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Essay: Role of ERP in HR module

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ROLE of ERP in HR MODULE

CHAPTER 2

LITERATURE REVIEW

2.1 What is Enterprise Resource Planning (ERP)?

Enterprise Resource Planning is defined in many ways with respect to the author’s descriptive and fewer for these definitions are listed below:

Fui-Hoon (2002) describes Enterprise resource planning as “configurable information system packages which integrates information and processes across organizational functional areas”.

ERP according to Bidgoli (2004) is defined as “an integrated computer-based system that manages both internal and external organization resource”.

However Vollmann (2005) , argues that the term ERP can be defined differently depending on one’s point of view. From the manager’s approach, ERP symbolizes as comprehensive software which supports decision making along with planning and controlling the firms’ tasks. Conversely, based on the business information technology viewpoint, ERP is defined has the software system that integrates applications of various sectors like finance, manufacturing, logistics, sales and marketing, human resources and other functions in a company. This integration is achieved by the means of database in all the functions and data processing application within an organization (Vollmann, 2005).

Glenn (2008) says that, “ERP is the method of integrating various functional systems of a large organization into a single system.” In precise, he defines Enterprise Resource planning as the process of merging the entire data of an organization from different departments into one single system. A well implemented ERP system builds a comprehensive efficiency across the various departments and uses a unified database to store data across many functions within an organization (Glenn, 2008).

Thus from all the above views, ERP systems can be described as a well integrated software systems which are operated to mechanize the essential corporate actions in various departments in a firm. This application has grown extremely high since last few years. Now-a-days, the companies are looking forward to improve their global management process and to implement competitive strategies, new industrial structures and customisation strategies. But many of the existing systems happened to be difficult, nonflexible and misaligned in a business strategy and thus the companies have taken an approach towards implementing ERP systems (Hackney and Dunn, 2000).

2.1.1 Growth of ERP

This section shows the growth of ERP from its early stages showing its developed features and purposes decade after decade (which is briefly explained in the introduction part of this dissertation as well).

From the table 1, it can see therefore that the ERP’s evolution and growth relates on the development of technology particularly on the grounds of software systems along with this the online transaction through internet as become the backbone to the organizations.

Timeline	System	Description
1960s	Inventory Management &control	Maintaining stock level in warehouse and inventory management
1970s	Material Requirement Planning (MRP)	Scheduling production processes.
1980s	Manufacturing Requirement Planning (MRP II)	Coordinating manufacturing process (from product planning, parts purchasing, inventory control to product distribution)
1990s	Enterprise Resource planning (ERP)	Improving the performance of the internal business processes (integrating business activities across functional departments)
2000s	Extended Enterprise Resource Planning	Extension version included more modules and functions, also included Advance Planning and Scheduling (APS) and E-business solutions like Customer relationship management (CRM) and Supply chain management (SCM)

Table 1: Outlines the growth of ERP from 1960-2000 [Source: Web1 & Web2]

2.1.2 ERP Today:

At present the primary advanced ERP vendors offering ERP solutions are SAP, Oracle, PeopleSoft and Invensys. They focus on internet based architecture because of the raise in E-commerce and globalization of business (Garg and Venkitakrishnan, 2006). Few of these organizations are growing their ERP system with new modules and also have changed their names of ERP systems to catchy names such as ‘Enterprise Suite, E-commerce Suite, Enterprise solutions’ etc. However, today’s ERP is much more advanced than the Manufacturing Resource Planning (MRP II) and is famous today for non-manufacturing operations (Hunter, 2008).

In the present day SAP is the global leader in inter-enterprise software manufacturing company and leading ERP supplier in the world. To have a wide-ranging applications, SAP idea was to give customers the ability to cooperate with a common database in an organization and today the corporations like IBM also use SAP products for running their business (WEB 3).

2.1.3 ERP Process

Markus and Tanis (2000) proposed a four phase life model of ERP process: Chartering, Project, Shakedown, Onward and upward.

The decision of implementing ERP is made.

