A comparative study between native and multinational

corporations utilizing ERP systems to enhance

competitiveness



Masters Thesis

BA 399 MBA Research Project

Presented to
Walter Kruz


By






Alaezi, Ekeoma Kelechi

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Table of Contents
1. Introduction ...4
1.1 Definition of Terms.5
1.2 Background of ERP Implementation...6
1.2.1 Objectives of ERP system Implementation/..........9
1.2.1.1 The drivers ..9
1.2.2 Challenges of an ERP Implementation..9
1.3 Statement of Problem.......10
1.4 Purpose of Study.11
1.5 Scope and Limitations.12
2.0 Review of Literarature and Study..13
2.1 Literature Review.13
3.1 Research Design With Supporting Rationale..14
3.2 Methodology.....14
3.2.1 Survey Administration an Scoring... 14
3.2.2 Survey Instrument and Measurement Framework
Development ...17
4.1 Data Collection.18
4.1.2 Vendor and Solution Responses......18
4.1.3 End-User Responses...19
4.1.3.1 Selected Core Issues.......19
4.2 Selected Company Cases......22
4.2.1 Case for ERP Usage: Ibeto Cement Example .......23
4.2.2 Case for ERP Usage:
Mortgage Processing Excellence at HB Bank.23
4.2.3 Call for ERP Implementation Caution :
Recommendations 24
5.1 Research Findings and Analysis.......25
5.2 SWOT Analysis for ERP market
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Nigeria Viz-a-viz Global Market.......27
5.3. Other FindingsMultinational Companies..........28
5.3.1. Vendor Landscape ...28
5.3.1.1 SAP AG Profile...28
5.3.1.2 Oracle / PeopleSoft Profile...30
6.0 Conclusion and Recommendation.................31
7.0 References...............32
List of Tables
Table 1.....13
Table 2 ...........14
Table 3.....19
Table 4.....20
Table 5..21
Table 6..23
Table 7..24
Table 8..29
List of Figures
Fig 1...7
Fig 2..14
Fig 3..18
Fig 4..20
Fig 5..21
Fig 6..21
Fig 7 ....22
Fig 8.24
Appendix A -Vendor/Solution Provider Questionnaire sample.28
Appendix B -End User Questionnaire sample....29
Appendix C-SUMI Questionnaire Page 1......30
Appendix D-SUMI Questionnaire Page 2......31
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1. Introduction

Fewer than ten indigenous Nigerian companies are using ERP applications in the day to
running of their business processes, while a handful of other companies using ERP
systems in Nigeria are multinationals like Schlumberger, Shell, Citigroup and Chevron,
and locally an indigenous bank, and other small to medium-sized businesses. In
government circles, the Delta state government of Nigeria, the Federal Inland Revenue
Service and the Central bank are the few arms of government to have embraced ERP
solutions. Certainly lots of Nigerian businesses, banks, companies and arms of
government still haven't caught the obsession or yet still found sufficient reasons to
implement ERP solutions.
Looking first of all at some of the more successful operations in Africa, to give impetus
and drive to a project in a continent where many believe everything is government,
expatriate or micro" argument. Zimbabwe has a thriving locally-owned business sector,
many of them using ERP systems. These companies have recognised that good systems
are vital for them to be able to compete both nationally and internationally, and they have
followed the rules to make sure that they can compete, can grow and can manage major
business sectors. In doing so, they provide not only many jobs, but more importantly,
extensive career paths for their employees. They also develop satellite industries which
provide employment and entrepreneurial opportunities.
In Mauritius, Namibia, Kenya, Botswana and other countries in Africa, similar rules apply.
Mauritius is a world player in textiles, Namibia is advanced in retail, Kenya and Botswana
have thriving tourism sectors. Uganda's march to prosperity is rapidly becoming the stuff
text books are made of. Seychelles is one of the most environmentally conscious
countries on earth. Even in Mozambique, long ravaged by civil war, building cranes are
aplenty on the skyline of Maputo, and evidence of development commercial, residential,
agricultural and tourism related - is everywhere. All these successes are linked to
flourishing ERP effectiveness in the running of businesses in key sectors of the economy
allowing enterprises to grow and prosper, with all the spin-offs for the economy and
employment.
To advance Nigerias march to economic prosperity, which has never been so desirous to
her citizens and the international community, there must be a lot of efficiency brought into
the day to day running of government and enterprises by leveraging on ERP systems.
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1.1 Definition of Terms

Budget: A plan which provides an estimate of future expenditure and revenues related to
planned activities.
Business Plan: A plan which provides an estimate of future expenditure and revenues related
to planned activities.
Billing: The process of sending invoices to customers.
Downtime: Time when a resource is scheduled for operation but is not producing for reasons
such as maintenance, repair or setup.
Database: Data stored in a mass storage device under the control of a software package
called a database manager.
Inventory: Raw material, WIP, stock, finished goods and all items required for manufacture or
trade.
Lickert scale: This is considered to be a natural way of eliciting opinions about a software
product.
Manufacturing Resource Planning (MRP): Method for planning of all of the resources of a
manufacturing company
Performance evaluation: Process of measuring performance for the purposes of feedback
and reporting. Reporting: Collecting and summarizing production data
Resource planning: Represents the process of determining the long range capacity needs of
the business
Software Usability Measurement Inventory (SUMI)is a rigorously tested and validated
method to measure software quality from a user perspective.
Total Quality Control - the objective of eliminating all possible sources of defects from the
manufacturing process.


