If a large company could be likened to a human body, an enterprise resource planning system would be akin to the nervous system, carrying information up and down the entire body, aiding decision-making.Updated: Sep 22, 2011 11:57 IST
If a large company could be likened to a human body, an enterprise resource planning (ERP) system would be akin to the nervous system, carrying information up and down the entire body, aiding decision-making.
So, in case the hand is reaching out for a hot plate, and the brain is aware of that, it takes the tactile shock out of the sensation and instructs the hand to, well, handle the plate with care. Similarly, through a well-implemented ERP package, a large corporation would know early enough if raw materials are running out of one production unit while they lie idle at another.
Then, instead of blocking money by buying more, it could move the raw materials to the unit that needs it. Of course, this is the simplest of problems that an ERP system or package can handle. Such systems aid strategic thinking, if implemented successfully. But it does illustrate one way in which it can help companies save money, which is just one resource to watch while running an enterprise – materials, human resources and tangible assets being the others.
Implementing an ERP system – comprising various components such as financials, customer relationship management, human resources, supply chain management, warehouse management and management dashboard – is no mean feat. The decision involves crores of rupees, and a significant effort from everyone in the company. Part of this effort is required to set work processes, or change them, to suit the software package chosen (SAP, PeopleSoft, and Oracle are some companies that make ERP systems). This is commonly referred to as business process re-engineering and it is just that – re-engineering processes so that the process facilitates information flow as required by the ERP package.
Awareness of power structures within a company is crucial during the re-engineering process because these structures are shaken up when the implementation process is rolled out, reducing or taking away the decision-making powers of the people in question as the functioning of the company gets streamlined.
“There is resistance from various individuals as well as business units who see the new processes as a threat to their position in the organisation,” says Manu Rana, who has spent more than a decade in the ERP and supply chain management business in San Francisco.
However, this sort of resistance is usually encountered by the professional involved in the functional aspects of the implementation.
“Functional roles will be required to interact with business users, managers and super-users of an organisation to map their daily tasks to ERP functionality. A technical consultant, on other hand, configures system architecture, which can range from deciding the networking, hardware requirement, software requirements and then also taking into consideration the scaling of systems for expansion in future,” says Vijendra Singh, project manager, Metlife, New York.
Sounds interesting but complex? It is. Be prepared to work long hours, and even nights, to meet deadlines. Also, ascertain the amount of patience and negotiation skills you possess. Add technical skills, domain knowledge and resilience to attributes you need to succeed in this career.
“While starting off in your career, technical skills are very important. Although ERP-specific knowledge is usually imparted as part of the training program at your employer, previous knowledge of database concepts (all ERPs have a database backend), some programming skills, and basic familiarity with computers is a must. As you rise up in the hierarchy, soft skills (how to deal with people) become more important. People with better soft skills rise higher and faster,” says Rana.
What's it about?
Enterprise resource planning (ERP) software connects all departments and functions in a company through a common interface, facilitating the management of key internal and external resources. Processes are mapped and information flow set according to them. ERP requires implementation by trained and experienced professionals, both in the technical and functional domain. On the technical side, knowledge of ERP packages and database management, including working with different types of data and their migration, is imperative. On the functional end, in-depth knowledge of the industry in which the company operates is necessary
For mid-level team leader
8.30 am: Meeting with client to discuss implementation
10.30 am: Document minutes of the meeting and send out to client and my team
12.30 pm: Working lunch with CEO of client company to report progress
1.30 pm: Meet individual members of team for discussions on specific issues
4 pm: Conference call with a team at another client site
5.30 pm: Meet software vendor to discuss integration issues
6.30 pm: Check data migration reports
7.30 pm: Call hardware vendor to discuss delivery schedule
8 pm: Study process maps created by team member
10.30 pm: Head home
Functional consultant (1-3 years - $60,000-$80,000 per annum, 3-5 years $70,000-$90,000 per annum, 5-8 years $80,000-$110,000 per annum, 8-12 years - $90,000- $1, 30,000 per annum, 10-18 years $90,000-$1,60,000 per annum)
Technical consultants (1-3 Years - $60,000- $80,000 per annum, 3-5 years $70,000-$90,000 per annum, 5-8 years $80,000-$100,000 per annum, 8-12 years - $90,000-US$100,000 per annum, 10-18 years $90,000-$130,000 per annum)
. Programming skills
. Understanding business processes
. Innovative thinking ability
. Documentations skills
. Negotiation and people skills
How do i get there?
For entry-level positions: Functional consultants should have worked in an industry in a management position for at least three years and used an ERP system for at least a year.
Technical consultants can be programmers in any one of the major programming languages with at least one year’s experience.
As you rise, requirements become more specific to the industry vertical, e.g. electronic data interchange for the banking industry on the technical side, (or in languages such as advanced business application programming, or ABAP) and banking management issues, laws and industry trends on the functional side. Most ERP implementations are done by consulting firms. You can get hired into an entry-level position there. There are also some openings at the software vendors themselves
Institutes & urls
. Edith Cowan University, Australia -
. IIM, Calcutta -
. NIIT -
. Siemens Information Systems -
. Oracle University -
. ERP World, Jabalpur -
. Lithan Genovate -
Pros & Cons
Delivering real value to clients
Highly skilled job
You will work with top management
Long work hours
High level of stress
Each successful implementation furthers your career
Have to stay away from home for months at end
India will need 50,000 ERP experts
An IIM Kozhikode professor talks about the scope of ERP in India
What is the current acceptability of ERP among corporates in India?
ERP acceptability stands at almost 99 per cent. No corporate can survive today without some form of ERP.
Are there any reputable courses to learn ERP implementation skills?
Yes. Lithan Genovate (with seven offices in India) offers an educational pathway beginning with a Bachelor and Master of business in ERP Systems to certification courses via the SAP Academy. These are complemented by career services including job internship and placement support. Also, NIIT offers training in Oracle ERP.
How many ERP experts would be required in India in the next five years?
As of today, we have about 27,648 companies in India, of which more than 20,000 are very good companies, and many of them are running ERP solutions. They cannot remain competitive in the long run without an ERP solution.
More and more Indian companies are now opting for ERP (in-house or outsourced). On the average, a team of 10 experts will spend about three months for an implementation (without customisation). For the next five years, the numbers of ERP experts (development/ implementation/ maintenance) needed would be more than 50,000.
What kind of competitive advantage does successful ERP imple mentation give a company?
It allows for simplification of business processes, enhanced productivity, flexibility and customer responsiveness, compliance and control, efficiency improvements, and enables new business and growth strategies. It also allows companies to be more agile in managing changes in the business environment and at the same time save on costs and eliminate inefficiencies. It allows for continuous improvement and lets you delve deeper into business data
What are the challenges of ERP implementations in service industries?
ERP implementations in service industries may face challenges due to inadequate requirements definition, resistance to change, or inability to achieve organisational understanding. Other challenges include assigning inadequate resources, lack of top management support, lack of organisational readiness, inadequate training and education, and unrealistic expectations, among many others, including long period of time required for return on investment.
Prof M P Sebastian Interviewed by Pankaj Mullick