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Question: Discuss about the ERP and its implementation. Answer: Introduction An Enterprise Resource Planning is a system by which companies manages and integrates the important parts of its business. It is a management system which covers different areas of an enterprise such as planning, purchasing, inventory, finance, marketing, human resource department and logistics (Ganesh et. al. 2014). It is the most commonly used software that uses a common data base through a database management which is systemized and which cover all the area of function and perform core activities which helps in increasing efficiency of the enterprise and the quality of work (Panayiotou, et.al. 2015). Mesfine Industrial Engineering (MIE) Pvt. Ltd. is metal construction and electromechanical engineering in Ethiopia. The company has recently adopted an ERP system. Implementation of ERP is much more difficult than developing a computer application which supports a single business function. This report includes key elements of ERP, different phases of process and problems faced by MIE in its implementation. It also explains the risk associated with this project and how MIE deals with that risk. Analysis of various factors Need of Enterprise Resource Planning To have a uniform information system in their business and to re-design its processes, many firms across the world have adopted and implemented ERP system. The need of ERP mainly arises in small and medium sized companies as they have an average growth rates and also suffers from the consequences of differences between what they have in their legacy systems and what they require to compete with the global environment. SMEs also face problems related to the collection of information, they need for conducting their operations (Xu, 2017). The data is piled up in the accounting systems, stand-alone spreadsheets and is not in the integrated form. Implementing ERP has helped SMEs in improving their business performance by better inventory control, proper reporting to take decisions, optimization of process, improving the quality of supply chain process and increasing the transparency in the functions performed by the company. ERP directly helps in reducing the cost in order to improve oper ating margins and also to increase the quality of customer services (Bradford, M., 2015). As far as MIE is concerned, the company has used five systems before ERP in past years which were developed by the local vendors and the company itself. MIE was facing problems regarding these systems as they were very expensive to use and difficult to maintain and develop. The data provided by them was not accurate and relevant for taking timely decisions and assessing the performance. One of the major system implemented by MIE was MERLIN (mechanized evaluation of resources, logistics and inventory) which was basically a scheduling system but was susceptible to manual manipulations. Corporate cost accounting was an additional system used by MIE to monitor its transactions financially but it also had problems of interfacing with different functions. On a whole, all the legacy systems used by the company did not contribute in establishing a direct contact with customers and suppliers. On the top of that, the systems did not help the company in increasing its growth in the changing global environment. This gave the rise to the need of ERP system in Mesfine Industrial Engineering. ERP will help the company in overcoming all its challenges and increasing its success rate. MIE formed a project team for implementing this system who includes the staff who have vital knowledge about the cross-sectional business relationships and experience of old internal system. The project consists of a management team which includes specialists from the external consulting company Syscorp. This company was chosen because of its experience in the manufacturing industries. The company has a specialized talents of Microsoft Dynamics SL consultants and also took the responsibilities for facilitating the project. MIE adopted the Microsoft Dynamics SL and used it (Harris and Schult, 2016). Problems during Implementation In implementing the ERP systems, many issues or problems were faced by MIE which are categorized as follows: Cultural Problems Some areas of the business which were functioning better than the old legacy system dii not completely accept ERP. Moreover, unlike legacy systems, some process or functions of the new system did not get the full and high appreciation from the areas. Thus, this made the project team to re-engineer their original plan by showing the improvements to be made in the company and by addressing training and cultural changes. Business Problems The company adopted Microsoft Dynamic SL and to make it work successfully the participants of cross-functional workshops have to change their working practices according to it. It means MIE need to change its way of doing business. To achieve this, the company used an internal business processing reengineering program (BPR), consisted of four steps. The first two steps involved the mapping of current process and identification of the problems in the same. The third one includes applying some of the identified problems to a demo of Microsoft Dynamic SL so as to determine potential issues within the new system. The fourth and last step ask for the modification in the processes align with MDSL (Harwood, 2017). Technical Problems Accuracy of the data was the main technical problem faced by MIE. The new system needs the recovery of old data from legacy systems so as to store it in a sensible data format in the new system. This could cause the duplication of the data which was a major concern for MIE, because in some areas, old systems still kept running which can be put out of use by the new system. For doing this, IT department develop interfaces between the systems. To alter the file formats, MIE uses the same CAD system. So accuracy and replication of data were the key technical problems of the company (Kapp, Latham and Ford-Latham, 2016). Different phases of implementation process The ERP project of MIE goes through various phases. Following are: Phase 1: Organization of project The first phase involves setting of the scope of project and its outline plan and costing. Development of objectives and implementation plan is done in this phase. MIE formed a team to control and overlook the process and a committee was also formed for providing financial guidance. In this stage, the roles and responsibilities of project team, process of implementation, goals, plan and scope of the project, tracking process and implementation schedule is decided (Sun, Ni and Lam, 2015). Phase 2: System definition The scope of MISs Microsoft Dynamics SL implementation has been defined in this stage which results in the creation of blueprint of the business. Activities that are carried