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Risk based ERP Implementation
framework for Higher Education
Institutions
Rajesh Subramanian Research Scholar, Amity University Rajasthan,
India Academic Services, Botho University, Botswana
Dr. Swapnesh Taterh
Associate Professor, Amity University Rajasthan, India
International Journal of Pure and Applied MathematicsVolume 119 No. 12 2018, 16211-16221ISSN: 1314-3395 (on-line version)url: http://www.ijpam.euSpecial Issue ijpam.eu
16211
Abstract - Despite the difficulties, risk and
failures, higher education institutions are
continuously replacing/implementing ERP
Systems to meet the demands of sector
competition and expectation form the
stakeholders. Many literatures claim that the
ERP implementation is risky and challenging.
Especially when HEIs are novice, it becomes
important to mitigate the risk involved in ERP
implementation for a successful
implementation. This paper proposes a new
risk based framework for ERP
implementation in higher education.
Keywords: Enterprise Resource Planning (ERP), ERP Implementation, Higher Education,
Implementation framework, Implementation model.
1. INTRODUCTION
Educational institutions are having traditionally
been non-competitive. However, with the
advent of technology they have become
competitive in-order to survive [1]. A robust
way to rationalise and enhance bottom line is
implement process automation. Thus ERP`s
have become the main stay. ERP systems not
only automates a given process and system,
they bring transparency, manageability [2] and
huge cost saving if implemented correctly.
ERP systems are high capability software with
complex algorithms with scope to service any
vertical within or outside an organisation. with
the main role to support key administrative and
academic services in an educational system [3].
Accuracy and accessibility of information are
the hallmarks of an ERP system with in any
business organisation and these are just some
of the tangible benefits amongst a host of other
advantages that come with it [4]. Primary focus
of ERP system is to connect all the business
functionalities into a single consolidated source
that can help to meet the needs of the entire
organisation. This ubiquitous system is
expected to bring quality, productivity
efficiency and profitability [8]. Despite the
presence of many commercial program
packages that merely amalgamate data and
business processes, they cannot be suitable for
implementation in an educational organisation
such as universities [5]. The biggest threat to
ERP systems, despite all their advantages, are
their high levels of “failure proportion” [6]. An
organisation by all measures can consider an
ERP implementation asits biggest project
undertaking [7]. Risk mitigation and
framework procedures adherence are of
paramount importance for a successful ERP
implementation.
2. LITERATURE REVIEW
2.1 Higher Education and ERP systems
The challenge of increased competition,
regulatory demands from the government and
rising customer expectations has added pressure to
the higher education sector to improve their
operational efficiency. The continuous and major
changes in the education sector demands all
administrative processes to be managed efficiently
[8,9]. Higher education ERP systems address the
basic administrative functions such as
Admissions, Student Administration, Programme
and course management, Batch schedule
management, Assessments, Student Services
Facilities etc., which are traditionally not
traditionally a part of ERP systems. “Traditional
ERP systems address only administrative
functions such as HR (Human Resource), Finance,
Operations & Logistics and Sales and Marketing
applications” [9]. Yet, the HE sector requires
unique function as mentioned above.
According to Fisher [10], “ERP systems were
initially introduced into HEIs in the US in
response to the same drives that encouraged
private sector adoption”. American HEI`s
embraced the ERP system as a mode to integrating
and managing complex process deficiencies that
we inherent in the existing setup [11]. Despite the
numerous advantages that are related with the
implementation of ERP in higher education, they
have far too often been described as un affordable,
un-necessarily complex and or hazardous and
risky to the implement [3, 6, 12, 13, 14];
However, globally, more organisations are seeing
ERP as an efficient tool to develop, grow and
sustain their organisations and have continued to
embrace it [15].
Although liturgical resemblance of likeness
between corporates and HEI`s do exist however a
“copy & paste” would prove disastrous [16, 17].
Pollock and Cornford [9] “suggest that though
Universities share similarities with manufacturing
organisations, but recognise that Universities have
specific and unique
administrative needs”. “The uniqueness of HEIs
according to Lockwood [21] is as follows:
• complexity of purpose, • limited measurability of outputs, • both autonomy and dependency from
wider society, • diffuse structure and authority, and
internal fragmentation.”
2.2 ERP Success and failure stories Various literatures reveal that there are mixed
results in the implementation of ERP.
According to a survey [10], almost 85% of ERP
system users have categorically stated their
absolute satisfaction with the sys tem. Additionally,
International Journal of Pure and Applied Mathematics Special Issue
16212
some have even argued that it is impossible to
continue without the system.
