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Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
Dissertation adoption of enterprise resource planning (erp) in vietnam
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Dissertation adoption of enterprise resource planning (erp) in vietnam

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  • 1. 1 Dissertation Adoption of Enterprise Resource Planning (ERP) in Vietnam Table of Content Table of Content ..................................................................................................................................1 List of tables 4 List of figures 5 Abstract 6 Chapter 1. Introduction..................................................................................................................7 1.1 Rationale for Chosen Topic .........................................................................................7 1.2 Research Background ..................................................................................................7 1.3 Research Aim and Objectives......................................................................................9 1.4 Research Significance................................................................................................10 1.5 Research Structure .....................................................................................................11 Chapter 2. Literature Review.......................................................................................................12 2.1 Introduction to ERP and Related Concepts ...............................................................12 2.1.1 Definition of ERP ........................................................................................................12 2.1.2 Concepts related to ERP ..............................................................................................12
  • 2. 2.1.3 Benefits of ERP............................................................................................................12 2.2 Construction Project ERP ..........................................................................................13 2.2.1 Status of implementation of ERP.................................................................................13 2.2.2 Considerations for successful ERP implementation....................................................14 2.2.3 Implementation of ERP - The difference between solutions.......................................14 2.2.4 ERP & Scale Deployment of enterprise.......................................................................15 2.2.5 Summary of cost ERP solutions on the market ...........................................................16 2.2.6 Comparison between domestic and foreign ERP.........................................................17 2.2.7 Selection process of ERP systems ...............................................................................17 2.2.8 Develop ERP project for Vietnamese businesses. Factors for success and failure .....17 2.2.9 Example of Failed ERP implementation......................................................................17 Chapter 3. Research Methodology ..............................................................................................18 3.1 Research Strategy.......................................................................................................18 3.2 Research Design.........................................................................................................19 3.2.1 Secondary Data............................................................................................................19 3.2.2 Primary Data ................................................................................................................19 3.3 Data Collection Methods ...........................................................................................19 3.3.1 Qualitative Methods.....................................................................................................19 3.3.2 Quantitative Methods...................................................................................................19 3.4 Validity and Trustworthiness.....................................................................................19 3.5 Limitations.................................................................................................................19 Chapter 4. Results and Discussion ..............................................................................................20 4.1 Target, Cope and Requirement of Overall System ....................................................20 4.2 Functions and Advantages of Provided Software......................................................21 4.2.1 Functions and available advantage system ..................................................................21
  • 3. 3 4.2.2 System Administration Application architecture model:.............................................22 4.2.3 Modules provide functionality according to PV needs Error! Bookmark not defined. 4.3 Technical Solutions Application System...................................................................26 4.4 Schedule and Budget Implementation Project...........................................................26 4.5 Discussion..................................................................................................................28 Chapter 5. Conclusions and Recommendation............................................................................29 Learning Statement ............................................................................................................................30 5.1 Personal Opinion........................................................................................................30 5.2 Development..............................................................................................................30 5.3 Contribution...............................................................................................................30 References Error! Bookmark not defined. Appendix 1 Error! Bookmark not defined. Appendix 2 Error! Bookmark not defined. Appendix 3 Error! Bookmark not defined.
  • 4. List of tables Table 2-1 Advantages of ERP system......................................................................................... 12 Table 2-2 Summary of research result about ERP solutions....................................................... 14 Table 2-3 Satisfaction of ERP solutions ..................................................................................... 14 Table 2-4 Overall comparison between SMEs and large enterprises ......................................... 15 Table 2-5 Comparison of ERP solutions..................................................................................... 16
  • 5. 5 List of figures Figure 2-1 A graphical view of ERP........................................................................................... 12 Figure 2-2 Major elements in ERP implementation ................................................................... 13 Figure 2-3 ERP governance framework...................................................................................... 14 Figure 3-1 Characteristics of a Research..................................................................................... 18
  • 6. Abstract The main purpose of the research is to identify and analyze the issues and problems that Vietnamese medium-sized companies will face when implementing an international ERP package. Two in-depth case studies were conducted for two Vietnamese medium-sized companies: one which experienced success and the other which experienced failure in implementing international ERP systems. The research findings suggest that continuous and clear communication, consistent and determined support from the top executives, concrete project management methodology and effective change management attitude are the biggest contributors to the success of ERP implementation in Vietnamese medium-sized companies. On the other hand, the research shows that problems with system customization and inadequate user training may hinder ERP success. Based on this analysis, recommendations are developed for Vietnamese companies to consider when implementing international ERP packages.
