Role of Enterprise Resource Planning (Erp) System: A Case Study of Mehran University of Engineering

International Journal of Modern Research in Engineering & Management (IJMREM) ||Volume|| 2 ||Issue|| 8 ||Pages|| 01-10 || August 2019 || ISSN: 2581-4540

Role of Enterprise Resource Planning (Erp) System: A Case Study of Mehran University of Engineering and Technology, Jamshoro 1,

Mohammad Junaid Memon, 2, Dr. Arabella Bhutto, 3, Dr. Adnan Pitafi, 4, Muhammad Saleh Ansari

----------------------------------------------------------ABSTRACT-----------------------------------------------Enormous studies were conducted on the impact of Enterprise Resource Planning (ERP) Systems on organizational performance. Past researches have demonstrated a blended connection among ERP and organizational performance where some recommended that ERP improves and others found that it doesn't. This study is focused to analyze and compare the performance of previous working and reporting system which was manual and present working system and reporting system i.e. ERP of Directorate of Finance, Mehran University of Engineering and Technology, Jamshoro. The main aim of this research is to identify the effect of ERP on employee’s productivity, service quality, working performance of the employees and satisfaction level of internal and external customers. The result shows that after implementation of ERP system the working performance has been significantly improved. However, some important recommendations have also been given to the management of the University for incorporating improvements in the system. So that functions of ERP system by developing some modules can be improved.

KEYWORDS: Enterprises Resource Planning (ERP) System, Manual System, Employees performance, Satisfaction level.

----------------------------------------------------------------------------------------------------------------------------- ---------Date of Submission: Date, 14 July 2019 Date of Publication: 30 August 2019 ----------------------------------------------------------------------------------------------------------------------------- ---------I. INTRODUCTION Recent past decades, universities globally have joined business organizations in implementing enterprise resource planning (ERP) systems (Swartz, 2012; Ndungu, Ndung’u and Kyalo, 2015; Noaman and Ahmed, 2015; Koch and Mitteregger, 2016). The incentives for universities across the globe and in Africa in particular to go this route are diverse. Typically, these impetuses, for example, are the ongoing decline in government funding for students in Africa, gradual spike in competition among higher education institutions, tighter regulations by higher education authority, changes in the needs of students, growth in the demand for higher education, and fluctuating expectations of employers and industry stakeholders. These changes have created a need more efficient management processes in universities which the ERP system purported to offer (King, P., 2002; Al-mashari, 2003).

Currently, the working and reporting system of Directorate of Finance, Mehran University of Engineering and Technology, Jamshoro is manual due to this the efficiency and pace of delivering output to internal customers (employees & Students) and external customers (contractors, suppliers, Banks, Government Departments etc) is very low. Also, this system is affecting the directorate in time submission of reports to the management.

Therefore, there is room for improvements in existing working system (Nizamani 2013 At All). To improve working and reporting system of the Directorate of Finance, MUET, Jamshoro, it is very much necessary to employ the automated system within the organization. “Enterprise Resource Planning Systems are software packages that provide the complete integration of information of various functional processes (departments)(Garcia-SancheztandtPe´Rez-Bernal,t2007 (McCredietandtUpdegrove,t1999) Presently, due to manual working in the Directorate of Finance, MUET, Jamshoro in terms of payments to their internal and external customers and presenting real time reports to their management is not up to that level where the same system is up to date due to implementation of automated system. The cycle of payment process to recording and preparing financial reports is manual and the staff members of directorate are maintaining their record in MS-Excel which is time taking process. They have also no any proper mechanism to inform their customers regarding status of their claims.

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II.

LITERATURE REVIEW

As a concept coined in the 1990s, enterprise resource planning (ERP) is a computer-based, multiple modules software solution, which assimilates information and business processes (Koch, 2002; Maas, van Fenema and Soeters, 2014). Among the common vendorsof ERP system are Oracle, PeopleSoft, SAP and SCT (Banner). As expressed by (Koch, 2002), the critical term in ERP is “enterprise” because it is designed as a packaged application to harmonize the functions of the whole organization into a single system which permits sharing of information all over the enterprise once it is entered into a database. This means, an ERP system is not a proprietary application developed for a single unique customer (Maas, van Fenema and Soeters, 2014) but rather is a complete application suite that can be used in several different enterprises (Charisma, 2014). The literature on ERP usage is diverse, and focused heavily on non-educational institutions. Nevertheless, in terms of the theories that underpin this study, and the literature generally, five key influences on the use of ERP system in organisations, generally can be identified: i.e., the degree of satisfaction of the user; their level of participation, involvement, and preparation; as well as their attitude and satisfaction with the system (Davis, 1989; Cavaye, 1995; Kwak et al., 2012; Bano and Zowghi, 2015).

Participation: Past studies illustrate that user adoption and utilization of an ERP system can be elevated by increasing their level of participation in the ERP development process (Barki and Hartwick, 1994). A university which provide deep and enriched participation during the initiation and development phase of the system stands a better chance to witness high degree of usage after the system “go-live” (Garg and Agarwal, 2014). (Jameel Qureshi and M. Abdulkhalaq, 2015)stressed the significance of user participation, and suggest that the building of employee skills set through training is key strategy to guarantee high participation. The earlier the involvement of users in the process the better because they are then able to develop a clear understanding of processes (Garg and Agarwal, 2014). (Mahdavian and Mostajeran, 2013) maintain that the inclusion of key users (i.e., those employees with good understanding of the university processes) early in the implementation is a useful tactic.