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1.2 Background

Companies in the global market place thrive in competitiveness and effective utilization
of available tangible and intangible resources. This has always driven these companies
irrespective of location to adopt solutions that enhance this posture. These companies
want to run their businesses as a whole and not their IT, human resources or any other
department. They want to do more with less. They want to remain ahead of competition
in the global market place. When MRP systems used by most manufacturing firms
evolved to ERP systems these global organizations were the first to embrace it as their
values. It's real for some companies, where the ERP systems can meet the vast majority
of their requirements, and they're not so big that they run into scalability issues.
With ERP solutions a single application can track and monitor all of a business's
functions.
The number and features of the Modules vary with the package. Some of the most
common modules available in almost all packages are:
Shop-floor Management
Inventory Management
Procurement Management
Production Control
Transportation Management
Supply Chain Management
Customer Relationship Management
E-business
Finance/Accounting
Manufacturing Planning/Scheduling
Plant Maintenance
Quality Management
Material Management
Human Resources
Distribution Management
Customer Order Management
Cost Management


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The key features for evaluation and selection of an ERP are:


1
Fig 1.1: ERP Serving as a Cross-functional Enterprise Backbone that Integrates & automates many Internal Business
Processes

Scalability - ERP solutions are designed to grow with the company. Unlike some stand-
alone applications, they do not succumb to volume and change pressures, leaving you to
start over from scratch.
Vendor management Managing a plethora of vendors for customer service is not
easy. An integrated suite gives you one solution supplier to work with.
FunctionalityAccess to the functionality required to run the business over timeat an
affordable price point.






1
Excerpt - Can ERP Become An Alternative To MIS ? Swatisudha Samantaray Roll. No. R060106013 UPES
Facilitating Mergers and AcquisitionsERP implementation has the potential to
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ERP implementation has the potential to hasten integration of newly acquired hasten
integration of newly acquired businesses.
Cheapest Choice at Firstbut it will usually be the most economical in the long run
as your business needs grow and change.
Reliable Service and SupportThe ability to access affordable service and support
is critical. It is easier to support an integrated ERP environment than a mixture of
different applications.
1.2.1 Objectives of ERP system Implementation
The opening up of the Nigerian economy has led to a significant growth of the mid market
segment. This growth has been across industry verticals in the manufacturing, retail,
services, and information technology sectors. This growth and along with that the associated
competition and quest for enhancing market share has led organizations to re-look at its
processes and procedures and put in place proper processes enablers and solutions to
make its business more efficient and effective.
The objectives of embarking on an ERP implementation are to:
Align business objectives with technology solutions
Evolve in the organizational value chain by enhancing customer confidence and
stakeholder commitment.
Achieve better organizations resource and asset utilization.
1.2.1.1 The Drivers of ERP Implementation decisions

Introduce efficiency and improvement of its business processes
Achieve transparency and availability of data across functions
Obtain right Information at right time for effective decision making.
Improve utilization of human capital and assets
Improve financial management
Cater to requirements of legislations in financial reporting
Streamline the supply chain processes
Improve Customer Relationship Management
Achieve efficiency in organizational reporting
Ensure data security and data scalability
Adopt systems that address changing technologies

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1.2.2 Challenges of ERP Implementation in Nigeria

The path treaded by an organization from identifying the need for an ERP till the
implementation is a long one. This involves identification of business needs, budgeting for the
procurement of product and services, evaluation of various products to suite its business
needs, staring the implementation journey and finally adopting the ERP package as an
organization-wide solution.
The challenges that an organization goes through in the ERP journey are primarily:
Choice of solution: This is a critical decision that an organization needs to take.
Implementation Process: This is major and time consuming activity which involves
analysis of the organizations processes, recommendation of good practices, mapping the
processes to the package, data management, implementation and support.
Internal Change Management: An ERP implementation entails changes in processes
and reporting structure. Addressing this paradigm shift is a process that the organization
has to go through. This will help in achieving the acceptability of the users to the new
systems.
Commitment of the Organization: ERP has to be viewed as a process enabler rather
than a package to be installed and run. The implementation process is a journey towards
achieving organizational efficiency. This demands a strong commitment of the
organizations stakeholders throughout the entire process.
Inadequate Market reach: Top market ends are saturated though lopsided.
Bureaucratic Nigerian Companies: Bigger Nigerian companies who should be the
ready buyers and users of ERP systems are constrained for reasons ranging from size (on
going mergers and acquisitions), unskilled performance monitoring to management
indecision.
Market Trend: Mid-size companies are now targets of major ERP vendors though these
companies might need only one or two of the ERP modules to run their businesses.
High Installation and maintenance costs: This is driving mid-size Nigerian companies
away.
Manpower shortfalls-Few indigenous consultants for after sales support (user and
ancillary), and training centers.
Awareness-Inadequate know-how to do side-by-side ERP evaluations, select enabling
characteristics of ERP systems and pairing them with the right businesses even as
vendors hustle their products through its irresolute ERP market.
10
Generalization of Performance Monitoring: Many have not seen the need to evaluate
their business performance inside the smaller units of the company. Theres still this
generalization of performance.
E-governance still at its infancy: All business in Nigeria falls into three camps:
government owned and managed, expatriate owned and managed, or locally owned
cottage industry. Nigeria has a background that would make one want to continue with the
argument that government owned business are by design labour intensive, so efficient
ERP systems have little place.
1.3 Statement of Problem
The bane of many enterprises has since been improper planning, inaccurate tracking of
supply chains and the vacuums of poorly implemented policies. Other concerns that
should necessitate the implementation of ERP systems for enterprises include;
The loss of businesses accustomed by inconsistent information and poor
communication across departments and units.
The wasted purchasing management and power due to non-integrated procurement.
Lack of coordination on common activities such as human resources, payroll, financial
management and inventory.
Limited analytical ability characterized by one off redo exercises.
Siloed functional organizational cultures and business practices with minimal touch
points all lead to wasted funds, resources and valuable manpower.
The need to have these problems addressed as a medium to enhance the competitive
edge of native companies in the international market precipitates this study.
1.4 Purpose of Study
This study seeks to elaborate different lines of action to be taken to increase installed
base of ERP systems in the country, overtake the limitations mentioned above and
capitalize on global market trends to enhance local and global competitiveness of
Nigerian businesses.

