13. Effectiveness Of Erp Systems

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Effectiveness of
Analysing the factors responsible ERP systems
for effectiveness of
implementation and integration of
139
enterprise resource planning
systems in the printing industry
Shahneel Baray
Business School, University of Northampton, Northampton, UK
Shafqat Hameed
University of Bradford, Bradford, UK, and
Atta Badii
Intelligent Media Systems & Services Laboratory,
Department of Computer Science, School of Systems Engineering,
University of Reading, Reading, UK

Abstract
Purpose – This paper’s purpose is to examine the impact of ERP adoption in one of the most
traditional sectors, namely the printing industry, within a case study of five typical large-scale
printing organisations set in the developing economy context of Pakistan.
Design/methodology/approach – The research methodology and the analysis motivated an
interpretive approach. The inductive reasoning approach has been used, since the aim was to find
something new for the printing industry and to try to discover the advantages that ERP could bring
about for the industry. In this research study, semi-structured interviews were conducted along with a
number of visits to the targeted printing firms selected as being prototypical of the sector in this
business environment. The research questions focused on identifying and exploring the benefits
related to ERP for the printing industry, and why it was needed.
Findings – The research shows that all the functional categories identified in the literature for ERP
can be introduced in the printing industry. However, within each category, not all its modules can be
adopted for this industry. The research has also shown that the benefits of some areas of ERP are still
to be understood by the stakeholders.
Practical implications – The enterprises under study now have an opportunity to look into ERP
solutions as the basis also for first-mover advantage within their sector.
Originality/value – There has been one previous attempt in Pakistan to restructure the largest
printing press by introducing SAP, which failed due to lack of technical expertise and training
support. This paper draws on the successful approaches deployed in ERP implementations in
other sectors and examines the extent to which they can be adapted for the printing industry,
for example which modules should be prioritised for integration and how to optimise their
impact. Journal of Enterprise Information
Keywords Manufacturing resource planning, Management information systems, Printing industry, Management
Vol. 21 No. 2, 2008
Pakistan pp. 139-161
q Emerald Group Publishing Limited
Paper type Research paper 1741-0398
DOI 10.1108/17410390810851390

JEIM 1. Introduction
21,2 The objective of this research was to assess the factors influencing the take-up and
optimisation of ERP implementations for the Pakistani printing industry. An
evaluation of the existing status of IT in the Pakistani printing firms was conducted. A
list of ERP modules to be prioritised was identified, followed by analysis of the benefits
that could be derived from such an implementation. There are, of course, certain ethical
140 issues that have had to be handled carefully and no data or information has been
inserted in this research without prior consent from the personnel concerned.
Throughout the paper, the words “ERP”, “enterprise resource planning systems” and
“ERP systems” are used interchangeably.

1.2 Enterprise resource planning systems
The concept of ERP can be analysed from different perspectives. Firstly, ERP is like a
product in the form of software. Secondly, it can be viewed as a means of mapping
multiple processes and data of a company and generating a comprehensive integrative
structure (Klaus et al., 2000). There are several ERP definitions, which carry a lot of
similarity. Klaus et al. (2000) define ERP as:
A comprehensive package of software solutions which seek to integrate the complete range of
business processes and functions in order to present a holistic view of the business from a
single information and IT architecture.
Yen et al. (2002) prefer to define ERP as::
Software that can be used to integrate information across all functions of an organisation to
automate corporate business processes [. . .] a business management system that integrates
all facets of the business.
It can be noted that both these definitions have one thing in common – integration.
This is what ERP does. It integrates all functions and processes of a business and
generates a comprehensive view of the entire company. This is facilitated via a single
database approach through which data records are integrated and data redundancies
eliminated (see Figure 1).