Umbel [18] said, “At Toro Co., ERP, coupled with
new warehousing and distribution methods,
resulted in annual savings of $10 million due to
inventory reduction. Owens Corning claims ERP
software helped it save $50 million in logistics,
materials management, and sourcing”.
According to Zaglago, Novotny and Sabati said
that “The Earthgrains Company witnessed a net
improvement in its operating margin from 2.4 to
3.3%. The company also improved its on-time
delivery to 99% thereby improving its customer
satisfaction metric” [19].
While these are some evidences for ERP
Implementation successes on the other hand the
literatures also registered the failures in the ERP
implementation.
Rasmy says [20], “three quarters of ERP projects
are considered failures and many ERP projects
ended catastrophically”.
Muscatello & Parente [22] reported that “failure
rates estimated to be as high as 50 percent of all
ERP implementations”.
Wang [23] said that, “70 percent of ERP
implementations fail to deliver anticipated benefits”.
Malahat [24] reports that “more than 50 % of the
projects were cost 189% of their original estimates”
Panorama Consulting Solutions, an ERP consulting
firm had published a report in the ERP 2015
magazine with the following information: [25]
• 58% implementation showed a cost overrun
• 65% had issued time overruns • 53% of the implementations stated that the
system met less than 50% of the set objectives in comparison to tangible benefits.
2.3 Risk involved in ERP implementation Research has indicated that there exists a high
implementation failure rate of integrated
information systems. A few instances have evolved
in to “high risk category”.
This is clearly due the way in which ERP evolved
historically. Success models of highly efficient
companies where used as a benchmark reference
for implementation. Complexities arising due to
adaptation were not considered thus increasing the
rise manifold.
Contrary to expectations of improved
organisational effectiveness due to an ERP
implementation, documented failure rate is high.
The reasons for failure can be manifold. But the
core reasons is due the evolution the ERP system
itself. The initial strategy was to capture “best
practice” processes across successful industries and
create a reference benchmark model. So, when a
different industry embarked on adapting the best
practice of completely different trade sector the
challenges and complexities became evident and
proved to be a huge deterrent to the exercise. Other
causes can be: [15]
• Unrealistic organisational objectives • Undecided implementation methodology • Poorly outlines goals • Lack of management support and
participation • Miscalculated scope, size and complexity • Organisation change readiness • Inconsistent project resource selection
process • Unqualified human resource with no
relevant skills • Questionable data accuracy • Infrastructure issues of technical nature
An ERP system serves all verticals of an organisation. Hence a successful ERP
implementation can only have defined by many
factors, for example:
• Stakeholder/management participation • Upgrade & or modernise existing processes • Connecting integral system to external
systems • Co-operation between advisors and staff • Highly skilled & educated staff.
An organisation is expected to undergo huge
financial cost for the implementation of an ERP
system. According to Umble [18] “the cost of
implementation of an integral information solution
for a medium-sized enterprise may amount to
between $2m and $4m. On the other hand,
theexpenses for the implementation of ERP
systems in a large enterprise can exceed $100m”.
2.4 ERP implementation Success and failures in
Higher Education Institutions Global ERP solutions were introduced to help
organise and standardise processes within an
organisation. The manufacturing sector was the 1st
reap its benefits. However, a “copy & paste” of this
framework into any other sector could mean risk
consequences as every other sector is different. Hence it is safe to say that HEI`s have a unique
context of operations. More industry specific
research needs to done to completely evaluate the
challenges and risks of implementing an ERP
system in the HEI sector.
However, Swartz [9] says “Universities are now
spending upwards of $20 million each to
implement modern Enterprise Resource Planning
(ERP) projects that can take two, three or more
years to implement. Early reports suggest a mix
result of ERP implementation in the HEI sector
International Journal of Pure and Applied Mathematics Special Issue
16213
from across demographics. The two authors of this
report, both CIO’s of large universities, share their
experiences and lessons learned on ERP and
provide a framework to approach an ERP that
could save universities millions of dollars.”
[21] “Despite a limited number of implemented
integral programme solutions in higher education
institutions, some cases of unsuccessful
implementation can be found in practice: At Cleveland State University, they were almost
forced to take legal action against the ERP vendor,
after they had found out that only half of student
requests can be dealt with in 1998. The University
continued with the implementation of ERP system
despite rising costs (the planned amount was
exceeded by $10.8m and amounted to more than
$15m).
Similarly, the planned cost of the implementation
of integral information solution at Ohio State
University rose from the initial $53m to $85m.
