Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

IMPLEMENTATIO
N OF SALES ERP MODULE IN
HAMDARD LABORATORIES (WAQF)
PAKISTAN
SUBMITTED TO:
COURSE:
SEMESTER:
SUBMISSION DATE:
2014.

SIR SOHAIL IMRAN

COURSE INSTRUCTOR
MIS-ERP
SPRING-2014
26th APRIL,

Group Members:
1. Syed Shoaib Bilal
2. Muhammad Atif Qamar

ID#:
ID#:

56096
56608
1 | Page

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

3. Sarosh Aijaz

ID#:

5050

2 | Page

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

ACKNOWLEDGEMENT

Firstly we would like to thank ALMIGHTY ALLAH for giving us

the opportunity and recourses to be able to do something
productive with our lives. Without His blessings, we would not have
been able to come as far as we have.
Then our sincere thanks to our course instructor SIR SOHAIL
IMRAN for helping us throughout this report. The report helped us
find new ways of being innovative and creative and understand the
organizational behavior in respect of HR Functions and its activities.
This report would not have been possible without his motivation &
cooperation and continuous direction.

Sincerely yours,
All Group Members

3 | Page

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Letter of Transmittal
26th April, 2014

SIR SOHAIL IMRAN

LECTURER:
MIS-ENTERPRISE RESOURCE PLANNING
Respected Sir,
We are honored to present this report you have assigned us for the
course of Enterprise Resource Planning. This report is based on
Implementation

of

ERP

in

Sales

module

in

Hamdard

Laboratories (Waqf) Pakistan.

We have learnt a great deal from this report, for which we are grateful to
you. Should there be any query concerning this report, we will be happy
to discuss it. Hope you will like it.

Sincerely yours,

All Group Members

4 | Page

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Table of Contents
Letter of Transmittal....................................................................................................... 3
Introduction:-.................................................................................................................. 6
Abstract....................................................................................................................... 6
SUPPLY CHAIN MANAGEMENT (SCM)............................................................................8
Business Domain:........................................................................................ (SALES ERP)
9
MAJOR REASONS FOR ADOPTING ERP:........................................................................9
Standard Operating Procedure (SOP):-.........................................................................10
Objective:.................................................................................................................. 10
Scope:....................................................................................................................... 10
Procedure:................................................................................................................. 10
Installation................................................................................................................ 17
Maintenance Support................................................................................................ 17
Security and Privacy.................................................................................................. 17
Training..................................................................................................................... 17
Suggest an Information System:-..............................................................................17
Benefits:-................................................................................................................ 18
Advantages:........................................................................................................... 19
Disadvantages:...................................................................................................... 19
Sales Order Process and Reports (Functional Areas):-..................................................21
Customer Sales Order:................................................................................................. 21
..................................................................................................................................... 22
Customer Sales Delivery Order:................................................................................... 22
Customer Sales Delivery Challan:................................................................................23
Customer Sales Invoice/Sales Tax Invoice:...................................................................24
Reports Generation: (Sales, Stock, Production, Planning & Consumption)...................25
Hardware and Software Requirements:-.......................................................................27
Network Requirement:-................................................................................................ 27

A mutual understanding between the service level and the network on how the
service is to be provisioned in the network...............................................................27
5 | Page

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

A standardized means of communicating requirements from the service level to

the provider network................................................................................................. 27

A standardized means of accepting requirements on the network and aligning

the network elements............................................................................................... 27
Integration with ERP:-................................................................................................... 28
Issues and Challenges:-................................................................................................ 28
Factors Affecting ERP Implementation:-.......................................................................29
Conclusions:-................................................................................................................ 31

6 | Page

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Introduction:Abstract
Hamdard Laboratories implement ERP systems to integrate the business
processes to obtain a competitive advantage. Enterprise Resource Planning (ERP) is
one of the solutions Enterprises in order to face the global challenges. This report
attempts to explore and identify issues affecting Enterprise Resource Planning (ERP)
implementation and challenges in front of Enterprises. This report attempts to
highlight those specific issues where a different factors needs to be addressed
while implementing the ERP system in this the four issues are proved to be crucial for
Enterprises such as proper system implementation, clearly defined scope of
implementation procedure, proper project planning and minimal customization of the
system selected for implementation.