The software is developed, configured and
deployed which is suitable for the firm’s requirements

This process is the time between deployment and normal operating status : here the controls are imposed and system is stabilize

The systems moves to the normal Operation status wherein the company begins using the ERP.

This model therefore, attempts to show that the companies must set their business purposes from ERP before buying it and implement those ERP applications which are suitable for company’s obligations which hence lead to better progress and growth of the company.

2.2 Significant features of ERP

“The key feature of ERP comprises of global financial capabilities, advanced planning and scheduling, product configurations, supply chain management, customer relationship management, e-commerce, business intelligence and component architecture” (Paszko et al., 2002).

The important characteristics of ERP systems are as follows:

• ERP integrates company-wide information from all the functional parts in a firm.
• The vital feature of ERP is: “it is a process-driven system”, in comparison with an individual and functional determined computer application in various departments within a firm.
• It is very adaptable in newer and different frameworks of a company.

* ERP operates using a shared Database Management Systems (DBMS) and also helps in effective communication (Bidgoli, 2004).

* They act in the actual business process in such a way that they are applied to the managing resources of an organization like dealing with customers and suppliers.

* ERP helps in multi-dimensional profit analysis.

* These systems motivate the power to react in the competitive pressures.

* ERP helps in increasing the rate of production at low cost, thus enhances productivity with improved financial closing phase (Paszko et al, 2002)

* Companies are benefiting an effort in globalizing their business, better customer service, improved accessibility of information and also web-enabling the business.

* However, ERP does not only help a company to survive but also to flourish in global economy (Desormeaux, 1998).

In short, it would appear that ERP has great adaptability in newer and various circumstances in every organization.

2.3 ERP Modules

Enterprise Resource planning modules consists of broader variety of functional elements called Modules. However, different vendors have offered various Module packages. Core ERP modules from the major players in enterprise system market are as follows:

ERP Financial Module: This module gathers financial data from various departments such as balance sheets, trail balance, general ledger and quarterly financial statements.

ERP Inventory Control Module: This module is for the process of maintaining stock level in the warehouse.

ERP Sales Module: This module implements functions like placing order, order scheduling, shipping and invoice.

ERP Market Module: This Module supports functions like direct mailing campaign and more.

ERP HR Module: HR module maintains a complete employee database.

ERP Production planning (PP) Module: This module maintains production information, planning and scheduling of data and recording the production activities.

ERP plant maintenance Module: This Module mainly helps in managing resources, recording the breakdown of equipments and planning for the maintenance of the machinery.

(Monk and Wagner, 2008)

However Hunter (2008) presents that these modules can be used as a stand-alone unit or can be blended together with other modules. Thus, the table below shows some of the modules which are merged and developed by few sub-modules by the top vendors of ERP (the merged modules are placed together in a cell) for the best run within an organization. However, fewer core modules cannot be merged and configured with other modules.

Customer Relation Management (CRM)

Asset Management

Finance Management

Supplier Relationship Management (SRM)

Business collaboration

Inventory Management

Order processing

Business Intelligence

Analytics and Reporting

Data mining

E-commerce

Sales Management

Retail Management

Project Management

Human Resource Management

Table 2: ERP modules merged with other sub-modules (Hunter, 2008)

As seen above, Human resource module is always a standalone application and do not merge with any other module. Human resource management provides an important support and suggestions for the better flow of the management. But most of the companies lag behind to implement ERP in its Human resource operations. This is because of many reasons like ERP is expensive and thus companies implement ERP in necessary functional managements only and secondly companies lag behind thinking the benefits of human resource in the organization. Thus, the further literature review explains the significance of ERP’s Human resource module.

2.4 ERP’S Human Resource Module

A business is concentrated by four productive resources namely its Land, Labour, Capital and Enterprise to produce or sell products and provide services. Simultaneously while achieving business tasks, concentration must be also be given to the people who carry out these functional jobs i.e., the organization’s Human resource (HR). Human Resources are the company’s people included in all hierarchy from employees to middle managers and non-managerial employees to the CEO and others (Jones, 2007).

