient and effective change in the manner in which work is performed. Competition is continuously increasing with respect to price, quality and selection, service and promptness of delivery. Removal of barriers, international cooperation, technological innovations cause competition to intensify. All these changes impose the need for organizational transformation, where the entire processes and organization climate and organization structure are changed. Hammer and Champy provide the following definitions: Reengineering is the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical contemporary measures of performance such as cost, quality, service and speed. Process is a structured, measured set of activities designed to produce a specified output for a particular customer or market. It implies a strong emphasis on how work is done within an organization. " (Davenport 1993). Creating the new enterprise involves considerable change in virtually everything to do with people's working lives. Rather than fixing the old, we set out to create the new. There is a fundamental transformation occurring in business - in terms of its structure, processes, people, and technology.

The table following presents the changes in that occur in the business under BPR. From Conventional Functional departments Simple tasks (division of labour) Controlled people (by management) Training of employees Compensation for skill and time spent Pay raises based on promotions and Seniority Advancement based on ability Protective organizational culture Managers supervise and control Hierarchical organizational structure Executives as scorekeepers Separation of duties and functions Linear and sequential processes Mass production To BPR Process Teams Empowered employees Multidimensional work Education of employees Compensation for results Low pay plus high performancerelated Bonuses Advancement based on performance Productive organizational structure Managers coach and advise Horizontal (flat) structure Executives as leaders Cross-functional teams Parallel process Mass customization

SOURCE: Based on Hammer and Champy, 1993.

In resuming, the whole process of BPR in order to achieve the above mentioned expected result is based on key step-principles which include redesigning, retooling and reorchestrating. Objectives of BPR When applying the BPR management technique to a business organization the Implementation team effort is focused on the following objectives: Customer focus. Customer service oriented processes aiming to eliminate customer complaints. Speed. Dramatic compression of the time it takes to complete a task for key business processes. For instance, if process before BPR had an average cycle time 5 hours, after BPR the average cycle time should be cut down to half an hour. Compression. Cutting major tasks of cost and capital, throughout the value chain. Organizing the processes a company develops transparency throughout the operational level reducing cost. For instance the decision to buy a large amount of raw material at 50% discount is connected to eleven cross checkings in the organizational structure from cash flow,
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inventory, to production planning and marketing. These checking become easily implemented within the cross-functional teams, optimizing the decision making and cutting operational cost. Flexibility. Adaptive processes and structures to changing conditions and competition. Being closer to the customer the company can develop the awareness mechanisms to rapidly spot the weak points and adapt to new requirements of the market. Quality. Obsession with the superior service and value to the customers. The level of quality is always the same controlled and monitored by the processes, and does not depend mainly on the person, who servicing the customer. Innovation. Leadership through imaginative change providing to organization Competitive advantage. Productivity. Improve drastically effectiveness and efficiency. In order to achieve the above mentioned adjectives the following BPR project methodology is proposed.

1.4 Expected Results / Benefits


The expected results for a company that implements business process reengineering are the following: Reallocation of jobs and processes so as to be combined into fewer, to be executed in natural order, simultaneously and by the least possible number of employees.

Reorganization of the company's structure (downsizing) and employee empowerment. Jobs and processes become flexible so as to be executed according to the needs of each case, company's and customer's need's (hybrid centralized/decentralized operations) The above changes will bring reductions of costs in the company, better quality (as far as price, promptness of delivery and offerings of related services) in the products and services provided to the customers. BPR shows that there is 'more than one way to skin a cat' and enables a fresh view without ingrained prejudice affecting judgement. It can produce huge initial savings where a
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business is struggling and often has the affect of turning around an unprofitable operation. Also, it leaves the business with a fully documented model of the operation, which is invaluable if embarking on a quality programme. The expected outcome from a successful BPR process should the desired one for the favour of the business concerned. The dramatic changes that are caused involve people's jobs and working relationships as it is very often that jobs are eliminated and the entire process is not as beneficial for all.

CHAPTER 2 LITERATURE REVIEW

LITERATURE REVIEW Business Process Re-engineering using SAP-R/3


"To change and to change for the better are two different things."
A German Proverb

"So how has SAP managed to survive and prosper despite the nay-sayers? Several factors have contributed to the longevity of the ERP market leader. First, the ongoing costs and hassles of integration have pushed clients away from a best of breed market. SAP is furthering its dominance in the core applications ERP market (FI, HR, basic manufacturing) through its strides in HR functionality, and it looks quite likely that SAP will continue to have success in FI, HR, and some basic manufacturing work across many industries. SAP has also managed to postpone its day of reckoning by maintaining a global, multi-currency presence and making great strides on industry-specific, targeted functionality."

INTRODUCTION
The concept of reengineering traces its origins back to management theories developed as early as the nineteenth century. The purpose of reengineering is to "make all your processes the best-in-class." Frederick Taylor suggested in the 1880's that managers use process reengineering methods to discover the best processes for performing work, and that these processes be reengineered to optimize productivity. BPR or Business Reengineering echoes the classical belief that there is one best way to conduct tasks. In Taylor's time, technology did not allow large companies to design processes in a crossfunctional or cross-departmental manner. Specialization was the state-of-the-art method to improve efficiency given the technology of the time. This paper is the first step towards an academic project leading to the implementation of SAP R/3 we intend to do. This literature review is not a critique but reflects on business process reengineering and how that may be achieved using SAP. We plan to discuss Business Reengineering and the use of SAP R/3 as a tool for achieving the best results in Business Reengineering in this paper. This literature review covers a wide range of articles that has appeared on various publications and internet related to SAP and business reengineering. The implementation project following this review is purely an academic work and there is no commercial objective driving this project. When we started working on this project, we were left with not many options regarding the material available for starting an academically inclined report. Such a report would require extensive research into the reading materials
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available on the subject addressed and probable interviews with industry experts. Both seemed rare and inaccessible if at all available in the beginning. So, we started visiting firms in and around Newcastle where BHP IT was and is implementing SAP R/3 and interviewed some consultants. We even mailed a few questionnaires to a wide range of consultants and customers of SAP. But all in vain.!!! The apparent interest for this project team in SAP and ERP in general was kindred by the latest developments in IT and the installation of SAP R/3 at the University. We do acknowledge the remarkable support given to us by Dr. Gregg Gibbon in understanding more of SAP and its "wonderfully complicated" world. Coming back to the issues addressed here and the materials, we have found a lot of material in the web and some publications in other media. We acknowledge and thank all the authors of these publications and the papers that we have quoted extensively throughout the review. The review starts with a peep into the world of Business Process Reengineering, rephrased throughout this paper and in the forth-coming reports from us as Business Reengineering. It then looks at the importance of IT in Business Reengineering and goes on in the next few chapters discussing the thoughts of experts in implementing SAP R/3 in an organization to achieve Business Reengineering goals set forth by the company. The paper also reviews literature written on the use of ASAP, a powerful tool used in the implementation of SAP. We have tried our best to express and project our thoughts about the issues addressed in these papers. It is acknowledged once again that we have extensively quoted experts and articles in this effort to make this review a genuine and effective stepping stone for our further research and implementation of SAP R/3. So what is the conclusion that we have reached at the end of this nearly exhaustive research?.. There are many ERP tools that are already in market and successful and there are many that are in the workshop that we are amazed at the rate at which new systems and opinions are revolutionalising ERP. But then, as this literature review will be a valuable component to this entire project and since we must work on a hypothesis to reach our goals, we suggest the notion that as of date, SAP is the best Business Reengineering tool that IT can offer to any firm, small or large, national or multinational, business or service, no matter what type of customer the enterprise caters to.

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The hidden difficulties in implementation and management of this tool are discussed in the coming chapters. The next chapter discusses Business Reengineering.
Business Reengineering Old Wine in new Bottles?