In this report we will discuss how Hamdard successful implement the sales
module of ERP system of a well known Multinational Engineering Organization.
This Module comprises of Contact Management and Sales Order Processing
Management. It is an integrated solution comprising of marketing and sales
activities. Organization can act immediately to improve sales, service and
marketing effectiveness by using this Module resource Sales Management
module is all about retaining customers, improving customer loyalty and
gaining customer insight.
This module also help to you getting your customer order management easier
day by day. Whether it is maintaining customer information, quickly creating a
quote or migrating them to sales order or being responsive to your customers
and provides right solution and efficient flow of information.

7 | Page

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

ERP System of Hamdard Laboratories (Waqf)

Pakistan

8 | Page

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

9 | Page

Timeli
ne

System

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Description

1960s

Inventory Management
Control

Inventory Management and control is the

combination of information technology and
business processes of maintaining the
appropriate level of stock in a warehouse.
The activities of inventory management
include identifying inventory requirements,
setting targets, providing replenishment
techniques and options, monitoring item
usages, reconciling the inventory balances,
and reporting inventory status.

1970s

Material Requirement
Planning (MRP)

Materials Requirement Planning (MRP)

utilizes software applications for scheduling
production processes. MRP generates
schedules for the operations and raw
material purchases based on the production
requirements of finished goods, the
structure of the production system, the
current inventories levels and the lot sizing
procedure for each operation.

1980s

Manufacturing
Requirements Planning
(MRP II

Manufacturing Requirements Planning or

MRP utilizes software applications for
coordinating manufacturing processes, from
product planning, parts purchasing,
inventory control to product distribution.

Enterprise Resource
Planning (ERP)

Enterprise Resource Planning or ERP uses

multi-module application software for
improving the performance of the internal
business processes. ERP systems often
integrates business activities across
functional departments, from product
planning, parts purchasing, inventory
control, product distribution, fulfillment, to
order tracking. ERP software systems may
include application modules for supporting
marketing, finance, accounting and human
resources.
10 | P a g e

1990s

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

SUPPLY CHAIN MANAGEMENT (SCM)

It is the management of an interconnected or interlinked between network,
channel
and
node businesses involved
in
the
provision
of product and service packages required by the end customers in a supply
chain.
Supply chain management spans the movement and storage of raw materials,
work-in-process inventory, and finished goods from point of origin to point of
consumption. It is also defined as the "design, planning, execution, control, and
monitoring of supply chain activities with the objective of creating net value,
building a competitive infrastructure, leveraging worldwide logistics,
synchronizing supply with demand and measuring performance globally."

SCM
draws
heavily
from
the
areas
of operations
management, logistics, procurement, and information technology, and strives
for an integrated approach.
11 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Business Domain:

(SALES ERP)

As per above discussion, we have selected business domain SALES MODULE

of ERP implement in Hamdard Laboratories. To keep pace with rapid changes in
the business world, Hamdard need an integrated and flexible enterprise system
that supports all aspects of their business with state-of-the-art functionality.
This ERP solution should upgrade effortlessly and interface easily with thirdparty applications as well as have the ability to incorporate existing systems
while extending its reach to the Internet and e-commerce.
In competitive business environment, Hamdard is increasingly being forced to
streamline business processes. In a world where it is no longer enough to
simply have the best product; Hamdard is focusing on core competencies and
closer partnerships over the whole supply chain. Here, increased efficiency in
sales and distribution is a key factor to ensure that Hamdard retain a
competitive edge and improve both profit margins and customer service. In
helping business to 'beat them on delivery', the Sales and Distribution module
of ERP systems offers a comprehensive set of best-of-bred component for both
order and logistics management.

