A SUMMER TRAINING REPORT

ON

“A Case study on the feasibility of ERP after the

implementation of SAP in the IB Group, Rajnandgaon”

Submitted in partial fulfillment for the award of the degree

Master of Business Administration
Chhattisgarh Swami Vivekanand Technical University, Bhilai

Submitted by–
ABHINAV SHRIVASTAVA
MBA – Semester III
(Session 2009-2010)

Approved By– Guided By–

Dr. Sumita Dave Ajit Mani
HOD Manager HR
IB Group
Shri Shankaracharya Institute of
Management and Technology
Junwani, Bhilai (C.G.) - 490020

ii | P a g e
CERTIFICATE

This is to certify that the summer training project report “A Case study

on the feasibility of ERP after the implementation of SAP in the IB

Group, Rajnandgaon” submitted to Shri Shankaracharya Institute of

Management & Technology, Bhilai in partial fulfillment of the

requirement for the award of Master of Business Administration (MBA)

is a bona fide work carried out by Abhinav Shrivastava, a student of

MBA III Sem, under my supervision and guidance.

Aj
it
Mani
M
anage
r HR
IB
Grou
p,Raj
nandg
aon
 Shri Shankaracharya Institute of
Management and Technology
Junwani, Bhilai (C.G.) – 490020

DECLARATION

I, Abhinav Shrivastava, a student of MBA III Semester 2009, at Shri

Shankaracharya Institute of Management & Technology hereby declare

that this summer training project report under the title “A Case study

on the feasibility of ERP after the implementation of SAP in the IB

Group, Rajnandgaon” is the record of my original work under the

guidance of Mr.Ajit Mani,HR Manager(IB Group). This report has never

been submitted to anywhere else for award of any degree/diploma.

Place: Bhilai
Abhinav Shrivastava
Date : 21.10.2009
MBA –Sem III

[ii]
ACKNOWLEDGEMENT

It’s a great pleasure for me to submit my summer training project report

on ” A Case study on the feasibility of ERP after the implementation

of SAP in the IB Group, Rajnandgaon ” to Chhattisgarh Swami

Vivekanand Technical University,Bhilai.

The exclusivity of this summer training report cannot be claimed as a

singular effort, since several have contributed, shared their valuable time and

helped me directly or indirectly in the accomplishment of this summer training

report. I express my profound gratitude,as without their generous assistance this

work would never have never completed.

From the core of my heart,I gratefully acknowledge my most humble and

sincere indebtness to Mr.Ajit Mani,HR Manager of the IB Group,and

Mr.Rathi,GM(Finance) of the Indian Solvent Industry,Mr.Dilip

Jain,Head(SAP),Mr.Soni,Company Secretary of IB Group under whose

guidance i could conduct my summer training on “A Case study on the

feasibility of ERP after the implementation of SAP in the IB Group,

Rajnandgaon”

[iii]
Place: Bhilai
Abhinav Shrivastava
Date : 21.10.2009 MBA
– Semester III

[iv]
TABLE OF CONTENTS

i. CERTIFICATE
ii

ii. DECLARATION
iii

iii. ACKNOWLEDGEMENT
iv

iv. TABLE OF CONTENTS

v

v. EXECUTIVE SUMMARY
vi

1. INTRODUCTION

Page No.1

2. LITERATURE REVIEW

Page No.13

3. RESEARCH METHODOLOGY

Page No.29

4. DATA ANALYSIS AND RESULTS

Page No.38

5. INTERPRETATION OF FINDINGS

Page No. 40

6. RECOMMENDATIONS

Page No.41

7. LIMITATIONS

Page No.42

8. CONCLUSION

Page No.43

[v]
vi. REFERENCES

Page No.44

vii. APPENDICES

Page No.45

[vi]
EXECUTIVE SUMMARY

I have selected this topic “ A Case study on the feasibility of ERP

after the implementation of SAP in the IB Group,Rajnandgaon ”

because I am a student of Computer applications in the graduation level (BCA)

as well Finance & Systems Management(IT),as dual specialization in MBA,so I

choosed to prepare my Summer Training report as a case study of an ISO 900-

2000 certified company IB Group, where SAP has been implemented to manage

the database,generate reports and for enterprise resource & planning

(ERP),which helped me to understand SAP up to much extent i.e its working

and areas of applications in any organization.

To conduct this case study I was in IB group for 2 months as per the

curriculum to understand the processes, working, products, techniques, quality,

system, management of the organization.I collected data for my report from

various personnel’s of the organization

In a view of the case study on “ A Case study on the feasibility of

ERP after the implementation of SAP in the IB

Group,Rajnandgaon” has been done and the project report is before

readers.If any part of this case study is taken positively by the company,I will

feel that my effort was worthwhile.

[vii]
[viii]
INTRODUCTION

IB Group – The IB Group is an ISO-9001-2000 certified group,one of the leading

multi diversified growing group based at Rajnandgaon,Chhattisgarh state,with an annual

turnover exceeding 550 crores.The Indian Broiler (IB) Group of companies is a highly

diversified organization with its operations in a wide variety of products.The group started

with Poultry as its backbone two decades ago,and today it is a big group with highly

diversified products such as Edible Oil,Poultry products(Broiler,Cockrail,Layer.Eggs

etc.),Organic Fertilizers,Animal nutrition(Fish feed,hen feed),Soyabean products(Soya

nuggets),Dairy products (Milk) etc.

IB group is the largest vertical integrator of commercial broiler in central India.IB

group is named as largest TRUE INTEGRATOR in commercial broiler because of its sale

services,retail and wholesale delivery services by their 108 retail outlets spread all over

central India,and has its own fleet of caged vehicles to transport the ready birds to these

outlets.

If there is one single factor that has been responsible for group’s meteoric rise and its

blazing performance is its quality. To have best performance and lowest production

cost,company made massive investment on technology, infrastructure & system

management(SAP).

[1]
 Everything from hatch to direct sales was visualized in a remarkable backward

integration plan, The aim was to provide a protein rich cost effective value added nutrition to

the common men.

