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According to Nazemi, et. al. (2012), ERP can be explained as the system different packages or software are integrated for the execution of the business process and these different modules of the package include sales, finance, human resource, production and cross organization. Different issues can be faced during the implementation of the ERP project and these issues affect the performance of the different modules of the business. OilCO and ExploreCO are implementing an ERP project for enhancement in the operation and effective management of the business processes. Differences and similarities between OilCO and ExploreCO will be discussed. Recommendations will be made for the improvement in the implementation process as well as in the learning from the case as a professional.
OilCO is operating in the Oil, Gas & Coal industry of Australia. It is engaged in the refining and marketing of the wide range of products of petroleum in Australia. It is having a strong employee base of more than 2000 employees and is operating at more than 1800 locations. OilCO has selected an ERP system for meeting the requirements of the business. And the implementation of this system in OilCO will involve different changes in the business processes of the company. OilCO has framed different aims and objectives which it is intending to achieve by implementing ERP system (Bloomberg, 2017). The main reasons for the adoption of ERP are the attainment of the integration in full process, improvement in the automation and facilitating planned restructuring of the business. ExploreCO is an oil and gas exploration and production company of Australia which is an affiliate of OilCO. ExploreCO is engaged in offshore exploration and production of gas and oil. ExploreCO is also planning to implement a system and an analysis will be done for the analysis of the feasibility of the system.
Major implementation issues in ERP projects
According to Tenkorang & Helo (2011), an ERP system results in an enhancement in the effectiveness and efficiency as well as maintaining a competitive position in the industry. Implementation of the ERP project needs to be done in an effective manner for enhancing the performance of the operations of the business. In the words of Seo (2013), there can be different implementation issues which can affect the implementation process and these issues include lack of effectiveness in communication with the users, lack of proper training to the employees, rise of conflicts between the user departments, lack of user support and lack of commitment and support from the senior managers. A company faces different issues during the implementation of the ERP project and these issues include lack of proper awareness among the business, different perceptions, huge cost and lack of proper management of the changes (Dixi & Prakash, 2011). According to Dixi & Prakash (2011), other issues or factors affecting the implementation process include lack of training and testing process, lack of required data, retention of the employees and lack of coordination between the different modules. The critical success factors need to be analyzed in a proper manner for maintaining effectiveness in the implementation process of the ERP system.
Various changes have been analyzed in the business processes of OilCO during the implementation of the ERP project. There is a need to match up with the process methods of ERP. But during the implementation, few issues have been identified and these implementation issues include involvement of excess cost or budget and excess time in the implementation process of the ERP project. Other issues which have affected the implementation process include reduction in the supplier of the business. These issues have been identified during the implementation of ERP 1 and ERP 2. Another issue is faced due to the lack of empowerment to the decision maker which has affected the decision-making process. Lack of proper focus on the different critical success factors have affected the implementation process and acted as issues. These critical success factors which are given less importance include proper support from the management, balance in the team, defining the scope and goals of the company.
ExploreCO has faced few implementation issues which have affected the implementation process and these include substantial dissatisfaction from the system and issues related to the budget. ExploreCO has planned to implement the system within 11 months and for the implementation, there is a need to analyze the different aspects of the system in an effective and efficient manner. ExploreCO is giving less importance to commitment and balance team, decision-making process and delivering the dates. Less importance to these critical success factors may affect the implementation process of the ERP system in ExploreCO. Another issue faced by ExploreCO is non-acceptance of the interface by the users due to which the effectiveness of the ERP system. This needs to be dealt so as to make the ERP system effective and appropriate for the business which suits to the requirement of the company.
Similarities and differences between the implementation of ERP in OilCO and ExploreCO
The ERP (Enterprise Resource Planning) implementation in both the companies, OilCO and ExploreCO has different similarities and differences. These are discussed in this section of the report with the help of various Critical success factors (CSF’s). As per Al-Sabaawi (2015), CSF’s are those key areas which have to be considered while implementing the systems or during the achievement of goals of the enterprise. These are the factors which help in making the difference between the success and failure of two process and systems. These success factors can be planning, communication, management, decision making, etc. The implementation of ERP in the companies given in the case is compared on the basis of CSFs.
The main similarity between the implementation of ERP system in both the companies is that both the companies identified the same CSF’s like management support, champion, Commitment, and vanilla ERP. Both the companies differ in terms of process and structures which are followed to achieve the implementation of ERP systems. The companies differ in terms of the pattern of CSF but are same in terms of the policy of minimum modifications or customization and the dates of delivery of the goals set for the implementation process.
In ExploreCO, the champion follows the hands on approach which means they learn by doing and by focussing on their activities whereas in OilCO there is a lack of continuity in the champion. It is found that the grading system of ExploreCO is different than the grading system of OilCO. The members of the project of ExploreCO are also better than OilCO. ExploreCO is also better in managing the project than OilCO. It is successful in meeting the deadlines and in delivering the projects on time while OilCO lacks in this Critical success factor which is important for the success of the project.