MAJOR REASONS FOR ADOPTING ERP:

Integrate financial information

Integrate customer order information
Standardize and speed up operations processes
Reduce inventory
Standardize Human Resources information

12 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Standard Operating Procedure (SOP):Objective:

ERP system is tightly integrated with the Sales and Distribution module. This
integration enables the mapping and supply of single-site or multi-site
organizations. Developing precise logistics planning for just-in-time deliveries,
this system can also generate replenishment orders by using defined
warehouse requirements.

Scope:
To integrate the business processes of a Company and help organizations obtain a
competitive advantage.

Procedure:
The following are the sales related business transactions in Hamdard
Laboratories:

Sales queries, such as inquiries and quotations

Sales orders Process

Outline agreements, such as contracts and scheduling agreements

Delivery/Shipment

Invoicing/billing

After Sales support

During sales order-processing the following basic functions are carried out:

Inquiry handling
Quotation preparation and processing

Contracts and contact management (order management)

Monitoring the sales transaction

Checking for availability

Transferring requirements to materials planning (MRP)

Scheduling the delivery

Calculating pricing and taxes

Checking credit limits

13 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Invoicing/billing
Creating
printed or

electronically transmitted documents

14 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

15 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

INTEGRATED SALES ERP SYSTEM IN HAMDARD LAB (WAQF)

PAKISTAN:
Hamdard Lab (Waqf) Pakistan ERP system is tightly integrated with the Sales
and Distribution module. This integration enables the mapping and supply of
single-site organizations. Developing precise logistics planning for just-in-time
deliveries, this system can also generate replenishment orders by using
defined warehouse requirements. The sales modules of Hamdard Lab (Waqf) for
ERP systems are designed to support the sales order processing systems, control daily
activities like prospecting, and manage contacts. We can Explain Hamdard Lab (waqf)
Pakistan ERP Sales Module from this diagram.

16 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Customer to Sales Department:

When any customer give order in Hamdard Lab (waqf) Pakistan, he talks with
sales person, customer queries about product and in this queries he talk about
cost and markup and shipment of product and after queries he generate sales
order in the shape of agreement and customer order status updated in ERP.

Sales to SCM:
When sales order booked, Sales Department connect with SCM through ERP System and send
customer sales order to SCM, SCM check the material requirement and tell the product availability
schedule and shipment of delivery to Sales Department.

Sales to HRM:
When sales order completed, Sales department connect with HRM and tell about customer order, If
there is any need of hiring and required employee personnel information so HR department
complete the need of these department to complete this order.

Sales to Accounting & Finance:

Sales Department forward sales order to Accounting and finance Department, Finance Department
Calculating the product Price and taxes and check company previous history and tell the credit term
and condition and credit limit of customer and generated billing invoice.

How Sales Modules Work and Process:

The following are the sales related business transactions:

Sales queries, such as inquiries and quotations

Sales orders

Outline agreements, such as contracts and scheduling agreements

Delivery/Shipment

Invoicing/billing

After sales support

17 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

During sales order-processing the following basic functions are carried out:

Inquiry handling
Quotation preparation and processing

Contracts and contact management (order management)

Monitoring the sales transaction

Checking for availability.

Transferring requirements to materials planning (MRP)

Scheduling the delivery

Calculating pricing and taxes

Checking credit limits

Invoicing/billing

Creating printed or electronically transmitted documents.

Depending on how your particular system is configured, these functions may be completely
automated. The data that results from these basic functions is stored in the system where it can be
displayed. ERPs Sales and Distribution module very actively interacts with the material
management and financial accounting module for delivery and billing.

IMPORTANCE OF SALES MODULE IN HAMDARD LAB (WAQF)

PAKISTAN.
It is important to know that the Sales module which also known as
Customer Relation Management (CRM) in an ERP system is the most important
and essential function for the existence of an organization. Hamdard Lab (waqf)
Pakistan Sales module in an ERP system manages the functions of domestic
and export sales of a company. This is the module that maintains the customer
and product database.
Functions of Hamdard Lab (waqf) Pakistan sales module also includes the
interacting enquiries, order placement, order scheduling and then dispatching
18 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

and invoicing form the broad steps of the sales cycle. Stock transfer between
warehouses is also covered by this module. Apart from all these functions
Hamdard Lab (waqf) Pakistan Sales module also carry out the task of providing
analysis reports to guide decision making and strategy planning.
Hamdard Lab (waqf) Pakistan Sales module in an ERP system allows activities
such as contacting customers and tracking of each customer orders right from
placing an order to dispatch of material for that particular order and customer.
This module also helps allows sales executives to contact customers and
follow-up each and every sales invoice and receive payments for such invoices.