11

1.5 Scope and Limitations
The scope of this research extends to end-users, vendors and solution providers in
Nigeria whose businesses employ and deploy the use of ERP systems to the running of
every day business functions whether they are multinational or are indigenousas many
as hope to stay competitive in an ever dynamic business climate vis--vis an increasingly
competitive global ERP market.














12
2.0 Review of Literature and Study
This research fits within the context of several recent studies exploring the impact of ERP
software applications on business productivity, beyond traditional measures such as the
level of information technology (IT) investment or feature/function comparisons. Through
this research one would argue that end-user productivity is based on multiple dimensions,
all of which are fundamental to maximizing the potential of the investment in IT systems
by the business owner.

2.1 Literature Review
ERP represents an expanded effort to integrate standardized record keeping that will
permit information sharing among different areas of an organization in order to manage the
system more effectively. ERP software provides a system to capture and make data
available in real-time to decision makers and other users throughout an organization. It
also provides a set of rules for monitoring various business processes to achieve the goals
of the organization. ERP systems are composed of a collection of integrated modules.
Among the widely used are for accounting and finance, others are for sales, supply chains
maintenance, manufacturing, and purchasing.
To take advantage of enterprise resource planning systems to drive fundamental business
transformation, organizations need to bring their functional groups together to determine
the optimal footprint for grouping those functions within more modern systems. Oceanic
International Bank Nigeria, like many organizations, has had mixed results in this regard,
and those results manifest in what one may call functional ERP implementations that
tend to focus on a narrow set of business functions and not on end-to-end business
processes-(the project is ongoing).





13
3.1 Research Design with Supporting Rationale

1 Literature Review using internet blogs and other published works.
2 Data gathering by way of surveys and questionnaires.
i. Survey by use of questionnaires to assemble opinions from users and Vendors of
ERP systems with emphasis on the user companies and banks.
ii. Survey by use of questionnaires for customers of these firms to appraise service
delivery improvements after their companys implemented ERP Systems.
iii. Case studies of mentioned companies, arms of government.
iv. Experiences from on-the-field work with implementation experts to give vivid
accounts of implementation shortfalls and possible improvements.
3 Data processing and analysis by use of relevant statistical tools and business models.
4 Instrumentation by extensive ERP vendor and end-user researches employing
relevant field experience, statistical software, and questionnaires. See Appendix.
5 Comparing business models and charts of Nigerian firms to those of top-rated
international corporations using ERP solutions.
6. Findings and recommendations







14

3.2 Methodology

3.2.1 Survey Administration and Scoring

The survey consists of forty-five statements on software business productivity, grouped into
the six categories of Usability, Familiarity, Transactional Efficiency, Flexibility, Business Insight,
and Collaboration. The survey was administered via telephone to end users of
2
ERP packages
ranging from Microsoft Dynamics NAV and Oracle Peoplesoft Solutions, and SAP All-in-One
and SAP R/3 in Sales & Marketing, Finance, and Operations departments of Multinational
companies(50) and Indigenous companies(60). Surveys were administered to capture a cross-
section of functional roles for each of the groups relevant to the research.
The totals by function and groups are shown below in Table 1.
Table 1-Respondent-base Distribution
Sales &
Marketing
Finance Operations IT Total
Multinationals 20 10 10 10 50
Indigenous Nigerian
Companies
25 10 10 15 60

















Fig 2: Participants functional fields (N=110)





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20
25
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Indigenous Nigerian Companies
15

3
For each statement, respondents were asked to respond on a scale of 1 to 6, with a 1
meaning that they strongly disagreed with the statement, a 6 meaning that they strongly
agreed with the statement, and a 4 meaning that they were Undecided with the statement.
Respondents were also given the option to respond that they didnt know or that the
statement was not applicable to their situation.

The score for each business productivity category is the average score across all the
statement responses. The overall score is a weighted average, which is derived by averaging
the scores of each category. Some statements are worded negatively, which is to say that a
high response on the Lickert scale indicates a low or negative impact on user productivity.
Before calculating the overall scores for each category, the scores for those negatively worded
statements were normalized to a standard scale to enable overall averaging of results. For
example, a response of a 2 (disagree) to the statement It takes too long to learn how to
work with this software would actually be averaged as a 6 to reflect a relatively high level of
positive impact.

















2
ERP End-User Business Productivity: A Field Study of SAP & Microsoft: Page 1 of 12, March 2007
3
McSweeney, R (1992) SUMI -- A psychometric approach to software evaluation. Unpublished MA (Qual) thesis in Applied
Psychology, University College Cork, Ireland.

16
3.2.2 Survey Instrument and Measurement Framework Development

The survey instrument and business productivity measurement framework are based on two
major inputs: standard usability test methodologies and extensive ERP user research.
The SUMI methodology informed the end user survey design and I leveraged
6
SUMI questions
where appropriate in the business productivity measurement framework. SUMI, the Software
Usability Measurement Inventory, is a proven industry-standard methodology used to
measure software quality from the end users point of view. The SUMI methodology was most
relevant and comprehensive in our categories of Usability and Familiarity.
Together, these three inputs (see Tables 2, 3 and 4) provide the basis for the comprehensive
evaluation framework used in the study.