"Your company is reengineering, or so it says. Is it the real thing or just another flavour of the month? Guess right, and your career should sky rocket. Guess wrong, and you could end up among the living dead."
Andrea Ovans, "Should you take the reengineering risk?", Datamation,

"In the early 1900's, Henri Fayol originated the concept of reengineering: To conduct the undertaking toward its objectives by seeking to derive optimum advantage from all available resources. Although the technological resources of our era have changed, the concept still holds. About the same time, another business engineer, Lyndall Urwick stated It is not enough to hold people accountable for certain activities, it is also essential to delegate to them the necessary authority to discharge that responsibility".
Lloyd, Tom, Giant with Feet of Clay/Tom Lloyd Offers a contrasting View of Business Process Reengineering, Financial Times, December 5, 1994:

We have come to understand that BPR is often used by companies on the brink of disaster to cut costs and return to profitability. The apparent danger is that during this process the company may slash its capacity for future growth. To reap lasting benefits, companies must be willing to examine how strategy and reengineering complement each other - by learning to quantify strategy (in terms of cost, milestones, timetables); by accepting ownership of the strategy throughout the organization; by assessing the organization's current capabilities and processes realistically; and by linking strategy to the budgeting process. Otherwise BPR is only a short-term efficiency exercise. As the theory goes, with BPR, you start with a clean sheet of paper and redesign entirely new ways to conduct some process that is important to your company's customers. Often BPR results in more responsible IT jobs. And the people who participate in successful BPR efforts have a much better shot at those jobs, having helped to create them in the first place. As a response to increased competitive pressure in the global market place, enterprises are looking to improve the way they are running their business. At least since Hammer's publication in 1993, these activities are subsumed under the term Business Process Reengineering. Business Process Reengineering, as we have learnt from these papers essentially means to "take a step back"
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and, starting from the business goals, critically analyze and design the processes needed and the information required to achieve those goals. In our culture of quick fixes and silver-bullet solutions, many executives miscalculate what it takes to reengineer a business successfully. Early reengineering projects must have been limited in scope with a minimum of affected "hard" processes and cross-organizational involvement. But today people are reengineering multiple business units, departments and divisions that are involved with "soft" processes like planning, product development and support servicing. In reality, this type of reengineering is more difficult because of the ambiguous scope and potential power conflicts associated with change. This requires more resources than most organizations and their executives are willing to commit. Such reengineering takes time. And the larger the project, the more time is required. Street-smart business reengineers understand that business reengineering requires infrastructure changes and cultural transformation in addition to process, organization, and technology changes. Furthermore, once the radical changes are made, they must install continuous process improvement practices in the business operation to prevent future deterioration and ensure preventive maintenance. So far we have only discussed certain issues that are associated with BPR. Now we will define BPR and discuss what BPR actually is. Depending on who you talk to, there can be many different definitions of reengineering. However, before we can discover what reengineering really is, let us look at what it is not A sure sign that a so-called reengineering project is one in name only is if the people in charge confuse business process reengineering with other activities that have nothing to do with it or are basically mutually exclusive to it. Beware if people in charge are confusing business reengineering with:
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Reengineering software, as the term is used in IT - unless that is done in support of a radical change in the way some business process is conducted. Reorganizing people in charge of departments, although that may result from reengineering - that just rearranges the way authority is parceled out, not the way work is done. Reengineering the IT department. Headcount reduction. More often, though, the opposite happens because reengineering leads to growth. Incremental change to an existing process - that is TQM.

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Successful reengineering is not happening most of the time. Even Michael Hammer arguably the world's leading expert on BPR, concedes that it is not even happening most of the time. Remember, real reengineering is about processes. Efforts aimed just at organizational charts, headcount reductions, or making the boss's nephew a big shot are potential minefields. The most common definition used comes from the book titled "Reengineering the Corporation, a Manifesto for Business Revolution", by MIT professors Michael Hammer and James Champy. They defined BPR as "The Fundamental rethinking and radical redesign of business processes to bring about dramatic improvements in critical, contemporary measures of performance, such as cost, quality, service, and speed." "The word reengineering today often implies changes from the most mundane to the most significant. Not all companies wish to make massive changes to their business processes. The changes companies require are on a continuum from streamlining to reinvention".
Nancy H . Bancroft, Henning Seip, Andrea Sprengel,

Implementing SAP R/3, II Ed, p116


The authors define streamlining as making incremental changes to the current processes to increase quality, decrease cycle time, or reduce cost and reinventing as scrapping the current business process and creating a new one that truly meets the needs of the company. It is pointed out by the authors that SAP R/3 is well suited to efforts anywhere in this continuum, although a company should develop a high-level design prior to the implementation of any project at the far right of this continuum. So, how do we achieve business process reengineering? Is there any concrete steps that has to be followed to achieve this? Or is this a theme that is usually developed by the in-house team of each company, which they put into practice by a trial and error or other methods? Does IT necessarily be there in this undertaking? What does IT do if it is used as a tool in the process? These were some of the most important questions that we were keen to find answers for in literatures we reviewed. The last two questions are answered in the following chapters.

To answer the first three questions, we took the help of what we term as the bible of business reengineering, Reengineering the Corporation, by Michael Hammer and James Champy. This book evolves around the performances of American businesses through out the 19th and 20th centuries, arguably one of the most successful business practices man kind has ever seen. The authors have developed their theories and
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suggestions based on a wide range of approaches to business process reengineering taken up by various companies. We gather that BPR is basically not just continuous improvement to the processes, initiated by certain concrete requirements of the company to improve its ongoing business processes. The figure below illustrates the basic steps in continuous improvement. Here, you begin by documenting what you do today, establish some way to measure the process based on what your customers want, do the process, measure the results, and then identify improvement opportunities based on the data you collected. Then implement process improvements, and measure the performance of the new process. This loop repeats over and over again, and is called continuous process improvement. BPR relies on a different school of thought than continuous process improvement. In the extreme, reengineering assumes the current process is irrelevant. BPR begins with defining the scope and objectives of your reengineering project, then going through a learning process (with our customers, our employees, our competitors and non-competitors, and with new technology). Given this knowledge base, one can create a vision for the future and design new business processes. Given the definition of the "to be" state, a plan of action based on the gap between our current processes, technologies and structures is developed, and where to go. It is then a matter of implementing the solution. The following picture describes BPR.

3. SAP R/3 a tool for Business Reengineering.


3.1. The Role of IT in Business Reengineering. SAP R/3 has changed the nature of the reengineering process in two ways: First, it works as an enabler where it provides a system that is integrated and is based on best practices. Second, it supports and drives the reengineering process, that is, it reaches a level where it becomes more than an enabler and behaves a driver in this reengineering process. But this does not mean that SAP R/3 will conduct the business reengineering for you, but it will only trigger it for the company and the company from then onwards has to take it on board and make the desired changes happen. Despite studies that indicate over half of all reengineering efforts are initiated "because of a perceived information technology opportunity...the actual technological solution is far less important than educating employees to use IT as both a strategic initiative and as a tool in the reengineering process."