  • 7. 7 Chapter 1. Introduction 1.1 Rationale for Chosen Topic Enterprise Resource Planning (ERP), viewed as advanced managerial information systems that strengthen the company and improve competitiveness, has become the most controversial topic among Vietnamese executives in Vietnam today. However, the success rate of ERP implementation in Vietnamese companies is still not very high. Implementing ERP in Vietnamese companies is much more challenging than it is in well-organized companies in developed countries. The low success rate of ERP implementation in Vietnam is caused by a number of problems which cannot be solved by simply applying the success factors of ERP implementation used in Europe or the United States due to the specific complexities and complications of a very unique combination of organizational structure and local business culture characteristics. Careful adaptation with methodological adjustments is required. 1.2 Research Background In 1990, the Gartner Group first used the acronym ERP (Enterprise Resource Planning) is an extension of material requirements planning (MRP), later manufacturing resource planning and integrated production computer. If there is no alternative to these terms, ERP represents a larger whole, reflecting the development of application integration beyond manufacturing. Not all ERP software is developed from a manufacturing core. Different vendors started with maintenance, accounting and human resources. In the mid-1990s, ERP systems addressed all core functions of the business. In addition to companies, governments and non-profit organizations also started to use ERP systems.
  • 8. ERP systems have experienced rapid growth in the 1990s because the 2000 issue and the introduction of the Euro disrupted legacy systems. Many companies took this opportunity to replace such systems with ERP. ERP systems initially focused on automating office functions that do not directly affect customers and the general public. Front office functions such as customer relationship management (CRM) dealing directly with customers, or e-business systems, such as e- commerce, e-government, e-telecom, financial electronic, supplier relationship management (SRM) became integrated later, when the Internet simplified communicating with external partners. "ERP II" was coined in the early 2000s. It describes web-based software that allows both employees and partners (such as suppliers and customers) real-time access to the system. The Role of ERP II extends the optimization of resources and of traditional ERP transaction processing to make use of the information related to the resource in the efforts of businesses to partner with businesses other, not only to carry out e-commerce buyers and sellers. Compared with the first generation of ERP, ERP II is said to be more flexible rather than confine the capabilities of the ERP system in the organization, it is designed to break through the walls of the company and to interact with the system other systems. "Enterprise application suite" is an alternative name for such a system. Many questions reflected the concerns of businesses threshold "computerization of enterprise management", namely that implemented ERP system or not? If implemented, how to choose the solution? Once businesses do not understand the nature of the ERP system, as well as the business will be when equipped with ERP systems, businesses cannot decide on the deployment of ERP. Many businesses only vague "need to computerize business tomorrow", or before the trend of integration and WTO accession, enterprises are eager to upgrade management system by using the "buy faster ERP Software as possible!". But ERP is actually a complex system, there are many abstract concepts is not easy to understand and fast deployment decisions. In fact, the Vietnamese businesses today are in need of counselling than the right ERP system deployment. However, the
  • 9. 9 "also" is lower than "demand" because the company does not have many professional activities in the field of counselling. However, businesses can consult directly from the company providing ERP solutions. One thing that businesses are concerned is present in Vietnam does not have many businesses successfully implemented ERP to other businesses get to "mirror" and "follow". They just heard that ERP is something "very complex" and many ERP projects fail than succeed. So at this time, Vietnamese businesses who decide to conduct business ERP implementation will be truly pioneering and very "brave". This also happened with the previous accounting Software. And business pioneer in the application of accounting software are all successful businesses. Everything has its price! 1.3 Research Aim and Objectives This dissertation is based on:  The experience of deployment on the enterprise managing system for the big customers is in the same business field with PV.  The information is given by PV through many surveys and evaluates the requirements of two representatives.  The document describing the whole process of professional management and PV’s the business scope that PV is requested. Enterprise Resource Planning (ERP), viewed as advanced managerial information systems that strengthen the company and improve competitiveness, has become the most controversial topic among Vietnamese executives in Vietnam today. However, the success rate of ERP implementation in Vietnamese companies is still not very high. Implementing ERP in Vietnamese companies is much more challenging than it is in well-organized companies in
  • 10. developed countries. The low success rate of ERP implementation in Vietnam is caused by a number of problems which cannot be solved by simply applying the success factors of ERP implementation used in Europe or the United States due to the specific complexities and complications of a very unique combination of organizational structure and local business culture characteristics. Careful adaptation with methodological adjustments is required. 1.4 Research Significance Vietnam is on track to join the global economy, especially with the preparation for WTO membership in 2005 and full AFTA membership in 2014. In this context, Vietnamese companies will face stronger market pressure from both domestic and international competitors. Companies are pressed to control costs in all business activities, to have a good control of inventory, to expand products and services, to improve product quality, and to provide better customer service. In short, to survive as well as to remain competitive and develop in the global market, Vietnamese companies will need to improve their business practices and procedures. A strong and robust ERP system is one of the important factors which will help determine the success or failure of companies in the global economy because it allows them to make the best use of all necessary business recourses. However, not all Vietnamese company managers fully understand the importance of properly designing, selecting and implementing ERP systems for better inter- departmental collaboration and business decisions. A recent study about 12 state-owned companies conducted by the Ministry of Post and Telecommunication reported that managerial applications in these companies are not standardized, consistent or integrated with each other (Ministry of Post and Telecommunication, 2003). Thus, at this point the urgency to organize and successfully implement an ERP package to be competitive and efficient is very important to Vietnamese companies.