IB Group is the largest vertical integrator of commercial broiler in Central India At

present it has a combined capacity of rearing nearly 4 Million birds ( 0.15 million broiler

breeders, 3.00 million commercial broiler, 0.5 million commercial layers and 0.3 million

cockerel) mostly are in environmentally controlled houses attached with silo feeding system.

IB Group is named as largest TRUE INTEGRATOR in commercial broiler because of its

sale services, home delivery services, hotel, wholesale and retail delivery services by their

108 retail outlets spread all over central India, and has its own fleet of caged vehicles to

transport the ready birds to these outlets.

If there is one single factor that has been responsible for the Group's meteoric rise and

its blazing performance is its quality. The group has well equipped laboratory to constantly

monitor the quality of incoming, in process and finished products by highly qualified

personnel.

To have the best performance and lowest production cost company made massive

investment on technology, infrastructure & system management and has high tech advanced

pellet feed plant with 400 TPD capacity, equipped with bulk storage silos, finished product

silos and bulk tankers. Over and above Group did backward integration of feed mill also to

provide quality raw material to its own feed mill and has established 500 TPD soy I

sunflower I rice bran solvent extraction plant attached with state of the art refinery and

marketing their own soya oil by the trade name "ABIS GOLD" & ABIS SILVER"

[2]
 In order to provide nutritional product the company diversified into dairy farming and

has over 2500 high yielding animals and markets its own packaged and branded milk by

trade name ABIS and very soon company is planning to come with extruded fish feed and

other Soya by products like Soya Flour and Soya nuggets.

Group realized that the chemical fertilizer posed serious threat to environment and

started manufacture of international quality organic pelleted fertilizer plant (100 TPD) brand

name and styled as "ECOFIT" is specially tailored to Indian needs made from com posted

poultry and cattle manure.

In the past two decades, over thousand of people have joined hands to help and build

IB Group a Corporate house in Indian Agri Business. The strong knowledge workers team

has been at the fore front providing the cutting edge in key areas of business activity. Work

culture at IB Group provides ample opportunity for individual growth and development in

tandem with the organization business objectives, Ultimately, visionaries of promoters and

people of IB Group who have made the company and will be the driving force to achieve

goals of tomorrow.

The Group Companies –

 INDIAN POULTRY
 INDIAN BROILER FARM
 INDIAN ORGANIC FERTILIZER INDUSTRY
 INDIAN SOLVENT INDUSTRY
 AZIZ POULTRY PVT.LTD.
 AZIZ LABORATORY
 AZIZ AGRICULTURE FARMS
 ABIS POULTRY PVT.LTD.
 ABIS EXPORTS (I) PVT.LTD.
 ABIS DAIRY HALIFAX MERCHANDISE PVT. LTD.

[3]
 The I B Group is situated in Rajnandgaon, a  small town in central     India stands

testimony to a massive agro- industrial revolution brought about by two young entrepreneurs.

What started as a small poultry farm two decade ago has today grown into a gigantic

diversified conglomerate with a unique combination of world class technology, systems and

quality and local talent nurturing eco-sustainable practices for a better tomorrow.

If there is one single factor that has been responsible for the Group's meteoric rise and

its blazing performance, it has been the complete, unwavering focus on quality. Every single

input raw material is tested against standard parameters, in-process testing and finished

product testing are a part of the standard procedure. Apart form existing laboratories at every

facility, the company is investing heavily in one of the most advanced central group

laboratory, which will house the most cutting edge equipment available world wide for

testing, research and development. It is destined to be one of the most sophisticated facilities

of its kind in the entire country. Quality has been the driving force for the company and shall

be the driver for its future growth too. The Group philosophy of related diversification,

integration and quality in everything it does has brought it on the threshold of  becoming a

global force to reckon with in its chosen business segments.

[4]
PROJECTS IN MAKING –

 Enhancement of breeder capacity to 3.0 million by the year 2008

 Enhancement of commercial layer capacity to 10,000,00 (1 million) by the year 2008

 Enhancement of milch animals to 5000 (cross breed cows and buffaloes) by the year

2010.

 Centralized highly sophisticated and well equipped laboratory by the year 2007

 Chicken processing plant by the year 2008

 Production of value added chicken by the year 2008

 Enhancement of 200 retail outlets in central India

 500 ton per day capacity starch plant

 100 ton per day capacity refinery

 Chain of chicken based fast food restaurants

 Enhancement of commercial broiler capacity to 5 million by 2008

50 tonnes per day capacity of pet food plant by the year 2008

[5]
 THE HATCHERY & BREEDER –

A state-of-the-art hatchery is the hub of the massive broiler chicken business of the

group. The hatchery has extremely stringent hygiene and quality standards and is equipped

with modern machines. The hatchery has a large breeder farm which is the IB Group’s

backward integration step of producing commercial flock for its broiler farms. The breeder

are reared in deep litter with slatted floor in environment control sheds with nipple drinking

equipped with automated feeding & silos.

THE POULTRY FARMS–

This is the pride and the flagship activity of the group. It has a massive combined

capacity of 5 million birds per annum and constantly increasing. But more important than the

numbers is the tremendous focus on quality and the massive investments in infrastructure,

technology, skills and systems management to achieve this.

All the Broiler & Cockerel Farms are environmentally controlled equipped with

computerized automated feeding, nipple drinking systems. These sheds are attached with

feed storage silos feeding  system.

Broiler Farms
Capacity 3,00,000 ( 3.2 millions)
Layer Farm
Capacity 5,00,000 (0.5 million )
Chicks / Grower Farm
Capacity 1,65,000 (0.165 million)
Cockerel Farms
Capacity 3,00,000 ( 0.3 million )

[6]
THE PALLET FEED PLANT–

Understanding and appreciating the need for balanced nutrition of its livestock the

group went in for backward integration by setting up one of the most hi-tech and advanced

feed plants with a 650 MT per day, capacity. The plant is equipped with Dryers, bulk

Storage, Silos, Pellet Mill, Extruder, Expellor, Pellet Finished Product Silos & Bulk Tankers.

This plant not only meets the  group's captive demand but also markets its products through

its extensive distribution network.