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According to a roundtable of executives with extensive BPR experience, although information technology plays a central role in reengineering, "the IS organization in many companies is unable to play." This ineffectualness may be due to the historic inability of IS to do "anything big quickly", the "breeding out" of risk-taking, or the lack of advanced technology groups. Senior management may be skeptical about the effectiveness of IT as a whole due to the "lackluster" performance of many information systems in the past decades. In fact, it can be argued that the huge investment in IT has had little impact on productivity. "Although 85% of IT spending in the 1980's was in the service sector, productivity in this sector increased only 1.9%, while productivity in the manufacturing sector rose 44%." Based on this record, it is not unreasonable to view IT as a disabler, which is never used to "challenge why things are done in a company, but instead justify the way they are done." Systems in the service sector have been used to generate more unneeded reports, speed up superfluous work steps, generate unnecessary information, encourage shoddy thinking and misdirect attention to spurious details. Based on the above findings, some insist that when developing a reengineering strategy, the best companies "ignore information technology." Only after the strategy is complete should innovative IT applications be benchmarked, since innovative applications often "stem from a combination of breakthrough ideas and from modifying several best practices." The "democratization" of IT from the mainframe to the PC is "breaking down the communications barriers between corporate functions, suppliers, and even customers." This is sometimes called the "disruptive" power of IT. This ability for information to be at many places at the same time -- which allows companies to reap the benefits of both centralization and decentralization -- is at the heart of BPR. We realize the slowness and the huge cost implications of using IT as a major tool for achieving the goals of business reengineering. But today, for companies, where information is the heart of anything and everything that they need to get to the customer, both internal and external, we propose a theory that IT is and will remain the most important tool that any organization can and should use to achieve business reengineering goals.

3.2. Integrated solutions in Business Reengineering with ERP.


Enterprise Resource Planning is a term used to describe business software that is:
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Multifunctional in scope - it tracks financial results, procurement, sales, and manufacturing. Integrated in nature - when a piece of data is entered, regarding one of the functions, data regarding the other functions is changed. Modular in structure - it can be used in a way that is expansive or narrow as you choose.

An ERP software solution is appropriate when an organization is seeking the benefits of integration and contemporary best practices in its information system, looking for a full range of functionality from the back office through operations and sales, and seeking to limit its implementation and ongoing support cost. Integrated solutions are large: they cover multiple business applications. More often than not, they require change in the underlying business processes in order to be fully successful. Some people view them as a cost, often as a waste of money; others view them as an investment as necessary in order to compete in a rapidly changing business environment. Because some software solutions are large, they are complex to implement. They are complex not merely because of the size - the number of users who will use the system - but more of scope - the fact that those users cut across numerous functions within the company. Until off-the-shelf ERP solution software was developed, the only way to achieve the functionality we today find in SAP R/3 and many other ERP solutions was to custom-design it. Because many in-house IT groups often designed for system elegance rather than ease of use, the disconnect between the business managers and the IT group continued. It has really been only in the past couple of years, with the advent of R/3 technology, that companies have truly been able to use the off-the-shelf information systems as enabling technology in a business reengineering effort. Corporate interest in application-integration software is high, according to new market research, and vendors continue to enhance their products. If you haven't asked yourself this question, you may be in for trouble: What do you want from your ERP software package implementation? According to our opinion, otherwise sophisticated executives are not asking this fundamental question often enough. Instead many adopt ERP these days because they "know" it's good for them. An old, beat-up legacy system is proving harder to maintain, so why not just replace it with a 21st Century system that, soon, no self-respecting company will be without? Just do it!

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According to recent surveys, almost two-thirds of all ERP implementations fail to live up to expectations. If this was true for the large companies that first adopted ERP, it could prove even worse for the many midsize companies that are now beginning to install ERP. The new tools and pre-configured solutions that vendors are offering for quick implementation by midsize customers are highly useful, but come without the customized optimization features that add much of the value promised by ERP. Unless you identify your company's specific operational needs and adopt a clear plan to extract them from the onesize-fits-all package, you risk adding just another layer of cost. To achieve reality-based progress, you should ask some of the following questions:
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What are your key performance measures and how are you performing? What's the transition plan for moving from legacy to ERP? Once you've got the basic ERP system up and running, how can you enhance it?

The key to deriving value from ERP investments is understanding the role of ERP packaged software, and using this new tool to drive business change, rigorously measuring performance, and following up with aggressive action. Within the realm of single-vendor ERP solutions, SAP software has a number of distinguishing features. It has the broadest and deepest available functionality. Most organizations use only 20% of R/3's available functionality. R/3 offers full integration of manufacturing, customer-facing, and back office functions in real time and in a seamless way. It also is a truly global product.

3.3. What is SAP R/3?..The Pandora's Box?


All the information about SAP given here are taken from their web page and we thankfully acknowledge that SAP, the worlds largest enterprise software company. They provide companies of all sizes with business solutions that deliver a better return on information. SAP products and services integrate an organization from financials and human resources to manufacturing and sales and distribution. This integration enables companies to optimize supply chains, strengthen customer relationships, and make more accurate management decisions. Founded in 1972, SAP today leverages a global network of people, processes and products to assure customer success. In 1972, in Mannheim, Germany, five engineers had an idea. They wanted to produce and market standard software for integrated business solutions. So, they started a little company (with a big name) called "Systemanalyse and Programmentwicklung." Since then, that company has become SAP (Systems,
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Applications, and Products in Data Processing). And, it has been dedicated to providing SAP users with A Better Return On Information. From its beginning, SAP approached business application software from a business viewpoint. By collaborating with business and IT executives, and partners worldwide, SAP developed a unique understanding of the challenges faced in implementing technology solutions for business users. They developed software that could help companies of all sizes link their business processes, tying together disparate business functions, and helping the whole enterprise run more smoothly. From the beginning, the software was developed to work on a multilingual/multinational level, gaining it quick acceptance in countries all over the world. And, because created through the SAP Business Framework, it evolved from mainframe to business application software solutions. The innovative thinking of SAP soon made it the top software vendor in Germany. Today, SAP is the largest supplier of business application software in the world the worlds fourth-largest independent software supplier, overall. In preliminary results for 1997, SAP sales had increased 62% to DM 6.0 billion. SAP employs over 17,000 people in more than 50 countries who are dedicated to providing high-level customer support and services. SAP's industry-focused strategy with close customer alliances has been very productive for both SAP and Aerospace & Defense customers. It has enabled Aerospace and Defense customers to work with SAP in defining industry critical requirements and influencing forthcoming industry-specific functionality. The Aerospace & Defence industry-specific functionality integrated with SAP core components provide a strategic business infrastructure, supporting Aerospace & Defense business processes and best business practices. Together, they enable SAP Aerospace & Defense customers to reap high benefits and return on investment. Even though we are not going to use this Industry specific application from SAP, we think it is important for the reader to know the wide range of products SAP offer.

3.4. The Eye of the Storm - when to go for SAP.


There are a few reasons to go for SAP. It is important to look at these reasons and ask oneself if they are really the reasons for undergoing the time, effort, and expense that will take to properly undertake the installation of SAP.

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The Good reasons:


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You are engaging in a business reengineering effort and have heard of that one can "kill two birds with one stone", by installing SAP right now. It is part of a well worked out IT strategy. Your company has an aging IT structure, runaway selling, general and administrative costs.

The Bad Reasons:


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You think this will be a quicker, easier, and less costly fix to your "Year 2000" problem than upgrading current systems. You think you can get a jump on your competitors. Your competitors have SAP, so you too should have it. You can not get fired for it.