Involvement: Another factor that influences the uptake of an ERP system is level of involvement. (Barki and Hartwick, 1994) make a distinction between participation and involvement, stressing that the latter is psychological in nature. Involvement demonstrates the significance and individual relevance of the ERP system to the employees who use it. Both executive support and university management flexibility have shown to enhance ERP system user involvement (Ha and Ahn, 2013; Zhang, Gao and Ge, 2013; Galy and Sauceda, 2014; Ahmad, Ibrahim and Garba, 2015). The influence that these factors have on users is by way of affecting their motivation and morale, and this support is relevant even after the system go-live.

Attitudes: The attitudes of employees who use the ERP system have shown to affect two aspects of their behaviour: (a) intention to use the system to its full capabilities; and intention to seek assistance (Barki and Hartwick, 1994). Attitude is a feeling held by the employee, and if he/she feels negative towards the ERP system, his/her use will drop. Positive attitudes encourage greater usage. Low level of participation in ERP activities and developments results in negative attitudes (M.E. de Waal and Batenburg, 2014). To build positive attitudes, (Nwankpa and Roumani, 2015) recommends the provision of technical support and resources to users, whereas (Esteves, 2014) recommends training. In contrast, (Schniederjans and Yadav, 2013) recommend the building of user trust especially trust between users and university administration, and user’s trust in the system itself.

Satisfaction with the system: Past studies have shown further that perceived usefulness ofa technology as well as its perceived ease of use both influence usage (Kwak et al., 2012). (Nwankpa and Roumani, 2015) found evidence that satisfaction with an ERP system increases when its user is able to see that the system makes him/her perform better or if the system demands no additional reduced effort. In other words, the user must see how he/she can benefit from the system, and in that way, he/she will adopt it and use it. (E. Silja, D. Maya, 2014) suggests that user satisfaction with ERP system can be enhanced through improving the quality of the system, i.e., its reliability, accuracy, and its ease of use. (Ali and Younes, 2013) observe that informational quality, i.e., completeness of data, timeliness of information flow, and its accessibility heightens the usage of the system. The quality of training and support, particularly system support and information transparency, have a bearing on use because they improve user’s level of satisfaction (Tsai et al., 2012).Current research also shows that when employees use an ERP system it is because they want greater convenience and satisfaction (Roses, 2011).(Kwak et al., 2012). argue that technology at work automatically conveys a sense of useful and ease of use which psychologically motivates employees/users. In other words, technology gives employees a sense that there is more convenience to experience in their work once it is adopted. Thus, in (Kwak et al., 2012) analysis, the ERP system, and its novelty, inherently drives curiosity and may be a motivating force for some users to want to use the technology.

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However, these scholars warn that resistance to using ERP emerges when the expectations that its users hold fail to converge to the reality of the system.(Noaman and Ahmed, 2015) reported constraints linked to the following factors but they did not elaborate in detail: unrealistic expectations from top management concerning the ERP system; too tight project schedule. However, (Barki and Hartwick, 1994) stressed that the most influential constraints on ERP uptake come from lack of user preparation, their lack of participation, involvement, negative attitudes, and dissatisfaction with the system.

III.

METHODOLOGY

Data Collection Procedure: The primary data was collected through questionnaire from the employees working in the Directorate of Finance, MUET Jamshoro.In response, all questionnaires were returned. Data of 46 completely filled questionnaires were entered in Statistical Package for Social Sciences (SPSS) for analysis.

Therefore, the response rate was 100%. There were 22 closed ended questions and there was one open ended question asking for further improvement in the ERP system.

IV. RESULTS AND DISCUSSIONS Respondents: Questionnaire was distributed among 46 employees working in the department of Directorate of Finance, Mehran university organization located in Jamshoro Sindh- Pakistan. Interpose, tallit question nearest wrester turned. Data toft46t complete lytfille d tquestionnairestweretenteredtint Statistical Packager fort Socials Sciences’ (SPSS) fort analysis. T Therefore, the tresponsetratetwast 100%.t Forty sixt ERP tuskers working tint organization tweretaskedttotfilltintthet questionnaire. T Feedback twasto btainedta bouttthet clarity, two rdings, tinterpretationtandtappropriatenesstoft questions.

Statistical Analysis: The data was entered and analyzed in SPSS (statistical program for social sciences).

Frequencies and percentages were calculated for categorical variables such as age in groups, gender, level of education, work experience and statistical testtchiQuaretwast applied trot compared the proportion between groups (ManualtandtERPtsystems). Numerical parameters like age in year, work experience in years, and scoring of satisfaction were presented as Mean ± Standard Deviation and t test will be applied to compare the means between groups (manual and ERP system). A model regression analysis was used to determine correlation between behavior intention and performance. All that data twist calculates dtont95%t confidence intervaltandt ptvaluet<t0.05twast considered tastsi gnificanttlevel.