The University of Minnesota had a similar
experience, when the planned cost of $38m rose to
$53m, and finally reached $60m.”
In many cases ERP implementation project failures
are prescribed to many reasons. Some projects were
left uncompleted and some others were terminated.
The core reason however is: [10]
• cost overruns that are a consequence of
improper scope definition
• Slow or negative project progression
According to several studies ultimate success or
failure solely lies in the commitment and
contribution the top management brings into an
ERP implementation. Hence stakeholder involved
is not only imperative but also crucial. [11].
Traditionally ERP projects are a high cost, high
intensity endeavours that come with certain
uncertainties and risks [12]. Hence to
reduce/minimize the risk the next section of this
paper proposes a framework that gives focus on
risk management in ERP implementation.
3 PROPOSED FRAMEWORK This proposed framework is based on the analysis
of previous studies of scholars, the relevant
research publications and considering the
uniqueness of the higher education sector. There
were few frameworks found in the literature for
higher education however, there is no much
importance given to risk management. This
proposed framework has different stages and gives
focus on risk management as well
The different phases are as follows
• Preparation Phase a. Accept stage
b. Selection stage • Planning Phase • Implementation Phase • Go-live Phase • Integration and Upgrade Phase • Risk Management Phase
3.1 Preparation Phase
Preparation is the initial stage of the framework.
There are two different stages in this phase they are
Acceptance stage and Selection stage
Acceptance stage is focuses on the adoptive
decisions of the ERP systems. There are important
activities in this stage. They are
1. Need analysis
2. Current environment
3. Decision making
The existing environment needs to be analysed for a
gap or need statement, the steps leading to defining
the “need statement” should be documented. The
“need statement document will highlight the draw
backs and strengths of the current system. Based on
this data a “need analysis” for a new ERP system can
established. This initiative will help determine
whether the current systems should be replaced with
an ERP system or to merely enhance the current
system to include additional capabilities.
A critical foresight of the challenges and risks
involved in the implementation of an ERP
systemshould be made know at this nascent stage
of decision making.
Institutional readiness for a project of this magnitude
in terms of time and mission criticalness should
always be gauged across the business vertical.
Rhetorical readiness questionnaires would try and
validate answers to the following kind of questions:
• Is this initiative the only one of its kind in
perusal at the moment across all business
verticals?
• Does the top brass willing to commit to
this project and back it to the hilt will
support and resources? • Does the institution need this system, in
other words, is the environment, right? • Are bottom line variants definitive and
quantifiable in numbers?
A validation of the responses to this questionnaire
may help in identifying and addressing any
resistance that might arise.
All this step will help in making the decision
whether the institution should really to implement
ERP system or the existing setup is enough to
International Journal of Pure and Applied Mathematics Special Issue
16214
continue the operation with relevant possible
enhancements in the current system.
Selection stage is another important phase after the
decision is made to move to ERP Systems. The
following selections to be done carefully
1. Product and vendor
2. Consultant
3. Steering committee
4. Project team
5. Risk management team
Product and vendor
A consensus in selecting the best fit ERP can only
begin when all current processes are audited and
documented in for SOPs. An in-depth analysis of
the strengths, weakness, opportunities and threats
in fulling organisational goals have to be
understood. Representatives from across all the
business verticals should be able to pitch in with
“pain areas” in their use of the current system.
These “stake holders” should be empowered by the
top management to challenges vendors to
demonstrate proof of concept either in an existing
environment or as feature that can be implemented
via customisation.
Critical to this process is a score card that can quantify
the system evaluation scores in numbers, for the
purpose of benchmarking with other vendors if
necessary. It is very crucial to not be overwhelmed or
be “star struck” by the features, aspects & benefits of
the system as elaborated by the vendor, but to
keep the end user impact in mind while
understanding each aspect of the system. A strong
negotiation system should be put in place to ensure
that both parties fairly gain maximum benefit from
this endeavour. Organisational negotiation is very
imperative in established a solid working
foundation for the project.
Consultant
As is the general business standard a consultant’s role
should never be relegated to a mere 3rd
party. In many
instances consultants are veterans in implementing
ERP solutions across various industry sectors. Their
role as a neutral guide with experience is tight corners
can make a huge difference in terms of cost and time
saving. Educational organisations that embark on this endeavour should interview and choose the best
possible personnel for this task.
Committees and Project Team
For a successful ERP implementation, it is important
to comprise the committees and a strong project team.