To ensure consistent supply of quality raw-material the group has taken another backward

integration step by step promoting farmers to grow maize in the region and has also set-up a

large Soya Solvent extraction plant. Each raw material as well as the finished product

undergoes stringent tests at the plants well-equipped laboratory.

Pellet Feed Plant Capacity 650 MT/ Day

[7]
THE DAIRY FARM–

In line with its vision of offering the highest quality of nutritional products the

company diversified into Dairy Farming.  The company has over 2000 high yielding

crossbreed cows and murra buffaloes and has developed its own pedigree herd through its

own breeding plant. The group  are  markets of its own  ' ABIS'  packaged  and  branded milk

through its highly penetrative distribution network.  An advanced laboratory at the farm

ensures quality of milk feed,  water  and fodder . A team of highly qualified and experienced

Veterinary Surgeons at the farm also monitor the health of the cattle as well as ensure the

breeding programme follows the planned course.

2500 Cross breed

Current Livestock Holistien Frizen Cows / Buffaloes

[8]
 THE SOLVENT EXTRACTION & REFINING PLANT–

The Group's constant quest for quality to further integrate vertically by setting a 500

TPD Soya Solvent Extraction and Refining and Lecethine plant. The solvent plant will

produce IB Soyabean meal a pioneering concept in India. The Soyabean meal involves

significant removal of mill, sand, silica & other undesirable material making.  This not only

makes it the finest quality meal but ensures a very light protein & amino acid content

reducing the quantity required in the final meal, thus leaving free space for grains etc. making

it a high-energy diet for poultry.

Many trials with IB Soyabean meal have conclusively brought about superior performance in

broiler layer & breeders when formulated to equivalent nutrient specifications compared to

normal diets through better performance & reduced costs. The 100 TPD refinery will be the

group's springboard to enter the branded packaged edible oil market with its 'ABIS' brand of

soyabean, rice bran, sunflower and other refined oils.

Capacity Extract 500 MT / day

Refinery 100 MT / day

[9]
BROILER MARKETING–

The Indian Broiler Group takes pride in the fact that it is the largest fully integrated

commercial broiler group extending its value chain right upto the point of customer interface

by forward integrating the marketing and retailing of its poultry.

The group operates over 100 retail & wholesale outlets, under most hygienic & ethical

conditions. It caters to all kinds of demands viz: wholesale, retail, hotel & home delivery etc.

Its retail network is widely spread over central India and is growing at a fast clip. The group

also operates a transport division with a fleet of over 100 caged trucks, which transport its

ready birds to the market.

[10]
 The IB Group (Indian Broiler Group) is an ISO 9001-2000 certified group is one of the leading

multi diversified growing group based at Rajnandgaon in Chattisgarh state with an annual turnover

exceeding 550 Crores.

Everything from hatch to direct sales was visualized in a remarkable backward integration plan,

The aim was to provide a protein rich cost effective value added nutrition to the common men.

IB Group is the largest vertical integrator of commercial broiler in Central India At present it has

a combined capacity of rearing nearly 4 Million birds ( 0.15 million broiler breeders, 3.00 million

commercial broiler, 0.5 million commercial layers and 0.3 million cockerel) mostly are in

environmentally controlled houses attached with silo feeding system. IB Group is named as largest

TRUE INTEGRATOR in commercial broiler because of its sale services, home delivery services,

hotel, wholesale and retail delivery services by their 108 retail outlets spread all over central India,

and has its own fleet of caged vehicles to transport the ready birds to these outlets.

If there is one single factor that has been responsible for the Group's meteoric rise and its blazing

performance is its quality. The group has well equipped laboratory to constantly monitor the quality

of incoming, in process and finished products by highly qualified personnel.

To have the best performance and lowest production cost company made massive investment on

technology, infrastructure & system management and has high tech advanced pellet feed plant with

400 TPD capacity, equipped with bulk storage silos, finished product silos and bulk tankers. Over and

above Group did backward integration of feed mill also to provide quality raw material to its own

feed mill and has established 500 TPD soy I sunflower I rice bran solvent extraction plant attached

with state of the art refinery and marketing their own soya oil by the trade name "ABIS GOLD" &

ABIS SILVER"

[11]
 In order to provide nutritional product the company diversified into dairy farming and has over

2500 high yielding animals and markets its own packaged and branded milk by trade name ABIS and

very soon company is planning to come with extruded fish feed and other Soya by products like Soya

Flour and Soya nuggets.

Group realized that the chemical fertilizer posed serious threat to environment and started

manufacture of international quality organic pelleted fertilizer plant (100 TPD) brand name and styled

as "ECOFIT" is specially tailored to Indian needs made from com posted poultry and cattle manure.

In the past two decades, over thousand of people have joined hands to help and build IB Group a

Corporate house in Indian Agri Business. The strong knowledge workers team has been at the fore

front providing the cutting edge in key areas of business activity. Work culture at IB Group provides

ample opportunity for individual growth and development in tandem with the organization business

objectives, Ultimately, visionaries of promoters and people of IB Group who have made the company

and will be the driving force to achieve goals of tomorrow.

[12]
LITERATURE REVIEW

Enterprise resource planning (ERP)–

Enterprise Resource Planning (ERP) is a term usually used in conjunction with ERP
software or an ERP system which is intended to manage all the information and functions of
a business or company from shared data stores.

An ERP system typically has modular hardware and software units and "services" that
communicate on a local area network. The modular design allows a business to add or
reconfigure modules (perhaps from different vendors) while preserving data integrity in one
shared database that may be centralized or distributed.

The initials ERP originated as an extension of MRP (Material Requirements Planning and
Manufacturing Resource Planning; later manufacturing resource planning) and CIM
(Computer Integrated Manufacturing). ERP systems now attempt to cover all core functions
of an enterprise, regardless of the organization's business or charter. These systems can now
be found in non-manufacturing businesses, non-profit organizations and governments.

To be considered an ERP system, a software package must provide the function of at least
two systems. For example, a software package that provides both payroll and accounting
functions could technically be considered an ERP software package.

