Change Management With Implimentation Of Erp

PAGE CHAPTER 1 1.1 1.2 1.3 1.4 1.5 1.6 1.7

CONTENT

no.

ABOUT THE COMPANY NATIONAL THERMAL POWER COOPERATION COMPANY PROFILE RIHAND SUPERTHERMAL POWER STATION INDUSTY PROFILE NEED OF STUDY OBJECTIVE OF STUDY SCOPE OF STUDY

1 3 5 7 8 9 9

2 2.1 2.2 2.3

LITERATURE SURVEY ORGANISATIONAL CHANGE CHANGE MANAGEMENT ENTREPRENEUR RESOURCE MANAGEMENT

10 13 18

3 3.1 3.2 3.3 3.4 3.5

REASERCH REASERCH METHODOLOGY SAMPLE TOOL FOR DATA COLLECTION PROCEDURE DATA ANALYSIS

27 27 27 28 28

4 4.1 4.2 4.3

RESULT COMMUNICATION EFFECTIVENESS OF TRAINING MEASURE THE LEVEL OF RESISTANCE

29 30 32

CONCLUSIONS

34

BIBLIOGRAPHY

35

5

CHAPTRE 1 ABOUT THE COMPANY 1.1 NATIONAL THERMAL POWER COOPERATION

NTPC, the largest power Company in India, was setup in 1975 to accelerate power development in the country. It is among the world’s largest (6th) and most efficient power generation companies. In Forbes list of World’s 2000 Largest Companies for the year 2007, NTPC occupies 411th place. NTPC has installed capacity of 29,394 MW. It has 15 coal based power stations (23,395 MW), 7 gas based power stations (3,955 MW) and 4 power stations in Joint Ventures (1,794 MW). The company has power generating facilities in all major regions of the country. It plans to be a 75,000 MW company by 2017.

NTPC has gone beyond the thermal power generation. It has diversified into hydro power, coal mining, power equipment manufacturing, oil & gas exploration, power trading & distribution. NTPC is now in the entire power value chain and is poised to become an Integrated Power Major.NTPC's share on 31 Mar 200 8 in the total installed capacity of the country was 19.1% and it contributed 28.50% of the total power generation of the country during 2007-08. NTPC has set new benchmarks for the power industry both in the area of power plant construction and operations.With its experience and expertise in the power sector, NTPC is extending consultancy services to various organizations in the power business. It provides consultancy in the area of power plant constructions and power generation to companies in India and abroad. In November 2004, NTPC came out with its Initial Public Offering (IPO) consisting of 5.25% as fresh issue and 5.25% as offer for sale by Government of India. NTPC thus became a listed company with Government holding 89.5% of the equity share capital and rest held by Institutional Investors and Public. The issue was a resounding success. NTPC is among the largest five companies in India in terms of market capitalization. Recognizing its excellent performance and vast potential, Government of the India has identified NTPC as one of the jewels of Public Sector 'Navratnas'- a potential global giant. Inspired by its glorious past and vibrant present, NTPC is well on its way to realize its vision of being "A world class integrated power major, powering India's growth, with increasing global presence". Vision A world class integrated power major, powering India's growth with increasing global presence. Mission Develop and provide reliable power related products and services at competitive prices, integrating multiple energy resources with innovative & Eco-friendly technologies and contribution to the society

Core Values – BCOMIT •

Business ethics

•

Customer Focus

•

Organizational & Professional Pride

•

Mutual Respect & Trust

•

Innovation & Speed

•

Total Quality for Excellence

1.2 COMPANY PROFILE Future Of The Generation Business Developing and operating world-class power stations is NTPC's core competence. Its scale of operation, financial strength and large experience serve to provide an advantage over competitors. To meet the objective of making available reliable and quality power at competitive prices, NTPC would continue to speedily implement projects and introduce state-of-art technologies. Total Capacity Portfolio India's generation capacity can be expected to grow from the current levels of about 120 GW to about 225-250 GW by 2017. NTPC currently accounts for about 20% of the country's installed capacity and almost 60% of the total installed capacity in the Central sector in the country. Going forward, in its target to remain the largest generating utility of India, NTPC would endeavor to maintain or improve its share of India's generating capacity. Towards this end, NTPC would target to build an overall capacity portfolio of over 66,000 MW by 2017. Fuel / Energy Mix For Capacity Addition Currently, coal has a dominant share in the power generation capacities in India. This is also reflected in the high share of coal-based capacities in NTPC's current portfolio. With high uncertainties involved in Domestic gas/ LNG, both in terms of availability and prices, NTPC would continue to set up large pit-head coal based projects, including few integrated coal cum power projects. To reduce the dependence on fossil fuels, there is a need to push for renewable sources of power in the sector. NTPC would avail of opportunities to add hydropower to its portfolio subject to competitive tariffs. A first step in this direction has already been taken with the investment in Koldam Hydro Power Project. NTPC would continue to closely monitor developments on nuclear front also and be open to setting up around 2000 MW of Nuclear power generation capacity, possibly through a Joint Venture. As a leader in power generation, NTPC would also consider other energy sources such as biomass, cogeneration, fuel cells, etc for future development thereby reducing the dependence on thermal fuels. While a decision on the fuel/energy mix for NTPC in the future would be largely governed by their relative tariff-