The following committees to be formed namely,
project steering committee which is responsible for
the overall governance and administration of the
implementation. This committee will be completely
responsible for the major changes and decision
making in relation to the cost and scope or any other
key changes in the ERP implementation process. This committee
represented at the top and senior management
people.
The project team on the hand is an implementation
team which consists of head from the various
department including the project head. This is the
core team which must be involved from the
beginning to the ending of the implementation.
There must regular recorded meeting should
happen between the committees and the project
team and the vendor project manager.
Risk Management Team
It is also vital to form a risk management team with
the risk management experts to identify, analysis
and mitigate the risk in the implementation. This is
a very important team which is usual not formed in
the project which may result in unsuccessful
implementation. This team should play a vital role
from the beginning to the ending of the project
with regular update through meeting and reports on
the status of the risk management in the project.
3.2 Planning Stage
Develop a clear SOA
Framework literature have always demanded a
clear definition of the scope of objectives as critical
to ERP implementation success [26,27]. The
scopedefinition to be defined by team of people
from all the divisions of the higher education
institution. For eg. The staff member from
Management, Faculty office administrators,
Academic division such as department level staff,
IT members, Student affairs, human resource,
finance, etc.,
Decide the Project Plan and timeline
Scheduling is key to the implementation of the
project. Activity time lines as defined by the
contract of implementation is critical to the success
of failure of the project. Frequency and sequence of
order is imperative in the scheduling process. Time
overruns and schedule adherence reports should be
validated frequently to identify delays or obstacles
to implementation in regards to time management.
A defined schedule of activities among other things
will help define the following:
• Monitor and control mechanism • Resource allocation and utilization • Quantify time based delay and its impact
on project cost • Project progress tracking.
The initial contract developed with stakeholder will
act as road map to ERP implementation. Interact
International Journal of Pure and Applied Mathematics Special Issue
16215
and develop a clear BRD with all stakeholders –
intensive work done in Phase 1 use the same
Short listing a framework is important to the
implementation process. Choosing the right fit eases
the roll out phase of implementation. In this stage process documentation and single step
implementation can be used.
Some organisations depending on their complexity
level can choose a phased roll out. Organisations
with a legacy system would prefer a parallel
adoption method where the legacy system will be
phased out at a later stage Decide the transition strategy (as applicable)
Identifying legacy data for conversion is the critical
action in this stage. Creating plans and templated so
the identical process flows are captures and
automated in the ERP system. A clear agreement of
Scope, Size, and schedule of the data should be
understood. Building a virtual module with the
process flows can ease the transition stage.
Initiate and sign the contract with deliverables
A contract initiation plan is finalized. Here the
shortlisted vendor is advised of deliverables and
also importantly penalties. All issues of BRD are
mentioned in the contract with turnaround time and
quality assurance matrix as specified by the
implementer and the vendor. Technical infrastructure
In this step the existing technical
infrastructure is analysed. It is
compared with proposed
requirement of the vendor to
implement ERP system. It is
important to procure the necessary
technical components for the
infrastructure to be ready for the
implementation including the
relevant licenses.
3.3 Implementation Stage
Create necessary technical environment
A technical environment within an organisation
helps create essential validators to service provision
and inter departmental co-operation. This would
essentially mean putting the correct infrastructural
elements in place as defined by the vendor.
Example servers, network provision, software etc.
Configure/develop and Deploy: To set up systems to replicate the legacy model.
Modules need to function as defined in the signed
BRD, In the event of a feature not readily available
the vendor will need to develop and implement the
same.
Data Migration
In this crucial stage the legacy master data from the
current system is prepared for movement or
migration in to the new ERP environment. Any
issues identified in this stage needs to be
documented and rectified immediately with regular
incidence reports.
Test and Ensure
Testing scenarios are the next vital step in the process.
The process flow to achievable are tested to
Phases Activities
Preparation Acceptance stage:
• Analysis and find the gap and
missing capabilities in the existing
system
• Identify the need for a new ERP
system and readiness
• Make the decision
• Understanding the benefits and
issues involved in ERP
implementation
Selection stage
• Select the right product and vendor
• Select the consultant
• Select Steering committee
• Select the project team
• Select Risk management team
Planning • Initiate and sign the contract with
deliverables
• Interact and decide the clear BRD
• Decide the Project Plan and
timeline
• Decide the framework
• Decide the implementation strategy
• Decide the transition strategy (as
applicable)
• Analysis Technical infrastructure
Implementation • Create necessary technical
environment
• Develop, deploy and configuration
• Data Migration (as applicable)
• Test and Ensure
• Documentation
Go Live • Prepare for Go-live
• Conduct the training
• Provide all necessary
documentation for the smoother
running of ERP at all levels
Integration and • Integration and upgrades
Upgrade • Repeat from step 3 to step 5
Risk • Risk Identification
Management • Risk Assessment
• Risk Mitigation and control
Table 1: RBERPI Framework
International Journal of Pure and Applied Mathematics Special Issue
16216
demonstrate its effectiveness. A testing
environment should typically assimilate both
typical and unusual scenarios and work flow
validation as defined in the BRD is essential at this
stage. All fixes and alignments need to be
documented and implemented.