3.5. The Success Stories. Central Michigan University Central Michigan University is a public university in Mount Pleasant, Michigan in the US. More than 16,600 students attend classes at the main campus, and another 12,000 attend classes at satellite sites. CMU is known for providing a quality, student-focused education. CMU needed a new system that would ensure year 2000 compliance and that would move it from a transaction processing environment to an information management environment. The university also intends to take advantage of best practices and processes that improve efficiency, such as distributed transaction processing and increased electronic processing. CMU expects that the R/3 System will help it advance into areas like employee self service applications, better management reporting, and possibly workflow. Project Details:

Duration: 9 months Implementer : SAP America Scope: Financials (FI, FM and CO), Materials Management (MM), Human Resources (PA, PD: Benefits, Time and Payroll) . Team size: 6 core team members for FI and 6 core team members for HR, plus shared clerical and training support
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Rollout sites: On-campus data entry and reports; Off-campus reporting at 14 sites. End-users: Approx. 650 total (350 active users) Budget: On time and within budget ($4 million incl. software, hardware, consulting, and related expenses)

Subaru-Isuzu Automotive Inc. Subaru-Isuzu Automotive Inc. is a joint venture of Fuji Heavy Industries Ltd. and Isuzu Motors Limited. Located in Lafayette, Indiana in the United States. Subaru-Isuzu was established in 1987 and currently employs approximately 3,000 associates. The $3 billion company produces the Subaru Legacy Sedan, Subaru Legacy Station Wagon, Subaru Outback, Isuzu Rodeo, and Isuzu Amigo. Subaru-Isuzus legacy financial systems were neither integrated nor all year 2000 compliant. Installing the R/3 System was the first opportunity for SubaruIsuzu to actively capture and manage costs in a real-time, integrated system. Andersen Consulting was chosen due to its extensive experience implementing R/3 and its past successes with rapid implementation. Project Details:

Duration: 4 months Implementor: Andersen Consulting, Andersen Consulting Enterprise Business Solution Center. Scope: Financials (FI and CO), Materials Management (MM), Funds Management (FM) . Team size: 9 consultants, 8 client full time and 4 part-time members . Roll-out sites: 1 site only-Lafayette, Indiana. End-users: 120 occasional, 60 heavy users.

Crosfield. Crosfield B.V. in Eijsden near Maastricht in the Netherlands was founded in 1983 and is part of the international Crosfield Group headquartered in Warrington, UK. The subsidiary in Eijsden is the largest production site for silicate and zeolite products. The company generates approximately $80 million revenue each year and employs 185 people. The group has additional production sites in the UK, Italy, USA, Brazil, and Indonesia. Crosfields previous information system lacked integration and failed to effectively support the internal supply chain. The chemicals business is competitive and price-sensitive, so Crosfield needed an information system that
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provides integrated pricing information. R/3 was the solution Crosfield opted for to support its global business and improve the quality of management information. The subsidiary in Eijsden was chosen as the groups R/3 pilot site. The R/3 roll-out is still in progress. Project Details:

Duration: Less than 6 months. Implementer: SAP Netherlands. Scope: Financials (FI and CO), Materials Management (MM), Sales and Distribution (SD), Manufacturing (PP). Team size: 6 full-time plus ad-hoc members. Roll-out sites: 1st phase: Netherlands, 2nd phase: UK and USA. End-users: 60 users. Budget: Within budget; $0.6 million.

3.6. Issues and Tools for Implementation of SAP


Before going into the real aspects of what tools are available for SAP implementation, we would like to take a look at the Logistics Module that we are concerned with. This group of modules provides support for inbound and outbound logistics as well as a variety of different manufacturing environments. There are a number of bolt-on software packages that add functionality, such as CAD and mobile data entry. Logistics includes operations from requisition of materials until the goods are delivered and the bill is sent. The following are the key areas in this module:

MM - materials management - probably the largest module in the entire SAP system. PP - production planning. PM - plant maintenance. QM - quality management. SD - sales and distribution. SM - service management.

We are still studying the functionality that are embedded within these sections and will be discussed and assignments will be done on this module at a later stage.

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Now to discuss the tool that we will be using at the Williamtown Airforce base to implement SAP R/3. There are certain myths about SAP implementation.

The company can hire all the SAP implementation resources necessary. The entire implementation can be outsourced and not take the staff's time. SAP R/3 is just another systems project, so the IT people can do it themselves. SAP R/3 can be installed in 100 days, even in a $20 billion company.

Accelerated SAP (ASAP) is SAP AG's rapid implementation methodology specifically designed for enterprises that establish tight time constraints for their R/3 implementation - resulting from the inherent pressures of an evolving business or from the need to become Year 2000-compliant. First it is designed for simple implementations by companies that are less complex and smaller in size, global companies that have turned to SAP in the past. It works best for a business or a business unit that generates between USD200 million and USD2 billion revenue as a single country or regional entity. The value proposition of Accelerated SAP - faster results, more certain outcomes - has proved to be compelling. Recognizing the potential of the methodology-based approach, other major ERP suppliers have responded with similar initiatives intended to streamline and standardize their implementation process. But SAP was the first ERP supplier to systematically attack the long-anduncertain implementation timeframe problem. There are six major phases in ASAP methodology.
o o o o o o

Project preparation. The business blueprint - outline of the business. Simulation - designing and configuring SAP. Validation. Final Preparation and Going Live. Support.

Perhaps the greatest single accomplishment of SAP has been the successful development of the ASAP implementation methodology, and the resulting success in the mid-market

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CONCLUSION
The title of this report suggests that we should be looking at the management mantra business process reengineering and should link it to the use of SAP to achieve the BPR goals. We have tried to discuss and give you an insight into the thoughts of certain industry experts in this regard. We have also tried to project what we feel about the issues of BPR and how this may be achieved by SAP. But, certainly, this is not a critique of any body's work and hence we have tried only to know what actually BPR means and not critique BPR. As a practice, it is seen with the installations of SAP that most of them used this tool to achieve one or the other BPR goals. Some on a short term basis, and mostly on a long term basis, as this ERP tool is one of the most costly applications available in the market. This literature review is developed with a view to help us in the project that we are undertaking and we believe that we have gathered certain very important facts about SAP and BPR during the research for this review. They are given at the end of this chapter. We came across an article which reflected on one of the SAPHIRE conferences that was held during this year. It seems like instead of the coffee mugs, tokens and other stuff that are given to CEOs to impress and make them take on board the costly ERP tool like SAP, they were offered Porsche Boxsters, VW Beetles and Harley-Davidson motorcycles!! The excess of it all inspired a few thoughts in our minds. We do not know how long all this will go on. The conventional wisdom is that ERP sales will decline substantially after 2000, when organizations are no longer trying to solve their Y2K problems with a fast (right!) ERP installation. No, ERPs are not purely a result of millennial craziness. For vendor and user companies, they are not a flash in the '90s pan, but rather a long-term phenomenon. However, no matter how depressing it may seem, "going live" with an installation is just the beginning (but presumably still better than "going dead").

23

We therefore reach the following conclusions.


o o o

ERP tools are going to be the sphere head for the future of Business Reengineering. BPR as seen and debated by a wide range of management experts identify the key "enabler" role of IT in reaching the goals of BPR. SAP and its rapid implementation methodology is going to keep it in the Global leaders position for at least till the end of the next millennium, provided Microsoft comes up with a similar product.!! If mismanaged, the entire implementation of SAP, whether it is done by the best of SAP consultant or by in-house teams, will dig the grave for the enterprise.

We take this opportunity once again to thank all the authors and publishers of materials on SAP and Business Reengineering. We once again acknowledge that we have drawn extensively from many authors and their publications and if anyone feels that they should be removed from this paper, we would me more than happy to comply.