The management which involve the activities framed to recruit best candidates suitable for the respective nature of the job and improve their skills and abilities by providing them good and proper support is called Human Resource Management (HRM). The five gears of HRM system are: recruitment and selection, training and development, performance feedback, payments and benefits, and labour relations (Jones, 2007). Figure 3 shows the core components of human resource management.

The out coming of HRM in early 1980s resulted in many changes in few countries and also a change in the labour market because of the development and influence of technology and political issues. Apart from these, the changes were also due to “rise in the international competition, information Technology, Globalization, higher added value, the enterprise society”. The expression that summarizes all these above is ‘the seek for Competitive Advantage’ (Legge, 2005).

Fig 3: Components of HRM         
             (Jones, 2007)

IT is the solution for all businesses, together with its employees and capital which is a potential functionality for a business strategy. Information technology plays a vital role in various process like improves the utilization of the company’s assets, decreases inventory cost, reduces production time and reducing labour cost (Swanson and Beath, 1991). From many years, the technology has almost reached every phase of human resource management. Computer technologies and software are playing a vital role in HR operations from enrolment to recruiting and from training process to retirement management. The organization’s requirements have grown so far that their HR systems are getting more complex and are integrating with other systems within the firm. Ian Turnbull, a system consultant says that, “Today’s HRM must think about how its systems can interact with the entire enterprise” (Greengard, 2001) and ERP is the answer for it.

One of the motivating applications in ERP market is its Human Resource application (Vander,2000). Before companies were only adapting the first waves of ERP: manufacturing, financial and sales modules but now there is an excess usage of the second ERP wave, Human resource module which is getting very popular to gain competitiveness (Salvendy, 2001). ERP HR systems are set basically to get information of the company’s valuable asset – The Employees says Kapp, Latham, and Latham (2001).

According to the research carried out by Hunter Group in 2008 illustrates the beginning of ERP’s Human Resource module which shows that greater than 60% of all companies had not implemented HR applications before the year 2000. Slowly, the implementation of HR module became logistically essential because of Y2K issues and also to focus on the business operations which took concern over HR needs. The practice of this module is as follows:

• In the beginning, concentration was given to the fundamentals of HR i.e. Payroll and benefits.
• Next implementation was on Training administration, Recruiting and Performance Appraisal.
• The next set of functions was focused on succession planning and compensation management.

But today, many organizations are trying to move beyond these initial ERP phases and providing the HR users the complete value of ERP systems says Vander (2000).

2.5 Is ERP HR application important for a Company?

2.5.1 Case study on Coca-Cola Enterprises Inc. by Skip (2003)

Coca-Cola Enterprises Inc in short CCE is the world’s largest producer and distributor of Coca-Cola Co. In 2002, CCE discovered the value and balanced approach for HR efficiency. Like the other companies, CCE didn’t realise how much they were spending for the benefits of the company. However, the returns on the benefits invested were unsatisfactory in spite of the considerable benefits in the average annual expenditure. Secondly, the company was concerned about the health and welfare benefits issues, also to reduce their perceived value and increase their costs. At this point of time, the HR employees were stuck with their everyday benefit issues and had less time to concentrate on the important strategic concerns like the talent recruitment, employee benefits.

Considering all these problems, CCE structured and scheduled the process of implementing a company-wide ERP. However, when the CCE initially processed ERP thought that this package was too complex and lengthy to go through the HR’s quick schedule because at that point of time ERPs were not designed keeping the HR practices in mind.

Later when ERP was implemented company wide, the solution approaches by CCE in order to utilize the HR module of ERP are as follows:

• Integration of existing systems by ERP: CCE integrated the existing pension administration solution with the new health and welfare systems and did not make any changes in these two systems.
• Retiree benefits: The expansion of the existing system of retiree benefits was expensive for CCE. As a solution, CCE added the retirees, bargaining employees (ex: Union employees) into the list of health, welfare and pension administration system using ERP with less time consumption. This process was adaptable for CCE’s future changes according to the business environment, new government rules and demographic changes.
• Employee relationship: CCE started HR shared service centre where in the company employees answer the employee related questions by the means of multiple databases which resides in the external servers. This has helped the company to maintain employee and employer relationship.
• Functionality: Technology was expanded in those HR fields which were still in the early stages of adopting technological tools such as ‘Compensation and Communication’.
• Employee database: ERP helped in creating a employee database which could be assessed by an higher representative who could automatically log on, trace and solve an individual employee’s issues (Skip, 2003)

Thus, by these solutions the HR executives could achieve and fulfilled HR goals. However, the planned technology investment, ERP delivered and supported the company’s objectives and also provided a significant ROI (Return on Investment).