4
Challenges with the Software statements/questions based on the Software Usability Measurement Inventory
(SUMI), Human Factors Research Group, Ireland.

17
4.1 Data Collection
4.1.2 Vendor and Solution Provider Responses
4.1.2.1 Detailed Findings and Implications
In this study, vendor and solution providers including major industry leaders like SAP, Oracle,
BaaN and Microsoft. ERP vendors in the Global market (including those in Nigeria who have
had years of experience in the international ERP market).In tables 2 through to 4, only
questions with direct bearing to core of this study were incorporated.
Table 2 (See Appendix II)
Vendor and Solution Provider Response Average Response/Score
Which Industry sector is most ready to embrace ERP solutions?
(50 Respondents)
12 Respondents for Oil and Gas Enterprises
Which Industry in your own opinion will have a better
competitive edge after employing ERP Systems
(50 Respondents)
Public Sector and Banking had 13 respondent each
Service performance delivery improved after your client, the
company in question installed ERP solutions for day to day
running of their businesses.
(50 Respondents)

Yes (27)
54%
What is the major challenge of end-users?
(50 Respondents)
Improper IT Orientation(17)

34%
Service performance delivery improved after your client, the
company in question installed ERP solutions for day to day
running of their businesses
Yes(30)
60%
Do you offer installation and training or do users have to figure it
out from the manual (if they even read it)?
(50 Respondents)
Yes(33)
66%
Will you fly someone out there, do a site survey to review user
alarms, transport, and general needs, help them design a
perfect fit solution, field trial it with me, and support clients after
installation?
(50 Respondents)
Yes(28)
75%
Does your solution fit with end-users manpower and resource
availability?
(50 Respondents)
Yes(28)
56%
How would you rate your clients assessment of your solution?
(50 Respondents)

High (40)
80%









18



4.1.3 End-User Responses
In the table that follows, respondents reacted to the following statements on the same five
point scale (5=strongly agree, 3=neither agree/disagree; 1=strongly disagree):

4.1.3.1 Selected Core Issues

According to this end-user survey conducted among 20 organizations, the top three factors
while selecting an ERP solution are Long Term Support, Fit with Core Business Processes,
and Product Flexibility and Scalability which have direct bearing on compatibility with current
platforms and technical know-how available.


































Fig 3 Gauging buying decisions for ERP purchase globally and locally with respondent data cut
across 110 Users by Category.





Difference in Productivity Scores based on: Which of this factors best determined your buying
decision?

Purchase and Installation
Price
Functional fit with core
business processes
Ease of Implementation
Long-term Support
Product Flexibility and
Scalability
0 5 10 15 20 25 30 35
Purchase and Installation Price
Purchase and Installation Price Functional fit with core business processes
Long-term Support Product Flexibility and Scalability
Ease of Implementation
19

In furtherance, respondent views this subject Does this software helps collaborate with other
companies I work with, such as suppliers, customers? was summarized by Fig 3 below.


















Fig 4. ERP User Collaboration showing percent difference between respondent scores


One survey respondent said of the importance of business insight and competitiveness:
[Before we implemented our ERP system], the worst part was reporting. We were responding
months if not years after data input. Now, I can get information to the executives: heres what you
are going to do next year based on deposits we have now. It allows us to be more proactive in
terms of decisions we make in marketing, employment levels, cost, operations we are now
looking at today and tomorrow because we have real-time data, not data that is a year old.
Everything is coming together (SAP User).
Table 3 - Other Responses (see Appendix I)

End User Response
Average
Score(Multinational
Companies)
Average
Score(Nigerian
Companies)
Score
Difference

Doing what you want to do with this ERP is Straightforward 4.8 3.6 12%
My company is able to change how we use the software as our
business
Changes
4.2 3.4 12%
It takes too long to learn how to use this software

2.2 3 8%
I sometimes I dont know what next to do with this software 2.6 3 4%
Theres too much to read before you can use this software. 3.2 3.8 6%
The softwares awkward when I want to do something which is
not standard
3.2 3.2 0%
There are too many steps required 2.2 3.2 10%
It is easy to share my comments and provide feedback on the
work of others using the ERP software.

4.6 4.6 0%

Table 4: Competitive Strengths of the software

Responses on ERP Collaboration
Strongly Agree,
18%
Strongly Agree,
18%
Strongly Agree,
23%
Strongly Agree,
32%
Strongly Agree, 9%
Strongly Agree
Agree
Disagree
Strongly disagree
Undecided





Disagree
18%
Strongly Agree
23%
Undecided
32%
Strongly Disagree 32%
Agree 18%
20
End User Response
Average
Score(Multinational
Companies and
Indigenous )
Charts
Based on its transactional
efficiency would you recommend
ERP solutions to companies
who want to enhance their
competitive edge?
Yes :85
No : 25


Did the software match up to
what they promised at the sales
Presentation?

Yes : 45
No : 55
Undecided:10

Did the performance of software
compensate for its huge
financial cost?
Yes: 54
No : 48
Undecided 8



Transactional Efficiency, measures the users perception of how easy it is to execute
common and repetitive tasks, the efficiency of the interface as it pertains to those common
tasks, and the speed and reliability of the software are key to enhancing competitive edge.
The question bordering on Transactional Efficiency is the category with the largest user
response score difference while that bordering on the compensation for its huge financial cost
stood out with a narrow user response score difference The respondents who answered yes
were scored 6% higher those who answered yes (Table 4.3Fig 6) compared to respondents
on the performance and price question where those who answered Yes scored 55% higher
than those who answered No.
The responses indicate strongly that price sensitivity and efficiency were largely uncorrelated
by users as one would have expected. The disharmony of transactional efficiency responses
showed it was one question of more concern to users than price was.