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CHAPTER INDUSTRIAL PROFILE

25

INDUSTRIAL PROFILE
India Fertilizer Industry India fertilizer industry is one industry with immense scopes in the future. India is primarily agriculture oriented country and its economy is highly dependent on the agrarian produce. The majority of the populace of India lives in rural areas and the foremost occupation in the villages is agriculture. Developments pertaining to different industries are being made on a massive scale to change the country's economy from an agrarian one to a industrial one. It is extremely important for the fertilizer industry India to have development in terms of technologically advanced manufacturing process and innovative new-age products. The first fertilizer manufacturing unit in India was set up in the year 1906 at Ranipat in Chennai. In the present scenario, there are more than 57 large and 64 medium and small fertilizer production units under the India fertilizer industry. The main products manufactured by the fertilizer industry in India are phosphate based fertilizers, nitrogenous fertilizers, and complex fertilizers. The fertilizer industry in India with its rapid growth is all set to make a long lasting global impression. 2.1.1. Some of the public sector companies in India fertilizer industry:

National Fertilizers Limited Fertilizers & Chemicals Travancore Limited Rashtriya Chemicals & Fertilizers Limited Madras Fertilizers Limited Steel Authority Of India Limited Neyveli Lignite Corporation Limited Paradeep Phosphates Limited Pyrites, Phosphates & Chemicals Limited Hindustan Fertilizer Corporation Limited

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2.1.2. Some of the private sector companies in India fertilizer industry:


Chambal Fertilizers & Chemicals Limited Ajay Farm-Chem Private Limited Balaji Fertilizers Private Limited Deepak Fertilizer and Petrochemicals Corporation Limited Bharat Fertilizer Industries Limited Coromandal Fertilizers Limited Gujarat Narmada Valley Fertilizer Co. Limited Meerut Agro Chemicals Private Limited Duncans Industries Limited Karnataka Agro Chemicals Godavari Fertilizers & Chemical Limited Shri Amba Fertilizers (I) Private Limited Tuticorin Alkali Chemi & Fertilizer Limited Gujarat State Fertilizers & Chemicals Limited Indo-Gulf Fertilizers & Chemicals Corporation Limited Southern PetroChemical Industries Corporation Limited Maharashtra Agro Industrial Development Corporation Zuari Industries Limited- Fertilizer Limited Mangalore Chemicals & Fertilizers Limited

2.2. WORLD SENERIO Fertilizer (or fertiliser) is any organic or inorganic material of natural or synthetic origin (other than liming materials) that is added to a soil to supply one or more plant nutrients essential to the growth of plants. A recent assessment found that about 40 to 60% of crop yields are attributable to commercial fertilizer use. They are essential for high-yield harvest: European fertilizer market is expected to grow to 15.3 billion by 2018. Mined inorganic fertilizers have been used for many centuries, whereas chemically synthesized inorganic fertilizers were only widely developed during the industrial revolution. Increased understanding and use of fertilizers were important parts of the pre-industrial British Agricultural Revolution and the industrial Green Revolution of the 20th century.

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Inorganic fertilizer use has also significantly supported global population growth it has been estimated that almost half the people on the Earth are currently fed as a result of synthetic nitrogen fertilizer use. Fertilizers typically provide, in varying proportions:

six macronutrients: nitrogen (N), phosphorus (P), potassium (K), calcium (Ca), magnesium (Mg), and sulphur (S); seven micronutrients: boron (B), chlorine (Cl), copper (Cu), iron (Fe), manganese (Mn), molybdenum (Mo), and zinc (Zn).

The macronutrients are consumed in larger quantities and are present in plant issue in quantities from 0.15% to 6.0% on a dry matter (0% moisture) basis (DM). Micronutrients are consumed in smaller quantities and are present in plant tissue on the order of parts per million (ppm), ranging from 0.15 to 400 ppm DM, or less than 0.04% DM. Only three other macronutrients are required by all plants: carbon, hydrogen, and oxygen. These nutrients are supplied by water and carbon dioxide. The nitrogen-rich fertilizer ammonium nitrate is also used as an oxidizing agent in improvised explosive devices, sometimes called fertilizer bombs, leading to sale regulations Fertilizers are broadly divided into organic fertilizers (composed of organic plant or animal matter), or inorganic or commercial fertilizers. Plants can only absorb their required nutrients if they are present in easily dissolved chemical compounds. Both organic and inorganic fertilizers provide the same needed chemical compounds. Organic fertilizers provided other macro and micro plant nutrients and are released as the organic matter decays--this may take months or years. Organic fertilizers nearly always have much lower concentrations of plant nutrients and have the usual problems of economical collection, treatment, transportation and distribution. Inorganic fertilizers nearly always are readily dissolved and unless added have few other macro and micro plant nutrients. Nearly all nitrogen that plants use are in the form of NH3 or NO3 compounds. The usable phosphorus compounds are usually in the form of phosphoric acid (H3PO4) and the
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potassium (K) is typically in the form of potassium chloride (KCl). In organic fertilizers nitrogen, phosphorus and potassium compounds are released from the complex organic compounds as the animal or plant decays. In commercial fertilizers the same required compounds are available in easily dissolved compounds that require no decay--they can be used almost immediately after water is applied. Inorganic fertilizers are usually much more concentrated with up to 64% (18-46-0) of their weight being a given plant nutrient, compared to organic fertilizers that typically often have only 0.4% or less of a their weight a given plant nutrient. Nitrogen fertilizers are often made using the Haber-Bosch process (invented about 1915) which uses natural gas (CH4+) for the hydrogen and nitrogen gas (N2) from the air at an elevated temperature and pressure in the presence of a catalyst to form ammonia (NH3) as the end product. This ammonia is used as a feedstock for other nitrogen fertilizers, such as anhydrous ammonium nitrate (NH4NO3) and urea (CO(NH2)2). These concentrated products may be diluted with water to form a concentrated liquid fertilizer (e.g. UAN). Deposits of sodium nitrate (NaNO3) (saltpeter) are also found the Atacama desert in Chile and was one of the original (1830) nitrogen rich inorganic fertilizers used. It is still mined for fertilizer. In the Nitrophosphate process or Odda Process (invented in 1927), phosphate rock with up to a 20% phosphorus (P) content is dissolved with nitric acid (HNO3) to produce a mixture of phosphoric acid (H3PO4) and calcium nitrate (Ca(NO3)2). This can be combined with a potassium fertilizer to produce a compound fertilizer with all three N:P:K: plant nutrients in easily dissolved form. Phosphate rock can also be processed into water-soluble phosphate (P2O5) with the addition of sulfuric acid (H2SO4) to make the phosphoric acid in phosphate fertilizers. Phosphate can also be reduced in an electric furnace to make high purity phosphorus; however, this is more expensive than the acid process. Potash can be used to make potassium (K) fertilizers. All commercial potash deposits come originally from marine deposits and are often buried deep in the earth. Potash ores are typically rich in potassium chloride (KCl) and sodium chloride (NaCl) and are obtained by conventional shaft mining with the

29

extracted ore ground into a powder. For deep potash deposits hot water is injected into the potash which is dissolved and then pumped to the surface where it is concentrated by solar induced evaporation. Amine reagents are then added to either the mined or evaporated solutions. The amine coats the KCl but not NaCl. Air bubbles cling to the amine + KCl and float it to the surface while the NaCl and clay sink to the bottom. The surface is skimmed for the amine + KCl which is then dried and packaged for use as a K rich fertilizer--KCl dissolves readily in water and is available quickly for plant nutrition. Compound fertilizers often combine N, P and K fertilizers into easily dissolved pellets. The N:P:K ratios quoted on fertilizers give the weight percent of the fertilizer in nitrogen (N), phosphate (P2O5) and potash (K2O equivalent) The use of commercial inorganic fertilizers has increased steadily in the last 50 years, rising almost 20-fold to the current rate of 100 million tonnes of nitrogen per year. Without commercial fertilizers it is estimated that about onethird of the food produced now could not be produced. The use of phosphate fertilizers has also increased from 9 million tonnes per year in 1960 to 40 million tonnes per year in 2000. A maize crop yielding 6 9 tonnes of grain per hectare requires 3150 kg of phosphate fertilizer to be applied, soybean requires 2025 kg per hectare. Yara International is the world's largest producer of nitrogen based fertilizers TECHNOLOGY ADOPTION IN FACT

FACT computerized its activities since 1965 to meet the growing need for management information, engineering and commercial applications. The major mission and function of the Computer Service Centre is to operate as a central agency for providing computer services to various divisions of FACT to aid in management of information. The centre is equipped with servers in all its divisions connected by FACT NET and Intranet network. FACT had introduced the ERP system in 2009. The main objective of this Computer Service Centre is the following: Setup and maintain corporate network of computers called FACT NET. Process data and prepare relevant information for various levels of management for appropriate and speedy managerial decisions
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Identify and develop prospective areas for computerization To augment production by reducing breakdowns of plants and equipments through integrated computerized maintenance and material management system. Cost reduction through standard costing and budgetary control monitoring through computerized system Financial disciplines by applying various modern techniques through computerized system Prompt and efficient service for meeting employees information requirements, payment of wages, settlement of claims etc. Optimum solutions to engineering designs and use of techniques such as CAD, CAE etc. thereby enhancing professional competency and aiding competitive quotes. To have a marketing management system for invoicing, credit control, marketing analysis etc To link the computer systems in FACT with the National Network for capturing environmental data and information required by the company.