Another important aspect of Hamdard Lab (waqf) Pakistan sales module is it

allows management to monitor sales target achieved by individual marketing
personnel as per the target planner for each marketing personnel. This feature
in of the sales module in the ERP system enhances the working of the Sales
and marketing department and ensures personnel are not on the right direction
Hamdard Lab (waqf) Pakistan ERP sales module can also track sales trends
over different periods and prepare the report, Sales forecast can be made using
this module as well as provide all over sales and marketing activities of the
company.
The ERP module offers an effective customer complaint management tool
which also includes repairs processing and document management.

Manufacturing business:

Receipt of order
Recording of new orders
Value of contracts
Preparation of indent
19 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Receipt of order:
i.

The order shall be checked against the valid offer and final negotiations
with the customer with respect to the following:
a.

Scope of supply and services.

b.

Delivery and payment terms.

c.

Warranty and liquidated damages.

ii.

In case of discrepancies, the customer shall be intimated requesting to

incorporate the necessary changes. The discrepancies shall be sorted
out through revised PO /Indent.

iii.

After the order has been won or on receipt of PO / IPO / II, an order
confirmation/ acknowledgement shall be forwarded to the customer,
where required. A system generated order number shall be allotted and
recorded in the register.

Recording of new orders:

i. Before recording of order it should be ensured that the customer master has
been created.
ii.
New orders shall be recorded if a contract is considered effective and
binding for all contracting parties.
iii.

A contract is effective and binding considering the following conditions:

a.
If the contract does not include any specific condition concerning
the effectiveness of the contract, the contract shall be considered effective
once it has been signed by the contracting parties.
b.
If certain conditions concerning the effectiveness of the contract are
laid down in the contract it becomes effective only when all contractually
laid down conditions are met.
c.
Where the contract includes clauses which allow one or more
contracting
parties the unrestricted right to cancel (without contractual penalty), the
contract is not binding upon the contracting party with the cancellation
option.
20 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

d. For blanket orders and framework agreements the individual release orders
with their fixed order quantity and purchase price are binding.

Value of contracts:
If a contract is considered effective and binding the total contract value shall
be recorded as new orders as soon as possible, irrespective of the contract
type (i.e. supply, service, maintenance or outsourcing contracts) and terms of
the contract. Total contract value is the agreed price for the goods to be
delivered and services to be rendered or the agreed fee for the irrevocable
term of contract.

Preparation of indent:
i. An indent setting out the customer requirements shall be prepared and an
indent number shall be allotted.
ii. The indent shall be forwarded to respective personnel for detailed designing
and confirmation of delivery period along with technical and other
supporting documents.

Responsibilities for Implementation:Installation

The ERP vendor usually heads the installation process. However, the
installation team also includes in-house technical experts. They test the
system and check if features require customizing. Implementers must
understand that although customizing can lead to improvements, it can
also slow down implementation. It may also cause additional expenses.
The time frame for full installation depends on the organization's size and
changes made to the system.

Maintenance Support

Third-party ERP consultants assist in-house staff in operating the ERP

software and system. In most cases, organizations sign a comprehensive
maintenance agreement with an ERP consulting firm or vendor. Most
agreements follow a time period and involve services such as technical
help desks, software repairs and system upgrades.

21 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Security and Privacy

ERP implementers are expected to continually monitor and upgrade

security systems if deemed necessary. They make sure only designated
staff have access to specific data and processes. Implementers should
design clear policies for all employees using the system when it comes to
handling private information. This includes accountability measures for
employees who violate such policies.

Training

In-house ERP implementers determine the state of expertise needed to

use the ERP software and system. They conduct adequate trainings for
new users to be able to run the system properly. ERP administrators
should also designate people with the right attitude and competency
level to key positions. These employees are ERP implementers in their
own right. Thus, their views and personal experience with the system
should also be solicited in assessments.