Examples of modules in an ERP which formerly would have been stand-alone applications
include: Product lifecycle management, Supply chain management (e.g. Purchasing,
Manufacturing and Distribution), Warehouse Management, Customer Relationship
Management (CRM), Sales Order Processing, Online Sales, Financials, Human
Resources, and Decision Support System.

[13]
 Some organizations typically those with sufficient in-house IT skills to integrate multiple
software products — choose to implement only portions of an ERP system and develop an
external interface to other ERP or stand-alone systems for their other application needs. For
example, one may choose to use human resource management system from one vendor, and
perform the integration between the systems themselves.

This is common to retailers, where even a mid-sized retailer will have a discrete Point-of-
Sale (POS) product and financials application, then a series of specialized applications to
handle business requirements such as warehouse management, staff rostering, merchandising
and logistics.

Ideally, ERP delivers a single database that contains all data for the various software
modules that typically address areas such as:–

Manufacturing–Engineering, bills of material, scheduling, capacity, workflow

management, quality control, cost management, manufacturing process, manufacturing
projects, manufacturing flow.

Supply chain management –Order to cash, inventory, order entry, purchasing, product

configurator, supply chain planning, supplier scheduling, inspection of goods, claim
processing, commission calculation.

Financials –General ledger, cash management, accounts payable, accounts receivable,

fixed assets.

Project management –Costing, billing, time and expense, performance units, activity

management.

Human resources –Human resources, payroll, training, time and attendance, rostering,

benefits.

Customer relationship management –Sales and marketing, commissions, service,

customer contact and call center support.

Data services –various "self-service" interfaces for customers, suppliers, and/or

employees.

Access control –management of user privileges for various processes.

[14]
 The term "Enterprise resource planning" originally derived from manufacturing
resource planning that followed material requirements planning (MRP). MRP evolved into
ERP when "routings" became a major part of the software architecture and a company's
capacity planning activity also became a part of the standard software activity. ERP systems
typically handle the manufacturing, logistics, distribution, inventory, shipping, invoicing,
and accounting for a company. ERP software can aid in the control of many business
activities, including sales, marketing, delivery, billing, production, inventory management,
quality management, and human resource management.

ERP systems saw a large boost in sales in the 1990s as companies faced the Y2K
problem (real or imagined) in their "legacy" systems. Many companies took this opportunity
to replace such information systems with ERP systems. This rapid growth in sales was
followed by a slump in 1999, at which time most companies had already implemented their
Y2K solution.

ERP systems are often incorrectly called back office systems indicating that customers
and the general public are not directly involved. This is contrasted with front office systems
like customer relationship management (CRM) systems that deal directly with the customers,
or the eBusiness systems such as eCommerce, eGovernment, eTelecom, and eFinance, or
supplier relationship management (SRM) systems.

ERP systems are cross-functional and enterprise-wide. All functional departments that are
involved in operations or production are integrated in one system. In addition to areas such as
manufacturing, warehousing, logistics, and information technology, this typically includes
accounting, human resources, marketing and strategic management.

ERP II, a term coined in the early 2000’s, is often used to describe what would be the
next generation of ERP software. This new generation of software is web-based and allows
both employees and external resources (such as suppliers and customers) real-time access to
the system's data.

EAS — Enterprise Application Suite is a new name for formerly developed ERP systems
which include (almost) all segments of business using ordinary Internet browsers as thin
clients

[15]
 Best practices are incorporated into most ERP vendor's software packages. When
implementing an ERP system, organizations can choose between customizing the software or
modifying their business processes to the "best practice" function delivered in the "out-of-
the-box" version of the software.

Prior to ERP, software was developed to fit individual processes of an individual

business. Due to the complexities of most ERP systems and the negative consequences of a
failed ERP implementation, most vendors have included "Best Practices" into their software.
These "Best Practices" are what the Vendor deems as the most efficient way to carry out a
particular business process in an Integrated Enterprise-Wide system. A study conducted by
Ludwigshafen University of Applied Science surveyed 192 companies and concluded that
companies which implemented industry best practices decreased mission-critical project
tasks such as configuration, documentation, testing and training. In addition, the use of best
practices reduced over risk by 71% when compared to other software implementations.

The use of best practices can make complying with requirements such as IFRS, Sarbanes-
Oxley, or Basel II easier. They can also help where the process is a commodity such as
electronic funds transfer. This is because the procedure of capturing and reporting legislative
or commodity content can be readily codified within the ERP software, and then replicated
with confidence across multiple businesses who have the same business requirement.

[16]
[17]
Implementation–

Businesses have a wide scope of applications and processes throughout their functional units;
producing ERP software systems that are typically complex and usually impose significant
changes on staff work practices. Implementing ERP software is typically too complex for
"in-house" skill, so it is desirable and highly advised to hire outside consultants who are
professionally trained to implement these systems. This is typically the most cost effective
way. There are three types of services that may be employed for - Consulting, Customization,
Support. The length of time to implement an ERP system depends on the size of the business,
the number of modules, the extent of customization, the scope of the change and the
willingness of the customer to take ownership for the project. ERP systems are modular, so
they don't all need be implemented at once. It can be divided into various stages, or phase-
ins. The typical project is about 14 months and requires around 150 consultants. A small
project (e.g., a company of less than 100 staff) can be planned and delivered within 3–9
months; however, a large, multi-site or multi-country implementation can take years. The
length of the implementations is closely tied to the amount of customization desired.

To implement ERP systems, companies often seek the help of an ERP vendor or of third-
party consulting companies. These firms typically provide three areas of professional
services: consulting; customization; and support. The client organization can also employ
independent program management, business analysis, change management, and UAT
specialists to ensure their business requirements remain a priority during implementation.

Data migration is one of the most important activities in determining the success of an ERP
implementation. Since many decisions must be made before migration, a significant amount
of planning must occur. Unfortunately, data migration is the last activity before the
production phase of an ERP implementation, and therefore receives minimal attention due to
time constraints. The following are steps of a data migration strategy that can help with the
success of an ERP implementation:–

[18]
 1. Identifying the data to be migrated
2. Determining the timing of data migration
3. Generating the data templates
4. Freezing the tools for data migration
5. Deciding on migration related setups
6. Deciding on data archiving.