2.5.2 Case study on Pharmaceutical Company: PLIVA by Bosilji-Vuksic, and Spremic (2001)

PLIVA Pharmaceutical Company is an internationally recognized company which experiences a largest turnover in central and Easter Europe. In 1996, to enter the global market, PLIVA separated its production units (like cosmetics and food) into individual units. Thus, entering the global market and to support each of its standalone business units, PLIVA implemented an effective ERP and invested in SAP’s ERP systems.

By the year 1997, PLIVA implemented SAP’s two core modules which concentrated only in the company’s cost centre: the Accounting module and Profit centre accounting module. They were implemented for the better management of the company’s financial resources. However, during this implementation, PLIVA had to undergo a reengineering business process as the purpose of the controlled future operations. This process aimed the restructuring of the core business operations as the key to success. During the ERP training point of time, conversely PLIVA realised the ERP implementation value in other core business functions which included Human resource management.

As a result, by 2000, PLIVA implemented ERP process in HR practices and by the end of 2002, the company had put in practice ERP in all its functions and were working for the company’s progress.

2.6 Applications of ERP’S Human Resource Management Module

According to Kapp et al (2001), the usage of ERP’s in Human Resource Module is each core part of HR practice is explained below.

Recruitment, Retention: This ERP module used to maintain the record of college visits for recruitment process, candidates from consultancies and their resumes; list of candidates available for full-time or Part-time work etc. This HR module can be integrated with training management to link with the initial process of the selected candidates.

Training Management: This module tracks the newly enrolled candidates who are under training process. It also maintains the course description, course availability, review course assessment, traces the training cost and fixes a training budget. The most important thing about this module is that, the e-learning training sources are connected to the employee’s desktop which can be used on requirement. Finally, ERP records the employee’s performance during the training period which will be useful to be reviewed by the training supervisors.

Payroll: Employees attendance and their time of entry to work and exit are entered in the system to determine the number of work hours. This module tracks, check and reports both the hours of work and respective wages of employees. It also includes the process of calculating the taxes and deducts from the salary and also garnishee wages for charity purpose like child support and for cancer patients.

Time and Attendance: this module is integrated with Payroll module. Apart from the roles of Payroll systems, it also concentrates on the sick leave of the employees. Time and attendance are easily recorded to the system by scanning the employee barcode which is located in every employee’s identity card.

Performance: ERP performance module basically maintains the history of employees’ performance and determines the number of employees eligible for reaching certain level of hierarchy.

Succession planning: This module highlights those employees who are well qualified at work and could be moved to the next level of hierarchy.

Compensation management: In this module, the top performed employees are targeted and supported with the compensation and retention scheme as the planned objective of the company. This package includes retention risks, cost replacement, and noticing a successor.

2.7 Impact of ERP in Human resource practices

The ERP technology system has taken the sole HR traditional practices and is placed in the heart of all organizations business functions. The source of HR is now used to support several core business functions. The integration tools and web based technologies have overlaid on restructuring of the back office operations (like HR and Finance) and has provided an opportunity to access the activity by the means of self-serving from employees desk (Boroughs et al. 2008).

The importance of Human resource values are realized as the significant part of business practice. With the growth of the company, technology and competitiveness, HR practices cannot use its old traditional way of approach. Thus implementing ERP technology helps in effective use of human capital. This increases the need of common HR data source with the financial data which helps the organization in cost decision making. ERP’s Human resource management is used to integrate within the human resource practices and also with other business functions (Boroughs et al., 2008).

