The Data collection process for the research will contain the data collection through various sources like the primary as well as secondary data sources. Among the secondary data sources case study method would be followed in order to analyze the impacts of implementing the SAP in the industrial organisations.
For collection of primary data survey method and interview method can be used by the researcher. For the survey method a questionnaire would be designed which will be filled by the respondents which have prior experience of SAP implementation process. Hence this way primary data can be gathered regarding the SAP implementation process.
2. Secondary Data collection
2.1 KJO Case study
Al-Khafji Joint Operations (KJO) is established under the cooperation between Aramco Gulf Operations Company Limited which is main oil company in Saudi Arabia and Kuwait Gulf Operations Company in early 1960s. The company is located an off-shore area which divides Saudi Arabia and Kuwait (Ex-neutral Zone). The main activity of the company operations is the provision of oil and gas exploration in the ex-neutral zone between the two countries.
As one of the major multinational companies that operate in this field of specialization and in order to modernize and update its operational functions, the company introduced the SAP/ERP software system in the company’s work activities to help in increasing its progress and developing the work performance. As sister company of Aramco Oil Company of Saudi Arabia (Joint venture between Saudi Arabia and American Standard Oil Company), operates as separate entity between Saudis and Kuwaitis for exploring oil reserves in the neutral zone region. As the company facilities were installed in the early 1960s and 1970s, it was necessary for the corporate to modernize its facilities and systems to meet the needs of the new societies in the world by increasing its functional operations. The update touched the software systems knowledge management needs for the corporate.
2.2 SAP Application in KJO Facilities
As part of SAP software project management in the corporate facilities, KJO applied its corporate on integrated management system in all of its vital business fields. SAP which is a short form of: systems applications and products were applied in the corporate various business operations by means of using ERP software. The objective beyond this is to obtain integrated SAP modules that can be used for a common integrated data platform. The major areas introduced this software included and not limited to; financial matters, cost control and human resource management, material management, oil distribution, project systems and plant maintenance.
According to the respondents’ feedbacks of question three, it was shown that the SAP/ERP systems application in Industrial projects, such as; SAP/ERP is good software and fit to integrate all areas of business functional units’ management. SAP/ERP became significant on creating changes on staff work practice. The system provides a customization, support and consultation; i.e., the corporate might employ business analysis practices, change management and hire specialists of both IT and business fields in ensuring its implementation smoothly for upgrading the work performance. In the same token, in answering question (20) of the list of the interview questions, it was noted that ERP system has the advantages of time and inventory reduction, efficiency of business processes as well as high profits and customer services improvements.
2.3 Aims of SAP/ERP Applications into Al Khafji Joint Operations (KJO) Project
The main aims of applying this new software into the corporate facilities is to reflect the thoughts of thinking the future status of the company; i.e., the objectives is to think about making KJO as gas industry and oil model in the Arabian Gulf. With the application of this software, it is important to know why (KJO) selected this type of software and what are its advantages? The major advantages of SAP/ERP applications implementation in the industry facilities are:
- SAP/ERP is capable to integrate all data fields into one database.
- It is considered as stable and secure system.
- The system is capable to grow more to meet the industrial needs of Al Khafji Joint Operations Company (KJO).
- In this system, all users can input an information access and at the same time obtain up-to-date information on timely basis.
- The system makes the job more efficient as well as productive.
2.4 Effects of SAP Implementation in KJO Facility
In introducing the SAP/ERP software system, it was expected to do some changes which are better than the old system, even though, it needs more computer based work with less paper based work. The negative views might be the need of continuous training and extra time involvement of the system to understand how the system operates and what are its difficulties that might be encountered in implementing the system through various business functional units?.
2.5 SAP Applications for Oil processing and shipping
By using SAP/ERP systems, various oil functions were applied to determine the work quality and performance. The crude oil processing works applied this system includes the following functions on monthly schedules:
- Creating sales order.
- Creating a delivery by assigning tanks, shipments and delivery documents.
- Making shipping instructions by assigning agents, inspectors or any other necessary details.
- Managing the loading confirmation and silo management.
- Managing the ship-shore comparison by ship quantities and art cargo.
- Carrying out printing the shipping documents and finally processing the bills on either monthly or yearly basis.
3. Primary Data Collection
3.1 Data collection through questionnaire
For collecting the primary data for the research, both survey method and in depth interview method have been used. In survey method responses from the customers would be taken from designing the questionnaire. A sample size of 30 respondents was chosen. The sample unit for the survey was IT officers and other technology implementation level people in organisation. The Sample was chosen in such a way that respondents have proper knowledge of SAP implementation process and also have some prior experience for SAP implementation in their previous or current organisations.