competitiveness, the fuel mix in 2017 may be different from the existing portfolio, though not very significantly. Diversification Along The Value Chain NTPC has achieved the distinction of being the largest thermal generating company in India. In the past, this focus was adequate as the industry was highly regulated with limited diversification opportunities. Over last few years, the country has been facing acute shortages, both in coal and gas, severely affecting optimum utilization of its power stations and these shortages are likely to continue in future as well. This is in spite of the fact that India is one of the largest producers of coal in the World. To safeguard its competitive advantage in power generation business, NTPC has moved ahead in diversifying its portfolio to emerge as an integrated power major, with presence across entire energy value chain. In fact, to symbolize this change, NTPC has taken on a new identity and a new name 'NTPC Limited'. NTPC has recently diversified into coal mining business primarily to secure its fuel requirements and support its aggressive capacity addition program. In addition, NTPC is also giving thrust on diversification in the areas of power trading and distribution. Diversification would also allow NTPC to offer new growth opportunities to its employees while leveraging their skills to capitalize on new opportunities in the sector. Establishing A Global Presence To become a truly global company serving global markets, it is essential for NTPC to establish its brand equity in overseas markets. NTPC would continue to focus on offering Engineering & Project Management Services, Operations & Maintenance services, and Renovation & Modernization services in the international market. Establishing a successful services brand would be a precursor to taking higher investment decisions in different markets. Going forward, NTPC would continue to evaluate various options for strengthening its presence in global markets including setting up power generation capacity, acquisition of gas blocks etc. Circa 2017: NTPC's Corporate Profile By the year 2017, NTPC would have successfully diversified its generation mix, diversified across the power value chain and entered overseas markets. As a result NTPC would have altered its profile significantly. Elements of the revised profile that NTPC would seek to achieve are: •

Amongst top five market capitalization in the Indian market

•

An Indian MNC with presence in many countries

•

Diversified utility with multiple businesses

•

Setting benchmarks in project construction and plant availability & efficiency

•

Preferred employer

•

Have a strong research and technology base

•

Loyal customer base in both bulk and retail supply

•

A leading corporate citizen with a keen focus on executing its social –responsibility

1.3 RIHAND SUPERTHERMAL POWER STATION THE VICINITY: This region locally known as “ Dakshinachal” is now one of the major power centres in the country.besides two other projects of NTPC viz.Singrauli (2000mw) aand vindhyachal (3269 mw) ,other power stations in the area are – two thermal and two hydel stations of Govt. Of U.P.viz. Anpara thermal (1600MW) , obrathermal (1550MW), Rihand hydel(300MW),Obra hydel (100MW). And also

the Renusagar Power co.(732.5MW) of

Hindalco.industries in these area are,other than the coal mines Hindalco-a major aluminium producing factory,kanoria chemicals and high tech carbon at Renukoot. The foundation stone of Rihand super thermal power project was laid down on 9 February 1982. It is one of the NTPC’s best power plants, in the northern region constructed by Northern Engineering Industries (U.K.). Rihand completes the power triangle with Singrauli STPS, Vidhychal STPS. It is situated in Bijpur village and in the industrial belt of the district- Sonebhadra of Uttar Pradesh, which is situated at the border of MP&UP. This plant is situated at the south bank of Rihand Reservoir (Govind Ballabh Pant Sagar), made artificially. Its area is about 50X10 sq.km. It is a large reservoir, having huge mass of water, from which five thermal power plants and one hydro power plant takes water for operation. The capacity of RhSTPP, Ist stage of 2X500 MW is in operation and IInd stage of the 2X500 MW plant under construction and one unit has been synchronized in the month of March 2005 and the second unit has to be synchronized till the month of November. High voltage direct current (HVDC) transmission system is the unique feature of this power plant. It is used to transmit DC current from this plant to Delhi. In Rihand STPP, coal from Amlori mines is used as a fuel to produce thermal energy. Coal normally contains 30% to 40% ash content. When it is burned in the boiler furnace, it results in large amount of ash depositions in various regions of the boiler via; water wall tubes, super heater tubes, reheater tubes, plugging of air heater baskets with the fly ash. This soot deposition reduces the heat transfer from flue gases to water/steam flowing inside the tubes. Therefore, its removal is very essential in the boiler. For this soot blowing system is used. SALIENT FEATURE •

Location:

Bijpur village, Distt. Sonebhadra. (U.P).

