Operations Management

Assignment
BUS 650/06
Summer, 2023

Status of ERP implementation in Bangladesh

Submitted To: Submitted By:

Dr. Md. Ahsan Akhtar Hasin Jesin Estiana
Id-2225425660
 Introduction
Digitization is a growingly widespread problem in today's economy, which is always evolving.
Modern organizations are becoming more reliant on technology to improve the efficiency of their
operations. Businesses are always searching for a system that can manage enormous amounts of
data more effectively. The Enterprise Resource Planning (ERP) system provides a solution for
these issues. The addition of these electronic communication systems to MRPII system is known
as Enterprise Resource Planning (ERP) system which is a 3rd generation system making
commerce viable. In addition, the present ERP system has multi-side integrated planning
capabilities. These days, this system is distinguished as a supplemental information system to
manage, administer, and coordinate the organization's whole supply chain.

ERP and its uses

ERP offers a technological framework that enables businesses to manage and connect their main
internal business activities. They deal with the issue of the inefficiencies in organizations brought
about by isolated information, business, and technological islands. A big corporation often has a
wide variety of information systems to support its many departments, levels of management, and
business operations. The majority of these systems are composed of distinct business units and
business processes that do not "talk" to one another. The information that managers need to get a
complete picture of how the organization is operating may be difficult for them to compile.
ERP systems offer a single information system for the coordination of crucial business
operations throughout the whole firm, which solves this issue. In order to integrate information
throughout the organization and reduce complexity, enterprise software models and automates
various business operations, including order fulfillment and shipping planning. When
information is shared across business processes in manufacturing, accounting, human resources,
and other parts of the company, it allows for smooth information flow throughout the
organization that was previously scattered across many platforms. Sales, production, financial,
and logistical discrete business processes can be included into a company's overall business
processes that move between organizational levels and functions. A technological platform that
spans the whole organization supports all levels and procedures.
Businesses operate primarily to make money, which is their fundamental driving force. It is to be
anticipated that a corporation would look for knowledge on how to boost profitability throughout
the whole computer system after making a significant investment in technology, such as the
adoption of an ERP platform. As everyone is aware, the only method to boost profits is to either
cut expenses or boost sales. The ERP software significantly improves data quality in several
areas, including accessibility, accuracy, and timeliness, among others.
An organization's decision-making processes, operational activities, and other features are among
the many factors that are affected by improvements in the quality of advice. Each of these
advantages may be provided by an ERP, which makes it easier to achieve advances in
organizational growth, which should eventually lead to improved profit margins. Businesses that
have access to greater information may be able to function more efficiently by using fewer
resources, such as physical labor or machinery, while simultaneously increasing sales through
precise sales forecasting and significantly improved customer service.

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 ERP Implementation

Improved Informaion Quality

Improved Productivity

• Lower Inventory
• Shorter Delivery Time
• Quicker Service Response
• Shorter Financial Close Cycle
• Improved Order Management
• Beter Demand Forecast

Less Resource Beter Customer Service

Cost Savings Increased

Higher Profits

Figure B: Comprehension of Profits through ERP

In contrast to operational regions, ERP systems are made up of a variety of discrete support
units. Modules for topics including client relationship management, financial accounting, supply
chain management, and individual assets are included in the database. These modules use the
database to get detailed information on each of their specialized areas. Businesses employing
ERP solutions may select the modules they wish to install based on their needs, and because
these systems are modular, they can start using specific parts of the ERP system in combination
with other systems to save costs. The costs and time required to fully execute a typical ERP
process are high, but the advantages of thorough information integration across all of the
company's operational areas surpass these drawbacks.

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 Finance
Strategic &
Human
Operationa
Resources
l Planning

Logistics
Management ERP Manufacturing

Materials Sale &

Management Distribution

Quality
Management

Figure A: Information integration through ERP System

Drawbacks of ERP
ERP system implementation entails a substantial commitment of time, money, and internal
resources and is rife with technical and commercial risk. A variety of difficulties are connected to
the adoption of ERP systems. First, ERP systems are expensive, necessitating difficult decision-
making procedures in order to acquire them. Second, ERP systems often have an impact on the
entire business. Therefore, to effectively choose, develop, and execute (Escallc et al., 1999),
requires a combination of technical and human competence. Third, there have been several
reports of ERP installation failures. Businesses like FoxMeyer Drugs, Applied Materials,
Hershey, Mobil Europe, and Dow Chemicals are examples (Bingi et al. 1999).
According to this paper (Azad Chowdhury et al., 2021), these were some findings that worked as
a Barrier to ERP Implementation in Bangladesh. Starting with the lack of skilled persons in the
root level which arises the vital problem for implementing ERP. Every day lot of problem arise
while using this ERP system because its UI (user interface) is not so convenient for the users. A
lot of logistic supports are required before using this ERP, but in most of the cases it was absent
for the users. That’s why the total system is segregated. One department can’t access other
departments' data base without permission of the authorized person. Sometimes it’s seen that
manual processing is interrupted because of incomplete system functions. Every department
needs to clear their work in this ERP otherwise one department's failure directly affects another
department. In addition, Small support team to give technical help. Absence of regular training
and risk of system failure.

