Realizing the Importance of User Participation and Business Process Reengineering during ERP Implementation

1 Assistant Professor, International Islamic University Islamabad, Pakistan 2 Director Computer Center, Quaid-i-Azam University Islamabad, Pakistan

3 Ministry of Information Technology, Islamabad, Pakistan

4 PhD Scholar, International Islamic University, Islamabad, Pakistan

Abstract. Business Process Reengineering being an essential part of ERP implementation always need to be addressed for Implementation process to be successful. The objective of this research is to explore the importance given to these factors by the top management during ERP implementation. In this regard, a case study was conducted in the Telecom Company where an ERP system has recently been implemented in two phases. Interviews of the top management, team leads and executives were conducted to understand the phenomena under research. The case study findings reflect that both factors such as BPR and user participation were not given due importance on the part of top management at the beginning phase of the project resulted in non integration of end to end processes. The two drawbacks were realized by the top management later on and necessary steps were taken by the top management in the second phase of ERP Implementation. This appeared to be very helpful to decrease user resistance, streamlining business processes and consequently acceptance and ownership of system on part of users.

Keywords: BPR, ERP, User participation

1. Introduction Information and communication Technologies (ICT) has significantly changed the old ways of doing

work in the organizations. In order to compete and survive in the current competitive world most of the companies are in the process of adoption of ERP systems. The implementation of ERP systems is different from the implementation of traditional IS systems in an organization (Rajgopal, 2002). ERP systems integrate different business processes and improve the efficiency and effectiveness of the enterprise, however ERP implementation is a challenging task (Davenport, 1998; Somers and Nelson, 2004). One of the major issues regarding ERP implementation is, “How does top management perceive ERP implementation?” Does top management take ERP implementation as simple automation of the existing system? ERP is not simply the automation, as it requires various changes in existing business processes of the organization to implement best practices (Davenpart, 1998). The efficiency and effectiveness of ERP systems is based on the efforts to be made regarding Business Process Reengineering in the organization (Subramoniam et al., 2009). The quality of end to end business process integration may be realized only if the management put in considerable efforts regarding BPR and further communicating the change process to the staff (Parr et al., 1999). The past research reflects that negligence of BPR during ERP implementation lack of user participation may lead to failure of ERP system (Sumner, 2007).The implementation of ERP without BPR has been found to be a big challenge even in advance countries (Kalakota and Robinson, 2001).Secondly, the importance of user participation during ERP implementation should not be ignored, because it plays a vital role in successful implementation of ERP in the organization (Amoako-Gyampah, 2007).

+ Corresponding author. Tel.: + (92-51-9019596); fax: +(92-51-9019544). E-mail address: zahidkhan.fms@iiu.edu.pk.

2012 International Conference on Information and Knowledge Management (ICIKM 2012)IPCSIT vol.45 (2012) © (2012) IACSIT Press, Singapore

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Abdul Zahid Khan 1 +, Rahat H. Bokhari 2, Syed Iftikhar Hussain 3 and Mahwish Waheed 4

One of the main objectives of this research is to explore the efforts made by the management regarding BPR and user participation during ERP implementation. For this purpose one of the telecom companies has been selected where the ERP system has been recently implemented. This research is based on the findings of case study conducted by Zahid(2010) in one of the telecom companies.

2. Historical Perspective The Importance of BPR and user participation in the ERP implementation has always been critical with

regards to success of any such system. ERP systems have to ensure that operational systems in various departments of the organization are fully integrated. The major objective of implementation of ERP is to improve the efficiency and to simplify the existing business processes which in turn require re-engineering of business processes to be more efficient (Huang et al., 2004). The adoption of ERP system in an organization requires major changes in business processes and system integration at various levels (Koch, 2001).

BPR concept is based on the redesign of business processes to improve the quality, cost, service and speed to exploit the ICT services in the organization (Sharma, 2004). The redesign could be achieved by introducing ICT in business processes. Subramoniam et al. (2009) have emphasized the importance of BPR and ICT by establishing a recursive relationship between them. ICT is not used only for clerical jobs but strategic decision making. Now ICT is considered as enabler for strategic decision making.BPR through ICT are gaining popularity due to this factor. Bosilj-Vuksic and Spremic (2004) have noted strategic role of ICT in business and its importance in BPR and project success.