•

Total proposed capacity:

3000 MW, in 3 stages each of 2X500MW

•

Total land (in acres):

UP

MP 4680

Total 1752

6432

+/-500Kv HVDC Bipolar line to Dadri (Delhi), 400kV single circuit AC line to Shaktinagar and Kaptur.

•

Beneficiary States:

UP, Haryana, Punjab, Rajasthan, Jammu Kashmir, Himachal Pradesh, Chandigarh and Delhi.

•

Financing:

Export Credit of pound sterling 344million, aid from Govt. of U.K. pound sterling 177 million. Govt. of India afforded the rest Cost of the project.

•

Major Resources: COAL

(a) Source

-Amlori mines.

(b) Maximum consumption

- 43,300MT/Day for 3000 MW (E-Grade Coal).

(c) Mode of Transportation

- MGR Rail Transportation System.

WATER (a) Source

- Rihand Reservoir.

(b) Maximum Consumption

– 300 cusecs.

(c) Maximum cooling water Requirement

-1500cusecs for 1000MW.

•

Chimney:

- 224.5mts (RCC structure with steel flue).

•

Ash disposal:

- Ash slurry pumped to Ash dyke.

•

Commencement of work:

•

Unit-1 synchronized:

- 31/03/1988.

•

Unit-2 synchronized:

- 05/07/1989.

•

Unit-1 commercialized

-01/01/1990

•

Unit-2 commercialized:

- 01/10/1991.

- 09/02/1983.

1.4 INDUSTY PROFILE

The Indian power industry - an overview General highlights

•

The power sector at this juncture is plagued by a number of problems. These include inadequate generation capacities, poor capacity utilization, very high transmission losses and poor project implementation.

•

Plant load factor (PLF) in most of the plants has been very low compared to the power plants in other parts of the world.

•

The sector has been bogged down by resource constraints.

•

In India electricity tariffs are a politically sensitive issue and often create turmoil. This is the reason for poor performance of most the state electricity boards (SEB) and has also resulted in serious financial problems.

•

Till date, the players have not started giving adequate consideration to the alternate energy sources for power generation.

•

Over the last few years, capacity addition has been consistently falling short of demand. This has resulted in a sharp increase in power shortage across the country.

Sector comments: Notwithstanding the massive increase in generation capacities over the past decades, the history of the Indian power sector has been punctuated by shortages, massive pilferages and a demand-supply gap, which has been growing. The shortages have been so chronic that, at times fears have been expressed about a negative impact on industrialization due to these shortages. Thus, while the figures for additional capacity being created may look impressive in isolation, the fact is that the demand growth has always been higher than the supply. Further, the capacity additions are significantly below the plan targets, particularly during the eighth plan, where the capacity addition of about 16,000 MW showed a shortfall to the extent of about 40 per cent from the revised plan target of around 29,000 MW.

Industry players and profile The power sector reveals that it can be largely segregated into four different categories on the basis of type of players in the industry. These include:

•

Central Government Corporations: which consist of corporations like the National Thermal Power Corporation (NTPC), Nuclear Power Corporation, National Hydro Electric Power Corporation (NHPC), and some other smaller players.

•

State Government Corporations: which consist of the various state electricity boards and other corporations that have been promoted by the respective government’s Poor management, transmission and distribution (T&D) losses and poor recoveries of dues are some of the factors, which are responsible for the plight of these corporations. Currently, the financial health of many SEBs is precarious and their revenue-raising capabilities are more or less dependent on assured guarantees from the respective governments.

•

Private Sector Licensees: In the private sector, some companies had been given licenses to carry on generation and distribution activities. While some of these, like BSES Limited, are generation and distribution companies others, like Surat Electricity, are just distribution companies.

•

Independent Power Producers: The Independent Power Producers (IPPs) are the companies that have been given a nod to set up generation capacities.

Finally, a look at the regulatory structure of the sector indicates that various Acts govern the power sector. These provide for the tariff determination procedure for companies. It also defines the various terms such as reasonable returns and capital base. However, approvals of tariffs rest with the respective governments. 1.5 NEED OF STUDY The organizational agenda is aimed at effectively achieving and managing the exponential and diversified growth in a dynamic business scenario. It is engaged in enhancing empowerment, especially at the regional level. It is revisiting the scheme of delegation of power and aligning the executives to the new business requirements through intensive programmes in areas like leadership development. It is using IT enablement in a big way. The Company has begun the roll-out of ERP, a flexible, standardized, and integrated information system as one of the key strategic initiatives at a few pilot units. It is a major tool to help its transformation and change-management objective. It will enable the Company in speedy decision making for competitive advantage. This ERP solution will align your Company’s business processes with global best practices. The implementation of Project ERP would benefit the organization in achieving improved and faster exchange of information, improved productivity, better data consistency and knowledge sharing. It will help in automation of all business functions of the organization and in establishing uniform processes and practices across the organization. 1.6 OBJECTIVE OF STUDY Primary objective: •

To know overall perceived effectiveness of change management at NTPC while implementing ERP SYSTEM.

