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Conducting ERP System Step by Step - Case Analysis of A Certain Group
Conducting ERP System Step by Step - Case Analysis of A Certain Group
cjxdsh@csust.cn
2
School of Management, Changsha University of Science &Technology, Changsha, 410076 China
luyujin09@163.com
Abstract: Nowadays, ERP system is the tendency and effective tool of information-based management mode of modern
enterprises. This paper introduces experiences and lessons of each stage of ERP system development process and tries to
explain the implementation of ERP system is a gradual process based on the example of Hunan Salt Group.
Keywords: ERP System, long-term planning, conducting ERP system step by step
1. INTRODUCTION
ERP (Enterprise Resource Planning) is a systematic managing idea based on IT, providing enterprise
decision for managers and employees with a managing platform. It is also a tool of foundation and
[1]
standardization of modern enterprises management . In brief, ERP is an integrated management information
system of production, logistics, finance and human resources including information integration of not only every
interior management function in enterprises, but also all interrelated businesses of the whole supply chain.
Nowadays, ERP system is the tendency and effective tool of information-based management mode of modern
enterprises. The ultimate objective of implementing ERP is to rationally adjust and make full use of enterprise
resources to realize the maximization of enterprise value.
As the enterprise which enjoys the largest scale and WAN coverage in light industry and salt industry in
China, Salt Group is the first enterprise conducting ERP in salt industry. Based on the spot investigation, the
author holds that conducting ERP in an enterprise cannot be realized in a short time. According to the actual
situation of the enterprise, we must make integrated planning, consider the cost benefit, and promote the
full-scale implementation of the ERP system step by step.
2. CASE ANALYSIS
Hunan Salt Group LTD.CO is a large-sized stated-owned enterprise directly affiliated to government of
Hunan Province. This group manages state-owned assets authorized by Hunan Province and controls the
exclusive distribution of salt in Hunan Province. Its business consists of science, industry, trade, transportation,
and processing industry of raw materials governing more than 40 subsidiary companies, 68 sub-branch
companies and 2 salt mines.
Owing to the management system, informatization construction of Hunan Salt Group had been lagging
behind. To meet the need of market economy, Powerise Software Company and Kingdee Company were
selected to joint-develop the ERP system by means of bidding in 2002 12th. For 3 years, until 2005 12th, the ERP
3. CONCLUSIONS
For Hunan Salt Group, the implementation of ERP system not only strengthens supervision to various
departments and subsidiary companies, enhances the connection of every parts of the group and shares recourses
and information of the group company, but also avoids isolated progress, reduces recourses wastes. In a word,
the Salt Group full plays the priority with the help of the ERP system. That the Phase 1 project of this ERP
system was affirmed doesn't mean the end of informatization construction of enterprise resource management, in
other words, the Phase 2 project is not the end-point. The ERP system is being on its developing and
consummating era.
The implementation of ERP system is a gradual process on the basis of long-term plan. (1)Before an
enterprise decides to develop an ERP system, it must know its present state of information management and
analyzes in detail whether it is a good time to carry out ERP system. (2)If the enterprise confirms the idea,
taking the economic strength and management status into consideration, it should be certain what functional
required modules must be finished in Phase 1 project and which can be lain over to avoiding consuming plenty
of manpower, material resources and financial abilities. (3)The modules developed in Phase 2 project should be
reserved the frames in Phase 1 project in order to save time cost and capital cost. Only making sure carrying out
every step smoothly, finding and solving problems in each step can the information management level of the
enterprise improve step by step and are enterprise decision and performance evaluation supported.
Learning from the case of the ERP system operated by Hunan Salt Group, the enterprises which are
carrying out or going to carry out the ERP system must take practical situation, the key factors, the integrated
plan and the implementation stages into consideration instead of being over anxious for quick results and
one-sided development. Besides, they must make sure that every stage target should be achieved in the whole
development process. Meanwhile, the input-output relationship should be fully considered in order to attain the
maximum utility. If not, the modules which can’t play positive roles immediately, needless to say to bring out
the economic efficiency, would drag the enterprise in a dilemma finally caused by income falling short of
expenditure.