Enterprise Resource Planning Vs Bespoke Software in Public Policy

Enterprise Resource Planning Vs Bespoke Software in Public Policy

C.T. Sunil Kumar
Post Doctoral Research Scholar, School of Public Policy, George Mason University, Room No:206, 3330 Truland Buildings, Washington Blvd, Arlington- 22201.

Abstract
The share of implementation of ERP software in corporate world is increasing day by day and to compete with them government agencies and organizations are also on the path of implementing them. The usage of ERP system in public offices can definitely provide better results, but at what cost? This paper is comparison of ERP software with bespoke software from a public policy perspective.
Keywords: ERP, Bespoke, Business Process Reengineering
Introduction
Enterprise Resource Planning is an enterprise solution software system that allows a company to automate and integrate the majority of its business processes, and share common data and practices across the enterprise through integration of various functions in the organization, managers and staff alike can use timely information to make better decisions and to perform activities, which add value to the company. An ERP system may thus provide. 1. A repertoire of standard business process tools to support management initiatives such as activity based costing , business process reengineering and supply chain management; 2. An integrated computer system with a common framework for all corporate processes and data. 3. Potential real-time analysis of key issues for enterprises, such as material usage, costs, quality, customer satisfaction and profitability.

Comparison
SL NO Criterion ERP Bespoke
1 Time taken for Implementation Less, As the enterprise solution is already there and requires only customization More, Will have to start everything from beginning

2 Management / Organization change required More, if BPR is used but will get the benefit of Best practices Less, Will actually change the manual work to computer

3 Cost Factor Timeline and obsolesce should be taken into account Timeline and obsolesce should be taken into account
4 Quality Use of Standards May or may not use industry standards
5 Best Practices in Industry Available Not Available
6 Expertise of Staff required for customization Functional Level Technical Level
7 Integration of Functions High Low
8 Proprietary License No Yes
9 Availability Of the shelf Not Available, have to build from the scarp

The ERP is the solution for the future. If you are able to implement the ERP software as such it will be a better option, because it has all the best practices in the industry integrated in to it. Once you implement ERP you should adopt the path of BPR (Business Process Re engineering) rather than customization because we will be able to use the best practices in the industry in a better way. But in the case of bespoke there is nothing called best practices. They will be making use of the computer in the functions which are normally done manually earlier.

When we consider software project management 90 % of the software projects are scrapped. The reasons may be many. The long term retention of employees in a software company is generally not possible. The person who wrote the software code in case of bespoke may not be available for any future reference or change in the package. But in the case of ERP there is a standard procedure developed over several years. The leading corporate giants of the world use SAP. The companies like Microsoft, Tata Consultancy Service, IBM, Colgate , Steel Authority of India Limited etc use SAP for their functioning.
Risk associated with technology obsolescence is greater in bespoke software in comparison to ERP. ERP software is updated frequently and there is no question of ERP going out of business. But in the case of bespoke software at the time of completion itself, will be obsolete. Many reasons can be attributed for this including modifications required in later part of the development at the stage of testing and modification by trail and error.

Negative from the government employees perspective

The operations relating to food grain management are unique in nature and if ERP software is implemented it will require a lot of customization. In a government organization the operations cannot be changed overnight and resistance to change is very high. So the software will require a large amount of customization. When customization is large, we may loss the integrity of the system.

Each time a new version of ERP is launched in the market the ERP Company will force the government organizations to upgrade to the new package and each time they will have to customize the upgraded. But customization is normally included in the 5 year AMC @ 22 % of the implementation cost per year; this adds to the cost of ERP implementation. In government organizations the work force is not as effective as in the private sector. Whatever is the level of training provided to implement ERP? It is difficult. The Trade unions and management will ask for more staff to be posted and recruitment as a policy is banned in many government organization.

When we look to the successful completion of ERP packages it is very less. A lot of commitment from top level management is required to change any process in a government organization. One of the advantages of the ERP system is that you will have the best practices of industries embedded in the ERP systems. However it is also thought that it will not have the options to take care of the nitty-gritty of food grain management in large organizations like Food Corporation of India where the industry is vertical integrated.

In India the material management or inventory function is not fully automated. The government sector requires a great deal of flexibility to our operations. Another advantage projected by ERP is that the ERP software can be customized by functional level person but for changes to be made in bespoke software you require technically skilled person. Does it make any sense? In case of government, technical as well as functional level people are all equal with no expertise. Both will not be doing the job.

Software made to requirement of the customer is actually computerizing the actual manual operations. There is also an opinion that ERP software is for looting the organization in the name of BPR (Business Process Reengineering) and that implementation of ERP in government offices will always fail. So it is always be better to use bespoke software. Because of the lack of knowledge of computer systems expertise the government companies and organizations are being cheated by the implementers by using technical jargons. For any successful implementation of the ERP software the role of a consultant is very important.

In an organization like Food Corporation of India, data must be fed in to the system from 1,064 locations across the length and breadth of the country. Due to the immature telecommunication network and lack of high speed internet in all parts of the country the data entry from remote areas will be affected and the implementation for computer data transfer system.
In the case of software implementation in various locations and the operations can vary from state to state and region to region. Another concern is that if a functional level consultant at any of the state or smaller level customizes the software it will loss the uniformity though out the organization and therefore a center location is required to maintain the updating and revisions.

One more thing is that it requires a greater understanding of ERP systems rather than the normal operation of the organization to operate an ERP package. Therefore the expertise of the employees will come in to picture which is low in government when compared to private organizations in India.

If we are looking from a larger perspective ERP systems are monopolizing the market. India is a developing country. Does the country need this type of technology advancement? Will it put the country in a technology trap? If we are promoting the ERP system the country will be denying opportunity of thousands of young people who are in the business of developing software. The government also will have to consider things from the point of view of social benefits.

Look at the government office in India, How many are using proper computer networks. Another aspect is of cost. If we implement bespoke software we are having cushion in rolling back. Now a day’s agreement for purchase or development of software is made with less number of licenses and after the entire software is put in to use and is fully functional. Then only the organization will purchase the balance rest 5000 or 6000 licenses for the implementation in the entire organization. But is it possible in the case of ERP.

The other day I had a discussion with one of my colleagues who is a member of the ISS (Indian Statistical Survey) cadre. It was his opinion that “With ERP Marketing in India, we are trying to sell some ones projects and consultants are only facilitating it. What is the actual intellectual contribution? Are they doing anything concrete? Rather than doing marketing for this multinationals. What will happen to the indigenous developments in this country?”

Conclusion

Since the technology is taking quantum leap every day. It will be better to have government agencies and establishments concentrate in their core competency and the best technologies doing the job for them. Since the operations of the similar nature will be there in the other part of the globe in same industry or operation of the same nature in different industry. One can review the merits and demerits and come to conclusion regarding implementation. It will be better if the government organizations leave the job of assisting development of software and rather leave the job to enterprise solutions like ERP to provide the complete solutions.
References




1. Text Book on ERP, Author: Mahadeo Jaiswal, Ganesh Vanapalli, ISBN :9781403927453, Imprint:Machmillan Publishers India, copyright:2005.
2. Maximizing your ERP System – A text book for Managers, Author: Scott Hamilton., Publisher: McGraw-Hill Companies, ISBN:0071406115
3. ERP: Making It Happen: The Implementers ‘Guide to Success with Enterprise Resource Planning A Wiley-Interscience | 1 edition (July 4, 2002) | English | ISBN: 0471218766
4. E-Business and ERP: Rapid Implementation and Project Planning Author: Murrell G. Shields ISBN: 0471406775