Cross-functional integration within the Human resource department: Different HR functions are inter-related to each other in order to carry out one or more business operations. For example Payroll module is connected with time and attendance systems to determine the working hours of the employees for the purpose of wages.

Cross-functional integration outside the Human resource department: For example integration of human resource information with financial data which helps in determining the reports and display employees wages expenses in the financial report (Boroughs et al., 2008).

2.8 Why invest ERP in Human Resource Management?

Companies today are coping with few contradictories i.e. developing innovation to run a real business value, managing IT successfully and maintaining the cost of the firm. Several companies try to minimize their IT facilities and lessening the software usages. But for the success of standardised business strategies, an effective business solution is required. If the company operates these requirements beyond the ability to understand whether these solutions support the new obligations or not can cause damage to the company. ERP is the leading example for such issues as many companies tend to invest large amount (around billion dollars) and time on ERP implementation and practice but do not achieve a maximum on their Return on Investment (ROI) (Hoy,2008).

2.8.1 Cost of ERP

The complete package cost of buying and implementing ERP includes its software and hardware cost, service charges and other internal cost. In 2002, a survey was conducted by Meta Group on ERP which states that the whole ERP package’s average cost starts from “$15 million to $300 million” [Web 5]. According to Monk and Wagner in their recent survey in 2008 says that if a large company has employed about an average of 1,000 employees then they tend to buy an ERP worth “$50 million to $500 million dollars”.

Thus Monk and Wagner (2008) say that the cost of the ERP depends on the size of the company based on the factors like currency values and taxation laws differing from one country to other. Its cost also varies based on factors such as the investment will be high in larger countries than smaller ones and also depends on type of vendors they look for in the market.

Apart from the above analysis, the ERP package will still need some more investment in its future needs after implementation. The greatest concerns after the implementation are given in the following diagram.

Fig 4: Internal cost of ERP        
            
[Source: Web 6]

2.8.2 Before investing in ERP

According to Millman (2004) financial executive article on ERP investment draws attention on the statement of CFO of Viper Motarcycle Co; “I think that a lot of companies wasted their IT investment dollars”. He underlines the importance of effective use of installed technology was not up to a business standard although these ERP systems were customized to match the business course of actions. In addition, he points out that few companies are still running ERP just to recover their million dollars investments.

According to Smith (1999), the three main factors which an organization must think about before investing in ERP are:

• To develop a clear strategy in identifying whether these packages are useful as a base infrastructure providing benefits and understanding the technology as a business can be redesigned and improved.
• To develop a beneficial focused implementation strategy: here the concentration is given on the activities that guarantee a business change and improvement.
• To utilize clearly the benefit delivering ERP system.

However, ERP is just a source which has to be handled in care in order to improve company’s functioning as the performance management is a necessary tool in today’s competitive business world. And secondly, technology is the key to success for effective performance management (Hoy, 2008) and one of the other important needs for better performance of the company is its Human Resource Management.

2.8.3 Investing in ERP’s Human resource management

The HR module act as a foundation module where other modules are nourished as the decisions taken in this department affects the other functions within a firm. One of the most effective integration of HR module is with financial management module. Human resource module value is increased in the organizations by providing its linkage with the financial systems into one single database which is flexible and user-friendly to carry out payroll operations, project costing and budgeting. In addition, this integration is adaptable in compensation programme in which the ‘Automated position control’ i.e., verifying that the cost of the salary of employees should not go beyond the budget, forecasting the working hours, expenditure is included (Ashbaugh and Miranda, 2002).