  • 11. 11 ERP can improve the quality and efficiency of a business. By keeping the internal business process of a company running smoothly, ERP can lead to better outcomes would be beneficial to the company as customer service, and manufacturing. ERP provides support for upper management to provide them with information to make important decisions. Support this decision will allow upper management to management options will strengthen the business down duong.ERP also create a more agile company that can better adapt to situations and change. ERP makes the company more flexible and less rigid structure in an effort to allow different parts of an organization to become more binding, in turn, strengthen the business both internally and externally. 1.5 Research Structure This research attempts to analyze implementations of international enterprise resource planning packages for Vietnamese medium-sized companies. The research has total five chapters. Chapter one is about the background, scope, methodology, limitation and sampling design of the thesis. Then, literature is reviewed in chapter two in the context of ERP and ERP implementation. The author has selected two Vietnamese medium-sized companies that have sufficient resources to implement and utilize ERP as case study. The two cases are studied in detailed in chapter three and chapter four. Chapter five is about findings and recommendation from the cases.
  • 12. Chapter 2. Literature Review 2.1 Introduction to ERP and Related Concepts 2.1.1 Definition of ERP Source: Idea Group Publishing (2002) Figure 2-1 A graphical view of ERP 2.1.2 Concepts related to ERP 2.1.3 Benefits of ERP Table 2-1 Advantages of ERP system
  • 13. 13 Source: Idea Group Publishing (2006) 2.2 Construction Project ERP 2.2.1 Status of implementation of ERP Important successful factors to implement ERP packages Source: Info-Tech Research Group, 2004 Figure 2-2 Major elements in ERP implementation
  • 14. . Source: Info-Tech Research Group, 2004 Figure 2-3 ERP governance framework 2.2.2 Considerations for successful ERP implementation 2.2.3 Implementation of ERP - The difference between solutions Table 2-2 Summary of research result about ERP solutions SAP Oracle Microsoft Segment two Average Time (months) 20 18,6 17,8 19,8 19,8 Implementation costs (Million USD) 16,8 12,6 2,6 3,5 8,5 Satisfaction level (%) 73,0 62,0 69,0 70,0 67,0 Risk level (%) 50,0 56,9 57,7 61,8 54,0 Microsoft Dynamics Table 2-3 Satisfaction of ERP solutions
  • 15. 15 SAP Oracle Microsoft Segment two Average Benefits 72,2% 58,0% 68,0% 68,6% 65,3% The satisfaction level of leaders 76,4% 75,9% 65,4% 67,7% 70,7% The satisfaction level of staffs 73,6% 60,3% 76,9% 76,5% 67,4% The general satisfaction level 73,0% 62,0% 69,0% 70,0% 67,0% The level of risks 50,0% 56,9% 57,7% 61,8% 54,0% 2.2.4 ERP & Scale Deployment of enterprise Table 2-4 Overall comparison between SMEs and large enterprises SMEs Large Enterprises Time for implementation (months) 18,8 25,2 Costs for Implementation (USD million) 3,07 24,07 Expenses/ Revenue (%) 10,5 4,9 Below 5% higher than budget (%) 40,5 35,9 5-100% higher than budget (%) 59,5 64,1 Project participants 14 74 The degree of modifications Low High
  • 16. 2.2.5 Summary of cost ERP solutions on the market Table 2-5 Comparison of ERP solutions SAP Oracle Microsoft Dynamics ERP solutions segment II The average deployment time (months) 20 6.18 18 8.17 Average implementation costs (million USD) $ 16.8M $ 12.6M $ 2.6m $ 3.5m Median ERP Implementation Cost $ 4.5m $ 2.2M $ 0.4m $ 1M Training costs Highest High Medium Medium Maintenance costs Highest High Medium Medium Total cost of ownership (TCO) Highest High Medium Medium Payback time Dainhat Long Shorter Shorter The level of benefits 73.60% 63.80% 61.50% 61.80% Increase performance levels 68.10% 41.40% 57.70% 52.90% Level of process improvements 75.00% 69.00% 80.80% 91.20%
  • 17. 17 Satisfaction of leadership / management 76.40% 75.90% 65.40% 67.60% Satisfaction of professional staff 73.60% 60.30% 76.90% 76.50% Note: This table compares only for reference. When selecting ERP enterprises, in addition to these criteria, should be based on the specific requirements of production management of enterprises to be able to select the most appropriate solution. 2.2.6 Comparison between domestic and foreign ERP ERP systems internal (Vietnamese ERP), advantages and disadvantages 2.2.7 Selection process of ERP systems 2.2.8 Develop ERP project for Vietnamese businesses. Factors for success and failure 2.2.9 Example of Failed ERP implementation