Secondary objectives: ➢ To measure the effectiveness level of communication about ERP SYSTEM at NTPC RIHAND. ➢ To measure the perceived level effectiveness of training provided to operate ERP SYSTEM. ➢ To measure the perceived level of acceptance of change being brought at NTPC RIHAND. 1.7 SCOPE OF STUDY

The scope mainly covers the following: •

The study mainly covers all employees of NTPC RIHAND.

•

The study covers executives of NTPC RIHAND.

•

The study covers sample of executives of NTPC RIHAND.

•

The need for this study of people understanding about ERP SYSTEM at NTPC RIHAND , and to help them to increase the effectiveness of new system.

CHAPTER 2 LITERATURE SURVEY 2.1 Organizational Change "Everybody has accepted by now that change is unavoidable. But that still implies that change is like death and taxes--it should be postponed as long as possible and no change would be vastly preferable. But in a period of upheaval, such as the one we are living in, change is the norm."--Peter Drucker, Management Challenges for the 21st Century (1999). Change in some way is necessary aspect of human life. One of the few things of real permanence are in this world is change. We see all sorts of changes – change in nature, seasonal change, and change in man – made organization, change in biological beings, and so on. Whole society is changing in some way or the other, for better or worse, though the objective of change is better.

The term change refers to alteration in the present system. Thus, organizational change is alteration in working condition or communication pattern or the technology used or the people. Organizational Change: Organizational Change (as opposed to Transformation) is an incremental improvement on existing organizational capabilities. This may be all you need. An organizational audit will make clear whether you need incremental change or transformational change. Almost all people are nervous about change. Many will resist it - consciously or subconsciously. Sometimes those fears are well founded - the change really will have a negative impact for them. In many cases, however, the target population for the change will come to realise that the change was for the better. The pace of change is ever increasing - particularly with the advent of the Internet and the rapid deployment of new technologies, new ways of doing business and new ways of conducting one's life. Organizational Change Management seeks to understand the sentiments of the target population and work with them to promote efficient delivery of the change and enthusiastic support for its results. There are two related aspects of organizational change that are often confused. In Organizational Change Management we are concerned with winning the hearts and minds of the participants and the target population to bring about changed behavior and culture. The key skills required are founded in business psychology and require "people”. Resistance to change: By definition, people are affected by change. A few will comfortably accommodate any degree of change, but most people have a change journey to undertake. Resistance to change is normal. The Project Manager should expect to encounter it and deal with it. The worst time to encounter resistance is during the cutover to the new solution. Transition is usually a busy, critical, high-risk period when the last thing you need is a lack of co-operation from the target population. The most common response to impending change is a negative response where, initially at least, the target population sees the change as a bad or threatening things.

FA

CT

OR

S IN

RESISTANE TO CHANGE:  Individual Resistance ➢ Economic factors •

Skill Obsolescence

•

Fear of Economic Loss

•

Reduce Opportunity for Incentives

➢ Psychological factors •

Ego Defensiveness

•

Status Quo

•

Low Tolerance for Change

•

Lack of Trust in Change Agent

•

Fear of unknown

➢ Social Factors •

Desire to Maintain Existing Social Interaction

•

Feeling of Outside Interference

 Group resistance

➢ Nature of Group Dynamics

➢ Vested interests

 Organizational Resistance

➢ Counting on Past Successes ➢ Stability of System ➢ Resource Limitations ➢ Sunk Cost ➢ Inter organizational Agreement

2.2 CHANGE MANAGEMENT: Organizational Change Management is a vital aspect of almost any project. It should be seen as a discrete and specialized work stream. Why then, you might ask, do we discuss it as part of the Project Management work. Unfortunately, it is common to find that the human component of the project is not recognized as a separate element of the work. The project management team frequently has to do their best to ensure that a technological change is successfully implanted into the business. In the worst-case scenario, the project leadership do not see this as part of their responsibility either and blame the organization’s line management when their superb new technical solution is not fully successful when put to use. Part of the art of Organizational Change Management is to: understand what journey you want which populations to take (it may not be the same for everyone), assess what their attitude is likely to be, and use that knowledge to guide them in the right direction. It considers that where organizational change is implemented correctly the benefits include: Employee participation a greater understanding of the change a better informed decision is made trust is maintained throughout the process lows of productivity is minimized.