ERP implementers conduct assessments to analyze the effectiveness of

ERP to the business. Assessment should be done within an ERP
operational period with a time interval of three months, six months and
annually. This periodic review ensures that adjustments can be made
immediately if they are found necessary. Implementers draft a set of
criteria for ERP assessment. The criteria should make it possible to
determine whether ERP performance consistently meets the needs and
objectives of the organization. It must be able to ascertain whether ERP
implementation is producing more financial gain compared to operational
costs.

Suggest an Information System:-

22 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Benefits:ERP systems centralize business data, bringing the following benefits:

They eliminate the need to synchronize changes between multiple

systemsconsolidation of finance, marketing and sales, human resource,
and manufacturing applications
They bring legitimacy and transparency in each bit of statistical data.

They enable standard product naming/coding.

They provide a comprehensive enterprise view (no "islands of

information"). They make realtime information available to management
anywhere, any time to make proper decisions.

23 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

They protect sensitive data by consolidating multiple security systems

into a single structure.

ERP can greatly improve the quality and efficiency of a business. By

keeping a company's internal business process running smoothly, ERP
can lead to better outputs that will benefit the company such as
customer service, and manufacturing.
ERP provides support to upper level management to provide them with
critical decision making information. This decision support will allow the
upper level management to make managerial choices that will enhance
the business down the road.

ERP also creates a more agile company that can better adapt to
situations and changes. ERP makes the company more flexible and less
rigidly structured in an effort to allow the different parts of an
organization to become more cohesive, in turn, enhancing the business
both internally and externally.

Advantages:
The fundamental advantage of ERP is that integrating the myriad processes by
which businesses operate saves time and expense. Decisions can be made
more quickly and with fewer errors. Data becomes visible across the
organization. Tasks that benefit from this integration include

Sales forecasting, which allows inventory optimization

Chronological history of every transaction through
compilation in every area of operation.

Order tracking, from acceptance through fulfillment

Revenue tracking, from invoice through cash receipt

Matching purchase orders (what was ordered), inventory receipts (what

arrived), and costing (what the vendor invoiced)

relevant

data

Disadvantages:

Customization is problematic.
Reengineering business processes to fit the ERP system may damage
competitiveness and/or divert focus from other critical activities.

ERP can cost more than less integrated and/or less comprehensive
solutions.
24 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

High switching costs associated with ERP can increase the ERP vendor's
negotiating power which can result in higher support, maintenance, and
upgrade expenses.

Overcoming resistance to sharing sensitive

departments can divert management attention.

Integration of truly independent businesses can create unnecessary

dependencies.

Extensive training requirements take resources from daily operations.

Due to ERP's architecture (OLTP, On-Line Transaction Processing) ERP

systems are not well suited for production planning and supply chain
management (SCM).

Harmonization of ERP systems can be a mammoth task (especially for big

companies) and requires a lot of time, planning and money.

information

between

The limitations of ERP have been recognized sparking new trends in ERP
application development, the four significant developments being made in ERP
are, creating a more flexible ERP, Web-Enable ERP, enterprise ERP and eBusiness Suites, each of which will potentially address the failings of the
current ERP.

The Order Fulfillment Process in Hamdard

Laboratories (Waqf) Pakistan

25 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Sales Order Process and Reports (Functional Areas):Customer Sales Order:

26 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Customer Sales Delivery Order:

27 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Customer Sales Delivery Challan:

28 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Customer Sales Invoice/Sales Tax Invoice:

29 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Reports Generation: (Sales, Stock, Production, Planning &

Consumption)
1.

Customer Wise Sales Order History.

2.

Customer Wise Statement of Account.

3.

Customer Balance Report

4.

Customer Ledger Items wise.

5.

Customer Sales Register.

6.

Customer with pending s Sales.

7.

Total Sales Reports

8.

Sales Book (Customer Wise)

9.

Sales Book (Items wise)

10.

Non Adjusted Delivery Orders.