Competitive Strengths of The Software
Yes , 85
No, 25
0 10 20 30 40 50 60 70 80 90
Yes
No
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No of Respondents
55%
Difference
Competitive Strenghts of the Software
Yes , 45
No, 55
Undecided , 10
0 10 20 30 40 50 60
Yes
No
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Competitive Strenghts of the Software
Yes , 54
No, 48
Undecided, 8
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No
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Fig 5 Competitive Strengths of the software I
Fig 6 Competitive Strengths of the software II
Fig 7 Competitive Strengths of the software III
21
4.2 Selected Company Cases

This report includes Issues based on the following criteria:
Weight: High, Critical, Unknown
Support: Yes/No
Score: 1-5
Confidence: High, Medium, Low, Unknown

5
PROJECT REPORT OF A FOREMOST CEMENT COMPANY NIGERIA

PRODUCT: SAP

VENDOR: SAP NIGERIA

Table 5
Weight Support Score Confidence

Ease of Use High Yes 5 High

Significant Install Base in
our Industry and Manufacturing High Yes 4 Medium
Environment.

Vendor System Architecture High Yes 5 High
is appropriate for
Aggressive e-business

Cost of Total Ownership/Upgrades Critical Yes 4 High

Data Security and
Protection structure-especially High Yes/3rd Party 5 High
Online needs.

Connectivity to Other Systems High Yes/3rd Party 4 High
With which data is to be shared

The financial condition of the High Yes 3 Medium
Vendor

The Quality of Support High Yes 4 High

Performance and Scalability Critical Yes 5 High
For 80-100 Users

Connectivity to Important Field Critical Yes 3 Medium
Management System

Commitment to Products High Yes 5 High
Further Development

5
March 2008 Survey
22
Total Product Score: 82.2%

Summary of Business Process Category Scores

Business Process Category | Score
7
High-Level Differentiators 82.2%
Summary of Support Answers

Support Value | Percent
Yes ---------------------80.0%
Yes/Custom ----------5.0%
Yes/3rd Party -------15.0%
Yes/Upgrade---------0.0%
Yes/Future------------0.0%
No-----------------------0.0%
Unanswered----------0.0%

4.2.1 Case for ERP Usage: Ibeto Cement Example
Ibeto Cement is an indigenous cement packaging and distribution company with about 500
employees. It has been operation for over 10 years and has its major plant located in the
south of the country.
The company revolutionized the impact of cement prices on builders and the general
populace as it drastically reduced prices of the product in the face of cut throat prices from
its competitors in 2007. Having had its license revoked by an outgoing administration and
the decision reversed by the incoming administration the company was set to improve its
internal processes and post appropriate returns to investors and the generality of the
Nigerian people. Thus implementing ERP systems was a major step to improve operations
and catch up and overtake competition with the aim of sustaining its impressive price
regime and distribution expertise. (See Table 6)
The companys 2
nd
quarter 2008 revenue as well its turn around time shot up as soon it
implemented new technologies including ERP systems to the day to day running of its
businesses. Increasing the turn around time to package almost 1.5 million metric tonnes of
imported consignment was of major concern to the companys management. It finally
achieved this 10-day packaging and warehousing turnaround feat with the aid of its newly
installed enterprise resource planning systems.
Key market metrics in production and sales saw the companys competitive edge reckon
that of other major packaging, producing and distributor companies.

6
High Level Differentiators-HLD having a value other than 'Yes' in the 'Support' data field and/or less than '5' in the 'Score'
data field will have its contribution to the category and total score reduced. The overall total product score are then based on
the requirement/HLD priority/weighting values.
Requirements/HLDs with no value in either the 'Support' or 'Score' data are not considered in the report.
23

Key among the goals were Improving efficiency and speed of operations, cost
optimization, improve manpower utilization, faster access to markets, need for readily
available business intelligence should compel organizations to adopt processes and
solutions that will help sustain their competitive advantage.
Table 6: Cement Bagging and Distribution Capacity of Nigerian Cement Plants
Company Bagging (Imported cement)
Location
Rate
Lafarge Atlas Cement PH 2 Million mt
Dangote's 4 Bagging Plants Apapa, Lagos, Onne, Port
Harcourt
3 Million mt
Flour Mills Lagos 2 Million mt
Eastern Bulkcem [Eagle
Cement]
Port Harcourt 0.6 Million mt

Ibeto Cement Co. Port Harcourt 1.5 Million mt
Source: Nigeria Statistics Bureau (2007)