Process preparation–

ERP vendors have designed their systems around standard business processes, based upon
best business practices. Different vendor(s) have different types of processes but they are all
of a standard, modular nature. Firms that want to implement ERP systems are consequently
forced to adapt their organizations to standardized processes as opposed to adapting the ERP
package to the existing processes. Neglecting to map current business processes prior to
starting ERP implementation is a main reason for failure of ERP projects. It is therefore
crucial that organizations perform a thorough business process analysis before selecting an
ERP vendor and setting off on the implementation track. This analysis should map out all
present operational processes, enabling selection of an ERP vendor whose standard modules
are most closely aligned with the established organization. Redesign can then be
implemented to achieve further process congruence. Research indicates that the risk of
business process mismatch is decreased by:

 linking each current organizational process to the organization's strategy;

 analyzing the effectiveness of each process in light of its current related business capability;
 understanding the automated solutions currently implemented.

ERP implementation is considerably more difficult (and politically charged) in organizations

structured into nearly independent business units, each responsible for their own profit and
loss, because they will each have different processes, business rules, data semantics,
authorization hierarchies and decision centers. Solutions include requirements coordination
negotiated by local change management professionals or, if this is not possible, federated
implementation using loosely integrated instances (e.g. linked via Master Data Management)
specifically configured and/or customized to meet local needs.

[19]
A disadvantage usually attributed to ERP is that business process redesign to fit the
standardized ERP modules can lead to a loss of competitive advantage. While documented
cases exist where this has indeed materialized, other cases show that following thorough
process preparation ERP systems can actually increase sustainable competitive advantage.

Configuration–

Configuring an ERP system is largely a matter of balancing the way you want the system to
work with the way the system lets you work. Begin by deciding which modules to install,
then adjust the system using configuration tables to achieve the best possible fit in working
with your company’s processes.

Modules — Most systems are modular simply for the flexibility of implementing some
functions but not others. Some common modules, such as finance and accounting are adopted
by nearly all companies implementing enterprise systems; others however such as human
resource management are not needed by some companies and therefore not adopted. A
service company for example will not likely need a module for manufacturing. Other times
companies will not adopt a module because they already have their own proprietary system
they believe to be superior. Generally speaking the greater number of modules selected, the
greater the integration benefits, but also the increase in costs, risks and changes involved.

Configuration Tables – A configuration table enables a company to tailor a particular aspect

of the system to the way it chooses to do business. For example, an organization can select
the type of inventory accounting – FIFO or LIFO – it will employ or whether it wants to
recognize revenue by geographical unit, product line, or distribution channel.

So what happens when the options the system allows just aren't good enough? At this point a
company has two choices, both of which are not ideal. It can re-write some of the enterprise
system’s code, or it can continue to use an existing system and build interfaces between it
and the new enterprise system. Both options will add time and cost to the implementation
process. Additionally they can dilute the system’s integration benefits. The more customized
the system becomes the less possible seamless communication between suppliers and
customers.

[20]
Consulting services–

Many organizations did not have sufficient internal skills to implement an ERP project. This
resulted in many organizations offering consulting services for ERP implementation.
Typically, a consulting team was responsible for the entire ERP implementation including
planning, training, testing, implementation, and delivery of any customized modules.
Examples of customization includes additional product training; creation of process triggers
and workflow; specialist advice to improve how the ERP is used in the business; system
optimization; and assistance writing reports, complex data extracts or implementing Business
Intelligence.

For most mid-sized companies, the cost of the implementation will range from around the list
price of the ERP user licenses to up to twice this amount (depending on the level of
customization required). Large companies, and especially those with multiple sites or
countries, will often spend considerably more on the implementation than the cost of the user
licenses—three to five times more is not uncommon for a multi-site implementation.

Unlike most single-purpose applications, ERP packages have historically included full source
code and shipped with vendor-supported team IDEs for customizing and extending the
delivered code. During the early years of ERP the guarantee of mature tools and support for
extensive customization was an important sales argument when a potential customer was
considering developing their own unique solution in-house, or assembling a cross-functional
solution by integrating multiple "best of breed" applications.

[21]
"Core system" customization vs configuration–

Increasingly, ERP vendors have tried to reduce the need for customization by providing
built-in "configuration" tools to address most customers' needs for changing how the out-of-
the-box core system works. Key differences between customization and configuration
include:

 Customization is always optional, whereas some degree of configuration (e.g., setting up

cost/profit centre structures, organisational trees, purchase approval rules, etc.) may be
needed before the software will work at all.
 Configuration is available to all customers, whereas customization allows individual
customer to implement proprietary "market-beating" processes.
 Configuration changes tend to be recorded as entries in vendor-supplied data tables, whereas
customization usually requires some element of programming and/or changes to table
structures or views.
 The effect of configuration changes on the performance of the system is relatively predictable
and is largely the responsibility of the ERP vendor. The effect of customization is
unpredictable and may require time-consuming stress testing by the implementation team.
 Configuration changes are almost always guaranteed to survive upgrades to new software
versions. Some customizations (e.g. code that uses pre-defined "hooks" that are called
before/after displaying data screens) will survive upgrades, though they will still need to be
re-tested. More extensive customizations (e.g. those involving changes to fundamental data
structures) will be overwritten during upgrades and must be re-implemented manually.

By this analysis, customizing an ERP package can be unexpectedly expensive and

complicated, and tends to delay delivery of the obvious benefits of an integrated system.
Nevertheless, customizing an ERP suite gives the scope to implement secret recipes for
excellence in specific areas while ensuring that industry best practices are achieved in less
sensitive areas.

[22]
Extensions–

In this context, "Extensions" refers to ways that an ERP environment can be "extended"
(supplemented) with third-party programs. It is technically easy to expose most ERP
transactions to outside programs that do other things, e.g.:

 archiving, reporting and republishing (these are easiest to achieve, because they mainly
address static data);
 performing transactional data captures, e.g. using scanners, tills or RFIDs (also relatively easy
because they touch existing data);

However, because ERP applications typically contain sophisticated rules that control how
data can be created or changed, some such functions can be very difficult to implement.

