Research Report

MBA1 TMIA Assignment

From

Tapas Sahoo

LSC: 0464DDDD0809

To:

Mrs. Uma Mohan

Senior Lecturer,

London School of Commerce

London
 Table of content

o Executive summery
o Introduction
o Approach adopted during innovation process
o Introduction to ERP
o ERP implementation in OMC
o Performance impact of organisation due to ERP
o Change management strategy for ERP implementation
o Performance due to the introduction of balanced scorecard
o Conclusion
Executive Summary

Here we are given a organisation in which new technology has been introduced. I have taken
Odessa mining corporation as organisation in which ERP as technology was introduced. How
innovation is connected to the technology has been clearly mentioned. The factors such as
uncertainty, path dependency and cumulative nature etc are the main characteristic of
innovation. Now in the organisation ERP is introduced through a vendor. So as in Odessa
mining corporation does the through a Bangalore based ERP company. Performance impact
after the ERP implementation depends upon various factor such as top management support,
training of end user, ongoing vendor support etc. Change management implementation
process is considered through knowledge formulation phase and strategy implementation
phase. Addition of balance scorecard is really matters in ERP implementation in the aspect of
various perspectives. To overcome user resistance to change then management has to Study
the linkage of structure and point out the resistance among the structure and also successfully
evaluate the status of change management system. Finally innovation and change are clearly
related to each other.

Introduction

Innovation has been a integral part of organisation by performing growth and competition
strategies of the firm. Now a day organisations are recognised by means of innovation and
trying to add innovation with business strategies.

Innovation is closely related with technology. As the result of close competition among
the organisation results most of the companies to innovate technology in order to perform
better and sustain in the race of competition.

Innovation process deals with the systematic steps followed by idea generation, evaluation,
selection, project planning, product development and testing of final product marketing. For
the innovation to be successful, the supportive environment and the process that enable
individual, team, organisation should respond better, cheaper and faster.

In this paper enterprise resource planning (ERP) was debated by its introduction in Odessa
mining corporation, Odessa.

Approach adopted during innovation process

Before going to new technology introduction in a company let us consider the basic
approaches during the innovation process which helps to reveal the fact for organisation
economists and organisation theorists to understand one of the distinctive feature of modern
capitalism.

Fundamental characteristic of technological development

It is very difficult to identify the organisational requirement of innovation process without
mentioning properties of technological innovation. The following factors are main
characteristic of technological development.

Uncertainty

Serendipity and luck play a vital role in the innovation processes which are considered as the
uncertainty factor. Primary and secondary uncertainties are very critical in the field of
innovation. Secondary uncertainty suggest due to lack of communication decision maker do
not reach in conclusion of concurrent decisions and plans stated by others. This can be
affected by changing boundary of organisation. While primary uncertainty arises due to
random acts of nature and unpredictable changes in concurrent preference.

Path dependency

Technology often evolves in certain paths dependent ways, countered, and channelled by
what might be thought of as technological paradigm. (Dosi,1982). A technological paradigm
can be treated as pattern of solution to selected problem which is derived from certain
engineering relationships. Relatedly, new product and process developments for a particular
organisation are likely come under technological neighbourhood of previous success.

Cumulative nature

Technological developments moves through several path set by paradigm in a cumulative

manner. It adds some new feature to the previous technology that usually have significant
organisation specific dimension.

Irreversibility

It has a property of strong irreversibility. Once a new technology is successfully implemented

it is unlikely go back to previous technology for a organisation because of certain trajectory.

Technological interrelatedness

Innovation is seen as technological connectivity between various subsystem. More

importantly successful commercial innovation needs quick decision making and close
coupling and coordination among research, development, manufacturing, sales and service.

Tacitness

The knowledge developed by organisation is highly complexly related each other. Often
technological transfer results in difficulties without the help of key individuals.

Enterprise resource planning

Enterprise resource planning is a part of sap in which company resources are handled
effectively by providing a total integrated solution for processing of information. It is really a
difficult task to evaluate the contribution of ERP systems because of the extent of
organisational changes in terms of value creation and economic returns. It is one of the
demanding segments in the software market which attempts to integrate all departments and
function across a company. Manufacturing, HR management, order entry, accounts
receivable and payable, purchasing, warehousing, transportation etc have been successfully
conducted by ERP software.( Howell,2005)

Complicated details of ERP implementation

ERP seems to be complicated when we consider its wide range of application. Specialised knowledge
is required to deal with ERP.