According to Ashbaugh and Miranda (2002); the other strengths which stress on the worth of investing Human resource ERP systems are as follows:

• ERP is replacing a standalone HR application with a single integrated approach.
• It supports the operation of one common database of staff information across the firm.
• Technology throughout the HR department is beneficial in carrying out all the HR functions like hiring; enrolment to change is employee pays or any other details.
• Legacy system risks are reduced.
• It also avoids the duplication of data entry as well reduces the manual entry and paper based works.
• There is an improved management in providing or reporting the information in particular for managerial works.
• These systems can be used with the support of Internet and Web resources. For instance a candidate applying for job can send his resume through the company’s website and few interview rounds like questionnaires can be answered on-line. But the HR module software does not feed this information directly into the system but they are entered manually. However, this process can reduce cost.
• Software upgrades are very flexible and improves the quality of HR practices more effectively.
• Sometimes this application may be time consuming but it is free from errors.
• On the other hand, it is easier to accesses the detailed history of every transaction.
• Accountability regarding employees’ wages is improved and accurate through domain audit levels i.e., recording activities like employee names, address, and their transactions and so on.
• Any employee can assess data as provides self-service function through web applications for instance travel reimbursement, changing personnel data and enrolling for different training courses.
• It also promotes the labour management by supplying the precise information and tracking on the disciplinary actions, bid processes, complaints, labour compensation and disability programmes. Along with these employee absence or cost of over timed work and staff benefit cost are also tracked.
• ERP overall helps to develop employee productivity.
• Decision making by HR managers will be easier from the information accessed and also helps in organization-wide planning.
• ERP HR modules are vigorous, very protective and provide security throughout access or alteration. Security is also offered during login, recording data and logout.
• ERP is a scalable application which can process many transactions, supports many users and is adaptable in future without any difficulty.

Now, HR has a powerful tool than before but still the companies lack behind and suffers from these advantages because ERP systems are not utilized in a right way (Greengard, 2001). To initiate the Human resource systems an organization must take part in many activities. The package offered by ERP is expensive in terms of its software license, hardware, training cost; its implementation is lengthy, higher consultant cost and other internal cost of the organization. However, this best business practice has the power to redesign the business operations with the increase flow of productivity; employee management and so on which is consecutively exhibits the Return on Investment (ROI) unless and until the organization manages to implement and utilizes it in a right way by changing the work environment, its technical levels, reprogramming or repacking and give proper training on this project (Ashbaugh and Miranda, 2002). The most important out of all these is the proper management support during the entire project especially during its implementation and redesigning the business (Salvendy, 2001).

However if estimated organizations are paying worth for advanced product which has larger number of benefits which is an addition for functionality and subtraction on risks (Ashbaugh and Miranda, 2002).

2.8.4 ERP, HR: cut costs by Saran:

The combination of Enterprise applications i.e. ERP and its HR module can bring up to 30% savings on the enterprise costs said by the business advisory organization: The Hackett Group. According to their report on the effective way to get a return on business complication in 2005 explains that the companies can cut their operation cost by introducing an IT system with the process of integration application like Enterprise Resource planning (Saran, 2005).

However, the companies which fail to put in practice the integrated solutions can be unsuccessful in reducing the operational, functional and other internal costs. According to the Hackett’s survey, organizations which lack to execute the IT solutions tend to spend “30% more on financial operations and about 18% more on the human resource practices”. Conversely, investing in Human resource systems can reduce the HR employees up to 35% and HR standalone operations to 27% less than that of the integrated systems (Saran, 2005).

ERP systems do not weaken the financial and business runs if the organizations have properly defined its business process and need for its implementation (Griffiths, 2002). Beaumont and Sutherland (1992) say that, “However the failure and success of this package depends on the quality of the company’s management but not the quantity of investment”.

2.9 ERP, HR: Competitive Capability

Business leaders have come up with plans that focus on the search progress for competitiveness through various business practices. With these practices the quest for innovation must continue for creating new concepts that leads to competitive environment. Apart from these, the search for competitiveness includes the factors like “globalization, technology, intellectual capital, capability focus and transformation” and so on. These factors rise to an improved edge on how the companies can develop competitiveness (Ulrich, 1997).