[23]
 SAP is a multinational software development and consulting corporation, which provides

enterprise software applications and support to businesses of all sizes globally. Headquartered in

Walldorf, Germany, with regional offices around the world, SAP is the largest software enterprise in

Europe and the fourth largest software enterprise in the world. The company's best known product is

its SAP Enterprise Resource Planning (SAP ERP) software.

History of SAP–

SAP was founded in 1972 as "System Analysis and Program Development" by five
former IBM engineers.

As part of the Xerox exit strategy from the computer industry, Xerox retained IBM to
migrate their business systems to IBM technology. The acronym was later changed to stand
for "Systems, Applications and Products in Data Processing".

In 1976, "SAP GmbH" was founded and the following year, it moved its headquarters to
Walldorf. SAP AG became the company's official name after the 2005 annual general
meeting.

In August 1988, SAP GmbH transferred into SAP AG, and public trading started
November 4. Shares are listed on the Frankfurt and Stuttgart stock exchanges.

Four of the founding members 1234—Hopp, Plattner, Tschira and Hector—form the
executive board. In 1995, SAP was included in the German stock index DAX. On 22
September 2003, SAP was included in the Dow Jones STOXX 50. In 1991, Prof. Dr.
Henning Kagermann joined the board; Dr. Peter Zencke became a board member in 1993.
Claus Heinrich, and Gerhard Oswald have been members of the SAP Executive Board since
1996. Two years later, in 1998, the first change at the helm took place. Dietmar Hopp and
Klaus Tschira moved to the supervisory board and Dietmar Hopp was appointed Chairman of
the supervisory board. Henning Kagermann was appointed as Co-Chairman and CEO of SAP
next to Hasso Plattner. Werner Brandt joined SAP in 2001 as a member of the SAP

[24]
Executive Board and Chief Financial Officer. Léo Apotheker has been a member of the SAP
Executive Board and president of Global Customer Solutions & Operations since 2002, was
appointed Deputy CEO in 2007, and then became co-CEO alongside Kagermann in 2008.

Henning Kagermann became the sole CEO of SAP in 2003. In February 2007, his
contract was extended until 2009. After continuous disputes over the responsibility of the
development organization, Shai Agassi, a member of the executive board who had been
named as a potential successor to Kagermann, left the organization. In April 2008, along with
the announcement of Leo Apotheker as co-CEO, the SAP supervisory board also appointed
to the SAP Executive Board, three new members, effective 1 July 2008: Corporate Officers
Erwin Gunst, Bill McDermott and Jim Hagemann Snabe. With the retirement of Henning in
May 2009, Leo has taken over as the sole CEO.

Business and markets –

SAP is the world's largest business software company and the third-largest independent
software provider in terms of revenues.It operates in three geographic regions –Europe,
Middle East and Africa; the Americas (SAP America, headquartered in Newtown Square,
Pennsylvania), which represents both North America and Latin America; and Asia Pacific
Japan (APJ), which represents Japan, Australia, India and parts of Asia. In addition, SAP
operates a network of 115 subsidiaries, and has R&D facilities around the globe in Germany,
Turkey, Canada, China, Hungary, India, Israel, Bulgaria, and North America.

SAP focuses on six industry sectors: process industries, discrete industries, consumer
industries, service industries, financial services, and public services. It offers more than 25
industry solution portfolios for large enterprises and more than 550 micro-vertical solutions
for midsize companies and small businesses.

[25]
SAP and Enterprise-oriented Architecture–

Service-oriented architecture moves the ERP (Enterprise Resource Planning) landscape

toward software-based and web services-based business activities. This move increases
adaptability, flexibility, openness and efficiency. The move towards E-SOA helps companies
reuse software components and not have to rely as much on in-house ERP hardware
technologies which helps make ERP adoption more attractive for small- or mid-sized
companies.

According to a press fact sheet from SAP, "SAP is the only enterprise applications software
vendor that is both building service-orientation directly into its solutions and providing a
technology platform SAP Net Weaver and guidance to support companies in the
development of their own service-oriented architectures spanning both SAP and non-SAP
solutions."

Products –

SAP's products focus on Enterprise Resource Planning (ERP). The company's main
product is SAP ERP. The current version is SAP ERP 7.0 and is part of the SAP Business
Suite. Its previous name was called R/3. The "R" of SAP R/3 stood for real-time - even
though it is not a realtime solution. The number 3 related to the 3-tier architecture: database,
application server and client (SAPgui). R/2, which ran on a Mainframe architecture, was the
predecessor of R/3. Before R/2 came System RF, later dubbed R/1.

SAP ERP is one of five enterprise applications in SAP's Business Suite. The other four
applications are:–

 Customer relationship management (CRM) - helps companies acquire and retain

customers, gain marketing and customer insight
 Product lifecycle management (PLM) - helps manufacturers with product-related
information
 Supply chain management (SCM) - helps companies with the process of resourcing
its manufacturing and service processes
 Supplier relationship management (SRM) - enables companies to procure from
suppliers

[26]
 Other major product offerings include: the NetWeaver platform, Governance, Risk and
Compliance (GRC) solutions, Duet (joint offering with Microsoft), Performance
Management solutions and RFID. SAP offers SOA capabilities (calling it Enterprise SOA) in
the form of web services that are wrapped around its applications.

While its original products were typically used by Fortune 500 companies.SAP is now
also actively targeting small and medium sized enterprises (SME) with its SAP Business One
and SAP Business All-in-One.
On 19 September 2007 SAP announced a new product named SAP Business By Design. SAP
Business By Design is a Software as a Service (SaaS) offering, and provides a fully
integrated Enterprise Resource Planning (ERP) solution, On Demand. SAP Business By
Design was previously known under the code name "A1S".

SAP officials say there are over 100,600 SAP installations serving more than 41,200
companies in more than 25 industries in more than 120 countries.