Documentation
In this stage the implementation team documents
all their activities and shared incidence report with
the necessary solutions to the project team.
3.4 Go-live
Many this stage as exciting or nervous as the
outcome would define the way forward. Critical
elements of this process are as follows:
• The implementer need to address all issue logs
and affirm that that have been corrected during
simulation. All modifications are inspected for
faults and documented if any. Staff and end user
training is put into motion. Vendor and
consultants are on “standby” on Go Live day.
• End users are assisted and trained by vendors
and implementers during this phase.
Fig 1: Phases of the framework and its interconnections
International Journal of Pure and Applied Mathematics Special Issue
16217
The Figure 1 above explains difference phases in
RBERPI framework. The relationship between the
phases with Risk management phase is also
indicated. It also show the activities involved in
each phase and its contribution is the other phases.
3.5 Integration and Upgrade Stage
The Go Live ERP system is then integrated into the
work environment as the “De Facto” system
replacing all legacy systems depending upon the
implementation strategy planned. If all the
integration is done before go live phase then only
upgrade to be focused. If the integration is planned
at different stage then that needs to be considered.
Periodical audits are conducted in order to asses if the
ERP system is delivering according to set objectives.
The implementer needs to highlight need for upgrade
as when a business need is not met. If this can be
solved by a simple workflow enhancement, it needs to
carried out without delays.
3.6 Risk Management
One of the most crucial and mostly neglected stop is
risk management and mitigation. Due to the colossal
size and scope of the system it is easy for the project
to under estimate or overestimate the risks involved.
Risks can range from broad to narrow and can
neutrality affect the outcome of the implementation.
Identification, Assessment and control
Identifying risk factors is key, Simple steps like
evaluating a vendor track record for successful
implementation is imperative. Similarly checking if
the Business Process Mapping is in line with the
organisational executive objective. GAP analysis in failure to meet objective is a
ongoing process if neglected can prove fatal.
Another factor is TCO of total cost of ownership.
When the initial selection and short listing of the
vendor process is in progress. Organisations fail to
seek clarity on how much the system might cost
eventually.
Need to have a water tight implementation road
map with insight and support from all the stake
holders are important. Buy in from all stakeholders
are essential.
An internal risk assessment team can also prove to
be extremely helpful. Or a risk assessment advisory
consultant will be a benefit to the team.
Risk identification and prioritization of risks at the
early stage is very important to minimize the risk in
the later stages. After the identification and
prioritization how to control the risk is planned. It is
also to identified the probability of the risk to occur
and re occur. At in this stage the contingency action
plan is also devised to deal if the risk turns into a
problem.
Design or control risks are sounded off at a very
nascent stage of implementation, this gives
implementers to be prepared. It is important review
or assess the current risk along with control library.
Checking system for conformance compliance is
key.
Overcoming risks at all stages are important.
Agility on part of the both the parties are critical.
Automating[28-30] a specified process into a
software. End users feedback about scope of
functions and improvement needs to done on a
regular basis. Vendor agreement must include “on
demand change”, whereby any required changes
are enacted within the stipulated time.
A clear segregation of the business process and the
technology layers are needed to understand end
points and handover points.
Optimizing the process design to meet internal
control objectives. Risks in “to be controls” vis -a-
vis “to be business process” are to be standardized
and categorised on their level of impact.
Baseline risks in change management needs to be
understood and incorporated in the planning stages.
Stake holders such as the IT department should
know when in advance as to what roles they would
be required to play in the implementation plan.[31-
32]
4. CONCLUSION
The purpose of this paper is to present a risk based
ERP implementation framework which has been
proposed. This framework will help the higher
education institutions to implement the ERP
systems with risk management and to engage and
act on the risk that will arise during the
implementation. This framework will also help to
identify the risks at in the vital stages of the ERP
implementation. The key focus is given to the risk
identification, Risk assessment and mitigation at in
the early stage of the implementation to reduce or
avoid implementation failures.
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