When respondents were asked about their work experience in current organisation many of them were having more than 5 years of experience in their current organisation. Hence the respondents were well aware of the company issues and strategy. Also in response to question about their prior experience about the SAP implementation plan respondents were found to be having sufficient SAP implementation experience in their prior organisation. Following chart shows the work experience and SAP implementation experience in respondents:
Chart1: Showing the work experience of respondents
In response to the question about SAP implementation plan at their current organisation, many of the respondents replied in negative as due to some issues that couldn’t be successful. From the whole sample size 90% of the respondents were not happy with their SAP implementation plans in company after investing highly for the SAP implementation. Some of the reasons revealed by the IT managers which hinder the ERP implementation were poor communication system, poor infrastructure, improper planning and bad leadership.
In response to the major problems encountered during SAP implementation plan respondent replied in following manner:
Chart2: Showing reasons of failure for SAP implementation plan
As shown above main reasons for failures of SAP implementation plan as reported by respondents are technological infrastructure failure, lack of employee support, lack of change management implementation, lack of training among employees, lack of communication and lack of other resources.
In response to the question about the technological infrastructure as the main component of the SAP implementation plan, 70% of the respondent replied that for agree and strongly agree about the fact. Other 10% of the respondents were neutral on the technological infrastructure factor while 20% of the respondents do not think that technological infrastructure is the major component of the SAP implementation plan.
In response to the question about the role of top management in SAP implementation plan, 50% of the respondent replied that in their organisation top management initiated the change process which was required for SAP implementation and also top management identified the need of SAP implementation in their organisation. While other 50% of the respondents replied that it was the end customer, user or middle level management people who helped in managing the change and identified the requirement for SAP implementation plan.
Respondent pointed out that there is very important role of top management in SAP implementation process. As the commitment from the top management can only set example for the other employees and can bring the change in the employees which is required for the SAP implementation. Top management decides the strategy of the company based on the vision and mission of the company. This strategy helps them to decide the implementation planning for SAP implementation.
Among the entire respondents which were selected for taking the response only 10% of the respondents think that the right kind of communication needs to be established company wide for the successful SAP implementation plan. A company who want to implement SAP needs to have a communication process which takes into account each stakeholder of the company i.e. starting from the end customer of the company to the supplier of the company. Hence everyone which will be affected through the SAP implementation process needs to be communicated about the process, its benefits and the changes required for the successful implementation.
In response to the question about combating the issues faced during the SAP implementation plan respondents replied that SAP implementation requires through and integrated planning process for successful implementation process. Each and every process needs to be planned in advance for successful implementation of the process. Some of the major finding which came out through the survey for tackling the problems faced during SAP implementation plan is as follows:
- Manage a troubleshooting team which consist people from multi functional units and can handle and resolve problem quickly
- Engage the full time experienced SAP consultant for the process
- Decide the time line for implementation carefully
- Top management needs to be committed throughout the process
- Change management is the key to process since if employee will not co-operate then process can’t be successful
3.2 Data collection through Interview
Questions which were designed for conducting the in depth interviews with the respondents are as follows:
My name is Abdullah Alotaibi, I am a student in Brunel University, and I am conducting the research on impact of SAP implementation in industrial companies. The Objectives of my research are to find out the problems encountered during SAP implementation, to identify various factors responsible for successful SAP implementation. I will appreciate if you will answer some of the question about the research. This will not take more than 7 minutes.
The Information given by you would be anonymous and can be withdrawn by you any time.
Name of the respondent…………………………………Age……………………………….
Name of the organisation………………………………Work Experience…………………
- What should be the role of top management in SAP implementation process?
- How technological infrastructure enables successful SAP implementation process?
- What kind of change management policy is required for the implementation of SAP implementation process?
- What should be the ideal SAP implementation process so that various factors of SAP implementation can be covered easily?
- What points should be taken care of while implementing the SAP?
- What solution can be proposed to the problems encountered during SAP implementation process?
Data Collection through interviews
The Process of data collection through primary source also involved the in depth interviews with the respondents. The In depth interview process will help in analyzing the issues in more depth and try to bring out some probable solutions for the problem. Sample sizes of 10 respondents were chosen in order to carry out the interviews with the respondents. The respondents were very experienced in the SAP implementation process as they all have gone through the SAP implementation process in their working experience.
The Role of top management as highlighted by the respondents was as a mentor for the overall plan. The Top management takes the strategy level decisions. The Main functioning of the top management in SAP implementation plan is as follows:
- when to go for implementation
- Either to go for implementation or not
- what process to carry out
- In what manner to go for implementation i.e. phased or complete
- Either to go for in house implementation or hire consultants
The Respondent on responding about the role of technological infrastructure in SAP implementation process said that technological infrastructure of the company decides the SAP implementation process since the infrastructure of the company which is basically hardware, software and database of the company. These factors can limit the SAP implementation process as they limit the packages available for evaluation using the SAP process.