[27]
 Partnerships –

Partnerships are core to SAP’s strategy and in its 35 years of history the network of
software solution providers, value-added resellers, distributors, technology and services
partners has developed into a broad ecosystem that is among the industry's largest. Opened in
June 2007, the SAP Co-Innovation Lab in Palo Alto, Calif. provides an efficient work
environment for joint projects with independent software vendors (ISVs), such as Novell,
Questra and Wonderware, system integrators (SIs) and technology partners to work
together with SAP around current and future technologies. Co-founded by Cisco, Hewlett-
Packard, Intel and NetApp, the lab offers a hands-on environment and real-world
performance for Web-enabled and Internet/intranet-accessible business applications based on
Enterprise SOA.

SAP partners include Global Services Partners with cross-industry multinational

consulting capabilities, Global Software Partners providing integrated products that
complement SAP Business Suite solutions, and Global Technology Partners providing user
companies with a wide range of products to support SAP technology, including vendors of
hardware, database, storage systems, networks, and mobile computing technology.

SAP partners with CSC, Capgemini, Cognizant Technology Solutions, Deloitte, IBM,
PricewaterhouseCoopers, Hewlett-Packard, Siemens IT Solutions and Services and
Accenture in offering services, including assessment, government and architecture for R3.

[28]
RESEARCH METHODOLOGY

Research Design : Descriptive Research

Research technique : Case Study

Data Source : Secondary Data

Research Instrument : SWOT analysis

[29]
 MODEL OF STUDY–

Strength

SAP Weakness
(ERP) Organization
Effectiveness
Oppurtunities

Threats

[30]
MEANING OF RESEARCH –

Research is a human activity based on intellectual investigation and is aimed at

discovering, interpreting, and revising human knowledge on different aspects of the world.

Research can use the scientific method, but need not do so.Scientific research relies on the

application of the scientific method, a harnessing of curiosity. This research provides

scientific information and theories for the explanation of the nature and the properties of the

world around us. It makes practical applications possible. Scientific research is funded by

public authorities, by charitable organizations and by private groups, including many

companies. Scientific research can be subdivided into different classifications.

RESEARCH METHODOLOGY-

“In Research Methodology not only talk of the Research Methods but also consider the

logic behind it the Methods we use in the context of our research study and explain why we

are using a particular method. Research methodology is a way to systematically solve the

problem. It may be understood as a science of studying how research is done scientifically. In

it we study the various steps that are generally adopted by a researcher in studying his

research problem along with the logic behind them. It is necessary for the researcher to know

not only the research method/techniques but also the methodology, they also need to know

which of these methods or techniques, are relevant and which are not, and what would they

mean and indicate and why .For example, an architect, who designs a house, has to

consciously evaluate the basis of his decision, i.e., he has to evaluate why and on what basis

he selects particular size , number and location of doors, windows and ventilators , uses

particular materials and not others and the like .similarly ,in research the scientist has to

expose the research decisions to evaluation before they are implemented . He has to specify

very clearly and precisely what decisions he selects and selects them so that they can be

evaluated by others also.

[31]
RESEARCH DESIGN–

Descriptive Research:-

Descriptive research studies are those studies which are concerned with describing the

characteristics of a particular individual, or a group. Descriptive studies concerned with

specific predication, with narration of facts and characteristics concerning with individual, or

group or situation are all are the example of Descriptive studies. In Descriptive studies, the

researcher must be able to define clearly, what he wants to measure.

So I have used descriptive research to in this research, as it is theoretical and by

merely description is needed.

[32]
RESEARCH TECHNIQUE–

Case Study–

The IB Group is an ISO-9001-2000 certified group,one of the leading multi

diversified growing group based at Rajnandgaon,Chhattisgarh state,with an annual turnover

exceeding 550 crores.The Indian Broiler (IB) Group of companies is a highly diversified

organization with its operations in a wide variety of products.The group started with Poultry

as its backbone two decades ago,and today it is a big group with highly diversified products

such as Edible Oil,Poultry products(Broiler,Cockrail,Layer.Eggs etc.),Organic

Fertilizers,Animal nutrition(Fish feed,hen feed),Soyabean products(Soya nuggets),Dairy

products (Milk) etc.

IB group is well known for its quality product.If there is one single factor that has

been responsible for group’s meteoric rise and its blazing performance is its quality. To have

best performance and lowest production cost,company made massive investment on

technology, infrastructure & system management(SAP).

IB group started its business from poultry in the year 1985,but later in the year 2000

the group diversified into Solvent(Edible Oil),Fertilizers, Animal Nutrition, Dairy etc.As the

business expanded, the group faced many difficulties with the database management,

accounting and billing, moreover creating daily,weekly,monthly reports and payroll became

problem for the organization, as they had a weaker software support for performing these

tasks,they hardly used Tally,Ms-Excel,Ms-Word,for data processing.

Then to gain efficiency in these tasks IB group decided to implement SAP in their

organization. In the year 2007 with a huge investment in Hardware (Servers & Computers) &

SAP software’s licensing & configuration (design).

[33]
 SAP is very helpful for organization in maintaining database of all employees,

creating payroll, daily/weekly/monthly/yearly reports, billing etc, and has made the work

easy by integrating all works.SAP also helps the top management in product

Costing,Purchase,Material management,Financial accounting,Controlling,Production

planning,sales & distribution,Quality management,Plant maintainance,operating weigh

bridge etc.SAP also provides excellent security to the database,It saves time as it is fully

automated.

Investment done by the IB group for the implementation of SAP –

SAP license cost – 16 lacs

20% of this amount is paid every year for its renewal.

Servers – 50 lacs.

Implementation & design of SAP – 1 crore

Maintenance of SAP – 2.5 lacs/month

Although implementation and maintenance cost of SAP is very high but it has brought

effectiveness in the organization, as far as systems management is concerned.SAP works on

privilege for management and employees. Programmers and database administrators have

been hired for control,updation and maintenance.

[34]
Data Collection –

Sources of Data –

The task of data collection begins after a research problem has been defined and research
design chalked out. While deciding about the method of data collection to be used for the
study. The two type of data is..

 Secondary Data
 Primary Data

SECONDARY DATA

The data referred to those which gathered for some other purpose and already available
in the firms initial record and commercial, trade or sources of secondary data.

 Internet.
 Published of secondary data.
 Specialized libraries.

PRIMARY DATA

The primary data are those which are collected afresh and for the first time, and thus happen
to be original in character. Primary data do not exist in record and publication. The researcher
has to gather primary data which is fresh for the specific study, under taken by him.