out in stage 2 includes defining the new policies and procedures, developing prototype of modules, reviewing the flow of information and explaining external system interface. During this phase, the core structures of project are identified. For research and development, an Integrated program management was adopted which covers the entire business. Moreover, a change was made in the timings of phase one and a change in schedule was also possible without an increase in cost. Phase 3: Environment development The system is physically implemented in this phase. The stage concerns with the design of system and the changes taking place in the working of company. As it was a large implementation, MIE divides the process in two parts. First deals with the replacement of legacy system, introduction of IPM and SFDM and ended with MDSL project. The main aim of first part is to give new capabilities for the production. The second part was almost of one year consists of purchasing, inventory, implementing requisition and order management. By this time legacy systems were eliminated and MDSL becomes the executive system (Fischer, et. al. 2017). Phase 4: Conference Room Pilot (CRP) A small-scale pilot of the system runs in this stage and for this a facility called production shop was chosen. This facility uses the materials which are at the low volume form external suppliers and internal units. The main aim of the pilot is to define business processes, principles and procedures, software, hardware and data transfers. Second pilot was also run for nonproduction purchasing and to explore the interaction between legacy systems and Microsoft Dynamics SL, a third pilot was also carried out (Piazolo, et. al. 2017). Phase 5: End user training This phase deals with providing trainings to the users enabling them to enhance their abilities and confidence in running system, to increase their potential in relating the system with daily operations and to give them a better view of global systems features. This will improve their skills and understanding to a desired level. Various modules are covered under training like finance, HR, distribution, manufacturing, project modules and system training (Altamony, et. al. 2016). Phase 6: Final preparation This is the final phase of implementation known as go-live. All the stages completed and the work is to put an ultimate test of the production uses of software. This phase includes several issues that are to be carefully addressed by project team. The main functions to be performed in the project were live preparation and reconciliation of data and live database initialization. Phase 7: Go live to Dynamics SL In this phase, the main problem is to transfer the data from legacy system to the new system. The volume of data that needed to be transferred is greater than any normal transaction load. For doing this successfully, the data has to be kept in stable form for some time. Initial data which is transferred include some transaction data and if any changes occur in the data on the old system, they are then logged and passed through the new system. The next step in go-live process concerns with the running of MRP system in order to make the whole system fresh. After the completion of go-live, old system kept on view only mode which enable the comparison between new and old system. At the end, legacy system are been phased out (Goyal, 2011). Project risk MIEs ERP project covers the various areas of entire business which are associated with risks. A risk analysis method (RAM) was used by the team to determine the most important risks and their chances of being present in the company. Every risk associated issue was critically viewed by the team. Some of the major risks are: Failure in deciding goals due to the conflict between the directions in the organization Absence of reliable IT hardware and software during implementation MIE and Syscorp provide inappropriate support after implementation. Opposition by the management and supervision for accepting the new change Instead of treating as a change in process methods, management treated the project as a simple IT implementation (Halford, 2016). Inefficient education given to the workers regarding the new system Failure to the new system due to the inability of loading data. Inadequate systems of testing volume, stress and conversion of data. Failure in giving priority to ERP because of the improvements going in the business. Difficulties in maintaining bridged legacy systems. Accounts of the company may get impacted with this project (Abu-Shanab, Abu-Shehab and Khairallah, 2015). Considering the above risks, the team adopted a characteristics analysis method (CAM) for the successful management of ERP project. The method lay emphasis on the aspects of management that are required to be covered to manage ERP. Human Resource Management was given a special attention in this project as it exceeds the critical level according to CAM. In addition to this, communication management, purchase management and other leadership skills are at the critical level. CAM provides a clear view to MIE regarding the cost incurred and time spent in the project along with the technical and operational risk involved (Jinno, Abe and Iizuka, 2017) Conclusion After facing all the difficulties and dealing with all the risks, MIE successfully implemented its ERP system. The company has understood all the aspects regarding such a large project and has formed a solid team for its implementation. The team used the special skills of consultants for producing a sound framework for the project. For managing the risk, CAM and RAM are the tools which are been used by the company. Once the system became at its executive level, all the benefits will be enjoyed. The lower IT cost will be visible when the system will be stable and when the users adjust to the changing working practices. Instant benefit will be of delivering the customers on time. Improvement in the supply chain process will also be there as the transactions become easier through electronic communication. Proper management of database will also be there as the data is stored centrally and is extracted from operational and technical databases. From the case study of Mesfine, it can be co ncluded that ERP implementation should be encouraged in the companies as it is the best way of sharing experiences with the companies of same nature. Issues or problems related to post-implementation should also be considered such as strategic needs and the requirements for sustaining the effectiveness of enterprise information system. References Panayiotou, N.A., Gayialis, S.P., Evangelopoulos, N.P. and Katimertzoglou, P.K., 2015. A business process modeling-enabled requirements engineering framework for ERP implementation.Business Process Management Journal,21(3), pp.628-664. Abu-Shanab, E., Abu-Shehab, R. and Khairallah, M., 2015. 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