Figure 1.
Departments and ERP
systems

1.2 The purpose of ERP Effectiveness of
Enterprise resource planning is a method for effective planning and control of all ERP systems
resources needed to take, make, ship and account for customer orders in a
manufacturing, distribution or service company (Sheikh, 2003). Large organisations
typically have many different kinds of information systems that support different
functions, organisation levels, and business processes (Pressman, 2003). However all
these systems are usually built around different functions, and managers end up 141
having a hard time assembling the data that they need so as to obtain a comprehensive
overall picture of the organisational operations. For instance, sales personnel may be
unable to tell at the time that they place an order whether the items that were ordered
were in stock, customers may be unable to track their orders, and manufacturing may
be unable to communicate easily with finance to plan for new production.
Enterprise resource planning systems solve this problem by collecting data from
various key business processes and storing the data in a single comprehensive data
repository to be used by all parts of the business (Laudon and Laudon, 2002). Managers
emerge with more precise and timely information for coordinating the daily operations
of the business and a firm-wide view of business processes and information flows.
ERP solutions use technology to address business issues, at the same time striving
to keep technology transparent for the users. Users do not need to learn more about bits
and bytes but they need to know how operational and long-term business issues could
be effectively addressed with technology, with a user-friendly interface (Ushasri, 1999).
Such systems can provide general managers with a firm-wide understanding of value
creation and cost structure. ERP systems can help create a “customer-driven” or
“demand” organisation, which better serves the customer’s value chain (Foss and
Stone, 2003).
Enterprise systems purport to replace legacy systems based on outdated
information technology (Chaterji, 1999). The organisation’s systems rarely include
vendors and customers (Laudon and Laudon, 2002; see Figure 2).
Enterprise systems can integrate the key business processes of an entire firm into a
single software system that allows information to flow seamlessly throughout the
organisation (Burton, 1999). These systems may include transactions with customers
and vendors (see Figure 3).

Figure 2.
Traditional view of
systems

JEIM
21,2

142

Figure 3.
Enterprise resource
planning systems

The prospect of successfully and rapidly transforming the corporate nervous system,
retraining thousands of workers, while also redesigning the fundamental business
processes, all at once, with the business still having to carry on as usual, is daunting
(Sadagopan, 1999). The costs of enterprise systems are large, up-front, highly visible,
and politically charged, while their benefits are elusive to describe in concrete terms,
particularly at the beginning of an enterprise project (Derek, 1998). The reason is that
the benefits often accrue from employees using the system after it is completed and
gaining the knowledge of business operations that would have not been readily
accessible previously.
A software project lifecycle follows five steps (Pressman, 2003):
(1) analysis;
(2) design;
(3) implementation;
(4) testing and debugging; and
(5) documenting

The typical lifecycle of an ERP system development involves more steps than a
software project lifecycle. The reason for this is that an ERP is a complete flexible
business solution while a software solution is more of a limited and fixed solution to a
specific business need. The lifecycle of an ERP system is shown in Figure 4. As can be
seen from Figure 4, implementing an ERP system is a ten-stage process, which
accounts for the time it takes to complete.

1.3 The printing industry
The enormous export potential of the paper and printing industry remains an
untapped treasure in Pakistan (Bashar, 2002). Over the years, the industry has
developed to a stage whereby it can meet the entire paper and printing needs of its
market sector, including those of multi-national companies. According to a recent

Effectiveness of
ERP systems

143

Figure 4.
ERP project lifecycle

survey, there are around 1,500 printing presses of various sizes all over the country
(The Economist, 2004). It is, however, surprising that despite having a strong industrial
and technical base, this industry has been neglected in the country and so far no
database is available regarding the performance of the industry. Machinery in
Pakistan is usually imported from foreign vendors such as Germany and Japan.
Pakistan has not even a single research and development facility for the printing
industry (Pakistan Association of Printing and Graphic Arts Industry, 2003).
The decline of the industry does not imply that eventually there will be no print
media. Printing can never be replaced completely. The type of printing or the
technology behind it is what will evolve in this sector. Offset printing would probably
be replaced by digital print in the next ten years in the USA but since Pakistan is
backward in this respect, it would take at least 20 years for something like this to
happen.
The Pakistani printing industry is at a stage of bare survival whereby small firms
will not be able to compete against the giants because of their lack of potential to invest
large amounts and import expensive machinery (The Economist, 2003). This in turn
implies that there will be a significant reduction in small-scale printing firms as
large-scale firms would be able to print the same product more cheaply and quickly,
using state-of-the-art machinery, and delivering better quality. Keeping this in mind,
information technology should be used as a tool to compete in the print market,
whether it is for innovation of new methods of printing or managing day-to-day
operations (Kipphan, 2001).