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CHAPTER 4 COMPANY PROFILE

32

COMPANY PROFILE
Industry Structure and Development The Fertilizers and Chemicals Travancore Limited (FACT) was incorporated in 1943. In 1947 FACT started production of Ammonium Sulphate with an installed capacity of 10,000 MT/annum at Udyogamandal, near Cochin. In the year 1960, FACT became a Kerela state PSU and towards the end of 1962, Government of India became the major shareholder. From a modest beginning, FACT has grown and diversified into a multi-division/ multi-functional Organization with basic interest in manufacture and Marketing of Fertilizers and Petrochemicals, Engineering Consultancy and design, Fabrication and Erection of Industrial Equipments. FACTs mission is to be a significant player in Fertilizers, Petrochemicals and other business such as Engineering and Technology Services. As mentioned earlier FACT became a Kerela State Public sector Enterprise on 15th August 1960 and 21st November1962, the Government of India became a major share holder. The 2nd stage of expansion of FACT was completed in 1962. The 3rd stage of expansion was completed in 1965 with setting up of a new Ammonium Sulphate Plant. FACT Engineering and Design Organization was set up on 24th July 1965 to meet the emerging need for indigenous capabilities in vital areas of Engineering, Design and Consultancy for establishing large and medium Fertilizer Plants. FEDO has since then diversified into chemicals, Petro-Chemicals, Hydrometallurgy, Pharmaceutical and other areas. FEDO offers services from project identification and evaluation stage to plant design, procurement, project management, site supervision and commissioning of new plants as well as revamping and modernization of old plant. The FACT Ltd has expanded and diversified over the year and has became one of the major producers of Fertilizers and allied Chemicals in India.

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VISION
Growth and Diversification are most essential to long term survival and FACT today is keenly pursuing new opportunities in the areas of: a) Software Development for process industry. b) Consultancy for infrastructure projects. FACTs vision is to emerge as a leader in business of agricultural inputs, industrial intermediary and engineering consultancy and construction of industrial and infrastructure facilities. MISSION FACTs mission is to be a globally competitive producer and supplier of agricultural inputs and extend world class engineering and technology service with maximum share holders value. The above mission statement means: a) FACT aims to provide best products and services. b) Globally competitive supplier means the product and services offered by FACT will match with the quality and price offered by competing international firms. c) World class services means expertise gained and required to develop technological capabilities required for design, installation, operation and maintenance in the chemical process industry and infrastructure sector. d) Maximum share holder value would mean that the company would operate profitably and generate enough resources for growth. To sustain such growth, the company would identify profitable opportunities and diversify. FACTs objectives are: a) To produce and market Fertilizers & Caprolactam and other products efficiently and economically, besides achieving a reasonable and consistent growth. b) To effectively manage the assets and resources of company to ensure a reasonable return on investment. c) To focus on reduction and technology up gradation in order to become competitive in its line of business.
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d) To constantly innovative and develop new products and services to satisfy customer requirements. e) To invest in new business lines, where profit can be made on a sustainable basis over the long term. f) To provide services to the framing community by organizing technical training, soil testing and other productivity improvement services in agriculture. FACT DIVISIONS The head office and registered office of FACT Ltd is situated at Ealoor, Udyogamandal. It has 4 divisions and 3 subdivisions. DIVISIONS A) Manufacturing Division B) Marketing Division C) FACT Engineering and Design Organization(FEDO) D) FACT Engineering Works(FEW) SUBDIVISION A) Research and Division B) Computer Centre C) Management Development Centre

Computer Services Centre at FACT


FACT is a pioneer in the industry for adopting information technology and has the unique distinction of having implemented IT enabled enterprise business systems way back in 1965 to meet the growing need for management information, engineering and commercial applications. IT systems have since then been kept constantly upgraded so as to keep pace with the rapid technological advancements. The latest in the chain of enhancements is the FACT>>FORWARD enterprise resource planning system (ERP) implemented in November, 2009 in-house core group along with implementation partners M/s SAP, the world leader in ERP segment. FACT Computer Services Centre (CSC), the in-house IT department performed a key role in implementation of FACT>>FORWARD system including feasibility analysis, securing management approval, selecting/managing core group members from different functional groups, coordinating project
35

management during project preparation, blueprinting, realization, final preparation and go-live. CSC is equipped with around 25 numbers of centrally located virtualized servers for hosting SAP system and the corporate IT network, FACTNET, which encompasses around 600 connected PCs, a Citrix based virtual private network (VPN) that connects via Internet around 150 sales points spread across the 4 southern states, 2 Mbps leased line from CSC to FACT Cochin Division, 4 Mbps Internet leased line for hosting Citrix VPN, 64 Kbps leased lines from CSC to FACT Engineering Works & FACT offices in Willington Island and around 15 Km of optical fibre network that links FACT offices in Udyogamandal complex & nearby locations. Functional modules of ERP system including Finance, Costing, Materials Management, Sales & Distribution, Production Planning, Quality Management, Plant Maintenance, Project Systems, Human Capital Management, and Supplier Relationship Management are maintained by the in-house Centre of Excellence consisting of members from functional groups. Technical modules including Enterprise Portal, Business Intelligence and ABAP based custom software are maintained by the in-house IT team. Besides functioning as a central hub for IT support in the organisation, CSC has an important role to play in ensuring compliance to enterprise wide standard, business rules and best practices, keep management abreast of fast paced technological changes and recommending timely enhancements of IT resources in the enterprise. CSC is geared up to augment its infrastructure with state-of-the-art data centre, disaster recovery site, optic fibre network for FACT Cochin Division, access control system for sensitive areas, e-kiosks for extending enterprise portal to employee work-spots and to explore IT enabled sectors such as mobile computing, e-commerce/e-payment/payment gateway, B2B systems and so on. ORGANIZATION CHART OFF COMPUTER SERVICE DEPARTMENT General Manager Deputy General Manager Manager System Administrator Staffs
36

CHAPTER 5 RESEARCH METHODOLOGY

37

RESEARCH METHODOLOGY PRIMARY DATA


The data was collected through questionnaire method. Certain respondents from each section where interviewed randomly for their exclusive opinions on the concerned area of my study.

SECONDARY DATA
E-Books, websites, FACTs Annual Reports have been a source for collecting secondary data pertaining to the topics right through the research.

RESEARCH PERIOD
Period for conducting research was for 2months, from the month June to July 1013.

SAMPLING METHOD
An explorative research design has been followed for conducting the research, where the thoughts ideas and perceptions where taken into consideration to know more about the real side prevailing within the organization for the topics concerned. The sampling method used was Stratified Random sampling, where the samples have been selected randomly from 5 different strata like PP, MM, FI, SD, and HR.

SAMPLE SIZE
The sample size was 50 employees, 15 each from Materials Management Department and Production Planning Department and 10 from FI and 5each from SD/Marketing and HR.

TOOLS USED
SPSS 16.0 was used as the tool for the purpose of data analysis, which is a statistical package developed by IBM for analysing data obtained from survey.

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CHAPTER 6 DATA ANALYSIS AND INTERPRETATION

39

1) Is ERP-FACT Forward easy to use? Responses Disagree Somewhat disagree Neutral Somewhat agree Strongly Agree Total No: respondents 0 2 6 7 5 20 Percentage 0 10 30 35 25 100

Disagree Some what disegree Neutral Some what agree Strongly Agree

Interpretation: About 25% of employees Strongly Agreed, 35% Somewhat Agreed, 30% said Neutral and 10% Somewhat Disagreed that ERP-FACT Forward system is easy to use.