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Literature Review
In a study (Azad Chowdhury et al., 2021), a notion was attempted to be formed by studying the
literature and looking at numerous current studies. The many circulars and reports issued by the
corporations have given them an idea about the state of ERP practices in Bangladesh today. The
study indicated that deploying ERP in local businesses enhanced productivity and earnings,
although there are still many issues to be resolved. To maximize benefits, the IT infrastructure
and power supply should be guaranteed. To efficiently operate the system, the staff must get
proper training.
In relation to a foreign network, Rahad (2014) developed a novel approach for accessing ERP
systems. Kabir (2020) assessed how Enterprise Resources Planning (ERP) deployment affected
BSRM Steels Limited's productivity and profitability. The analysis shows that after
implementing ERP, BSRM's productivity and profitability both dramatically increased.

Status of ERP in Bangladesh

Though it is progressing, the spread of ERP adoption in underdeveloped countries is still far
behind that of the industrialized ones. The USA holds 66 percent of the worldwide ERP market,
followed by Europe with 22 percent and Asia with just 9 percent. On the other hand, Asia's
economic expansion is accelerating the adoption of ERP, and major ERP suppliers have made
Latin America and Asia their top international markets. The majority of small and medium-sized
firms are now putting the mechanisms into place to understand the operational efficiency of the
market. Additionally, a lot of ERP providers have tailored their ERP platforms to compete in this
industry, which is growing quickly. South East Asia is not an isolated case in this regard. Even
though a large number of organizations in Bangladesh have implemented or are currently
implementing Enterprise Systems, there is no trustworthy source to confirm their exact numbers.
However, it's possible to imagine the rise in platform implementation among various businesses
applying or using it, the anticipated benefits, and the pertinent problems faced by the businesses
that have implemented or are still in the process of doing so from the website advice of the top
ERP vendors and in the regional partners in this area. Numerous large firms are already using
ERP systems from leading ERP vendors like Oracle, SAP, and AX, which are maintained by their
local partners, according to interviews with management, site information, press announcements
in the ES system sellers, and the executing organizations. A number of enterprises will also make
use of ERP methods created, carried out, and maintained by regional software firms.
Currently, a wide range of large, medium-sized, and small businesses, as well as subsidiaries of a
major multinational corporation, neighborhood groups of organizations, leasing companies,
telecommunications businesses, tourism businesses, knit and clothing sectors, government and
semi-government businesses. According to several correspondences and talks with directors,
many important crucial success elements weren't adequately taken into account while making
decisions. After thirty years of the project's implementation, many of them have no clear notion
when it will be finished. A lack of adequate training for the employees using the system on a
daily basis is frequently cited by the investors as a reason why the software investment is now
over budget.

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Additionally, according to the stakeholders, a number of the scenarios do not yet show the
apparent advantages that ERP providers had promised. The discrepancy between the expected
benefits and reality is growing as a result of the inadequate understanding of the critical elements
for ERP adoption. It should be noted, however, that a copycat approach to a western model of
execution won't be helpful due to contextual issues like economic growth, business environment,
civilization, IT adulthood, along with telecom infrastructure, etc. In a developing nation like
Bangladesh, careful examination of the issues is another significant obstacle for effective
implementation.

Challenges of ERP implementation in Bangladesh

ERP technology has additional challenges in underdeveloped nations due to underlying
infrastructure, economic, and cultural difficulties. In addition to ERP implementation, the
nation's lengthy economic history offers a solid platform for IT/IS growth. Infrastructure, which
comprises both physical and information technology infrastructure, is a crucial requirement for
ERP adoption. The whole infrastructure must be in good working order to support the extensive
value chain control made possible by ERP. Bangladesh is having issues with its infrastructure.
Deploying ERP is also made more challenging by a lack of IT maturity and a lack of a business
intelligence plan.
According to Hofstede's cross-cultural studies on Bangladesh, the culture is mostly hierarchical,
limited to classes, and uses the peculiar cultural measurement of collectivism. It also exhibits
higher levels of uncertainty avoidance and energy space. Thus, Bangladeshi culture would not
allow for a quick imitation of established Western practices.

Conclusion
The lack of proper management involvement and continuous assistance in Bangladesh continues
to be a barrier to effective implementation. Management commitment is necessary for the
effective implementation of ERP in both developing and mature nations due to the complexity
and resource needs. However, given the basic function of ERP in developing nations, it's
probable that these nations may see a wider application of this technology.
ERP implementation in our nation is quite difficult. But we have reason to expect that many
businesses have already adopted the ERP system. Organizations will see an increase in their
business as soon as they comprehend the advantage. It is difficult to picture a business or group
of businesses operating without an ERP setup in the far future. Some software companies in
Bangladesh create their ERP systems, which are already well-liked in the home market.