Using the right change style: The design of the project's approach should take into account the optimum style of addressing organizational change issues. In general, the target population will be more supportive of the changes if they have been part of the change process. The cynical view is that you should make them feel part of the process even if you prefer to ignore what they have to say. In fact, their active participation is likely to add to the quality of the solution - it should be taken seriously. Conversely, if they feel their views were sought then ignored they are likely to become more resistant. Working with a broad selection of the target population adds time and cost to the project. The degree to which you involve them will depend on the magnitude of the change. A straightforward non-controversial change may require no previous contact. If, for example, you are simply introducing a new set of expense codes you can publish the message "with effect from 1st April, new codes must be used as per the attached book". Conversely, if you are making huge changes to the job and lifestyle of the target population you will need to work with them to gain their co-operation, for example, if you wish them to re-locate voluntarily and re-train for substantially altered jobs. Here are some change styles that may be appropriate: 

Collaborative - The target population are engaged in the change process, typically through cascading workshops or meetings. They will be kept up to date on the issues. Their views will be actively sought and acted upon. Feedback will demonstrate how their input has been acted upon.



Consultative - The target population is informed about the changes and their views are sought.



Directive - The workforce is informed about the changes and why those changes are important.



Coercive - The workforce is told that they must obey the new instructions.

Communication One of the main tools for promoting change is communication. Early in the project an initial approach to communication will be formulated. It has two main purposes: 

to convey important information that the audience needs to know, and



to promote organisational change.

Messages supporting the project's change objectives should be carefully constructed. The best media should be identified to convey the right messages to the right people at the right time. During the project, these messages and methods will be refined based upon achievements, feedback and the changing circumstances of the project. Organizational Change Management during the project Organizational Change Management techniques fall into two main types: 

input - analysing the problem, and



output - inducing organisational change.

It may also be appropriate to couple these organizational issues and needs with the mainstream design work of the project; so that certain issues could be solved by the way the solution is designed. It may be easier to make the solution fit the people rather than the people fit the solution. The input activities are essentially forms of fact-finding and analysis. Organizational Change Management experts have many specialized tools to: 

identify a population,



assess that population's capabilities, attitude, behaviour, culture,



define the change goals, and



determine what is required to bring about that change.

In the absence of an expert you would fall back on basic fact finding and analysis, coupled with common sense and experience. Output activities tend to be various forms of communication, for example: 

communicating messages



coaching



setting up sponsorship cascades



collaborative workshops.

Although the change management analysis, design and planning may be specialist tasks, much of the change output can be applied by other project team members. All team members will have opportunities

to spread the right message. In many cases, the way they approach a given activity might have a significant affect on the target population - increasing or decreasing resistance. Non-specialist team members should be given the basic skills and understanding to promote organizational change. They should also be guided by the specialists (if any) and by the project's change management approach and planning. Organizational Change Management at phase start For each phase the change management plan will be prepared in detail. Input and feedback from previous phases will inevitably lead to modifications to the overall approach. Update the Sponsorship Map to show who is involved at this stage and what is required of them. As part of the launch activities for the new phase, sponsors should be informed, briefed and reanimated. Their continuing support should be ensured. Often a new phase means new team members and new participants from the business. Make sure there is a good process to capture their support and enthusiasm. Organisational Change Management during the project Organizational Change Management techniques fall into two main types: input - analyzing the problem, and output - inducing organizational change.

It may also be appropriate to couple these organizational issues and needs with the mainstream design work of the project; so that certain issues could be solved by the way the solution is designed. It may be easier to make the solution fit the people rather than the people fit the solution. The input activities are essentially forms of fact-finding and analysis. Organisational Change Management experts have many specialized tools to: Identify a population; assess that population's capabilities, attitude, behavior, culture, define the change goals, and determine what is required to bring about that change. In the absence of an expert you would fall back on basic fact finding and analysis, coupled with common sense and experience. Output activities tend to be various forms of communication, for example: communicating messages coaching setting up sponsorship cascades collaborative workshops.

Although the change management analysis, design and planning may be specialist tasks, much of the change output can be applied by other project team members. All team members will have opportunities to spread the right message. In many cases, the way they approach a given activity might have a significant effect on the target population - increasing or decreasing resistance. Non-specialist team members should be given the basic skills and understanding to promote organizational change. They should also be guided by the specialists (if any) and by the project's change management approach and planning. Organizational Change Management at phase end The end of a phase is always a good time to review progress. Many organizational change activities are imprecise in their effect. It can be hard to measure whether the target population has now become sufficiently supportive for the project to succeed.

