A Report On Satyam Venture Engineering Services Information Technology Essay

In the report below I will be analyzing how Satyam-Venture engineering services pvt ltd (SATVEN) company can be benefited from implementing ERP II in their organization and how a BPR process will help for the successful implementation of ERP II, the risks involved if no BPR process is taken into consideration before implementing ERP II and also how a Business Intelligence system with ERP II will help speed up company’s operational and decision processes and finally I will talk about how ERP II will help the organization in realizing the benefits of lean philosophy.

Executive Summary:

The ERP II facilitates to improve internal business process by integrating all the departments in the organization. It leads to increase in the interdependence level among the various departments in the organization which in turn helps to reduce the waiting time for information. With the help of ERP II, SATVEN can automate the back office processes like payroll, billing and budgeting.

ERP II applications are web centric. With an advantage of web enabled applications, organization can connect the internal systems with the systems of suppliers, customers and all the branches across the world. It also helps the empowered employees to access their information from anywhere in the world which is crucial for their job. This makes the company stand among the competitors.

The sophisticated management system components like CRM and SCM of ERP II help the organization in maintaining better relations with the customers and suppliers. CRM facilitates functionalities like customer service management and customer identification process and SCM helps the corporate and commercial department to choose the affective suppliers; it also assists manager with the details of when to order and what to order.

The firm must undergo a BPR process to analyse firm’s capabilities and risks involved for successful implementation of ERP II. Conducting a BPR process prior to ERP II implementation helps the organization to reduce conflicts during implementation and also helps realize all the benefits from implementing ERP II.

Failure to undertake BPR process during the early stages of ERP II implementation can lead to integration problems and also may cause user ambiguity which can also be the reason for not realizing all the benefits from ERP II.

By combining ERP II with business intelligence system, company can enjoy abnormal results in generating business reports. The adoption of ERP II also plays a major role in implementing lean philosophy across the organization. The lean philosophy in the organization helps to provide customer centric services.

Organization Overview:

Satyam Venture Engineering Services Pvt Ltd – popularly known as SATVEN is a Joint Venture between Satyam Computer Services and Venture. SATVEN is a global player in the Engineering Services Sector focused on the Automotive Industry. SATVEN has about 700 associates operating in USA, UK, Germany and India with a turnover of around $25 million. SATVEN has prestigious customers like BMW, Ford, JLR, VW group (Audi & SEAT), Nissan-Renault, TRW, Magna, Denso etc.

As the major area of business for the organization lies in engineering services apart from the designing software’s like Catia v5, Pro-e est., company doesn’t have any sophisticated ICT that integrates entire business. SATVEN has its own Intranet facility in head office Hyderabad, India. The systems department is responsible for developing and maintaining the intranet applications. These intranet applications have only the basic functionalities like LMS (Leave Management System), PMS (Project Management System), e-Time (Online timesheet entry). Employees can access these applications with a single URL. Finance department is using payroll system developed by the local software company and The intranet applications are used by senior managers and HOD’s to view and mange their data efficiently.

Organization Structure:

The current ICT was not able to integrate all the departments and also could not support the sophisticated management systems like CRM (Customer relationship Management), SCM (Supply Chain Management) ,KM (Knowledge Management), Project Management and Resource Management which are essential for maintaining better relations with customers and suppliers. To meet the emerging business requirements and to maintain better relation with stakeholders, company has to adopt an enterprise wide system which utilizes internet and connects every aspect of value chain.

The enterprise system which has the above capabilities and which can help SATVEN stand out among the competitors is ERP II. ERP II is a set of cooperative financial and operational processes that build stakeholder relationship value by operating internal and external world of enterprise (Gartner Group 2002).

Benefits of Implementing ERP II:

I am using the framework developed by Moller (2005) to analyze the potential benefits that SATVEN can infer from implementing ERP II. The abstract framework of ERP II illustrated in figure 1 has four layers.

Core Components

Central Components

Corporate Components

Collaborative Components

Figure 1

(Adopted from Moller 2005)

Core Components:

The core component of ERP II is Centralised Database.

With a centralised database across the organization, SATVEN can achieve data integrity i.e. no redundancy of data.

Maintaining single system is easy than the maintaining multiple systems.

Empowered users can access their information across the organization which leads to cut down the response time for customer needs.

Central Components:

The central component of the ERP II has traditional ERP and additional functionalities like QMS (Quality Management Systems), PMS (Project Management System) and web centric services.