JEIM The industry has taken some really commendable measures in importing
21,2 technology in the last three years. PAPGAI has been holding yearly exhibitions in
Karachi, the industrial capital of Pakistan, where printing firms from all over Pakistan,
Japan and China have displayed their technologies and new innovative techniques
(Print2Pak, 2005). This has provided a chance for organisations to discover the
emergening technologies to support the printing world.
144

1.4 ERP for the printing industry
Since it is unlikely, in the near term, to see much R&D investment in the sector, what
can be done is to use IT as a tool to strengthen the managerial aspects of large- and
medium-scale printing firms. Streamlining manufacturing operations through ERP
systems is one solution to the problem, although it requires a lot of effort and technical
expertise. The implementation of an enterprise resource planning (ERP) system can
provide a printing firm with a comprehensive internal architecture by lowering total
costs in the complete supply chain and automating many of the basic processes of the
company, from finance and accounts receivable operations to those on the shop floor
(Leland, 2000).
Various printing giants have already jumped into the ERP era all around the world.
ERP software like PECAS Vision II offers a low-risk option for anyone in search of a
printing or packaging management information system (John, 2003). As small firms try
to survive, their survival will be based on acquisitions and mergers. For them, future
growth is not going to be too difficult, based on the continuation of business strategies
which are still proving to be successful as long as they are able to couple this with
deployment of the latest technology (Holohan, 2005).
Printing firms are in great need of centralisation and ERP is the ideal tool for this.
“Our goal with XML – Print Buyer, specialised printing ERP software, is to leverage a
corporation’s existing investment in an e-procurement or ERP system and to
streamline print workflow, cut costs, and, most importantly, centralise control and
accountability of the print buying process-something that is sorely missing today”,
explained iPrint Enterprise Systems Group Vice President Tom Haley (Newton, 2001).
ERP systems would henceforth help the printing industry by not only centralising all
data but also enabling MIS applications to run smoothly (see Figure 5).
The current range of online intermediate print-related services include solutions to
manage print ordering and service support, total service providers, auction sites and
print procurement sites. Many of these systems and categories fall into the category of
enterprise resource planning (ERP) or customer relationship management (CRM)
solutions or products (Speirs, 2005).
As mentioned before, the reason why the first EPR attempt failed in the Pakistan
printing industry was a lack of training and skilled personnel to run the system. The
rapid pace of technological change has had a major impact on the size of the workforce
needed in the printing industry, as well as on the occupational mix and the type of
skills required (Smallbone et al., 2000). This factor should be considered when
designing and deploying ERP systems.

Effectiveness of
ERP systems

145

Figure 5.
Range of established
modules forming the main
core of a MIS, plus a
selection of add-on online
e-commerce modules of
ERP and CRM

2. Research approach
This research methodology and the analysis here basically motivated an interpretive
approach. The theoretical aspects of enterprise resource planning were already known
to a large extent prior to the commencement of the research. The idea thus was to
investigate the likely impact of the deployment of the theoretical ERP adoption models
on the printing industry of Pakistan and evaluate their possible impacts. The aim of
this research was to assist the designers of ERP systems for the printing industry of
Pakistan at Stage 1 – i.e. “solution inquiry”. Therefore, in order to do so, the inductive
reasoning approach has been used since the aim was to find something new for the
printing industry and try to discover the advantages ERP could bring about for the
industry. As ERP adoption was something that could be replicated in any organisation
within the same industry with some customisation, this research would be able to
generalise from its results, at this stage, by focusing on an exemplar printing business
in this environment to initially identify the basic printing processes.
A qualitative analysis base thus evolved whereby every attempt was made to
discover what benefits accrued from ERP for printing companies in Pakistan. Hence,
this research strategy involved direct semi-structured interviews and the elicitation of
primary qualitative data on ERP adoption and integration issues.
As has been mentioned, there were no previous research studies focused on this
area. In this research study semi-structured interviews were conducted, along with a
number of visits to the targeted printing firms selected as prototypical of the sector in