ExploreCO has a very narrow and focused process for implementation of the ERP systems whereas OilCO and its implementation process is based on the module based specifically on the oil industry. OilCO has to bring major changes in its processes so that it can match the processing methods of ERP whereas ExploreCO analyzed many ERP systems to check their feasibility and then implement the best one suited to their needs and requirements which could also solve their purpose.
ERP system in OilCO resulted in better forecasting of sales, better processes of business and better profitability whereas the scope of the project of ERP in ExploreCO is uncertain which goes on according to the live system. They need to make their ERP system parallel with the ERP system of OilCO.
The ERP implementation in OilCO crossed the budget and time in which it was planned but the process of ERP implementation was covered in the planned budget and time in ExploreCO. This shows that the process of ERP system implementation in ExploreCO is significantly more successful than it is done in OilCO.
Evaluation of the success of the project
From the discussion of the different implementation issues and the critical success factors of OilCO and ExploreCO have been analyzed which are crucial for the companies. According to Samita, et. al. (2013), there are different aspects which need to be considered during the implementation of the ERP system which ensures the success of the project. For the successful implementation of the project, there is a need to provide proper attention to the critical success factors which enhance the effectiveness of the project. These critical success factors include support from the management, team spirit, support from the vendors, involvement of the users, effective training processes, management of the changes, restructuring of the business processes and effective communication between the different levels of the organizations. In the words of Stanciu & Tinca (2013), different aspects need to be considered for the evaluation of the success of the project implemented and these aspects include decisions related to implementation, selection of the vendor for ERP, partner in the implementation process, scope and implemented module, team engaged in implementation and commitment of the management.
It can be concluded that it is a successful project as the focus of the ERP projects of OilCO and ExploreCO is on the attainment of the objectives and the goals set. OilCO and ExploreCO have given importance to the different critical success factors which have resulted in successful implementation of the ERP project. The policy adopted by OilCO and ExploreCO is focused over the minimisation of the customization and deliverable dates for enhancing the effectiveness of the project. The lack of proper defining of the roles, processes, and structures have created adverse impact over the successful implementation of the project but the critical success factors have helped in the successful implementation of the ERP projects. Major changes need to be made in the business processes due to the implementation of the ERP project. The focus of OilCO is the enhancement in the process of sales forecasting, real-time financial data, improvement in the quality of the data and streamlining the business processes.
For the enhancement in the implementation of the ERP system in OilCO and ExploreCO, there is a need to analyze the needs or requirement of the companies. OilCO and ExploreCO have formed different objectives for the implementation of the ERP system for the improvement of the business processes. As professional different aspects related to the implementation of the ERP system in the business. Implementation of an ERP system is an important aspect of every business as it enhances the performance as well as implementation in ineffective manner results in negative impact on the performance of the business. Different critical success factors for the implementation of the ERP system have been discussed. This has developed the knowledge related to the critical success factors as well as of the different implementation issues which can affect the implementation process of the ERP system. Strong project and chain management skills can be developed as the project is implemented for the integration of the different functions of the business. For the improvement in the implementation process of OilCO, there is a need to select an appropriate system and development of the implementation team for the implementation of ERP system. This can result in a reduction in the cost of the company.
This report has discussed the concept of Enterprise resource planning system which is used for the management of the different modules of the business. OilCO and ExploreCO have implemented ERP system for the enhancement of the effectiveness of the operations of the business and during the implementation different implementation issues are identified by OilCO and ExploreCO. These implementation issues have been discussed. Similarities and differences have been discussed in the implementation of the system on the basis of the critical success factors. The success of the project has been analyzed with the help of the critical success factors and the strategy adopted by the company. Recommendations have been provided for the improvement in the system.
Al-Sabaawi, M. Y. M., 2015, “Critical Success Factors For Enterprise Resource Planning Implementation Success”, International Journal of Advances in Engineering & Technology.
Bloomberg, 2017, “Oil Co of Australia Ltd”. [Online:] Bloomberg. Available at: https://www.bloomberg.com/profiles/companies/OCA:AU-oil-co-of-australia-ltd [Accessed: 11 January 2017]
Dixi, A. K. & Prakash, O., 2011, “A Study of Issues Affecting ERP Implementation in SMEs”,International Refereed Research Journal, Volume II, Issue –2.
Nazemi, E., Tarokh, M. J. & Djavanshir, G. R., 2012, “ERP: a literature survey”, Int J Adv Manuf Technol (2012) 61, 999–1018.
Samita, R. S., Das, S. & Hota, J., 2013, “ERP implementation success: The people (P) factor”, Research gate.
Seo, G., 2013, “Challenges in Implementing Enterprise Resource Planning (ERP) system in Large Organizations: Similarities and Differences between Corporate and University Environment”, Working Paper CISL.
Stanciu, V. & Tinca, A., 2013, “ERP Solutions between Success and Failure”, Accounting and Management Information Systems, Volume 12, No. 4, pp. 626–649.
Tenkorang, R. A. & Helo, P., 2011, “Enterprise Resource Planning (ERP): A Review Literature Report”, Proceedings of the World Congress on Engineering and Computer Science 2011 Volume II.