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2) Getting started with SAP is Easy? Response Disagree Somewhat disagree Neutral Somewhat agree Strongly Agree Total Frequencies Percentage 0 0 1 5 5 25 8 40 6 30 20 100

Disagree Some what disegree Neutral Some what agree Strongly Agree

Interpretation: About 30% of employees Strongly Agreed, 40% Somewhat Agreed, 25% said Neutral and 5% Somewhat Disagreed that SAP is easy to use.

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3) An ERP System has increased the productivity and efficiency of the employees using it. Responses Disagree Some what disegree Neutral Some what agree Strongly Agree Total No: respondents Percentage 0 0 1 6.25 4 25 9 56.25 2 12.5 16 100

Disagree Some what disegree Neutral Some what agree Strongly Agree

Interpretation: About 12.5% of employees Strongly Agreed, 56.25% Somewhat Agreed, 25% said Neutral and 6.25% Somewhat Disagreed that ERP System has increased the productivity and efficiency of the employees using it.

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4) The ERP help you in faster completion of your daily routine tasks Response Disagree Some what disegree Neutral Some what agree Strongly Agree Total No: of Response 0 0 7 9 4 20 Percentage 0 0 35 45 20 100

Disagree Some what disegree Neutral Some what agree Strongly Agree

Interpretation: About 20% of employees Strongly Agreed, 45% Somewhat Agreed, 35% said Neutral that ERP help you in faster completion of your daily routine tasks

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5) The report generation is much simpler using the ERP Response Disagree Some what disegree Neutral Some what agree Strongly Agree Total No: of Response Percentage 0 0 0 0 3 15 6 30 11 55 20 100

Disagree Some what disegree Neutral Some what agree Strongly Agree

Interpretation: About 55% of employees Strongly Agreed,30% Somewhat Agreed, 15% said Neutral that The report generation is much simpler using the ERP

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6) The information in the ERP is detailed, structured and accurate. Response Disagree Some what disegree Neutral Some what agree Strongly Agree Total No: of Response Percentage 0 0 0 0 4 20 5 25 11 55 20 100

Disagree Some what disegree Neutral Some what agree Strongly Agree

Interpretation: About 55% of employees Strongly Agreed, 25% Somewhat Agreed, 20% said Neutral that The information in the ERP is detailed, structured and accurate.

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7) Is the modules of SAP useful for your Department Response Disagree Some what disegree Neutral Some what agree Strongly Agree Total No: Of Response Percentage 0 0 0 0 5 25 9 45 6 30 20 100

Disagree Some what disegree Neutral Some what agree Strongly Agree

Interpretation: About 30% of employees Strongly Agreed,45% Somewhat Agreed, 25% said Neutral that The Modules of SAP are useful for there department.

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8) Do you feel that ERP system have helped in automating the tasks Activities and made the inventory management more efficient and effective? Response Strongly Agree Agree Disagree Strongly Disagree Total No: Of Response 3 14 3 0 20 Percentage 15 70 15 0 100

Strongly Agree Agree Disagree Strongly Disagree

Interpretation: About 15% of employees Strongly Agreed,70% Agreed, 15% said Disagree that ERP system have helped in automating the tasks Activities and made the inventory management more efficient and effective

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9) Can ERP help in better decision making as a user? Response Yes No Total No: Of Response Percentage 20 100 0 0 20 100

Yes No

Interpretation: About 100% employees agrees that ERP helps in better decision making.

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10) DOES THE ERP HELP YOU IN FASTER COMPLETION OF YOUR DAILY ROUTINE Response No: Of Response Percentage Yes 20 100 No 0 0 Total 20 100

Yes No

Interpretation: About 100% employees say that ERP helps you in faster completion of your daily routines.

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11) Do you feel that implementation of SAP the interrelation between various department and person have favourable affected? Response No: Of Response Percentage Strongly Agree 5 25 Agree 12 60 Disagree 3 15 Strongly Disagree 0 0 Total 20 100

Strongly Agree Agree Disagree Strongly Disagree

Interpretation: About 25% of employees Strongly Agreed,60% Agreed, 15% said Disagree that they feel implementation of SAP the interrelation between various department and person have favourable affected.

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12) Do you feel that implementation of SAP affected in a better way? Response Yes No Total No: Of Response Percentage 17 85 3 15 20 100

Yes No

Interpretation: About 85% of employees feel that the implementation of SAP affected in a better way.

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13) While implementing ERP, how significantly did you customize your ERP package? Response No Customization Minor Customization Some Customization Significant Customization Extreme Customization Total No: Of Response Percentage 0 0 5 25 4 20 11 55 0 0 20 100

No Customization Minor Customization Some Customization Significant Customization

Interpretation: About 25% of employees says Minor customization,20% says Some Customization, 55% said Significant Customization was made using ERP.

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14) Is your institution outsourcing or considering outsourcing any component of ERP support for any module?

Response No: Of Response Percentage Already outsourcing 11 55 Currently in Process of outsourcing 5 25 Will outsource 3 15 May Outsource 1 5 Total 20 100

Already outsourcing Currently in Process of outsourcing Will outsource May Outsource

Interpretation: About 55% of employees says Data outsourcing is Already Being done ,25% Currently in Process of outsourcing, 15% said Will Outsource,and 5%says that they May Outsource.

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15) Do you feel that SAP serves a platform for member customers, employees, and management working collaboratively to define enterprise service?

Response No: Of Response Percentage Strongly Agree 4 20 Agree 15 75 Disagree 1 5 Strongly Disagree 0 0 Total 20 100

Strongly Agree Agree Disagree Strongly Disagree

Interpretation: About 20% of employees Strongly Agreed,75% Agreed, 5% said Disagree that that SAP serves a platform for member customers, employees, and management working collaboratively to define enterprise service.

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16) How do your (ongoing) support costs compare pre-ERP to post- ERP?

Response Increased above 50% Increased above 20% Minor % increased Stayed about the same Decreased above 10% Decreased above 20% Not Measured Total

No: Of Response Percentage 9 45 0 0 3 15 0 0 5 25 0 0 3 15 20 100

Increased above 50% Increased above 20% Minor % increased Stayed about the same Decreased above 10% Decreased above 20% Not Measured

Interpretation: About the cost comparison of post-ERP and pre-ERP implementation, 50% of employees says increased about 50%,25% says Decreased about 10%, 15% says Not Measured

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17) Did your institution perform BPR(Business Process Redesign) as a part of implementation of ERP?

Response No: Of Response Percentage No Redesigning 0 0 Minor Redesigning 3 15 Some Redesigning 6 30 Significant Redesigning 11 55 Extreme Redesigning 0 0 Total 20 100

No Redesigning Minor Redesigning Some Redesigning Significant Redesigning Extreme Redesigning

Interpretation: About 20% of employees Strongly Agreed,75% Agreed, 5% said Disagree that that SAP serves a platform for member customers, employees, and management working collaboratively to define enterprise service.

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18) Which is the most significant obstacles you had to overcome to successfully implement this product?

