A Comprehensive Analysis of Oil & Gas Organizations Undergoing Erp Implementation: Business Processes Modelling and Risk Management
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A Comprehensive Analysis of Oil & Gas Organizations undergoing ERP Implementation: Business Processes Modelling and Risk Management
Harsha Sinha, Samrat Roy Choudhury
Indian Institute of Technology, Kanpur
Abstract — Enterprise Resource Planning (ERP) systems are company-wide systems which help enterprises automated and integrate its business processes. Most large organisations all around the world have adopted ERP. One of the most challenging phase is that of ERP implementation as it leads to changes in the existing business processes. In this paper we analyze the implementation of ERP in OilCO and later on in its affiliate ExploreCO and subsequent changes in business processes. We also comprehensively analyze the critical success factors in both the implementations. The complete analysis is done using BPMN modelling technique whereby necessary model diagrams have been made of pre, post and of implementation phase of ERP to have clear representation of actors and their patterns and roles during each phase.
Keywords - ERP implementation, Business process patterns, BPMN modeling, Exclusive choice pattern, Split and merge pattern, Swimlanes ERP implementation
Introduction
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In the past few decades IT has emerged as an integral sector which has changed the way the business process are carried out. This is all because of the introduction of the Enterprise Resource Planning systems which has reduced operational and maintenance costs for information systems, decreased administrative expenses and made business processes more efficient, more comprehensive data is available to decision makers, large scale processes automation and growth are way more feasible. One of the major challenge faced is that of implementation of ERP in a cost effective and timely manner. One of the major challenge is to make people accept change. The employs generally fear the new roles they may be assigned and if they will be able to cope with these. Many such projects have failed due to poor cost and time management. Hence, a comprehensive planning of the implementation is vital to its success.
Therefore, it is important to understand the real-life implementations, problems and related scenarios in detail. Hence, we took the case two well established petro-mineral organizations (OilCO & ExploreCO) which undergo ERP Implementation in late 90s.
Furthermore, to the best of our knowledge, very few real-life ERP implementations in the oil and gas sector are documented in the literature. Therefore, this paper will facilitate the understanding of the constraints, problems, success and pitfalls of implementation in this sector.
Literature Review
A. Enterprise resource planning
ERP system is a comprehensive system which integrates various business processes and maintains data using a central database which also make data available real time. It also help in logging and tracking the stock , cash, production capacity ,orders, purchase orders , employee work record, salaries, etc. It serves as an information channel between various departments such as sales, accounting, transport, operations, manufacturing and purchasing. This helps in the information flow among all business functions, and managing connections with outside stakeholders of the business.
ERP system software industry is a multibillion-dollar industry. These software can either be purchased from these the companies which make ERP software and can also be made in house. In house production is generally more expensive but provides various advantages like it can be made totally according to the requirements of the company. Another option is get a custom made software from an IT company which is way more expensive than the other two options. This has led to a great increase in the investments in the IT industry. Nowadays, like the large organisations small organisations also have started using ERP thus giving rise to a whole new segment in the ERP system software market.
B. System development life cycle
System development life cycle is the process of designing, planning and developing an information system for an organisation. It is generally a complex task to design such system for large scale use and require thorough and structured methodology to avoid any problems at a later stage.
Traditionally, SDLC involves deploying a top down problem identification which basically means breaking down a large problem into many small ones and then use a bottom up solution approach whereby solutions are developed for each such problem in a hierarchical manner. The process begins when the management recognises the need for such system for their company. Such need generally arises in case the company needs competitive advantage or lacking behind its competition or to expand to larger enterprise or to improve their productivity. Some organisations which seek to expand into a global corporation generally resort to this option.