Enterprise Resource Planning Integration (ERPI) for Project Management
Enterprise Resource Planning (ERP) systems are designed to reduce data inconsistency and redundancy, via the creation and maintenance of a central database of corporate information. In addition to the reduction of errors or omissions during data entry, ERP systems also provide stakeholders with real-time information which facilitates decision-making, and integrates multiple business processes without the need for manual intervention (Ehie & Madsen, 2005:545). In the same vein, Williams & Parr (2006: 115-129) define a Project Management System (PMS) as an enterprise application that facilitates the delivery of projects by providing several functions, including:
- Documentation and dissemination of progress reports
- Provision of organisational templates, policies and procedures
- Building up of a repository of information on all aspects of the project
- Automation of workflow processes
- Serving as a platform for reporting and enterprise-wide communication
Furthermore, one of the Critical Success Factors (CSFs) for the selection and implementation of a viable PMS within an organisation is that it should be capable of being integrated with other existing enterprise applications (Williams & Parr, op.cit.:115). In recognition of this necessity, the major ERP vendors (Baan, J.D Edwards, Oracle, PeopleSoft and SAP) have developed a project management application within their ERP tools (Kabanis, 1999:30).
Prior to this innovation, project managers used ‘best-of-breed’ project management solutions in carrying out their activities; however, they had trouble communicating project status and performance with the central system, or, they had to make duplicate entries into both the PMS and ERP systems, which wasted time and created opportunities for error. Therefore, the added project functionality of ERP systems means that project managers can plan, execute, monitor and control projects in a familiar environment, using familiar tools, which receive and store information within a central database (Kabanis, op.cit.).
Thus, the integration of an ERP system for project management provides enterprise-wide access to real-time data regarding resource utilisation, cost, and schedule performance. It also enhances reporting, documentation and information management, as well as facilitates communication among stakeholders. Moreover, the ERP system endows project managers with visibility within an organisation, as their activities can be directly seen to impact both top-line revenue growth and bottom-line profits (Kabanis, op.cit.:32).
REFERENCES
Ehie, Ike & Madsen, Mogens. (2005). ‘Identifying Critical Issues in Enterprise Resource Planning (ERP) Implementation’, Computers In Industry, 56(6), pp. 545-557.
Kabanis, Jeanette. (1999). ‘ERP: Integrating Project Management into the Enterprise’, PM Network, February 1999, pp. 29-32.
Raymond, Louis & Bergeron, Francis. (2008). ‘Project Management Information Systems: An Empirical Study of their Impact on Project Managers and Project Success’, International Journal of Project Management, 26(2), pp. 213-220.
Williams, David & Parr, Tim. (2006). Enterprise Programme Management. London: Palgrave Macmillan.
Sandra Okah - Avae
05 Apr 2014 00:25
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Varun
Project Management (PM) module in an organisation is clearly a very important function. SAP and other leading ERP systems are ready to go out of the box with a PM, that can the end to end cycle for a variety of project types. (e.g. Contract, Time Based, Internal, and Investment. Conversely they lack the functionality of tracking projects as per the guidelines of SCRUM, Capability Maturity Model Integration (CMMI), or ISO.
To fill the gap integration with third party softwares such as Microsoft SharePoint and Microsoft Project Server have facilitated companies manage large projects without being constrained by location. Especially in the case of global projects, where local files from Microsoft Project can then be integrated into the ERP Projects module via Project Server.
Additionally of document handling, version control, knowledge libraries, and metric calculations, record of communication, and risk assessment can be handled on many platforms, but Microsoft SharePoint is the only one that can easily be integrated with SAP or similar ERP’s to form a link between project data in the the ERP and SharePoint. To sum up SharePoints and Project Server are tools that can be used as PMS and easily integrates with most ERP solutions.
12 Apr 2014, 13:52
Sandra Okah - Avae
Varun,
This is an excellent addition to the earlier piece. In my limited experience with the project management application in SAP, I find that the files and reports can be exported and integrated with MS Project, as you rightly pointed out.
However, the rest of your comments sound like a sales pitch for Microsoft tools (LOL!). I won’t pretend to understand it.
But on the whole, this is very informative. Great stuff!
12 Apr 2014, 22:39
Varun Shah
The sales pitch was not my intention, but i wanted to stress on the inability of ERP systems to manage projects in regards to project documentation, such as risk management, project plans, high level designs, minutes or meeting, and quantitative tracking e.t.c. Thus it is important to have collaborative document management platforms, like SharePoint server to manage projects as well.
Moodle is something like a SharePoint website, but i know for a fact SharePoint is more ERP friendly in terms of integration.
Project server is simply a tool that transfers data incrementally back and forth between SAP and MS projects, so managers can work remotely.
14 Apr 2014, 00:04
Sandra Okah - Avae
I think that the choice of tools for Project Management is largely dependent on the size and complexity of the project/programme, the nature of the sponsoring organization, number of stakeholders, and so on. Also, the project/programme lifecycle can be administered with a combination of different ‘best-of-breed’ tools and ERP systems. Again, I hesitate to prescribe one tool or ‘brand’ over another – these issues are subjective and must be tailored to suit the needs of individual organisations and managers. Personally, I do not support the implementation of sophisticated technology for the sake of it – KISS – ‘keep it simple and straightforward’! Works every time!
With regards to Risk Management, it is standard practice in project management to use the Program Evaluation Review Technique (PERT) or the Monte Carlo Analysis to determine the frequency and probability of occurrence of identified risks/issues. To the best of my knowledge, ERP systems or allied tools are only useful for compiling the Risk Register, Responsibility Assignment Matrix, Risk Mitigation Strategy, or tracking issues.
14 Apr 2014, 10:58
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