Response Resources constraints Training issues Data issues Technical / Software issues Lack of internal expertise Other issues Total

frequency Percentage 3 13 5 21 3 13 7 29 4 17 2 8 24 100

Resources constraints Training issues Data issues Technical / Software issues Lack of internal expertise Other issues

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CHAPTER 7 FINDINGS

58

FINDINGS

1. From among the 80-100 employees who are expected to work with SAP, only a few were aware of the functionalities of SAP, that too each person known only the activities related to their area of operations. In each of the 5 sections using SAP 70% responded that they are fully comfortable with SAP while with rest 30% were finding SAP it only partially Comfortable which shows the level of comfort of each person among 30% is on a low side which is shown in Table No. 2, which shows that Re-engineering effort is not fully effective. 2. The main advantage offered by SAP in FACT is Integration of all Levels of Information, Easy Data up-dating and access to real time data also it increased the productivity of certain department up to 50%. 3. SAP in FACT, covers Business Process like MM,HR,PP,SD and FI. 85% of the total responses which shows that implementation of SAP have favourably affected their work and their department. 4. It could be seen from all the above results that organizations performance level got changed significantly with SAP. 5. Majority of the responded believes SAP has played an Enablers Role in FACTs BPR program, which shows the significance of IT in FACT for re-engineering purpose. 6. Majority of responded got an opinion that Finance related processing got changed significantly with the implementation of SAP. 7. About 55% if responded strongly agree that the data generated by ERP is detailed, structured and accurate.

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CHAPTER 8 SUGGESTIONS

60

SUGGESTIONS 1) Educate employees about the features and future benefits that SAP
provide to FACT and thereby to its employees by fully working with the SAP system. Give proper training by showing them demonstration and visual aided talks on the opportunities which remain hidden by fully utilizing SAP for doing all the processes.

2) Try focusing more on already implemented modules and make it fully


functional by taking an initial step by a group of employees who feel SAP as a reliable system.

3) Motivate the employees and lead them by taking initiatives by senior


level Management, which could make the employees feel comfortable working with the SAP.

4) Customize the most complex takes involved in SAP to an understandable


and simple from by configuring it.

5) Go in for help of technical and functional level consultants if it seems


difficult to work with many of the inbuilt process in SAP.

6) Make use of Internet Transaction Servers (ITS), which is the transaction


processing system that connects the web HTTP server and the standard R/3 system. All the Internet Application Components (IAC) of SAP will be transactions can be performed through the WWW which enables the better utilization of SAP.

7) Streamline interface process for creating a more reliable SAP


environment which also increases long-term return on IT investment. SAP application interface framework can benefit any SAP customer, large or small, that has multiple interfaces in its SAP landscape.

8) Make maximum use of SAP which would fetch you maximum return on
information, which is possible only if most of the activities in FACT are done using SAP itself.

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9) Even after implementation of such a costly software in FACT, it is not


fully utilized which causes the employees to get a feel that it is not trust able; hence the first and the most serious action which has to be implemented Assign financial or non-financial rewards for the quick leaners, since it is the main motivation for employees to move forward with it.

10)

SAP has got many additional built in tools like solution manager, UCD etc which is not even known to many of the employees who work with SAP. Try exploring more on such tools which is available with the package itself and which helps in activities like Change Management, making user friendly interface, etc. From the survey conducted, majority of responded mentioned FACT can meet customer expectations only generally and not always, if the technology available with FACT is kept fully utilised then the FACTs entire face would get changed to a modern business atmosphere which would turn it to an agile firm which could fulfil customers needs to the field. A holistic approach to IT management is needed, which recognizes and emphasis active integration and strategy, business process management system and structure and organizational structure.

11)

12)

13)

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CHAPTER 9 CONCLUSION

63

CONCLUSION

Tools such as SAP, BAAN and various ERP systems that promote the horizontal organisational structure in order to adapt to the vehicles for Reengineering the organisational structure in order to adapt to the horizontal operational subsystem of the tools. For the first time we can say IT does not only support management, IT changes the organizational structure. From the survey it was clearly evident that The highest realized benefits of BPR are for Integration of all levels of information, quick information flow etc. While the lowest improvements are easy updating of data, easy way of communications etc. The study on Business Process Re-engineering helped me how FACT works with the use of SAP. Usability has got a serious impact on the Business Process Reengineering program in FACT, Using SAP. If only the employees feel the system as easy to use then only they would feel comfortable working with it which causes the full fledged use of SAP in FACT for all the processes and its sub processes, hence SAP users should be properly educated on how to work with it in a easy way. FACT has got the wider opportunity of Re-engineering many of the activities and hence can make the maximum earnings out of the huge investment made for implementation of SAP in FACT. Increase in role of IT in Business Process Re-engineering at FACT causes a massive reduction in cycle time which means that the cycle time has been reduced to a significant extend with the Enabling Role of IT in FACT, which is the basic need what every firm would look for improving its business

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CHAPTER 10 BIBLIOGRAPHY

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BIBLIOGRAPHY

FACT annual report 2012-13 FACT news BPR- report by Sotiris Zigiaris. Innoregio Project-BPR Literature review- university of Newcastle. Australia www.tojet.com www.sapfunctional.com Grant Norris, Ian Wright, James R. Hurley, John Dunleavy and Alison Gibson," SAP An Executive's Comprehensive Guide", John Wiley & Sons.Inc, 1998. Jonathan Blain, " Using SAP R/3", II Ed., ASAP World Consultancy, Prentice-Hall of India, 1997. http://www/sap.com

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QUESTIONNAIRE

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Effectiveness of Implementation of ERP at FACT


Employee Post: Divisions: Questionnaire Please appropriate option: 1. Is ERP easy to use? DISAGREE SOMEWHAT AGREE SOME WHAT DISAGREE STRONGLY AGREE NEUTRAL

2.

Getting started with this version of SAP is easy. DISAGREE SOMEWHAT AGREE SOME WHAT DISAGREE STRONGLY AGREE NEUTRAL

3.

An ERP System has increased the productivity and efficiency of the employees using it. DISAGREE SOMEWHAT AGREE SOME WHAT DISAGREE STRONGLY AGREE NEUTRAL

4.

The ERP help you in faster completion of your daily routine tasks DISAGREE SOMEWHAT AGREE SOME WHAT DISAGREE STRONGLY AGREE NEUTRAL

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5.

The report generation is much simpler using the ERP DISAGREE SOMEWHAT AGREE SOME WHAT DISAGREE STRONGLY AGREE NEUTRAL

6.

The information in the ERP is detailed, structured and accurate. DISAGREE SOMEWHAT AGREE SOME WHAT DISAGREE STRONGLY AGREE NEUTRAL

7.

All the modules of SAP useful for the Department DISAGREE SOMEWHAT AGREE SOME WHAT DISAGREE STRONGLY AGREE NEUTRAL

8.

Do you feel that ERP system have helped in automating the tasks activities and made the inventory management more efficient and effective? Strongly Agree Strongly Disagree Agree Disagree

9.

Can ERP help in better decision making as a user? YES NO

10. DOES THE ERP HELP YOU IN FASTER COMPLETION OF YOUR DAILY ROUTINE
TASKS?

YES

NO

11. Do you feel that implementation of SAP the interrelation between various department and person have favorable affected? Strongly Agree Strongly Disagree
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Agree Disagree

12. Do you feel that implementation of SAP affected in a better way? Yes No

13. While implementing ERP, how significantly did you customize your ERP package? o o o o o No Customization Minor Customization Some Customization Significant Customization Extreme Customization

14. Is your institution outsourcing or considering outsourcing any component of ERP support for any module? o o o o o Already outsourcing Currently in Process of outsourcing Will outsource May Outsource Not under consideration

15. Do you feel that SAP serves a platform for member customers, employees, and management working collaboratively to define enterprise service? Strongly Agree Agree

Strongly Disagree Disagree 16. How do your (ongoing) support costs compare pre-ERP to post- ERP? o Increased above 50% o Increased above 20% o Minor % increased o Stayed about the same o Decreased above 10% o Decreased above 20%

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17. Did your institution perform BPR(Business Process Redesign) as a part of implementation of ERP? o No Redesigning o Minor Redesigning o Some Redesigning o Significant Redesigning o Extreme Redesigning 18. Which is the most significant obstacles you had to overcome to successfully implement this product? o Resources constraints o Training issues o Data issues o Technical / Software issues o Lack of internal expertise o Other issues

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