4.2.2 Case for ERP Usage: Mortgage Processing Excellence at HB Bank

The case-study is based on a real financial institution, although the name of the company
as well as certain details about the nature of its business, its geography and the names of
The case-study is based on a real financial institution, although the name of the company
as well as certain details about the nature of its business, its geography and the names of
its employees has been changed to protect confidentiality has been changed to protect
confidentiality.
Harmond Bank (HB) has over 600 employees and has been operating in the consumer
banking market in Ireland for over 80 years. Its home loans division is one of the most
profitable parts of its business, contributing between 25-30% to HB's overall profits.
Despite increasing competition from other mortgage providers, HB has maintained a
strong position in the home loans market thanks to its attractive range of mortgage
products and its friendly image. Even though the popularity of 'flexible' mortgages allowed
customers to freely switch between mortgage providers, HB has been able to retain
customers by building strong customer relationships and providing a high level of
customer service. This in turn attracted new customers to HB who wished to transfer their
existing mortgage to HB.
24
At HB bank because of the lack of a single, consolidated view of the customer,
opportunities for cross-selling (home insurance, theft insurance, home renovation loans
etc.) were being lost because the CRM suite (an ERP package) was not fully integrated
with the call-centre application. Call-centre staff followed a standard 'script' for every
customer, rather than scripts that were personalized according to the profile of the
customer.
Indeed, behind the glossy veil of the HB Website, 'islands of applications' (25) existed that
reflected how HB's IT architecture had haphazardly evolved rather than being strategically
planned. As Ed put it, HB lacked a "seamless end-to-end process for mortgage
processing." These shortcomings were put an end when HB bank started to transform
their business into a flexible enterprise based on state-of-the-art, back-end business
processes with the implementation of ERP systems with the support of Top-management
which always, is key to successful ERP implementations.

For banks not yet considering ERP systems, this research urges that the experience of
peers who have adopted ERP software is an indispensable source of information for
determining their own IT strategies. Likewise it recommends that adopters regularly
compare experiences with their industry peers leveraging on this survey for an industry-
specific ERP software benchmark.

4.2.3 Call for ERP Implementation Caution: Recommendations

Here cases of international companies for reference to Indigenous companies are discussed
Due to problems with an ERP module rollout, medical care product manufacturer Invacare
reported a $30 million (USD) shortfall for the fourth quarter of 2005.
Likewise Grainger, a Fortune 500 distributor of manufacturing supplies and spare parts lost
$19 million (USD) in sales and $23 million (USD) in earnings during the second and third
quarters of 1999.
The culpritGraingers new ERP system, which was counting more products than were
actually on hand in the companys warehouses.
In 1999, Hershey launched a $112 million (USD) dollar ERP system.
Because of various implementation snafus, Hershey was unable to effectively ship its products
to retailers for Halloween and Christmas of 1999.
The resulta 19 percent drop in 1999 Halloween candy sales, and a 12 percent drop in 1999
revenue overall.
25
5.1 Research Findings and Analysis
Market segmentation with pricing bias toward companies having yearly turnover around
and generally above USD 15 million (eqv 2 billion Nigerian Naira).
About 60% of the Nigerias corporate clientele are in this segment.
Mid-Market client expectations:
Obtain competitive, fit for purpose business solutions that would meet or exceed users
expectations through continual improvement.
Solution deployment needs to be rapid and economically justified.
Key areas of focus for Vendors/Solution Providers:
Proven package configuration and implementation experience before selecting vendors
Fit for purpose bespoke systems development and rapid deployment for decision support
Cost trend from initial purchase to consistent long term usage decreases over time from
high cost of Initial Purchase to the lowering cost at consistent long term usage as
presented in Fig 6.









10
Fig 8 Cost Trend of Automation with Traditional Systems in use at companies



6
Source: SAP - Answer to the challenges: 2004 CDI
Time
Costs
Ongoing Maintenance
Consistent Costs-Long Term
Initial Purchase
26

5.2 SWOT analysis for ERP Market: Nigeria vis--vis Global Market
SWOT AnalysisAnalysis for Multinational Companies to the Left, and Nigerian Companies to the
Right.
MULTINATIONAL ERP MARKET NATIVE ERP MARKET
















































Strengths
Subsidiaries of, and powerful industrial
groups already using it
Market is expanding
Work force is qualified (over 60%
personnel with
high educational degrees)
Subsidiary connects to group IS as same
packages are to be implemented in other
subsidiaries.


Strengths
Subsidiaries of and powerful industrial
groups already using it want to see
ancillary companies adopt it
Market is expanding

Weaknesses
There is still too much of a tendency to try and
keep it small and simple, to rely on family for
management and simple bookkeeping for
information. Many hold themselves back, being
somehow convinced that they cannot compete
with overseas business.
Brain drain and incapacity to retain skilled
manpower.
Conventional government owned business are
by design labour intensive, so efficient ERP
systems have little place.
Expatriate businesses make their buying
decisions in their home countries so any ERP
system decision to purchase would not be
made in Africa, and that locally-owned
industries are too small to warrant ERP
systems.
Weaknesses

Rising debt burden among major players
Economic recessions and Slow downs
Bitter Price Wars among major players

27



Opportunities Opportunities
















Threats Threats




















Industry Consolidation
Highly price sensitive mid-market
Intensely competitive enterprise applications
market
Awareness among executives to the benefits
still low
Highly price sensitive mid-market
Intensely competitive enterprise applications
market




Enterprise Support offering expected to
increase share of maintenance sales. A major
advantage for ERP vendors despite ERP
consolidations.
Fast growing SMB market segment
Expanding product line through innovation


Entrepreneurship, knowledge, staff skills key
to ERP usage on the rise
Chase for small to medium enterprise sector
starting to yield expected patronages.
Increasing awareness and patronage
government Patronage increasing.