JEIM this business environment. The research questions focused on identifying and
21,2 exploring the benefits related to ERP for the printing industry, and why it was needed.
The targeted population for research was basically the large- and medium-scale
printing companies in Pakistan. Due to ambiguities that could arise in some company
registration formalities, whilst in actual fact there are about 23 large-scale printing
companies in Pakistan, officially the number of companies under this category was
146 actually recorded as five. Since in this context the population itself was small, no
sampling was necessary as the whole population was taken as the target for this
research study. The five firms will be referred to as Printing Firm 1 (PF1), Printing
Firm 2 (PF2), etc.
Keeping this in mind, the objective of this research was to create awareness in these
five organisations about ERP, and if ERP were to be successfully implementable in
these organisations, then the other companies could be targeted. Semi-structured
interviews were conducted with various departmental managers within the five
organisations being studied for this research. Before the interviews were conducted,
the interviewees were given some background information on ERP so that they could
prepare themselves for the interview. The interviews were aimed at identifying the
following:
.
present status and dependency of IT within the organisation – the IS maturity
stage;
.
the potential for extension of the usage of IT as a strategic function of the
business;
.
adaptation of in-house development and outsourcing;
.
budget allocation for IT enhancements and business solutions;
.
acceptability of IT-based solutions within the organisation;
.
future plans for IT enhancements;
. ERP familiarity and current research status;
.
existing sub-systems and their inter-dependency;
.
drawbacks of existing sub-systems and possible future threats;
.
previous ERP implementation attempts and results; and
.
system analysis of existing manual and semi-automated business processes.

On the basis of the above, a second stream of interviews was carried out which was
basically designed to obtain some feedback on the proposal of implementing an ERP
system. For this purpose, ERP as a business tool, a strategic option and an operational
mechanism was presented to these five organisations and their response was noted. A
questionnaire was also distributed along with the interviews and the responses were
recorded. The basic idea behind this second stream of interviews and the
accompanying questionnaires was to identify the organisational response to the
following:
.
increasing the budget to implement an ERP system to support the business and
how this might be best be accomplished, for example whether it is done via local

ERP vendors or through the purchase of customisable ERP solutions such as Effectiveness of
SAP, BAAN, Oracle, etc.; ERP systems
.
using ERP as a strategic tool to win more market share;
.
comprehending the advantages that ERP systems designed for printing
companies in Pakistan could bring to the organisation in terms of operational
benefits, long-term financial benefits and effective resource management;
147
.
exploiting the grey areas (segments within the business which are currently not
being utilised) and demonstrating the reasons why they have been unsuccessful
for the organisation in the past and how they could be beneficial in the future
through ERP implementations;
.
enabling the organisation to envision the potential for future enhancements after
an ERP implementation is carried out (linking and devising plans for deploying
supply chain management and customer relationship management systems);
.
describing ERP implementation in various foreign Printing firms across the
globe and what change and impact has been derived from them; and
.
possible drawbacks and limitations associated with such an implementation and
ways to handle them.

The response received from those concerned helped in justifying the initial hypothesis
of this research, as to whether introducing ERP in the printing industry of Pakistan can
be seen as productive and beneficial for the industry in the future and hence, whether
these five large-scale firms that have been identified as potential ERP users should take
the step of investing in ERP packages. In order to achieve a high level of credibility for
the conclusions presented in this study, it was important to demonstrate that the
research was designed and conducted in such a way so as to ensure that it revealed the
ERP adoption factors and likely benefits in the case study context (Ryan et al., 1992).
To this end, research methodology guidelines were fully observed so as to minimise
sources of error and bias and to ensure the highest validity and reliability of the
research findings.

3. Results
3.1 Questionnaire and interviews – Stream 1
Since this research was primarily a qualitative research augmented by a quantitative
questionnaire in some cases to obtain actual operational data, the results obtained from
the interviews and the questionnaire will be discussed together to allow an integrative
analysis.
The response of the companies as a whole to the questionnaires sent to them was
recorded. The questionnaires were targeted at general managers, finance managers,
HR managers, directors, IT managers, distribution heads, procurement managers,
operations managers and sales and marketing managers. The respondents were given
the option to answer the questions related to their specific department. The primary
focus in this phase was on the interviews; the questionnaire was used as a
supplementary instrument as required. The questionnaire as handed out was designed
to understand the business focus, market share and other quantitative measures in an
organisation.