Take a fresh look at the organizational issues: Did we really understand the barriers? How effective were the actions taken? What more do we need to achieve? The conclusions will be fed into the planning for the next phase of work. Organizational Change Management at project end The test of change management is whether the new business solution can be launched successfully in as efficient and pain-free a manner as possible. The lead up to the transition is often the most intense period. In many cases it is the first time the affected populations really become aware of the changes (although, as you saw above, it is not wise to tackle change issues late in the project). Now they are confronted with changed jobs, new procedures, new skill requirements, training courses, and maybe even physical relocation. In some projects not all the current workforce will be required for the new solution. Dealing with the painful process of redundancy is normally left to the HR and line management functions. There are, however, two big issues for the Project Manager: The redundant staff will be required to operate the current systems and processes until the new solution is ready - and maybe for some period of parallel running. Since it is a legal or contractual requirement in most countries to announce potential redundancies well in advance and to give individuals notice before

their departure date, the question is how to ensure they give good service and do no damage to the organization or the new systems. There may also be implications for the survivors - those people who you are relying upon to deliver the new solution. They may be affected by the bad news concerning their colleagues. They may even go through a period of uncertainty when they do not know whether or not they themselves will be retained. What needs to be done to maintain their support and enthusiasm? Bear in mind that the same issues could confront project team members as well as the target population. By this stage in a major change, there needs to be a substantial support mechanism for the target population. As the key messages are communicated, the project team needs to be ready to help and prepared for the inevitable issues. By this time, the sponsorship cascade should be complete and solid often extending down to local champions carefully placed in the users' teams. Support mechanisms will ease the users' troubles, for example with appropriate training at the right time, desk-side coaching, good help desk /call centre support. Organizational Change Management should not stop with the end of the project. During the Benefit Realization stage of the lifecycle, continuing emphasis will be needed to encourage the community to adapt to the new ways of working and get the most from the change. 2.3 ENTREPRENEUR RESOURCE MANAGEMENT

Enterprise resource planning (ERP) is the planning of how business resources (materials, employees, customers etc.) are acquired and moved from one state to another. An ERP system supports most of the business system that maintains in a single database the data needed for a variety of business functions such as Manufacturing, Supply Chain Management, Financials, Projects, Human Resources and Customer Relationship Management. An ERP system is based on a common database and a modular software design. The common database can allow every department of a business to store and retrieve information in real-time. The information should be reliable, accessible, and easily shared. The modular software design should mean a business can select the modules they need, mix and match modules from different vendors, and add new modules of their own to improve business performance. Ideally, the data for the various business functions are integrated. In practice the ERP system may comprise a set of discrete applications, each maintaining a discrete data store within one physical database Origin of the term

The initial ERP originated as an extension of MRP (material requirements planning, and then manufacturing resource planning) and CIM (computer-integrated manufacturing) and was introduced by research and analysis firm Gartner. ERP systems now attempt to cover all basic

functions of an enterprise, regardless of the organization's business or charter. Nonmanufacturing businesses, non-profit organizations and governments now all use ERP systems. 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. However, the term is typically reserved for larger, more broadly based applications. The introduction of an ERP system to replace two or more independent applications eliminates the need for external interfaces previously required between systems, and provides additional benefits ranging from standardization and lower maintenance (one system instead of two or more) to easier and/or greater reporting capabilities (as all data is typically kept in one database). Examples of modules in an ERP which formerly would have been stand-alone applications include: Manufacturing, Supply Chain, Financials, Customer Relationship Management (CRM), Human Resources, Warehouse Management and Decision Support System. Overview of ERP Solutions 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 the financial systems from another, and perform the integration between the systems themselves. This is very common in the retail sector, where even a mid-sized retailer will have a discrete Point-ofSale (POS) product and financials application, then a series of specialized applications to handle business requirements such as warehouse management, staff roistering, merchandising and logistics. Ideally, ERP delivers a single database that contains all data for the software modules, which would include: 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 Configuration, Supply Chain Planning, Supplier Scheduling, Inspection of goods, Claim Processing, Commission Calculation Financials General Ledger, Cash Management, Accounts Payable, Accounts Receivable, Fixed Assets Projects Costing, Billing, Time and Expense, Activity Management Human Resources Human Resources, Payroll, Training, Time & Attendance, Roistering, Benefits

Customer Relationship Management Sales and Marketing, Commissions, Service, Customer Contact and Call Center support Data Warehouse And various Self-Service interfaces for Customers, Suppliers, and Employees Enterprise Resource Planning is a term originally derived from manufacturing resource planning (MRP II) 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. Enterprise Resource Planning or ERP software can aid in the control of many business activities, like 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 in their legacy systems. Many companies took this opportunity to replace their legacy 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. ERPs 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. ERPs are cross-functional and enterprise wide. All functional departments that are involved in operations or production are integrated in one system. In addition to manufacturing, warehousing, logistics, and information technology, this would include accounting, human resources, marketing, and strategic management. ERP II means open ERP architecture of components. The older, monolithic ERP systems became component oriented. 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.[citation needed] Before Prior to the concept of ERP systems, it was not unusual for each department within an organization to have its own customized computer system. For example, the human resources (HR) department, the payroll department, and the financial department might all have their own computer systems. Typical difficulties involved integration of data from potentially different computer manufacturers and systems. For example, the HR computer system (often called HRMS or HRIS) would typically manage employee information while the payroll department would typically calculate and store paycheck information for each employee, and the financial department would typically store financial transactions for the organization. Each system would have to integrate using a predefined set of common data which would be transferred between each computer system. Any deviation from the data format or the integration schedule often resulted in problems. After