In 1990’s BPR was considered ‘tactically focused’ than strategic i.e by emphasizing on cost reduction, company downsizing and operational efficiency rather than strategically focused. Sumner (2005) has considered globalization, deregulation and competition at global level as main reason for re-engineering of business processes. Evolution of concepts like e-business, Customer Relationship Management (CRM) and Supply Change Management demands a change in processes for their effective implementation (Kalakota and Robinson, 2001; Sumner, 2005).

Past research showed various benefits of BPR in terms of cost reduction, better inventory management, improvement in response time, timely decision making and effective customer service (Sumner, 2005). Koch (2001) emphasized the importance of integration of BPR and ERP and considered it as major challenge during ERP implementation.

Al-Mashari(2003) argues that organization can achieve ERP benefits only if there is a strong link between implementation approach and business process performance measures in addition to this they also noted that the capability and professional atitude in terms of change strategy development and deployment, enterprise-wide project management, BPR integration with IT and technical aspects are important in terms of successful ERP implementation. The implementation process of ERP will be smooth and free of issues if the processes are to be streamlined prior to starting the implementation process (Subramoniam et al., 2009).

Kawalek & Wood-Harper (2002) have stressed the importance of user participation during ERP to get the benefits of their “local intelligence” in designing business processes. The existing knowledge of user may be useful for ERP implementation team in understanding the existing business practices. The user support needed in requirement analysis and implementation phase of ERP is well advocated in the literature (Bhatti, 2005). The suitable and relevant staff members may participate must get the benefit of user participation in ERP implementation (Bingi et al., 1999). Amoako-Gyampah (2007) has mentioned the importance of intrinsic involvement of user in order to increase the perceived usefulness of the system. This will help in increasing motivation, user commitment and user acceptance of ERP in the organization.

3. Methodology In this research we are attempted to explore the efforts made by the top management regarding BPR

during ERP implementation in a Telecom Company. Formal and informal interviews of the persons involved in the ERP implementation process have been conducted as a source of data collection. In addition the available documentation concerning the implementation process, was also consulted.

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The triangulation approach which is usually helped to minimize the bias in the study (Yin, 2003) has been adopted. The ‘data triangulation approach’ was used for this purpose. In order to strengthen our study we conducted interviews of General Manager (GM) ERP, Senior Managers(SM) ERP and Assistant Manager (AM) ERP formal and informal way in addition to their team leads. All formal interviews conducted were taped and the get validated from the interviewee to ensure accuracy. In some cases the interviewee was approached more than once for the clarification of data collected about complex issues. Communication through emails and phone calls also helped to gather relevant information in this regard. The challenges and issues explored were further validated with the operational level managers through informal interviews.

4. The Case study The case study was conducted in a telecom company, responsible for providing communication services

in the country. The top management decided to implement ERP to overcome the problems in terms of delayed consolidation of company reports, non cohesive view of the data for decision making, and non integration of business processes. Such issues were causing great difficulties in acquiring updated information needed for strategic policy making. ERP system was implemented in two phases. The ERP modules selected were Financials (FI), Material Management (MM), Human resource Management (HRM), Network Lifecycle Management Plant Maintenance(NLM-PM) and Project System (PS).

4.1. Interview Results During our research study interviewee were asked about whether or not BPR was considered as a critical

factor during ERP implementation. How much efforts were made by the top management regarding BPR and what strategy adopted? Formal interviews along with informal discussions with the management personals reflected that the organization did not pay attention to the BPR. Some of the management officers mentioned that organization was in the process of restructuring at the time of implementation of ERP so little attention was paid to this aspect on organizational level at the out set of the project.

Afterwards, the need of BPR was realized. So a " Department of BPR” was established and an expert was also hired to carry out business process reengineering activities in the organization. Unfortunately, the expert hired resigned soon after joining the organization, leaving BPR activities un-managed. It might be speculated as a drawback in ERP implementation. One view offered by the manager of PS is as under:

There was a specific wing responsible for BPR but due to restructuring in the organization the department was closed. BPR was discontinued and ERP was implemented without reengineering the existing business processes

The modules implemented at this time were Finance (FI), Human Resource (HR) and Project Systems (PS). There were problems of end to end process integration at the completion of first phase of this project. The due time required for re-engineering of certain processes was not given properly. The management wanted to see the out put on urgent basis consequently compromising on certain processes. The urgency factor was considered one of the problems in this regard. The due attention was not given and management did not pay attention to processes. They were simply concerned with the outputs. Similar views were expressed by a team member, reflects the attention given to this factor:

During study it was found that the existing business processes of organization were not documented properly so this situation appeared as a major drawback for business processes to be reengineered. The vendor faced lot of problems in collecting requirement /information about business processes in the organization although they were accompanied by the project team members of organization. One of the team members said:

Our processes were not documented as such. We spent lot of time in collecting relevant information about the processes and their documentation.

