20th January 2013. Vol. 47 No.2 © 2005 - 2013 JATIT & LLS. All rights reserved.
A SYSTEM DEVELOPMENT METHODOLOGY FOR ERP SYSTEM IN SMEs OF MALAYSIAN MANUFACTURING SECTORS YOUSEF KHALEEL, 2 RIZA SULAIMAN 1 Student, Department of Industrial Computing, UKM, Selangor, Malaysia 2 1
Assoc. Prof, Department Industrial Computing, UKM, Selangor, Malaysia E-mail: email@example.com, firstname.lastname@example.org
ABSTRACT Improvement in the effectiveness and competitiveness of Malaysian SMEs (Small Medium Enterprises) in the global market is very important, because these SMEs an essential role in the Malaysian economic growth. The ERP (Enterprise Resource Planning) is a significant tool to increase the effectiveness and competitiveness the SMEs. The ERP enhances the efficiency of the whole business operations in an organization and increase the optimal income. Nevertheless the due to various reasons the implementation of the ERP has not been successful in many organizations and hence its success rate of implementation is quite low. A lot of researchers have identified the factors that constitute towards the successful implementation of the ERP. It has been identified that majority of the SMEs tend to refrain from adopting the ERPs due to the cost and complex implementation factor. In this paper, the authors have developed and proposed an efficient methodology that enables successful implementation of ERP system in SMEs. The aim of this paper provides a platform to accomplish the objectives of ERP system. However for the purpose developing ERP systems to suit the needs of Malaysian manufacturing SMEs a new methodology is required. Hence this paper proposes a methodology that comprises two main methods: (1) preliminary study which includes two quantitative questionnaires, current status questionnaire and readiness assessment questionnaire; and (2) system development method which includes four phases that make up the ERP system development method are: analysis and definition, design, construction, and evaluation stages Keywords: ERP System Development Methodology INTRODUCTION In Malaysia the SMEs constitute a part towards the economical growth, as compared to the other businesses [1-2]. As one of the contributors towards the growth of Malaysian trade and industries, the SMEs have contributed in the country’s overall production network. SMEs are also evenly contributed extensively to the performance of Malaysia economy even though large enterprises are explicitly monopolized and have overshadowed the visibility of SMEs in most countries in terms of net profit and assets, . Since SMEs in Malaysia are now competing in the fast-growing challenging market environment, they are aimed at moving forward and upgrade their business operations to the optimum level. The ERP system would be one of the best ICT tools that will help the SMEs in handling their business operation and increase efficiency in decision making. However the adoption of ERP would be a very 1.
costly aspect to SMEs [2-3]. The issues involving in the adoption of ERP among SMEs in Malaysia will be discussed in this paper later. ERP can be defined as software, which integrates the whole functions of an enterprise into one unified database and is considered as a business solution. It integrates all the functions within the enterprise such as: production planning and supply chain . Thus, SMEs also has seen this as an opportunity for them to improve their business processes in line with many of large organization as they have invested in ERP implementation to seek into the competitive advantages and remain solid in the face of globalization. The objective of this research paper is to discuss the previous works that have been published related to the development of ERP system for SMEs and suggest suitable methodology to develop ERP system that is compatible with...