We collect primary data during the course of doing experiments in an experimental

research but in case we do research of the descriptive type and perform surveys, whether sample
survey or census surveys, we can obtain primary data either through observation or through
direct communication with respondents in one form or another or through personal interview.
Important once are..

[35]
RESEARCH INSTRUMENT–

SWOT analysis–

SWOT Analysis is a strategic planning method used to evaluate the Strengths,

Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It

involves specifying the objective of the business venture or project and identifying the

internal and external factors that are favorable and unfavorable to achieving that objective.

A SWOT analysis must first start with defining a desired end state or objective. A SWOT

analysis may be incorporated into the strategic planning model. An example of a strategic

planning technique that incorporates an objective-driven SWOT analysis is Strategic Creative

Analysis (SCAN). Strategic Planning, including SWOT and SCAN analysis, has been the

subject of much research.

[36]
Strengths:– attributes of the person or company that are helpful to achieving the objective.

Weaknesses:– attributes of the person or company that are harmful to achieving the
objective.

Opportunities:– external conditions that are helpful to achieving the objective.

Threats:– external conditions which could do damage to the objective.

Identification of SWOTs is essential because subsequent steps in the process of planning

for achievement of the selected objective may be derived from the SWOTs.

First, the decision makers have to determine whether the objective is attainable, given the

SWOTs. If the objective is NOT attainable a different objective must be selected and the

process repeated.

The SWOT analysis is often used to highlight and identify strengths, weaknesses,

opportunities and threats. It is particularly helpful in identifying areas for development.

[37]
DATA ANALYSIS AND RESULTS

Strength–Strength of the system SAP is that it is totally integrated with entire

requirements of the organization. It is a real time system which connects the whole

organization (Corporate office, solvent industry & other branches) online. It also helps the

managers to control their operations & retrieval of the informations.SAP helps in maintaining

the database of various information related to the organization, generating

daily//weekly/monthly/yearly reports, billing, creating payroll, accounting, inventory

control etc.Its special feature is that it also helps the upper management in various kinds of

planning.SAP in the IB group acts as a MIS as well DSS i.e Management Information

System & Decision Support Systems. It helps in planning, analyzing & decision making.

Hence it is very useful to the organization. It has automated various functions, and has helped

to overcome various problems which were head-ache to the organization. It also provides

security to the confidential informations.So implementation of SAP proved boon for the

organization.

Weakness–Although SAP has proved to be a boon for the organization, but it also has a few

disadvantages. For operating SAP the operators need to be trained, as any novice can’t

operate SAP. Working in SAP involves certain set of rules, and operator needs to follow

systematic rules. Training the operators is a long term process, to overcome this the

organization hired SAP trained operators, which cost expensive.SAP also needs regular

maintenance. The group spends near about 2.5 lacs/month on the maintenance of SAP.

[38]
Oppurtunities – Oppurtunities present in front of the organization is to become the pioneer

among the organizations who implemented SAP to control ERP and to attain maximum

feasibility of SAP in the operations of the organizations and use the extended capabilities of

SAP for the betterment of organization so as to achieve organization effectiveness.

Threats –Threats present in front of the organization is, if SAP is not used up to the optimum

level, the huge investments done will be worth less, i.e the risk of non-optimal utilization of

resources, which can lead to loss.

INTERPRETATION OF FINDINGS

[39]
 Implementation of SAP for the ERP was a positive step taken by the organization 2

years back in 2007, although the organization did surplus investments to implementation,and

is spending much money for its maintenance.

Inspite of this the SAP is very useful for the organization’s system’s management

and it has added to organizations effectiveness, i.e SAP is very helpful in efficient working of

the organization.SAP is useful in many ways to the organization.

SAP helps in maintaining the database of various information related to the

organization, generating daily//weekly/monthly/yearly reports, billing, creating payroll,

accounting, inventory control etc.Its special feature is that it also helps the upper

management in various kinds of planning.SAP in the IB group acts as a MIS as well DSS i.e

Management Information System & Decision Support Systems. It helps in planning,

analyzing & decision making.

Hence SAP’s feasibility is maximum as far as the ERP of IB Group is concerned.

The implementation is fruitful for the organization today as well it will help the organization

to keep themselves updated in the future.

[40]
RECOMMENDATIONS

Although the IB group has implemented the ERP(SAP) successfully and are using its

capabilities up to the optimum,there are a few recommendations:-

(i) The organization should try to remove the errors existing in the system(SAP).

(ii) The organization should utilize the capabilities of SAP to the optimum.

(iii) The organization should upgrade the system as and where required to exploit

the capabilities of SAP.

(iv) The organization should try to cut down the amount spent on maintenance of

SAP.

(v) The organization should spend lesser amount in training SAP to the

employees.

[41]
LIMITATIONS

(i) The limitations of SAP is that it is needed to be designed as per the needs of
organization, if properly not designed SAP will not give desired results.

(ii) For the operations of SAP efficient and trained operators are required, without them
SAP can’t operate.

(iii) SAP needs extended internet facilities to operate on-line, without internet real-time
operations are not possible.

(iv) SAP needs regular maintenance to work efficiently.

(v) To implement SAP successfully huge investments are to be done, it can’t be

implemented in low cost, as purchase,licence,interests & design cost is more.

[42]
CONCLUSIONS

After SWOT analysis we came across many advantages and disadvantages of SAP,
but finally we can draw out following conclusions–

(i) SAP is efficient and effective.

(ii) SAP’s implementation & maintenance is very expensive.

(iii) SAP has optimum feasibility over ERP.

(iv) SAP covers entire needs of the organization’s systems management.

(v) SAP is the whole sole solution for ERP.

(vi) SAP is secure & reliable.

(vii) It needs a team of trained people to operate.

(viii) SAP may malfunction if properly designed.

[43]
REFERENCES

Internet Sites–

http://www.ibgroup.co.in

http://www.indianpoultry.com

www.indiansolventindustry.com

http://www.wikipedia.org/

http://www.sap.com

http://www.erpwire.com

[44]
APPENDICES

[45]