ERP software, among other things, combined the data of formerly separate applications. This simplified keeping data in synchronization across the enterprise, it simplified the computer infrastructure within a large organization, and it standardized and reduced the number of software specialties required within larger organizations. Best Practices

Best Practices were also a benefit of implementing an ERP system. When implementing an ERP system, organizations essentially had to choose between customizing the software or modifying their business processes to the "Best Practice" function delivered in the vanilla version of the software. Typically, the delivery of best practice applies more usefully to large organizations and especially where there is a compliance requirement such as IFRS, Sarbanes-Oxley or Basel II, or 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. Where such a compliance or commodity requirement does not underpin the business process, it can be argued that determining and applying a Best Practice actually erodes competitive advantage by homogenizing the business as compared to everyone else in the industry sector. Implementation Because of their wide scope of application within a business, ERP software systems are typically complex and usually impose significant changes on staff work practices. Implementing ERP software is typically not an "in-house" skill, so even smaller projects are more cost effective if specialist ERP implementation consultants are employed. The length of time to implement an ERP system depends on the size of the business, the scope of the change and willingness of the customer to take ownership for the project. A small project (e.g., a company of less than 100 staff) may be planned and delivered within 3-9 months; however, a large, multi-site or multicountry implementation may take years. 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 may 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: 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. 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 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 becomes between suppliers and customers. 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. Customization Services Customization Services involves any modifications or extensions that change how the out-of-thebox ERP system works. Customizing an ERP package can be very expensive and complicated. Some ERP packages are not designed to support customization, so most businesses implement the best practices embedded in the acquired ERP system. Some ERP packages have very generic features, such that customization occurs in most implementations. It is also often possible to extend the standard ERP package by purchasing third party software to provide additional functionality. Customization work is usually undertaken as bespoke software development on a time and materials basis. Customization can be further classified into: Core system customization or custom extensions in custom libraries Core system customization is where customers change the software vendors’ proprietary code. This means that the software will no longer be supported by the vendor for the particular function that was customized as the code would be modified to the customers need. The

customers IT department will then normally support the code in-house or subcontract a consulting organization to do so. Custom extensions are where a customer build bolt on custom applications that run parallel to the standard system i.e. custom extended applications. Modules that are extended but core code not changed remain supported but the extensions will have to be supported by the customers IT department or subcontracted consulting organization Maintenance and Support Services Maintenance and Support Services involves monitoring and managing an Operational ERP system. This function is often provided in-house using members of the IT department, but may also be provided by specialist external consulting and services companies. Advantages In the absence of an ERP system, a large manufacturer may find itself with many software applications that do not talk to each other and do not effectively interface. Tasks that need to interface with one another may involve: •

Design engineering (how to best make the product)

•

Order tracking from acceptance through fulfillment

•

The revenue cycle from invoice through cash receipt

•

Managing interdependencies of complex Bill of Materials

•

Tracking the 3-way match between Purchase orders (what was ordered), Inventory receipts (what arrived), and Costing (what the vendor invoiced)

•

The Accounting for all of these tasks, tracking the Revenue, Cost and Profit on a granular level. Change how a product is made, in the engineering details, and that is how it will now be made. Effective dates can be used to control when the switch over will occur from an old version to the next one, both the date that some ingredients go into effect, and date that some are discontinued. Part of the change can include labeling to identify version numbers.

Some security features are included within an ERP system to protect against both outsider crime, such as industrial espionage, and insider crime, such as embezzlement. A data tampering scenario might involve a disgruntled employee intentionally modifying prices to below the breakeven point in order to attempt to take down the company, or other sabotage. ERP systems typically provide functionality for implementing internal controls to prevent actions of this kind. ERP vendors are also moving toward better integration with other kinds of information security tools.[12] Disadvantages Problems with ERP systems are mainly due to inadequate investment in ongoing training for involved personnel, including those implementing and testing changes, as well as a lack of corporate policy protecting the integrity of the data in the ERP systems and how it is used. Disadvantages •

Customization of the ERP software is limited.

•

Re-engineering of business processes to fit the "industry standard" prescribed by the ERP system may lead to a loss of competitive advantage.

•

ERP systems can be very expensive leading to a new category of "ERP light" solutions

•

ERPs are often seen as too rigid and too difficult to adapt to the specific workflow and business process of some companies—this is cited as one of the main causes of their failure.

•

Many of the integrated links need high accuracy in other applications to work effectively. A company can achieve minimum standards, and then over time "dirty data" will reduce the reliability of some applications.

