May 23, 2011

An ERP Implementation Case – Ekin Project

This entry is related with an ERP implementation project within an International construction sub-contractor company. In the study Ekin Project`s ERP experience will be shared and analysed. Firstly brief summary of the project decision stage will be held and afterwards implementation process will be analysed in detail.

Ekin Project is a company which usually does mechanic sub-contracting jobs in large scare construction project such as airports, commercial centres and skyscrapers. They work internationally and employ staff different nations. They use project based organisation structure and they suffers from not being able to keep the intellectual property within the company. There was not an integrated IS tool they use. Data capturing and stored was done by spreadsheets stored in company`s databases. This disintegrated structure causes some problems in information sharing and results in duplications in data. Every staff use their own way of keeping and tracing the information and when they leave, their system cannot be continued by the new comer.

The owner of the company foresees the need of and integrated IT program and forces the management board to have an ERP program. The owner has a name in his mind, MS Dynamics Axapta. The program decision was not given rationally. The owner of the company gathered some information from his friends and contacts who he has in construction company. In the decision process the needs of the company and best candidates were not selected by going through a logical process. Even IT department`s manager`s decisions were not taken into consideration. The patron took a pushy role and forced the company implement the change as soon as possible. However middle level and lower level managers were not happy to have such a large scale change in the current process. Ekin is an old company and employs old fashion people as well. Excitement of the boss did not shared by his employers, however nobody sounded any disagreement in the board meeting or any an official meetings organised by the boss. They did not resist and comment on the issue until they realised they have to change.

In the company a new organisational unit was formed. ERP implementation and integration team was formed with 2 personnel and one manager. These two personnel are experienced in their subjects and had work for the company at least 7 years. Even though the manager is new in the company, he is loved and respected by the other personnel. Although they work willingly in the project, they were not happy not to be asked their opinion in the program`s selection process. The duty of this team is acting like a bridge between the program developer consultant company and the site staff.

Probably, MS Dynamics was not the most ideal alternative. Microsoft is well known and has god reputation in the global market as a software supplier but developing and selling an ERP program was totally new to them. They got in ERP sector by requiring acquiring an European software company and their ERP product. Especially first few versions create lots of problems and did not do well in the market. However version 4 and especially 5 do a good job with a reasonable price. They aim at SMEs by implementing a cheap price.

Obviously Axapta was not ready to be used within construction sector. While the biggest player in the market SAP providing the sector with different editions of the ERP program, Microsoft uses developers and solution partners to tailor the general version of the program to a specific company. In general, there are a handful of construction companies which utilise an ERP module with all modules. Construction sector requires a totally different product because their processes are different from a production company. Therefore alternating the current modules and making them suitable for a construction job made the project last longer than it was planned initially.

The process of the implementation process was like; the consultation company gives training for an ERP module and describes the capability of the module. Ekin ERP team analyses the current system and process and comes up with a requirements list. By using these two, ERP team decides on amendments which are necessary for the implementation. This process generally involves floor personnel who actually use the system. They are consulted while analysing the system and creating a process flow with satisfies the company`s needs and adapts ERP program`s capabilities. Change demands are shared with developers after they are agreed by the ERP team. Developers estimates a duration for the change asked for and at the end of this period new part of the program is tested by ERP team. Tested and approved modules are explained and trials are done with the floor personnel. A user manual for the each module and sometime for the small add-on are prepared in two languages and disseminated to the concerned personal.

Floor staff and even middle level are not usually willing to change. They persist to keep the status quo. During the training phase, their awareness of the benefits of the new program is tried to be increased. When this does not work, the boss publishes an ordinance to force the change to personnel. The huge support from the boss accelerates the implementation process. However the need to keeping the new and old processes until the ERP module becomes fully functional. As an experience, staff should be allowed to work in the two systems simultaneously during a specific period of time. After it is understood that the ERP module is fully functional the old way of doing the job is abandoned. In this way any unexpected problem can be dealt with.

Accounting module is the most crucial one in an ERP program. Nearly every sub-module has a relation with this module. Purchase module transfers the details of purchase bills, project module transfers the direct and indirect costs of the progress done in that period. Therefore the manager of the ERP team decided on implementing the accounting modules last after all others are done.

As a conclusion, like every change project, an ERP implementation process confronts challenges and resistance from staff. Resistance can be overcome by educating the personal and showing them the benefits of the new system from their point of view. High level managements support and encourage are crucial in the success of such projects. Such a large scale project requires commitment from everyone within the business.

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