28
5.3 Other FindingsMultinational Companies

5.3.1 Vendor Landscape
There are currently two major players in the ERP software market: SAP and Oracle. However,
those two companies represent three major products, SAP, Oracle, and PeopleSoft due to
Oracles January 2005 acquisition of PeopleSoft. Over the last few years there has been
significant consolidation in the ERP vendor market. The most recent and most notable
acquisition occurred when Oracle successfully acquired Peoplesoft after a bitter 18-month
takeover battle. PeopleSoft had just acquired JD Edwards when Oracle initiated its hostile
takeover. Now both PeopleSoft and JD Edwards products are being integrated into the Oracle
solution suite. While Oracle has already begun an effort to integrate the best of each product
line via an initiative called Fusion, PeopleSoft will remain a separate, supported product for
at least the next few years. Although Oracle and PeopleSoft have generated more media
attention due to their merger, SAP remains the market leader in terms of ERP software sales.
5.3.1.1 SAP AG Profile

SAP AG (SAP) is a provider of business software solutions. Its principal activities are the
development, marketing, sales and support of a variety of software solutions, primarily
enterprise application software products for organizations, including corporations,
governmental agencies, aerospace and defense, and educational institutions. mySAP
Business Suite solutions are helping enterprises around the world improve customer
relationships, enhance partner collaboration and create efficiencies across their supply chains
and business operations. The Company has more than 26,000 customers in over 120
countries that run more than 88,700 installations of SAP software.
Table 7-SAP Overview
US Address
SAP America, Inc.
3999 West Chester Pike
Newtown Square, PA 19073
(610) 661-1000
(610) 355-3106
Year Founded 1972
Annual Revenue $9.7 billion
Number of
Employees
31,000+

29

5.3.1.2 Oracle / PeopleSoft Profile

Oracle Corporation is an enterprise software company that develops, manufactures, markets,
distributes and services database software and infrastructure software, including application
server, collaborative software and development. The Company also offers a suite of business
applications software. It is organized into two businesses, which are further organized into five
operating segments. The software business consists of two operating segments: new software
licenses and software license and product support. Oracle's services business consists of
three operating segments: consulting, advanced product services and education.
Table 8-Oracle Overview
Address
500 Oracle Parkway
Redwood Shores, CA 94065
(650) 506-7000
(650) 506-7200
Year Founded 1977
Annual Revenue $10 billion
Number of Employees 40,000+
Website
www.oracle.com
www.peoplesoft.com/corp/
Oracle's Acquisition of PeopleSoft-http://www.oracle.com/peoplesoft/index.html

In December 2004, the Company acquired PeopleSoft, doubling the Companys share of the
ERP market. PeopleSoft had acquired JD Edwards in 2003. The PeopleSoft acquisition will
require Oracle to support multiple product lines while simultaneously pursuing a significant
effort to merge the diverse ERP products.













30
6.0 Conclusion and Recommendation

My intent is that indigenous Nigerian companies implementing ERPs and those making buying
decisions leverage upon this research to enhance their competitive edge. The business
productivity measurement framework used in this study is to provide a useful mechanism to
gauge the perceptions of actual end users and to benchmark the applications according to the
productivity charts.
Three major points emerge from this study:
The importance of user productivity should be significantly elevated in software purchase
decisions.
User attitudes are of prime importance, equal to feature/function comparisons. Indeed,
users must feel comfortable using advanced application functionality if it is to benefit the
organization. This study, therefore, has broad implications for companies who are in the
process of developing selection criteria for use as a basis for evaluating ERP systems.
9

High user productivity is driven by more than an appealing user interface and must be
evaluated on multiple dimensions.
Applications differ in their ability to make features available, usable, intuitive, and
valuable to end users and high marks in these areas positively impact user productivity.
Respondents in this survey scored Microsoft and Oracle applications higher across the
board than they did SAP applications.
Heres a promise from a major ERP systems provider trying to penetrate the Nigerian ERP
SMB Market. These views are without bias to any one ERP solution.
They can implement and go-live fast with measurement in days and weeks rather then
months and years.
They can quickly have any required modifications made at a fraction of the cost of
other systems.
They can easily and cost effectively integrates into other systems they are required to
support.
They have a system that can easily adapt to almost any environment as their business
changes.
They can be assured of a virtually unlimited upgrade path and scalability.
And last but not least, they can finally have a fixed long term cost that they can predict
and manage.
9
This finding is echoed by Forrester, which concluded that before buying or building a new software application or
when making the decision to overhaul an existing implementation firms should evaluate application usability as a critical
component, right along with technology, architecture, and functional breadth and depth. Put Business Applications To The
Usability Test, Forrester Research 2006.
31

With promises and evidences of impressive ROIs after ERP implementations as submitted in
this work one hopes that the government and businesses will brace up to the challenge of
ensuring ERP systems drive the core of their operations and business re-engineering
processes.
I hope that this framework proves valuable for those considering application purchases and to
enhance their competitive edge, as ERP systems can boost a companys bottom line but an
ineffective ERP evaluation and implementation can bring a company to its knees


























32

7. References

Al-Mashari, M. 2000. 'Constructs Of Process Change Management in ERP Content: A
Focus on SAP R/3', Proceedings of 2000 Americas Conference on Information
Systems, AMCIS 2000, Long Island, California, USA, pp. 977-980.

Alaezi, Onwukwe (2007): Verbal Discourse on Problems of Small Businesses in Nigeria.
Center for Entrepreneurial Studies, Fed-Uni-Tech Owerri.

Brown, C., Vessey, I. (1999). ERP Implementation Approaches: Toward a Contingency
Framework, Proceedings of the 20th international conference on Information
Systems, ICIS 1999, 411-416.
Daniel A. Carr (2004), SAP the Answer to the Challenges, Computer Decisions
International (CDI) Publications, Michigan

Davenport, T. 1998. 'Putting the Enterprise into the Enterprise System', Harvard Business
Review, July-August 1998): 121-131.

ERP Market Hits A Rough Patch, Growth Declines. The Financial Express (Mar 12,
2003)

Forrester (2006), Put Business Applications To The Usability Test. Forrester Research
2006.