11.

Sales Order References.

12.

Details of Sales Invoice Wise.

13.

Sales Register.

14.

Sales Summary

15.

Sales Items wise (Quarterly comparison)

16.

Sales Order Confidential Details

17.

Sales Delivery Order Details.

18.

Sales Return Customer Item Wise.

19.

Current Stock Status.

20.

Stock Trail Balance.

21.

Current Stock Report.

22.

Production wise Sales Report.

23.

Production Tracking Report

24.

Finished Items Production Report

25.

Plan vs Production Report.

26.

Material Consumption Report.

30 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

31 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Hardware and Software Requirements:We cannot generalize the software and hardware requirements for any
ERP Implementation as the requirements differ from one implementation to
other but this program can be easily run in below mention configuration.

RAM of 1.00 GB or Above

Dual Core Processors 2

Minimum 100 GB hard disk

Windows Operating Systems

Network Requirement:This program needs only Local Area Network (LAN) to access server.

A mutual understanding between the service level and the network on

how the service is to be provisioned in the network.
A standardized means of communicating requirements from the service
level to the provider network
A standardized means of accepting requirements on the network and
aligning the network elements

32 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Integration with ERP:ERP systems connect to realtime data and transaction data in a variety of
ways. These systems are typically configured by systems integrators, who
bring unique knowledge on process, equipment, and vendor solutions.

Direct integrationERP systems have connectivity (communications to

plant floor equipment) as part of their product offering. This requires the
vendors to offer specific support for the plant floor equipment that their
customers operate. ERP vendors must be expert in their own products, and
connectivity to other vendor products, including competitors.

Database integrationERP systems connect to plant floor data sources

through staging tables in a database. Plant floor systems deposit the necessary
information into the database. The ERP system reads the information in the
table. The benefit of staging is that ERP vendors do not need to master the
complexities of equipment integration. Connectivity becomes the responsibility
of the systems integrator.

Enterprise appliance transaction modules (EATM) These devices

communicate directly with h the ERP system via methods supported by the ERP
system. EATM can employ a staging table, Web Services, or systemspecific
program interfaces (APIs). The benefit of an EATM is that it offers an offthe
shelf solution.

Customintegration solutionsMany system integrators offer custom

solutions. These systems tend to have the highest level of initial integration
cost, and can have a higher long term maintenance and reliability costs. Long
term costs can be minimized through careful system testing and thorough
documentation. Customintegrated solutions typically run on workstation or
server class computers.

Issues and Challenges:Though the market for ERP seems to be growing, there are several issues and
challenges one has to contend with when implementing an ERP system in the
Enterprise segment. Some of these are:

Awareness: There is a low level of awareness amongst Enterprise for

ERP vendors, applications etc. most of the time they do not even know what
ERP systems are and what they can do. They consider ERP systems to be a
magic wand, which will help solve all their business problems, be it in terms of
quality, or process defects. ERP brings in a more disciplined execution of
33 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

business process giving more transparency and visibility to the working of the
organization.

Perception: Enterprise has the perception that ERP is meant only for large
firms mainly owing to the high costs of acquisition, implementation and
maintenance as also the complexity. Some of the SMEs even feel they do not
need ERP.

Earlier Implementations: SMEs have heard of the much-publicized failures

in ERP implementation, which have led firms to bankruptcy. Some SMEs who
have implemented ERP earlier have failed. This has led SMEs to believe that
ERP implementations are a waste of time and effort and can even lead to the
demise of company.

Approach to implementation: ERP vendors advice SMEs to mould the

business to ERPs way of Working. Considering that ERP systems will bring it
best business practices. This is the plain vanilla approach that was mentioned
earlier, which would bring down the cost of implementation. But most SMEs
have processes that they have evolved over time and hold very dear to their
hearts. As a result, SMEs are having the entire ERP system customized to meet
their requirements. This would increase the overall cost of implementation. A
good approach would be to keep the customization to a minimum.

Cost: Small Enterprise have less of capital than their larger counterparts.
Change management: One of the major reasons why ERP implementations
nationwide have been known to fail is due to the implementation being
considered as an automation project instead of one that involves change
management. This results in the system being put in place but not being used
effectively due to people not ready to accept the change.