Implementation time is directly proportional to size of the business.. Usually company

implements ERP software through vendor. The striking factor of ERP implementation is that
purchasing company power without having any rights.

Implementation process

Vendors are responsible for the implementation of ERP whose additional job involves
delivery of work to tailor system. Basically additional product training, creation of process
triggers, and work flow are attached to tailoring process.

In customization phase new user interface and application code are applied by doing some
changes in working pattern.

After successful completion of the implementation process then support agreement is done to
validate the guarantee of ERP software. A maintenance agreement gives the right to all
current version patches, minor and major releases.

ERP implementation in Odessa Mining Corporation

The OMC limited was established in 1956 as a joint sector with Govt of India to explore and
harness mineral wealth of the state.(Home page, off site OMC). The skilled manpower and
scientific business process have been adding to the corporation`s productivity. It has a
mining leases at least 35 location all over the Odessa.

ERP was introduced in OMC on 8 TH September 04 covering the following module.1finance

and controlling 2. Material management 3. Sales and distribution 4. Sales operation planning
5. Quality management in sales and procurement . the implementation was confined to head
office as well as regional office. By the implementation of ERP has brought significant
changes in productivity. It was the first mining corporation in India to implement ERP.

Performance impact on organisation due to the implementation of ERP

The success factor of ERP implementation depends upon the following factor which affects
the performance of the organisation.

Top management support

The commitment of top management is needed to the diffusion of innovation throughout the
organisation. The roles of top management in IT implementation includes developing an
understanding of the capabilities and limitation of IT. So the importance of top management
support has been extremely important for organisation.

User training and education

The role of training is a vital tool for the technology implementation in a organisation. Lack
of training results failure in complete understanding of ERP software and its application. ERP
appear to have a six month learning curve at the beginning of the project.( Make up, 20 Feb.
2010). Everyone who uses ERP system needs to be trained in terms of business process and
work.

Use of vendors` development tools

Vendor provides the right technique for the implementation of ERP which results small times
and low cost. The benefits of vendors include business process modelling tools that links
business model to the software.

Selection of appropriate package

Budgets, time frame, and goal need to be considered for the perfect selection of any
technology. ERP should be chosen according to the best matches of organisation needs.
Selecting wrong software can lead to dissatisfy of strategic goal set by organisation.

Steering committee

To make ERP succeed it is required to form a committee. A steering committee enables

senior management to directly evaluate team decisions by making approval right on all major
decision.

Data analysis and conversion

To make ERP successful it needs to maintain exact [Link] can lead to serious
implementation delays. Here the challenge is to put correct data loading and converting all
those data structure in to a single and systematic format.

Ongoing vendor support

ERP systems are way of life and may be a life long commitment of many companies. There
always be a new module found which need to be installed in order to cope with maximum
efficiency. Vendor support helps to extend technical assistance, emergency maintenance,
updates and special user training.

Change management strategy for ERP implementation

For every technology introduction in organisation causes some change. So as ERP

implementation has. During implementation organisation may require to change some
business process to meet the software standard. There are mainly three phase exists to assist
top management with the complex organisation problem of worker. Those are knowledge
formulation, strategy implementation, and status evaluation.

Knowledge formulation phase

The first step in effectively managing change is to identify and evaluate the attitude of
individual user and influential groups.

Source (change management strategies for successful ERP implementation, Adel M

Aladwani)

The above figure is a suggested framework for managing change associated with ERP.

Employee raised facts, belief, values are good indicators of what may cause their resistance
to change.(Hultman 1979). So implementation of an ERP system could justify this context.
When ERP is implemented it definitely affects employer belief, facts, value. For example the
employee might have the perception that his job could be challenged by implantation of ERP.

Strategy implementation phase

In strategy implementation phase attitude of potential user of ERP is changed through

affecting cognitive components of users attitude. One of the communication strategy is to
give a general description of how the implemented ERP system will work. Marketers always
should use the strategy that creates receptive attitude from users of a new product. So in this
context it is better for management to clarify general outputs and inputs of the system and
determine departments that will provide data and define computer knowledge needed to
operate the system.