The relevant persons responsible for process design and implementation were not included in the team. The problem of ownership of processes aroused due to this issue. The system was badly affected and due to these missing end-to-end processes desired results were not achieved. This problem was realized after the implementation of certain modules, when certain activities were performed out side the SAP system. One of the manager said:

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I guess we did not convey system requirements properly to the vendors. Unfortunately, some intermediate processes were ignored by the members of the team who participated during ERP implementation. They did not possess the knowledge of end to end process.

Due to lack of participation of users and lack of consideration to BPR raised the issue of customization. The users were demanding too much customization and vendor was reluctant to customize and was of the opinion to adopt best practices. The users were frustrated and the problems of ownership of the systems were also aroused. The executive of PS module said:

The employees of department of Project System were demanding customization of PS module at major level to best fit with the old practices in use, however, the vendors were stressing that their PS module uses best practices so customization at major level is not recommendable.

During the informal discussions one of the team members was of the view that we did not achieve the efficiency level that we desired of the system because of integration problems. Realizing the critical importance of BPR in the organization, attention was given to this factor in the second phase of the project. The modules configured out during this phase were Material Management (MM) and Plant Maintenance (PM). The requirement gathering regarding business processes was carried out through meetings and interviews with the relevant persons leading to documentation of existing business processes. The whole process was explained by the team lead of PM as quoted below:

We are operating in different regions. To collect undocumented data from different regions was a big challenge. We had interviewed the people who were involved in these activities and documented the “As is” [existing process] processes. We also held workshops for business blue prints. The vendor proposed the “To be” processes. In this regard we conducted the workshops inviting general managers, senior managers, engineers and all the people involved in organizational processes. Consequently, we came up with the “To be” [process to be implemented] processes after getting feedback from the officials mentioned above and what the vendor proposed.

The Manager of Material Management commented: We synchronized policies and processes in our department. We preferred to adopt best practices of SAP

and changes were made accordingly in our existing business processes. A lot of benefits have been realized on adoption of such practices.

There were positive results of BPR activities in the organization. Now the users are not demanding customization, because mostly the best practices have been followed, as suggested by the vendor. To successfully implement BPR practices the management should develop effective strategy. The communication gap has been reduced between the vendors and the users. The benefits have been communicated to the users. The management encouraged the participation of users at different levels. The training strategy developed by the management has also been very effective. Most of the managers preferred to run the existing business processes in parallel with the ERP solution being implemented until their employees would be familiar and learn its use properly. The change management efforts made by the management also helped in success of this project.

5. Conclusion The implementation of ERP in this organization was a new experience for the management so the

management might not have completely foreseen the problems resulting due to non consideration of activities like BPR. The top management did not visualize the true picture of ERP and considered it as an automation activity. ERP is just not an automation of the business processes (Bingi et al., 1999; Adwani, 2001; Kumar et al., 2003). The top management due to lack of experience in ERP was not fully aware of the benefits of ERP at organizational level. They did not give enough time to the pre-implementation phase of project and showed lack of project preparation. Our research supports the findings of Sammon & Adam (2009), it emphasizes the importance of proper preparation for ERP project in order to avoid problems in future. Our research findings reflect that the user participation in this case was symbolic during ERP initiation phase and the management hardly considered it an essential aspect at the out set of the project. However, user participation should not be ignored as has been stressed in the literature (Bingi et al., 1999).

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The user’s knowledge and skills about existing processes and their suggestions to streamline the “To Be” processes may help to reduce potential problems of ERP implementation. We found that lack of user participation appeared as one of the causes of lack of commitment, non cooperation with ERP team, resistance to adoption of new technology and ownership of the system. The users were not familiar with the potential benefits of the solution so they were found not to be motivated at the out set of project. The management hardly realized that lack of user participation could be problematic and adversely affect implementation process. It may be speculated that the problems might be reduced if the management would have realized the importance of user participation at the initiation of project. The BPR was not conceptualized and performed properly during phase A1 of the project. So some processes therefore not reengineered properly, causing a single business process to be completed by performing some of its sub tasks manually. This drawback was due to non consideration of business process reengineering on implementation of ERP.