Limited resources: Most SMEs do not have an in-house IT team. Due to

this they have to rely on external agencies to help them and this add to the
implementation costs.

Factors Affecting ERP Implementation:The major factors can be classified into four subheadings namely, the
top management, training, the data collection & Software design and
Testing. The factors affecting the ERP implementation are determined. The
34 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

consensus among the ERP team and top management is very important
to indicate the need for application framework. The factors are can be
illustrated as fallows1. Data provided: Adequate and correct data should be provided it had to be
collected.
2. Parallel systems: When issues began to crop up after implementation
of ERP in sales and distribution module was completely ignored, they shifted
work with these modules back to the old system. This hampered the proper
integration of organization data and led to data mismatch

in other modules as well. As a result, support system provided by the vendor

became obsolete and difficult to implement. Hence, use of parallel systems
should be avoided outright.
3. Training and testing: Training and testing of the system should be done
properly by the ERP Consultants, that is, the vendor is provided as part of the
implementation procedure to only a 30% group of people from the clients side
known as the Core Team. This core team in turn trains a rest of people who are
actually responsible for day-to-day transactions called the End Users. It was
observed that the 50% second leg of training which is provided to the end
users was not carried out mainly due to lack of computer literacy, not
will to accept the responsibility this triggered a strong resistance to change
for the new system being installed and caused reduction in employee
motivation.
4. Expectations from the ERP System: Clarity in management objectives
and expectations from the ERP System are clearly stated to the vendors.
This led to a belief of the systems power to integrate the company
actual functions. According to the vendor, management expected a quick
return on investment which was not practical since it takes around three to four
months to notice any significant returns. Hence, top management should be
patient with the new system and any fear of failure should be done with for a
successful running system.
5. Employee Retention: It was observed that after the completion of ERP
training provided to the staff and within some days of the system going
live, many of the trainees from the organization quit the company causing
great losses to organization in the form of shortage of key resources i.e. trained
staff. This was a big percentage of employee attrition rate and it is not possible
35 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

for a company to hold back any of its employees even with the most stringent
contract.
6. Design & Testing: is a very important part of software testing and should
not be neglected the
computer work stations are set up in a room to
represent each of the major tasks of customer service /order entry,
planning, goods-in, stores and finance. A simplified data set is loaded and the
company operations run through. The data is gradually increased as first the
project team, then managers and finally users get more familiar with the
software. This is conducted just before the ERP becomes fully functional in the
organization.
7. Customization should be less than 30%- Customization Services
involves any modifications or extensions that change how the out-ofthe-box
ERP
system
works. Customizing an ERP package can be very
expensive and complicated. Some ERP packages have very generic features,
such that customization occurs in most implementations. Customization
work
is
usually
undertaken
as
"changes
requested
beforehand"
development on a time and materials basis. But ideally, experts in the ERP
implementation field have suggested that customization should be less than
30%. The level of customization in the case of

Multiplex exceeded beyond this and posed a great deal of problems when key
applications were run and found to be not working as they were intended to.
8. Stakeholders shall be identified in the initial phase including
customers and vendors: Stakeholders are all those who are directly or
indirectly affected by a company implementing any new ERP system be it
organizations like those of the supplier as well as the vendors. A failure to
identify the stakeholders gives the implementing company a major setback
when the concerned people or organizations work against the new system. So
identification of all stakeholders has to done in advance.

Conclusions:It is possible for Hamdard to mine value from an ERP system post
implementation. To achieve this they need to understand what their ERP
system can do and then invest in people, training, the system and internal
processes to achieve alignment. Once this work has been carried out the
36 | P a g e

Implementation of SCM-SALES-ERP in Hamdard

Lab (Waqf) Pakistan

Hamdard should be leaner and more efficient, and better able to achieve
competitive advantage.
Finally, remember that the cost to re-implement an existing ERP system is
likely to be substantially lower than the costs in money and resource,
required to select and implement a new system.

37 | P a g e