JEIM The finance department is where the money comes from and goes to. The level of
21,2 importance (rating) given by the general managers of the five organisations to the
finance department was high (i.e. 5), indicating that it would require more focus in
implementation of an ERP package. After the interviews, it was discovered that even
although the finance department was a very highly rated department, its budget was
very low and it was usually under-staffed. The finance managers were asked to
148 identify the information sub-systems currently existing in the finance department of
their respective organisations (see Table I).
As can be seen from the results, the payroll system was the one currently used by
every organisation. Hence, if ERP were to be implemented, it would be essential to see
whether the existing payroll system had the capability to seamlessly communicate
with the other modules within the same department, or whether there should be a
re-development of the payroll system on the basis of business process re-engineering.
Apparently, two out of five organisations were using third-party software bought off
the shelf which handled their payroll (could not handle complex problems), while one of
them was using the payroll module of Oracle Financial, which does provide an
excellent level of integration with various ERP systems. Eventually, the three
organisations were asked to point out their level of satisfaction achieved from their
existing payroll software and their response was noted (see Table II).
It was noted that two of the enterprises in the case study – namely PF1 and PF4 – had
made some investment in automating their transactions through an offline transaction
processing system by deploying the payroll module of Oracle Financial. However, they
had not adopted the TPS module from the same suite. Both firms were asked to point out
their level of satisfaction derived from this system and their response was noted. PF1
quoted a figure of 50 per cent, while PF4 were 30 per cent satisfied with their TPS (overall
satisfaction average ¼ 40 per cent). The satisfaction rate in this case was once again less
than 50 per cent for these two firms, which shows that they were looking to improve
upon this, possibly through another system to be installed.

Sub-system name Number of organizations

Transaction processing system 2
Table I. Budget allocation and financial planner 0
Sub-systems existing in Payroll management 3
the finance department of Forecasting system 0
organisations Consignment costing system 1

Organisation Satisfaction level (per cent)

PF1 60
Table II. PF4 40
Level of satisfaction from PF3 35
existing payroll system Overall satisfaction (average) 43.3

A consignment costing system has been implemented at PF5, since most of the raw Effectiveness of
materials they use are imported. The system keeps track of which raw material (paper, ERP systems
ink, and card) will be arriving on which date and records the costs associated with the
delivery from the supplier to its premises (logistics, taxes, temporary storage, etc.). PF5
has given an 80 per cent satisfaction level on their existing consignment costing
system, which shows that the implementation has turned out to be a profitable move.
However, the system however was designed as a desktop application. If the system 149
were to be redeployed as a web-based application, it would be a more effective solution
because users at the shipment receiving point would simply be able to add new
purchase orders, which would get updated right away.
Besides these systems, no other financial system had been deployed by any of the
organisations in the case study. Financial budgeting and planning were central to
every printing firm’s business plan. Nearly all the planning was done using
spreadsheets. However, there was not a specific system designed or deployed in any
organisation which catered for financial planning and budgeting. Forecasting, on the
other hand, was an area which only happened to be an issue of importance for PF3. As
for all other enterprises in the case study forecasting did not play a major role because
of a tendency for little strategic and forward planning.
The operations department in a printing press has a close link to manufacturing
resource planning and materials requirement planning. It basically involves the
processes from the point where an order to supply some printing first arrives to the
point where the delivery of the printed material is received by a client. The level of
importance (rating) given by the general managers of the five organisations for the
operations department was 5. Since ERP is basically derived from manufacturing
resource planning (MRP), the operations department would be a key target for the
implementation of ERP. The operations department of the large-scale printing firms in
Pakistan was the only department where technology was visible. The entire process is
primarily dependent on the level of quality control that the organisation can provide on
a particular job at a low cost. The general managers of the five companies studied were
asked to point out which systems currently existed in their business set-ups (see
Table III).
Only two organisations currently have an inventory management system. However,
when the managers of the other organisations were asked about this, their response
was that an inventory management system would be the most crucial system that their
organisation would invest in.
Their existing business system lacked a number of useful functionalities that ERP
can offer. One thing that the system did have, however, was connectivity with the
quality control system. When a new batch of paper supply came in, a sample would be

Sub-system name Number of organisations

Inventory management 2
Quality control system 2 Table III.
Sales order processing system 0 Sub-systems existing in
Purchase order processing system 0 the finance department of
Process control system 0 organisations