QMS will drive the SATVEN in improving the efficiency and effectiveness of its performance in meeting customer and organizational requirements. It will also help quality department in automating auditing process, quality improvement process and also they can use QMS as a portal to provide quality checklists for the employees. The quality manager can track and alert the operational managers for the closures of NC (Non Conformance) and QSI (Quality System Improvement).

The PMS can help the operations managers of SATVEN in scheduling of work, resource allocation and monitoring the deliverables and project deadlines. Although the existing intranet applications have these features PMS will come with more security.

With an advantage of web enabled applications, organization can connect the internal systems with the systems of suppliers, customers and all the branches across the world. It also helps empowered employees to work from anywhere.

Corporate Components:

The corporate components of ERP II are decision support systems like CRM (Customer Relationship Management), CPM (Corporate Performance Management), SCM (Supply Chain Management), HRM (Human Resource Management) and SRM (Supply Relationship Management).

The CRM with functionalities like customer service management and customer identification process assists SATVEN to maintain better relations with customers.

The SRM is the supplier version of CRM it helps the SATVEN to manage their suppliers effectively.

The SCM facilitates to reduce the order processing costs. The SCM helps the corporate and commercial department to choose the affective supplier; it also assists manager with the details of when to order and what to order.

HRM helps the HR department of SATVEN to speed up the recruitment process and also facilitates to conduct online training and performance appraisals.

The CPM helps the senior managers and department HOD’s of SATVEN to monitor and control the overall performance of the organization.

Collaborative Components:

One of the Collaborative components of ERP II is e-procurement (B2B).

E-procurement facilitates SATVEN to automate the traditional procurement process by carrying out process through web which helps to improve efficiency.

The intranet facility throughout the organization provides the employee with a personalized portal.

The web enabled applications enable authorized employees to access data and make quick decisions.

Benefits and Risks of BPR:

To enjoy all the above mentioned benefits from the implementation of ERP II, SATVEN has to undergo some process innovation. BPR (Business Process Reengineering) is one of the process management tools for accomplishing dramatic improvements with redesign of processes.

“BPR is the radical redesign of business processes, combining steps to cut waste and eliminate repetitive, paper-intensive tasks to improve cost, quality and service and to maximise the benefits of I.T.” (Koh and Stuart 2009)

Benefits of BPR:

Implementing an enterprise wide system is a major change in the organization. With the help of BPR, a firm can understand and measure its capabilities before undertaking such a major change in the business. BPR assists the organization to analyze its current processes and ensure that they are effective in the current business environment or not (Koh and Stuart 2009). By carrying out the BPR process SATVEN can identify new ways of carrying out business operations. (Koh and Stuart 2009). BPR will assist SATVEN to improve the efficiency and effectiveness of business process and management structures that exist across organization. (Hooshang 2006). By undergoing a BPR process SATVEN can transfer from function-oriented thinking to process-oriented thinking. The prior implementation of BPR reduces the conflicts during ERP II implementation which eventually leads to revel all the benefits from ERP II. BPR acts as a tool to reduce the strategic gap in the organization as” what it can do versus what it must do” (Subramoniam et al 2009).

Let us look at how the Process of BPR takes place in the organization. Davenport and short (1998) defined the seven step process for IT aimed BPR implementation. Figure 2 shows the seven step process for BPR implementation.

Figure 2

(Adapted from Davenport and short 1998)

In the first step of the BPR we have to define the objective of the process. The main objective of BPR in SATVEN is to improve customer satisfaction by reducing the turnaround time and better working conditions to improve productivity. Secondly, we have to identify the process to be redesigned. The choice of the process can be accomplished by two approaches, “exhaustive and high-impact” (Subramoniam et al 2009). By adopting high impact approach we can select the process that infringe with business and process objectives.

The processes like service delivery process, recruiting process, knowledge base process and QMS process need to be redesigned.

Need to develop a new process for e-procurement and enterprise wide integrated system.

Third, we have to set the benchmark standards for the processes. The standards should be achievable and goal oriented. In the fourth step the detailed analysis of ERP II components and functionalities will help to finalize the functionalities which need to be modified with respect to the processes. In the fifth step build the prototype of redesigned and newly build processes. In the sixth step test the processes by implementing in one sector of the organization. The successful pilot implementation leads to implement of changed processes across the organization.

Risks of not undertaking BPR:

It is very important that company has to undergo some form of BPR before implementing ERP II. Failure to undertake BPR during the early stages can lead to major problems once the system goes live. The following points shows what may happen when the BPR does not take place.

The ERP software packages encapsulates with a wide range of business processes. Firm has to customize these processes according to their business, failure to do leads to serious problems.