For implementing the SAP technology respondents talked about the importance of change management process in the organisation. Respondents reported that the role of change management is to ensure the support from the key executives of the company since if key executives in the company are not supporting the process then it can’t be successful. Another aspect of change management process a: understanding the implementation objectives of the SAP process. Understanding the SAP process objective will help in achieving the objectives since clear understandings of the objective is necessary.
The Change management has got its role in providing the counseling services for the employees and also change management is concerned with the gauging readiness of the company to implement the SAP process. According to the respondents the ideal SAP implementation process would be as follows:
- Preparing the project
- Blueprinting and sizing
- Developing the functions
- Preparing the final stage
As per the experience from the various respondents while implementing the SAP process there should be some points which are cause of general SAP failures which should be taken care of. The first major point to be considered while implementing the SAP process is the selection of right consultant for the implementation process since right kind of consultant will only make the proper blueprint which is very essential for the whole process. Another thing which should be well taken care of is that SAP R/3 implementation should not be considered as the IT project hence for implementation continuously support is required from all levels of managers in the organisation.
The Blueprint of the process should be defined with all care since blueprint is said to be the power house of the company. So one proper blueprinting is done then implementation of the processes would be done easily. The Hardware and software implemented for the SAP implementation process should be checked rigorously so that end user do not face any kind of problem after implementation process.
4 Analysis and discussion
From the data collected about the SAP implementation process with the help of the primary as well as secondary data collection methods in the industries various insights have been developed about the SAP implementation process. The Primary data collection method which have collected the data with the help of questionnaire as well as with the help of in depth interviews with the respondents have shown the SAP implementation process which is used by the various organisations.
The Survey method which was done with the help of the questionnaire designed for the respondents have shown that some of the major success factor for the SAP implementation process are active participation from the top management of the organisation, role of communication in the organisation which not only provides information to employees but also give necessary motivation to the employees and managers, proper project planning which includes various decisions such as whether to go for SAP implementation or not, what methodology to adopt for SAP implementation phased or vanilla strategy etc, the steps followed for the SAP implementation process.
In the questionnaire method of data collection most of the respondents have laid emphasis on the technological infrastructure in order to make the SAP implementation successful. Since though SAP implementation is the strategic decision to be taken by the organisation but at last SAP is complex software which any organisation needs to handle. And in order to handle such a complex software organisation must have an integrated and error free technological infrastructure which can support the software. A powerful technological infrastructure is very important since if there is any issues with the technological infrastructure then the whole process of the organisation would collapse because of that. Hence technological infrastructure is a major component.
Another major factor reported by the respondents is the support of the employees of the organisation. Since if the employees of the organisation will not support the process then it can’t work properly. As employees of the organisation have to work on the software and support only can make the system successful.
From the data collection process which involved primary data collection and secondary data collection various insights have been evolved about the SAP implementation process in the industrial firms. Some of the insights which have emerged from the current research are as follows:
4.2.1 Major elements to SAP implementation process
Some of the major success elements for SAP implementation process which have been identified in the research process are:
- Technological Infrastructure: Technological infrastructure includes the hardware, software and database system which a company needs for the SAP implementation process. Technological infrastructures have emerged as one of the major source for SAP implementation. Many a companies have faced failure in SAP implementation plan since their technological infrastructure did not support the SAP implementation process.
- Change management: Change management process is the process of aligning the people in the company with the goals of the company so that everyone knows about the objectives and continuous support is maintained from every employee.Read about Employee Selection Process.
- Employee support: Employees of the company needs to support the SAP implementation process then only it can work properly. Employees need to understand the SAP implementation process is going to benefit them in long run. Since they are accustomed with their regular processes and systems so they do not want to change to SAP processes.
- Proper employee training: SAP implementation process needs to be complimented with the proper employees training. Since at last employees would be working on the SAP systems and if proper training is not imparted to them they will not be able to help the end customers to operate on the system. Hence proper employee training for every functionality needs to be imparted.
- Communication process: In order to involve the whole organisation in the SAP implementation process proper communication needs to be established organisation wide. An integrated approach to communication process needs to be followed in organisation from the end customers to the suppliers of the company. As a communication process will help the employee to know about the strategy and objectives of the company for SAP implementation and will be able to work in the integrated manner.
- Lack of other resources: Other resources are also very essential for the SAP implementation process to be successful. This resource includes proper management team, capital and time etc.