Harmon,P. "Developing an Enterprise Architecture," Business Process Trends
Whitepaper, January 2003

J Kirakowski(1994), The Use of Questionnaire Methods for Usability Assessment. SUMI
Background Reading Handbook, 5--The SUMI Questionnaire as at Present, Pg 16.

Lam, Wing: The Journal of Computer Information Systems, Saturday, October 1-2005.
http://www.allbusiness.com/technology/1066322-1.html
McSweeney, R. (1992), SUMI -- A psychometric approach to software evaluation.
Unpublished MA (Qual) thesis in Applied Psychology, University College Cork,
Ireland.

33
Samantaray, Swatisudha. (2000) Can ERP Become An Alternative To MIS?, Roll. No.
R060106013, UPES
Tom Nevin (1999). Are you ready for ERP?. African Business: June, 1999


William G. Zikmund, Oklahoma State University, Business Research Methods.7
th
Edition:
Thompson South-Western.

William J. Stevenson, Rochester Institute of Technology. Operations Management. Ninth
Edition: McGraw-Hill, New York.





















34
APPENDIX A -Vendor/Solution Provider Questionnaire Sample


Primary place of business address is (check all that apply)
[ ] Owned Rented [ ] Rented with an option to buy [ ] Donated

Do you control one or more entities?
[ ] No [ ] Yes

Which industry sector is always most ready to embrace ERP solutions?
[ ] IT [ ] Aerospace [ ] Health [ ] Banking [ ] Public Sector [ ] Oil and Gas [ ] Telecommunications

Which industry sector is least ready to embrace your ERP solution?
[ ] IT [ ] Aerospace [ ] Health [ ] Banking [ ] Public Sector [ ] Oil and Gas [ ] Telecommunications

Service performance delivery improved after your client, the company in question installed ERP solutions for
day to day running of their businesses.
[ ] No [ ] Yes [ ] Undecided

How would you rate your clients assessment of your solution?
[ ] High [ ] Low [ ] Fair

Which of these are is most relevant to your gross income.
[ ] Maintenance Fees [ ] Installation Fees [ ] Client/Vendor Partnership Fees

What is the major challenge of end-users?
[ ] Inadequate Previous Training [ ] Improper IT Orientation [ ] Software Performance Issues [ ] Indifference

Do you offer installation and training or do users have to figure it out from the manual
(if they even read it)?
[ ] Yes [ ] No

Will you fly someone out there, do a site survey to review user alarms, transport, and general needs, help them
design a perfect fit solution, field trial it with clients, and support them after installation?
[ ] Yes [ ] No [ ] Yes but subject to negotiation

Does your solution fit with end-users manpower and resource availability?
[ ] Yes [ ] No













35

APPENDIX B-End-User QuestionnairesOpen-Ended Questions Sample



Industry Type
[ ] IT [ ] Aerospace [ ] Health [ ] Banking [ ] Public Sector [ ] Oil and Gas [ ] Telecommunications
[ ] Manufacturing
What is the ERP user size of your organization?
[ ] 1-9 [ ] 10-99 [ ] 100-999 [ ] 1000-9999

Annual gross revenue (check range that applies)
[ ] 0 - N999,999 [ ]N1,000,000 N99,999,999 [ ] N100,000,000 N499,999,999
[ ]N500,000,000 N999,999,999 [ ]N1,000,000,000 N1,499,999,999 [ ]N1,500,000,000 or more

Doing what you want to do with this software is straightforward
[ ] Strongly Agree [ ] Agree [ ] Disagree [ ] Strongly Disagree [ ] Undecided

My company is able to change how we use the software as our business
Changes
[ ] Strongly Agree [ ] Agree [ ] Disagree [ ] Strongly Disagree [ ] Undecided [ ] Dont Know

This software helps me collaborate with other companies work I with, such as suppliers, customers, partners, or
service providers.
[ ] Strongly Agree [ ] Agree [ ] Disagree [ ] Strongly Disagree [ ] Undecided

It takes too long to learn how to work with this software
[ ] Strongly Agree [ ] Agree [ ] Disagree [ ] Strongly Disagree [ ] Undecided
This software is very awkward to use
[ ] Strongly Agree [ ] Agree [ ] Disagree [ ] Strongly Disagree [ ] Undecided

I sometimes dont know what to do next with this software
[ ] Strongly Agree [ ] Agree [ ] Disagree [ ] Strongly Disagree [ ] Undecided

There is too much to read before you can use the software 3.9 46%
[ ] Strongly Agree [ ] Agree [ ] Disagree [ ] Strongly Disagree [ ] Undecided

This software is awkward when I want to do something which is not standard
[ ] Strongly Agree [ ] Agree [ ] Disagree [ ] Strongly Disagree [ ] Undecided

There are too many steps required to get something to work
[ ] Strongly Agree [ ] Agree [ ] Disagree [ ] Strongly Disagree [ ] Undecided

It is easy to share my comments and provide feedback on the work of others in ERP software.
[ ] Strongly Agree [ ] Agree [ ] Disagree [ ] Strongly Disagree [ ] Undecided

What is the percentage of users licensed to use your companys ERP systems?
[ ] Less than 10% [ ] 10-50% [ ] 51-90% [ ] Above 90%

Company relationship to ERP Solution Provider
[ ] Vendor Relationship [ ] Installation/Maintenance Relationship [ ] Other Partnership [ ] Unsure

Did the software match up to what they promised at the sales Presentation?
[ ] No [ ] Yes [ ] Undecided

Based on its transactional efficiency would you recommend ERP solutions to companies who want to enhance their
competitive edge?
[ ] No [ ] Yes [ ] Undecided




36
SUMI Questionnaire Page I

37

SUMI Questionnaire Page II