The second step in the strategy implementation phase is to influence the affective
components of user’s attitude. If the change agents convince ERP users that their net
outcomes adoption process will be positive then a strong feeling comes out of them to accept
and adopting the new system.

The last part in the strategy implementation is getting endorsement and support of well
known individuals. The choosing of right time of introduction of new technology equally pas
value to the organisation. That means until the positive frame of attitude is seen ERP should
not be implemented. Ultimately management commitment and support are necessary for
successfully introduction of ERP to organisation.

Status evaluation phase

Performance system in a organisation is to monitor the progress of ERP change management

efforts. The role of status evaluation phase involves providing feedback information to top
management . In order to be useful the feedback should be accurate, timely and systematic.
Considering the outcome in status evaluation top management takes right decision. Feed back
coming from evaluation phase can be positive or negative. It is the responsibility of
management to work on negative feed back.

Concluding thoughts on change managements

To overcome users resistance to change, top management has to

(Source change management strategies for successful ERP implementation, Adel M

Aladwani)

1. Study the linkage of structure. Point out the resistance among the structure.
2. Situation should be handled by using right strategies and techniques in order to
introduce ERP successfully.
3. Exactly evaluate the status of change management efforts.
 The above model has been drawn for the formal testing. The model contains the basic
feature of ERP implementation and marketing.

Performance affected due to the introduction of balanced scorecard in ERP software

In terms of performance ERP implementation project can be viewed as two facts. First
one is ERP system is running and second one is the complete project is on time and with
in the budget.

During the process of implementing ERP software different involved members should
be informed whether

 The ERP software is come with organisation and its process

 The selected ERP solution supports the needs of the system user
 The development and adoption of the system to changing parameter are
guaranteed.

Role of balanced scorecard to ERP software implementation

Balance scorecard is added to the system due to mainly two reason i.e. controlling and
evaluating ERP implementation.

First of all balanced scorecard highlights financial cost , customer, internal process and
innovation and learning. After that project perspective is considered for ERP implementation.

Another vital reason of adaptation of balanced scorecard is consistent transformation of

vision into strategies, objectives and measure. The prime objective of implementation process
is to customize of the ERP software that follows strategic goals.

The below figure shows that financial perspective and project perspective are less involved
with the process of ERP implementation. There are three parts of every ERP projects such as
consulting, software, or hardware cost. Here the total cost of ownership are not measured.
Project perspective is often integrated with other activity.

After the successful implementation experience can be regarded as a important factor as

considering another implementation of similar project.

Financial Perspective
What are the detailed
costs of the
ERPimplementation?

Customer
Perspective Project Internal Processes
Does the ERP- Perspective Does the ERP-software
software improves the internal
support efficiently the business processes?
individual user
 Innovation and Learning
Is the ERP-software
(source; Measuring the performance of enough
flexible ERP software,
to Michael Rossman)
integrate future changes?
By the implementation of ERP in OMC has brought some significant changes such as
material procurement has been streamlined, sales cycle period has been reduced. Any time
stock position of mine can be traceable. Also in HR module of ERP employee can get various
facilities like sick leave grant ion, salary slip , loan approval, IT returns. Self appraisal
management is also possible on line.

Conclusion

From innovation to implementation it is organisation`s responsibility to find out the critical

issue involving the total process. From the above analysis it is clear that it has been always
important to find out right structure on technology implementation. After all it can be
advisable to organisation to implement the software at the right time when the employees of
the organisation are fully aware of the technology which leads to the successful change in the
organisation. Finally it may be concluded that the invention of new and better way of making
things continuously affect production for the betterment of a company.

Reference

1. Howells 2005, The management of innovation and technology, SAGE publication

2. Andersen 2001, Technological change and evolution of corporate innovation,
Edward elgar publishing Limited
3. Chesbrough 2003, Open innovation, Harvard business school publishing
4. Nooteboom & Stam 2008, Micro foundations for innovation policy,
5. Roseman & Wiese , Measuring the performance of ERP software

[Link], K. (1979), The path of least resistance: preparing employee for change,
Learning Concepts, Austin, TX.

[Link] , 1982, technological paradigm and technological trajectories, research policy

8. Internet – change management strategies for successful ERP implementation available

at ([Link]

[Link]- organisation change management ([Link]

Management/[Link])

10. Personal communication, Asutosh make up, Odessa Mining corporation