The integration of systems will be a problem. Without the prior design of enterprise wide system process which shows how the information has to flow between departments, customers and suppliers, company cannot be benefited from implementing enterprise wide system.

When you are implementing the enterprise wide system, there should be a process for data standards. Failure of designing such process leads to an ambiguity while generating reports.

The impediments will be greater than benefits when you have not gone through BPR before ERP II implementation.

The knowledge base, QMS, recruiting processes is different from company to company without prior customization company cannot revel all the benefits from these processes.

Business Intelligence:

Business Intelligence (BI) is the foundation of any ERP II system. The success of the business depends on how well you understand your customer needs and how well you understand your competitors. BI enables the organization in collecting data of customers and competitors, converting collected data into information and help the mangers while decision making. (Stuart and Habibu 2008)

With the help of business intelligence SATVEN can identify it’s potential threats and opportunities (Frates and Seena 2005).

Adoption of Business intelligence system will drastically reduce the processing time for generating business reports which help in decision making. Boots company servers have to generate around 400 reports in every minute adopting a business intelligence system helped company to improve his business reports (Thomson 2008).

The Business intelligence system plays a major role in analyzing the financial data of the organization which in turn gives the overall picture of financial performance to its financial directors. The article in the computer weekly supports the above point by showing how financial directors forcing organizations in adopting business intelligence system (www.computerweekly.com 2008).

By adopting business intelligence system SATVEN can implement some computerised processes to execute background work and foreground work simultaneously. For example sending an alert e-mails to the vendors and customers. It also assists SATVEN to develop customer-centric views which eventually help maximize customer satisfaction.

With the help of BI SATVEN can analyze the data with regards to new sector business, employee performance and vendor performance.

When we apply BI with supply management, the system will be prompting user what product to buy, when to buy and where to buy. With this we can reduce the cost of good by ordering it at right time in right quantity.

Lean Philosophy:

The fundamental idea of lean process is to understand customer better; it means identifying the process or system which is adding value to customer and which is not. Then eliminate all waste to develop an operation that produces high quality services with low cost. (Slack et al 2007). Lean philosophy helps people determine, value of the service from the customer’s point of view instead of service provider’s point of view.

To guide organizations in attaining the popular words of lean “High Quality and Low Cost” researchers have identified five principles.

Value: Determine the customer value (customer willing to pay) of service.

Value Stream: how much value you have delivered to the customer. The gap between value stream and value should be eliminated. The processes which are not adding value to the customer should be eliminated.

Flow: Ensure free flow of information across the organization. All the bottlenecks need to be eliminated.

Pull: Deliver the service as per requirements.

Perfection: Continuously monitor and improve the processes to meet above principles.

(Piercy and Nick 2009)

The processes in the organization can be divided into three categories,

Value Adding: The processes that are adding value directly to the customer and also essential for the organization.

Non-value Adding: The processes that are not adding any value to the customer but essential for the organization.

Waste: The processes that are not adding any value to the customer and also not essential for the organization to run.

Most of the processes in the organization come under Non-value adding. We can’t eliminate these processes but we can speed up the processing time. ICT plays a major role in accelerating these processes. With the implementation of ERP II we can reduce the gap between value delivered to customer and value customer wants. The following points show how ERP II helps to implement lean philosophy in our organization

The legacy systems are not able to integrate the departments in the organization which leads to increased waiting time for information required by the user. To reduce this waiting time company has to implement an enterprise wide system like ERP II.

The lean process says that organizations has to involve customers in the development process i.e. customer has to know what is going on in the organization. The sophisticated system like CRM helps serve customer better.

The finance department has to collect data from other departments and then generate reports to see the organization performance. This process is not adding value directly to the customer but it is essential for organization. This process needs to be accelerated by implementing BI systems.

The traditional procurement process involves a lot of paper work. E-procurement helps the organization to automate the traditional procurement process by carrying out process through web which in turn helps improve efficiency.

The fundamental process of organization like human resources, payroll, budgeting which are not adding value directly to the customer can be automated by implementing ERP II.

Conclusions:

By analyzing all the benefits of ERP II we can say SATVEN can go for the implementation of ERP II. It helps organization in all the sectors to grow and serve the customer better. To realise all the benefits from ERP II company has to put in use BPR process before implementing ERP II which has its own pros and cons as explained in the report above. And so is the case for BI as we saw how by combining the ERP II with some business intelligence system helps to speed up the operational process. We have also seen how implementing ERP II leads to revel all the benefits of Lean philosophy across the organization which inturn helps to improve the stake holder relations.

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