•

Once a system is established, switching costs are very high for any one of the partners (reducing flexibility and strategic control at the corporate level).

•

The blurring of company boundaries can cause problems in accountability, lines of responsibility, and employee morale.

•

Resistance in sharing sensitive internal information between departments can reduce the effectiveness of the software.

•

Some large organizations may have multiple departments with separate, independent resources, missions, chains-of-command, etc, and consolidation into a single enterprise may yield limited benefits.

•

The system may be too complex measured against the actual needs of the customer.

CHAPTER 3 REASERCH 3.1 REASERCH METHODOLOGY A SURVEY was conducted among employees of NTPC RIHAND, through a structured questionnaire “SURVEY ON ATTITUDE OF EMPLOYEES ON INTRODUCTION OF ERP SYSTEM” .The questionnaire was administered among 150 executives of NTPC RIHAND. 3.2 SAMPLE The sample is consisting of 150 executives of NTPC RIHAND selected randomly selected out of 432 executives of the organization. The sample was further classified into groups on basis of technical knowledge and designation.

Technical groups • •

Technical executives Non-technical executives

Designation hold • •

Senior executives (E4-E7) Junior executives (E1-E3)

3.3 TOOL FOR DATA COLLECTION A structured questionnaire “SURVEY ON ATTITUDE OF EMPLOYEE ON INTRODUCTION OF ERP SYSTEM AT NTPC RIHAND”. The questionnaire content 16 questions to measure their responses. ➢ The rating was five point scale: • Totally true =1 • Quite true=2 • Neutral =3 • Quite false=4 • Totally false=5.

➢ Questionnaire also collected some demographic information, like: • Age • Years of service • Designation • Department ➢ On basis of objectives, questionnaire may be divided into three parts; • Awareness in employees about ERP SYSTEM (communication): 1,2,3,5 and 10. • Effectiveness of training provided: 4,7,9,11,14 and 16. • Level of resistance: 6,8,12,13 and 15. 3.4 PROCEDURE A specifically designed questionnaire “SURVEY ON ATTITUDE OF EMPLOYEES ON IMPLIMENTATION OF ERP AT NTPC RIHAND” was distributed among the executives of NTPC RIHAND, to measure their attitude attributes the new system.

3.5 DATA ANALYSIS

1. Master table was prepared in MS-EXCEL. 2. Simple graphical presentations were made to draw conclusion. 3. The five point scale of questionnaire was restructured into three point scale, with following considerations: •

Positive = totally true + quite true

•

Neutral = neither true nor false

•

Negative = quite true + totally true

CHAPTER 4 RESULT 4.1 OBJECTIVE 1: COMMUNICATION CHART 4.1.1

Result: The level of communication shows positive trend, 54% of executives were aware of the ERP System. CHART 4.1.2

Result: The non-technical executives are more informed than the technical executives.

CHART 4.1.3

Result: Higher level executives were more informed. 4.2 OBJECTIVE 2: EFFECTIVENESS OF TRAINING Chart 4.2.1

Result: The training provided was effective for most of the employees (52%).

CHART 4.2.2

Result: The training was more effective for technical executive, who were mostly engineers (53.33%). Chart 4.2.3

Result: The fresher’s were benefited most by the training irrespective of their department they were working.

4.3 OBJECTIVE 3: MEASURE THE LEVEL OF RESISTANCE CHART 4.3.1

Result: Resistance was found to be least within the employees; this may have come from their faith in their organization. Chart 4.3.2

Result: Technical department appears to more comfortable with this new system.

Chart 4.3.3

Result: Fresher’s/ lower executives were more accepting the new system.

CHAPTER 5 CONCLUSIONS

1. The level of communication is satisfactory in the organization. There is significant difference in awareness among technical and non-technical executives about ERP System. 2. The training provided is also satisfactory. The organization should build its own training resource instead of using external training agent. There is difference between effectiveness of training for technical and non technical as well as between higher and lower executives. 3. There is no visible sign of resistance among the employees. There is nominal difference between the levels of resistance between any of group divided under the study. 4. The change appears to be successful in functioning, and helping the organization in achieving its goal in long and short term, as three main factors (communication, training and resistance) was found to be in facilitating state. 5. The employees are supportive, so the collaborative style of management will be more effective.

Bibliography Books: 1.

Thornhill, A., Lewis, P. Millmore, M., & Saunders, M. (2000), Managing Change: A human resource strategy approach.

2.

Colenso, M. Successful organizational change: Evolution and revolution in the organization.

3.

Nilakant, & Ramanarayan, S. (1998). Change management. Response Books.

4.

French, & Bell. (1995). Organizational Development.

5.

French, W. L. & Bell, C. H. (1995). Organisation Development.

6.

Bennis, W. G. Organisation Development: Its nature, origin and prospects.

7.

McGill, M. E. Organisation Development for operating managers.