The important key for creating and entering the competitive market are the company employees. It depends on how these employees are treated, how the organization is managed and how well the organization carries out its work. This can be done by redefining and advancing the human resource as the device for creating competitive actions (Ulrich, 1997). Bratton and Gold, says that, the corporate leaders also identify that the processes to attain competitive advantage in today’s environment is basically their own people. This can be done only when the company knows how to deal with its human resource as the traditional management styles are not suitable in today’s dynamic work atmosphere

Foulkes said that, “effective human resource management does not exist in a vacuum but is related to the overall strategy of the organization” (Legge,K 2005). Hence, restructuring of fewer HR activities will have greater impact on the business competition. Utilizing sophisticated technologies can also create challenges respectively (Bratton and Gold,1999). Howard Joseph, the managing director of K3’s manufacturing division says that, “Now with the global economic climate so competitive and uncertain, that’s changed. Companies are looking for ways to use their assets faster, better and more intelligently, and ERP is key” (Howard, 2008).

Ulrich (1997) had pointed the factors to overcome the old traditional HR practices were: speed, implementation of new ideas, innovation and integration. However, other authors have given the answer for these factors as Enterprise resource planning systems.

ERP forms a diversified team network by its integration process and executes a well specified expectations (O’Leary, 2000). It can be said that good preparation and practice before implementation is a better run through after implementation (Griffiths, 2002). Presently, Enterprise resource planning and Human Resource management system (HRMS) are multifaceted application which is grown more complexly and becoming user-friendly in execution. Helene Slowik, a consultant at Cedar, Chicago highlights that. “The right balance between what’s best for a department or a work group and what’s best for the enterprise can prove extremely challenging” (Greengard, 2001). Thus, relating technology systems, databases can twist the business operations in any way says Samuel, (2003).

Integration into a common database emphasis each and every sub-modules of HR and knots together with all process in end-to-end succession. As said by many experts, “integration dominates functionality” and thus leads to a competitive edge (Ashbaugh and Miranda, 2002)

2.10 Conclusion

Human Resource is a vital part of every successful organization. The information received from this section is required to have a continuous follow and accurate evaluation for the professional development and for the social welfare of the workers. In this area, the job is becoming more difficult each day in order to handle large quantity information. Thus ERP is represented as a useful tool to help and make the users easier and focus their work in a direct relation with staff, skills and aspiration of an individual related to the objectives and the goal of the company. Success of an organization depends on the capacity of the companies in attracting, developing and maintaining its key employees. Thus, it is important to have an integrated system and most favourable processes for the management of the same.

In today’s emerging business environment, large companies have no options to avoid such massive IT packages. Basically its aim is to mechanize work flow and generate cost savings. For the present competitive scenario, lagging ERP technology seems to be unsuccessful for a firm. Thus ERP systems have the possibility either to confine or expand the organization’s capabilities and lead a pathway to competitiveness.

Competitive edge develops from the company’s ability by renovating its operating technology systems to its latest kind with following business changes and reflects and improves the structure and employee relationship. It is also developed by building intellectual capital which can create a strong knowledge base for the company’s welfare. Therefore organizations using ERP as mean for competitiveness must reorient their Human resource activities because these activities are essential in competitive platform.

Overall the literature review justifies that, together with all the Human resource roles help in looping with other core functions of the organization by the course of Enterprise resource planning integration systems which tend to focus on both the vital elements of achieving the business tasks and whose outcomes show the way to competitive advantage.

2.11 REFERENCES

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2.12 WEBSITES

* WEB 1:

http://www.sysoptima.com/erp/history_of_erp.php

[Dated: 05/02/10]

* WEB 2:

http://www.igi-global.com/downloads/excerpts/193070836XExcerp.pdf

[Dated: 02/01/10]

* WEB 3:

http://www.sap.com/services/education/course.epx?context=%5B%5B%7CAC210%7C%7C%7C062%7CG%5D%5D%7C

[Dated: 28/12/09]

* WEB 4:

http://www.igi-pub.com/downloads/excerpts/193070836XExcerp.pdf.

[Dated: 05/03/10]

* WEB 5:

http://www.sysoptima.com/erp/cost_of_ome.php

[Dated: 06/01/10]

* WEB 6:

http://articles.techrepublic.com.com/5100-10878_11-1054263.html

[Dated: 09/03/10]