The Second Case – ERP Implementation on A state-owned integrated electricity company

Many organizations have implemented ERP system to draw as much value as possible from their investment and to use it as an enable of high performance. The system attempts to integrate all departments and functions across a company into a single computer system that can serve all those different departments particular needs, so that the various departments can more easily share information and communicate with each other. The concept of ERP system is simply because the technology can provide value added point, this include: eliminate of processes that do not need (elimination process), simplification of complex processes (simplification process), and unification redundant processes (integration process), and automating manual processes (automation process).

The key objective of an ERP system is an Integration Process, the integration between business processes helps develop communication and information distribution, leading to remarkable increase in productivity, speed and performance. The integration is typically accomplished by constructing a single database repository that communicates with multiple software applications providing different divisions of an organization with various business statistics and information

Accenture as a global management consulting, technology services and outsourcing company have a proven track record to implemented ERP System in many organization and always committed to delivering innovation and help client to improve their performance.

CaseStudy

A state-owned integrated electricity company employing around 38,000 staff, serving over 37 million customers (households, industry, business and others) with a total asset of USD 35 billion (December 2009), has been operating throughout the country with non-integrated systems and non standardized business processes. The company’s major issues were that business processes are not standardized and consolidated financial reports were not produced on a timely basis, lacking important decision-making information. In addition, lack of integrated knowledge and control of inventories and assets led to underutilization of assets. With respect to Talent Management, the company’s processes concentrated on basic record keeping and un-integrated payroll systems, making it difficult to introduce training plans, career management, succession plans, transparent performance evaluation, and other requirements of a modern Human Resource Management area.

How Accenture Helped

Accenture implemented an integrated Enterprise Resource Planning (ERP) that covers Financial Management, Material Management and Human Resource Management areas, using SAP.

Given the large scale of ERP Implementation and considering the company’s first experience with an integrated system, major change management effort is required. To minimize implementation risk, Accenture selected a multiple phase approach. Combinations of rollout sites were carefully picked to ensure minimal business disruption and yet breadth of functionalities is covered. Lessons learnt from earlier roll out was studied and immediately applied to the next one.

A total of over 500 training classes were held and a total of over 10,000 training days were consumed by users to learn the ERP system. Appropriate management sponsorship was maintained throughout the implementation, including training which resulted in over 95% training attendance rate.

Throughout the implementation journey, Accenture managed to help the company build ERP template that consists of standard policies, business process, chart of accounts and reports to be used at other company’s business units.

By implementing ERP, what would be the impact to the company’s business processes?

Based on case study above, Accenture implemented an integrated Enterprise Resource Planning (ERP) that covers Financial Management, Material Management and Human Resource Management areas, using SAP.

Financial Management

ERP for Financial management it’s a module that include Accounts payable, accounts receivable, fixed assets, general ledger, cash management, and billing. By using an integrated system it will provide maximum efficiency and accuracy in core financial functions, consolidated financial reports were produced on a timely basis, and also deliver comprehensive data to enable management to make strategic decisions.

Material Management

The state-owned integrated electricity company faced problem that lack of integrated knowledge and control of inventories and assets led to under utilization of assets. ERP for Material Management it’s a module that include material control, assets, procurement and inventory control. By using this ERP all process will be integrated and have a centralized database asset. The benefit implementation such as tighter inventory controls, stronger service within each department to control inventories and assets, and also increase operational performance.

Human Resource Management

ERP for Human Resources Management it’s a module that include recruitment process, training development, compensation, time and attendance, integrated payroll system. The implementation of an integrated system it will have a benefit such as reduced human resource administration, improved human resources service delivery, and also enable talent optimization that include career management, succession plans and performance evaluation of each personnel can be monitored by the system. Overall with ERP Human Resources department can work more efficient and effective.

As a conclusion, with all above aspect, ERP as an integrated system makes all business process running smoothly, although takes a long time to do implementation and training are required to learn it. The implementation of ERP System can assist the company to improve efficiency, productivity and business process performance. ERP also helps the company build cost effective solutions, give contribution to competitive advantage, and accelerate business results, so for the further management can make the right decision for the sake of continuity of business enterprise.
On another major business process, with a standardization financial reporting it will significantly reduce the time used to compile business planning, simultaneously to improve the quality and data integration.

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