  • 18. Chapter 3. Research Methodology 3.1 Research Strategy Figure 3-1 Characteristics of a Research
  • 19. 19 3.2 Research Design 3.2.1 Secondary Data 3.2.2 Primary Data 3.3 Data Collection Methods 3.3.1 Qualitative Methods 3.3.2 Quantitative Methods 3.4 Validity and Trustworthiness 3.5 Limitations
  • 20. Chapter 4. Results and Discussion This chapter is aim to present the results observed from the case study of Phong Vu Computer. Further discussion on the related issue is provided. In order to achieve the study purpose, the chapter is divided into five sections as following: (1) the target, scope, and the system’s the requested overall. The target of the project, the scope of the project, the content of the projects and the requested overalls about the projects; (2) Function description and the advantages of the provided software system; Mention the function of enterprise managing software provided; (3) The technology solution is applied by the system according to the requested frame; (4) Plans, progress and funds for implementation; and (5) Evaluation about the solution. 4.1 Target, Cope and Requirement of Overall System Board of directors PV Computer equipment office Department 3 Shop specialized equipment Warranty service - repair Base depot Consolidated financial report Statistical reports, business analysis activities of each department Financial reporting systems The report details the functional modules Consolidated financial reporting system Management reporting systems of the company Financial statements of each system units Management reports for each system units Supermarket PV Department 2 Department 1
  • 21. 21 4.2 Functions and Advantages of Provided Software 4.2.1 Functions and available advantage system System Diagram Manage ment system Accoun ting capital in cash Buy & liabilities Sales & Accounts Receivabl e Accounti ng & managemen t of fixed assets Invento ry Accountin g Forwar d entry final closing of accounting books GENERAL ACCOUNTING The financial statements The tax report Boo kkeepin g system Informa tion, books, accounts synthesis The report analyzed data Compa ny- specific reporting Upd ate report Mod ule integrat ed data Data Synthesis Report
  • 22. 4.2.2 System Administration Application architecture model: SERVER_DATACENTER_HEAD OFFICE ` Client ` Client ` Client Input data Data_All the Company Data Unit 1 Data_Synthesis of units Data Company main office (Supermarket PV) ` Client Input data Input data Input data ` Client Input data Data Unit 2 Data Unit 3 Data Unit 4 Automatic processing Input Data Input Data Input Data SERVER DATABASE TAX DATABASE LOCAL ` Client ` Client ` Client
  • 23. 23 ``` Client 1 Client 2 Client n SERVER ` Client 1 ` Client 2 ` Client n ` Client n ` Client 1 ` Client 2 ` Client 1 ` Client 2 ` Client n Draytek 2910 Draytek 2910 Draytek 2910 Draytek VPN VPN VPN HEAD OFFICE UNIT 1 UNIT 2 UNIT
  • 24. Sales Department Up vote proposal buy Director approved the proposal Up purchase orders Supplier Agree DisagreeSend Total storage Warehousing Check bonded goods Do started End
  • 25. 25 Customers To receive warranty parts Receiving Check Product need warranty Longer warranty Out of warranty Repair bills Company Authorized Do Send Return the product warranty Product need warranty Warranty Repair quotes Repair bills Warehousing components warranty Request form Product need warranty Warranty Return the product warranty Product Returns has warranty No Report name 1 Materials imported reports detailed by the company (Samsung, Sony, etc.) 2 Reports statistics on the pay of each firm. 3 Statistical report inventory of materials of each company warranty. 4 Statistical reporting agents to customer warranty 5 Report warranty to be delivered. 6 Synthesis report inventory longer warranty. 7 Report warranty so not delivered. 8 Table monitoring contract term maintenance and installation of organs 9 Statistical reports and materials installed for the ABC store 10 Statistical reports of customer repair, not repaired
  • 26. 11 Report track repair history - Detailed warranty customers 12 Detailed service summary report for each employee, each department (office Informatics, Electronics, Refrigeration, Phone, etc.). 13 Statistical reporting costs: purchase of foreign supplies, buying its supplies and other expenses (gasoline, etc.) 14 Detailed report aggregate debt service by . 15 Detailed report detailed debt service by . 16 Statistical reporting of revenue, expenses, profit and loss information for each service . 17 …. 4.3 Technical Solutions Application System List of database systems Assessment backup strategy Datab Database at the Company Data is very large, important, major activities in the daily working hours (Monday to Saturday, from 7am to 18h). High instantaneous data centralized, relatively easy to recover from the insurance data are recorded through vouchers. 4.4 Schedule and Budget Implementation Project Phase 1: Survey and development of the system as required. No work People Progress of implementation of the first phase (Week) 1 2 3 4 5 6 7 8 1 Survey programming requirements and correct, supplement function 2
