A case study on Border states industries fuels rapid growth with ERP

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Group8 123 125 126 139 150 152 Abhishek Gupta Aditya Goel Akshay Narayanan Chhavi Gupta Mohamed Anas S Panii Ngaonii

The solution was extremely successful for BSE. Though implementation costs ballooned to 9 million instead of an expected 6 million, the investment was paid back by savings within 2.5 years. Between 1998-2006 the SAP system generated a total savings of 30 million. Some of the advantages BSE obtained by ERP implementation are as follows 1. Warehouse costs, delivery costs and total overhead costs declined substantially 2. The system generated an ROI of 3.3 million annually between 1998 to 2006. 3. Management could obtain a picture of the entire business at any point of time thanks to the system reducing decision times and improving the quality. 4. The work activities of a transactional nature were automated freeing up resources to add more employees working with customers. 5. Though the IT costs increased by about 3 million a year, a resultant increase in sales more than justified the rise. 6. Sales increased 300%, PROFITS CLIMBED 500% since the implementation. 7. The inventory turnover increased to more than four turns a year. 8. Financial results were made available within a day of closing. 9. Manual work has been reduced significantly with the resultant cost advantages. 10. Transaction errors and costs reduced as a result of automation 11. Rebate fulfilment time reduced to 72 hours from the earlier 15 - 30 days 12. Transaction processing time reduced by 63 %. The key learnings from the implementation are as follows 1. Close working of management is a key ingredient in an ERP systems success. 2. Day to day operations might suffer during implementation 3. Continued customization of packages to resemble legacy systems cause delays and budget overshoots and following industry best practices is a better approach. 4. A firm has to keep the changing environment and rapid technology changes in mind while implementing systems to prevent obsolescence. 5. Proper implementation of IT can help significantly shorten lead times of activities, increase inventory turnover, reduce manual work, get up to date financial information, reduce staff size, get current information for effective management enabling management to make better decisions faster etc and thus significantly reduce costs and increase the competitiveness and profitability of a firm . 6. ERP systems can provide substantial advantages in acquisitions to align the processes of the acquired firm with the parent.

7. IT systems must be regularly updated and should look out for new opportunities to remain a source of competitive advantage.