The management learned a lesson from such bitter experience during phase A1 and proper attention was given to BPR during implementation of NLM-PM module in phase A2 of the project. In this regard, the existing business processes were documented after developing consensus among the users from different regions of organization. The documentation of existing processes also helped the team of Siemens to understand the prevailing business processes in the department concerned. Consequently, it assisted in adopting best practices to run end-to-end processes smoothly. In our opinion, the step taken towards consideration of BPR during second phase should have been at the outset of the first Phase. This problem impeded to get insight the integration of business processes within the organization.

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Author Index

A Abdolhamid Rouhani 53Abdul Rahim Ahmad 165Abdul-Hay Akbar Pandor 211Adnan Faroqi 1Ali Selamat 222Alireza Sadeghi Hesar 246Alok Kumar 227Amir Ghaebi 267Angela Lee Siew Hoong 57Arent Greve 48Asadullah Shah 118Asadullah Shaikh 118Asmidar Abu Bakar 165Ayoub Mohamed H. Elyasir 149

B Bokhari 289B. P. Sharma 227, 233B. Shanthini 143Beatrice Andrew 222

C Che-Cheng Chang 6Chee Yung Xuen 17, 22Chew S. F. 272

D DanielOhene-Kwofie 78Dao Viet Nga 17, 22David Prata 123Dinesh Kumar Saini 108Do Nguyet Quang 17, 22

E E. J.Otoo 78Eduard Gabriel Ceptureanu 277Elahe Hosseini 267Engr. Bilal shahid 1

F Fadi Yamout 180, 206

Fayas Asharindavida 282

G George Brito 123Gideon Nimako 78

H Haidi Ibrahim 74Hai-Lun Yen 11Hamid Tabatabaee 246Hong Choon Ong 190Hoong-Cheng Soong 175Hossein Reza Babaei 211Huang, Hui-Hsin 154Humaira Dar 118

I Iftikhar 289

J Jamalul-Lail Abd Manan 165Jana Chvalkovska 27Jichiang Tsai 6João Y. Ishihara 123Juggapong Natwichai 113Justin Lim Renn Aun 57Jyh-Yih Hsu 11

K Kabiru Dahiru Abbas 239Kalaiarasi Sonai Muthu Anbananthen

149

Khairuddin Bin Omar 108

L Lai Lee Chee 17, 22Laila Zaman 251Ligia Ivaz 277

M Mahwish 289M. D. Singh 227, 233

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Mariwaldo G. Caetano 123Maros Zobok 88Masitah Ghazali 170,185,195May Yee Khoo 190Md. Al Mamun 251Mehrdad Jalali 246Michal Mejstrik 27Milan Strbo 88Mina Seifi Inallou 103Min-Sheng Lin 63, 69MoloodBarati 93, 98Muhammad Rafie Mohd Arshad 201Muniba Shaikh 118Munirah M. Y. 272

N Naki Chiam 170Nazura Abdul Manap 53Neha 233Nieves Ucol-Ganiron 36Nima Jafari Navimipour 42Nisar Hundewale 282Nuraini Hidayah Sulaiman 185, 195Nuwan Samarasekera 158

O Ofentse Molalapata 211Ong Hang See 17, 22

P Patrick Letouze 123Pavol Tanuska 88Porjet Sansai 113

R Radu Camenita 277Rao M.Navid-ur-Rehman. 1Rina Herani 48Rogers Bhalalusesa 201Roslan Ismail 165Roya Baradar 267Rozlini M. 272

S S. Swamynathan 143

Sami Abdulla Mohsen Saleh 74Samir K Amin 108Sara Halimi Shabestari 42Sarfaraz Khan 33Sebastian Ion Ceptureanu 277SeyedjamalZolhavarieh 93, 98Siew Lin Saw 190Sultan Aljahdali 282

T Tan-Hsu Tan 63, 69Tomas Ganiron Jr 36Tommy Ganiron 111 36Tong Ming Lim 57Tsung-Yu Liu 63, 69Tzu-Ching Lin 129

V Vahid Samadzad Samaei 42

W WEI WAN-CHU 263

Y Yu-Ling Chu 63, 69Yusnita binti Muhamad Noor 133, 138

Z Zahid 289Zeynab Fazaee Qarabolaq 103Zhenyu YANG 217Zubair Ahmed 1Zulikha binti Jamaludin 133, 138

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