Erp Implementation in Oil Industry

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Acta Polytechnica Hungarica

Vol. 8, No. 4, 2011

ERP Project Implementation: Evidence from the Oil and Gas Sector Alok Mishra, Deepti Mishra
Department of Computer Engineering, Atilim University Incek 06836, Ankara Turkey alok@atilim.edu.tr, deepti@atilim.edu.tr

Abstract. Enterprise Resource Planning (ERP) systems provide integration and optimization of various business processes, which can lead to improved planning and decision quality, and a smoother coordination between business units, resulting in higher efficiency and a quicker response time to customer demands and inquiries. This paper reports the challenges and opportunities and the outcome of an ERP implementation process in the Oil & Gas exploration sector. This study will facilitate the understanding of the transition, constraints, and implementation process of ERP in this sector and will also provide guidelines from lessons learned in this regard. Keywords: case study; ERP; implementation; oil and gas exploration; SAP

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Introduction

ERP implementation poses major challenges to organizations, as many of them fail in their early stages or substantially exceed the project cost [1]. ERP systems differ qualitatively from prior large scale Information Technology (IT) implementations in three ways [2]: 1) ERP impacts the whole organization, 2) employees may be learning new business processes in addition to new software, and 3) ERP is often a business led initiative, rather than IT led. ERP is an integrated set of subsystems that integrates all facets of the business, including planning, manufacturing, logistics, sales and marketing. ERP systems originated to serve the information needs of manufacturing companies. Over time though, they have grown to serve other industries, including financial services, consumer goods sector, supply chain management and the human resources sector. These systems provide integration and optimization of various business processes and this was what the companies looked for [3] along with tangible and intangible business benefits to organizations [4]. Effective integration is the key because if one of these links fail, the organization's performance may suffer and may not meet the expectations of its customers or the service level of its competitors [5]. It

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A. Mishra et al.

ERP Project Implementation: Evidence from the Oil and Gas Sector

is not wrong to say that ERP systems gained importance as they arrived at a time when process improvement and accuracy of information became critical strategic issues [6]. With this growth, ERP systems, which first ran on mainframes before migrating to client-server systems, are now migrating to the Web and include numerous applications. ERP is a product that helps automate a company's business process by employing an integrated user interface, an integrated data set, and an integrated code set. Hunter and Lippert [7] forecasted the ERP market to reach USD 1 trillion by 2010. A summer 2005 survey of members of the Society for Information Management showed that ERP is among the top application and technology developments of its members [8]. ERP systems are complex, and implementing one can be challenging, time-consuming and an expensive project for any company [9]. Motwani et al. [10] emphasized that ERP adoption involves initiating appropriate business process changes as well as information technology changes to significantly enhance performance, quality, costs, flexibility, and responsiveness. ERP systems are widely adopted in a diverse range of organizations and define the business model on which they operate [11]. An ERP implementation can take many years to complete and costs tens of millions of dollars for a moderate size firm and more than $100 million for large organizations [12]. Implementing an ERP system is a major undertaking. It is well known that the implementation of an ERP system is a very expensive and complex task and implementation tasks include...
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