The demographic characteristics of the employees of directorate of finance presented Table 1: Descriptive data of gender wise response (n = 46) Gender Male

Number 43

Percentage 93.5%

Female

3

6.5%

Table shows the frequency distribution of respondents. Out of 46 employees, 43(93.5%) were males in majority and 3(6.5%) were females.

Table 2: Age wise distribution of ERP Users (n = 46) Age Group 26-30yrs

Number 1

Percentage 2.2%

31-40 year

30

65.2%

Above 40 years

15

32.6%

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Role of Enterprise Resource Planning (Erp) Systemâ&#x20AC;Ś In this study, Table2 shows the variation in age of the respondents. Most of the employees 30(65.2%) were seen in the age group 31 to 40 years and 15(32.6%) employs were count in the age group more than 40 years.

Table 3: Distribution of participants according to level of education (n = 46) Level of education Graduation Masters

Number 9

Percentage 19.6%

37

80.4%

In this study there were 9 (19.6%) workers who had education of graduation level whereas 37(80.4%) employs who had education at masterâ&#x20AC;&#x2122;s level.

Table 4: Experience wise distribution of ERP users (n = 46) Work experience Less than 5 years

Number 01

Percentage 2.2%

5-10 years

17

37.0%

Above 10 years

28

60.9%

Astforthowtlongtthetrespondentsthadtbeentworkingtinttheirtcurrenttorganizations, 4, mostly 28(60.9%) of staff had been working in their organizations more than 10 years. Around 17(37.0%) had been working from 5 to 10 years and 1(2.2%) employee had been working for less than 5 years.

Ittcantbetseentthat, trespondentsthadtbeentworkingtatttheirtpresenttorganizationtfortnearlytthreettotfivetyears Figure 1: To Analyze Satisfaction of Management and Employees with ERP System

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Role of Enterprise Resource Planning (Erp) Systemâ&#x20AC;Ś It has been observed that 61% responded as Strongly Agreed and 23% responded as agreed regarding satisfaction of ERP, therefore the 1st Objective i.e. To analyze satisfaction of management and Employees with ERP has been achieved.

Figure 2: To Compare Performance of Manual Working System and ERP System in Directorate of Finance, MUET, Jamshoro

It has been observed that majority responded as Strongly Agreed and Agreed regarding performance of ERP is greater than Manual System, However, the majority have responded that as Strongly Disagreed and Disagreed regarding performance of Manual System, therefore the 2nd Objective i.e. To compare the performance of Manual Working System and ERP system in Directorate of Finance, MUET, Jamshoro has been achieved.

Table 5:

Mean Comparison of Manual versus ERP Systems (n = 46) N

Minimum

Maximum

Mean

Std. Deviation

Manual System

46

1.00

4.00

1.6522

.82239

ERP System

46

2.00

5.00

4.1957

.85945

Above table shows a good difference between mean of manual system (u= 1.6522) and ERP System (u= 4.1957).

Measure the relationship between organizational goals and type of (Manual And ERP) System Table 6: Relationship between organizational goals and type of (Manual and ERP) system

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Manual System Pearson Correlation Manual_System

1

Sig. (2-tailed)

ERP___System

Decision_Making

Goals__

ERP System

Decision Making

Goals

*-.405

-.186

-.216

.005

.215

.150

N

46

46

46

46

Pearson Correlation

-.405**

1

.133

.360

Sig. (2-tailed)

.005

.378

.014

N

46

46

46

46

Pearson Correlation

-.186

.133

1

**.240

Sig. (2-tailed)

.215

.378

N

46

46

46

46

Pearson Correlation

-.216

**.360

.240

1

Sig. (2-tailed)

.150

.014

.108

N

46

46

46

.108

46

**. Correlation is significant at the 0.01 level (2-tailed). *. Correlation is significant at the 0.05 level (2-tailed).

•

There is negative correlation between Manual System and ERP system (r = -*.405)

•

There is positive relation between decision making and ERP System (r = *.240)

•

There is positive relation between Organizational Goals and ERP System (r = .360) Table 7:

Relationship between organizational goals and type of (Manual and ERP) system

Relationship between Manual System and the goal of organization

(-0.216)2 x 100 = 4.66%

Relationship between ERP System and the goal of organization

(0.36)2 x 100 = 12.96%

V. •

CONCLUSION AND RECOMMENDATIONS:

•

After analysis of both the systems of directorate of finance MUET Jamshoro, it is concluded that ERP system is more efficient and accurate than manual system.

It has been also observed that management and employees are more satisfied with the ERP system than manual System.

The implementation of ERP system has significantly improved the performance in terms of accuracy, easiness, of directorate of finance MUET Jamshoro. However, for cost there is no significant difference between the two.

In this study, the following recommendations are given to increase performance of employees toward use of ERP system.

There is a room for improvement in the functions of ERP system by developing some modules, so that reporting efficiency can be improved.

Frequent ERP training program should be launched for employees for using ERP.

•

The training program for ERP should be easy.

• •

•

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•

Organization should provide necessary resources to use ERP System

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