4.2.2 Critical success factor for SAP implementation
Sap implementation process needs to have some of the success factor in place so that implementation process can proceed without any problem. These critical success factors identified from research with the help of data collection process are as follows:
- Choosing a SAP consultant wisely since a better consultant can only make a better SAP blueprint which can guide for the whole process
- SAP implementation should not be considered as the IT project since it requires overall support from every level of employees
- Making the blueprint for the SAP implementation plan is the basic of all processes since if one blueprint is defined clearly then there is no problems faced in the execution of the plans
- Testing the technological infrastructure is very important since end users should not face problems while using the SAP system since if it happens then end customer would be reluctant to do that
- Designing the change management process since change management process can help the end users to know what technological changes he is going to adapt and what information he have to input into the system
4.2.3 SAP implementation process
The SAP implementation process which is reported by the respondent through the survey and interview process can be described as follows:
- Preparing the project
- Designing technical support team
- Designing vision for SAP
- Blueprinting and sizing
- Estimating total project cost
- Defining disaster recovery requirements
- Engaging experienced SAP vendor for the process
- Train the employees
- Establishing data centre for SAP
- Installing the system
- Developing the functions
- Implementing the change management
- Operation management
- Integration of various functions
- Preparing the final design
- Preparing for cutover phase
- Testing the system
- Go live
5 Recommendations and Conclusion
For implementing the SAP implementation process following recommendations can be given based on the various SAP implementation functions:
5.1.1 Change management strategy
For implementing the change management process in the organisation for SAP implementation plan following strategy should be adopted by the organisations:
- Understanding the needs of the company: most of the business organisation uses the SAP implementation process not because of their needs but to support the information technology of the company. And also sometimes companies have to do that all since competitors in market are doing that and it become necessary for survival. But still companies need to analyze their business environment and according to that business environment organisations need to make decision whether or not to go for the SAP implementation process.
- Building a pioneer team: The Prime task in SAP implementation process is to build a team which is pioneer in SAP implementation issues and handle the implementation issues easily.
- Establishing vision and strategy: Companies need to establish clear vision and strategy for their company as they need to be very clear about their vision and strategy before implementing the SAP process since employees should be well aware of the objectives and mission of the company.
- Establish communication with the entire stakeholders: A communication process which needs to organisation wide needs to be established since everyone in the company should be aware of the objective and strategy of the company. Hence a integrated communication process needs to be established.
5.1.2 Technological infrastructure requirements
For technological infrastructure requirements of the SAP implementation process following things should be taken care of:
- Specifications of the hardware required should be identified initially
- Hardware configuration should be tested in order to check the proper functioning of the hardware system
- A comprehensive hardware system report should be prepared before implementation
- Proper analysis of the existing system in organisation have to be carried out in order to understand the capability of the system
- A dedicated IT manager have to be assigned for handling the technological infrastructure issues related to the SAP implementation process
- Database management of the company should be very efficient and can be able to store the various data related to the history and current transactions
- Database management system should be such that it allows minimum duplication process in the system so that data once put into the system can be used at multiple points
- Software interface of the SAP should be such that it is easy to use and user friendly as well
- Troubleshooting team for technology infrastructure should be made in order to handle the technological glitches in the SAP implementation process since technological glitches can disrupt the overall functioning of the system
5.1.3 Communication process required for SAP implementation
An organisation wide communication process needs to be established in the company in order to implement the SAP process in the organisation. Following recommendations can be given based on the communication strategy for SAP implementation process:
- Communication should include each and every stakeholder
- There should not be any barriers in communication process due to the management hierarchy in the company
- Objectives and mission of the company needs to be communicated to every stakeholder time to time
- Proper use of information technology can enhance the communication among the organisation
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5.1.4 Team building in SAP implementation process
For the SAP implementation process various teams need to be built up in the organisations which are as follows:
- A multifunctional team needs to be made which contains people from various business functions such as marketing, finance, HR etc
- A multi hierarchical level team need to be established in the organisation which will help in analyzing the various impacts of the SAP implementation process on the various managerial level people in the organisation
- A troubleshooting team for IT infrastructure needs to be established which can handle the technical glitches at the spot
- Change management team should be made which may contains people from HR and other leaders of change management which are popular among the employees
The Current research has revealed that the information technology infrastructure has a major role in the success of SAP implementation project as most of the SAP consultant has highlighted the fact that without proper technology infrastructure SAP implementation process can’t be completed. Also commitment of the top management is very essential for the SAP implementation process since with the commitment of the top management only project got proper direction and leadership which is very crucial.
So organisation should consider several factors while implementing the SAP processes in their company. Some of the major factors are: change management strategy, proper communication strategy and building technology infrastructure etc.
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