  • 27. 27 2 Installation, configuration and operation of the test system 2 Phase 2: Implementation and support of mining operation No work People Progress of implementation of Phase 2 (Week) 1 2 3 4 5 6 7 8 9 10 11 12 3 User Guide 2 4 Support operators and system operators 3 5 Review, acceptance and transfer. 2 Warranty and support using the following test. Month from the date of acceptance of the whole program. Phase 3: Upgrade ERP on-demand use of PV Time to upgrade every year depending on the demand of each individual company PV is 02 years Estimated cost of implementation Products and services offered. Number Price (USD) Money (USD) Software Asia Enterprise 10.0 (provide from 20 to 100 PCs on LAN / WAN) 1.1Management System Financial Accounting. System provides head office Internal management system Tax Management System. System aggregating data across the company. 1.2. Business Management System - distribution – sales. Manage buying process Distribution Manager - Sales
  • 28. 1.3 Management System repair service - warranty 1.4 Human Resource Management System – salaries. Human Resource Management Management of Attendance – Payroll. 1.5 Asset Management System - equipment. .Set costs 02 database (internal and taxes) on the same 01 and set the Link system to convert data between internal and taxes. The cost to install and configure the system to run online between Vp with units. .System implementation costs (including consulting, installation, training and manuals for about 04  05 months). Use & support 12 months warranty. VAT (Software is not subject to VAT) TOTAL ( 1 + 2 + 3 + 4 + 5 + 6) In words : …………………………………………………….. ./. 4.5 Discussion
  • 29. 29 Chapter 5. Conclusions and Recommendation These days ERP is considered to be an indisputably powerful tool which can help companies to be efficient and competitive. However, ERP is also considered to be one of the most difficult business solutions to implement and execute internationally. In Vietnam, the challenges are even greater because of outdated and nonstandard business processes in addition to English language ability and misinformed perceptions about adopting international ERP packages for Vietnamese companies. Taking into account these unique differences, the author concludes that ERP is critical in order for Vietnamese companies to develop and take part in the global economy. Thus, proper ERP implementations will help Vietnamese companies “to stand on the shoulders of the big giants” (Financial informatics magazine, March 2004) and take the advantage of the international markets. To make ERP implementation successful and gain advantages that ERP offers, Vietnamese medium-sized companies should take into account the following factors: clear business objectives about ERP, clear communication with adequate users input, good project management, top management support, BPR and adequate customization, English capability, proper training and update to users, suitable hardware and ERP package, and good input data. In addition, companies should not procure ERP packages and struggle to implement the system themselves. A proper engagement of external professional consultants will help companies to make use of existing industry knowledge in terms of BPR and leverage ERP to enhance their competitiveness and efficiency. Last but not least, companies should be well prepared for the deep transformation that new ERP processes will require and get ready for the long run.
  • 30. Learning Statement This part indicates the experience of the researcher regarding which skills learnt from the study, how to transfer these skills to work as well as social situation, and how to improve the quality of future researches. 5.1 Personal Opinion Research information: 5.2 Development 5.3 Contribution This document is provided by: VU Thuy Dung (Ms.) Manager Center for Online Writing Resources Facebook : https://www.facebook.com/vu.thuydung.5076 Email : assignmentsource@gmail.com Blogger : http://assignmentsource.blogspot.com/ Website : http://assignmentsource.com/

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