JEIM taken out and passed through a set of QC processes for that kind of paper. If the sample
21,2 was approved, the batch was accepted.
The two organisations were thus asked to point out their level of satisfaction
derived from the inventory management system that they had installed. PF1 quoted a
figure of 40 per cent, while PF3 were not that satisfied with their inventory
management system and quoted a 10 per cent satisfaction rate. The overall satisfaction
150 (average) is thus 25 per cent. There is a lot of work that can be done in this area.
Inventory management is definitely a crucial element in business information systems.
All the firms have a quality assurance procedure; unfortunately only two firms have
a quality assurance system. Quality control in printing comes at three stages (besides
the quality checks that are performed during the printing lifecycle). This comprises
raw material quality control at the warehouse, printed material quality control in the
operations department, and binding quality control after the finished product is sent
for approval.
PF1 and PF2 have deployed quality control. The system performs quality checks at
two stages. At the first stage, the printing ink is tested by checking its density, water
and oil combination, colour matching, etc., at different temperatures. The results are
recorded in a similar way. At the second stage the system takes its input from a
densitometer which checks the density of ink on paper to ensure that the correct colour
has been produced. PF1 claimed to be 55 per cent satisfied with their QC software,
while PF2 quoted an 80 per cent satisfaction rate. The overall satisfaction (average)
was thus 67.5 per cent. The installed base software supports only stage 1 of the above
QC process and does not cater for stage 2.
None of the organisations have an effective sales order processing or purchase order
processing system. A more popular investment is the process control system, which is
the core of MRP II (manufacturing resource planning II). It is a system that manages
the daily operations in a manufacturing plant. In the printing industry of Pakistan,
there are numerous independent systems that can be found in the operations
department, each designed for and serving a particular process within the department.
But none of these systems are inter-related with each other and there is no controlling
mechanism that is keeping track of these systems.
When asked about the level of satisfaction attained from these sub-systems,
responses shown in Figure 6 were noted. After further research, it was found that this
satisfaction level related to individual subsystems. Another query response was thus
requested to identify the organisation’s satisfaction level over the whole operations
department. As can be seen from Figure 7, none of the companies showed a high level
of satisfaction with the performance of the whole operations department. One of the

Figure 6.
Level of satisfaction with
individual process control
subsystems

main reasons for a low satisfaction level was the lack of a single system managing Effectiveness of
these sub-systems and integrating them with each other. Secondly, all managers ERP systems
complained about the absence of a scheduling system whereby they could check which
job could go on which machine and updated the status of the availability of a machine.
Finally, some managers mentioned that every time there was a problem with a printing
job they were working on and they needed more paper, they needed a view of the
inventory at run time so as to check the stock level. 151
Pre-press activities are all the activities that are performed before the printing job
enters the printing room. This includes composing, film-making, negative to positive
conversion, colour separation, machine scheduling, plate making, etc. Pre-press
basically means converting a job into film and plates. It was extremely difficult to
identify whether organisations were satisfied with their respective pre-press
departments and their activities. Some organisations had CTP technology (computer
to plate) whereby data from the computer is printed on the plate without any film.
These organisations were thus questioned on the effectiveness of the system and their
level of satisfaction with it From Figure 8, it can be seen that none of the organisations
under study are entirely happy with their pre-press activities. This may be because
organisations are well aware of the new technologies that are available and may be
thinking in terms of innovation. The HR department is usually devoid of much
investment in most sectors of the developing economy of Pakistan, and this was found
to be the case in the printing enterprises under study. HR had the least number of
employees (normally three to four). Table IV shows the level of importance, based on
relative resource deployment for the HR function as compared to other departments, in
each of the five organisations. It also shows the satisfaction derived from their existing
employee records systems.
Although the HR department is perceived as not so operationally significant, all
organisations have to maintain an employee records system. Each of the five
organisations had developed its own ad hoc approach to HR systems support. None of
the HR systems had an employee image module, or an attendance module. Those

Figure 7.
the operations department
as a whole

Figure 8.
pre-press systems

JEIM organisations which did have a payroll module did not share the same database as that
21,2 of their employee records system.
HR as a strategic function of the business was not found to have much perceived
significance in the printing industry in Pakistan. The majority of the printing press
businesses did not even have a separate HR department, as all hiring and firing was
carried out by the manager of the particular department. Training was not supervised
152 by the HR departments in any of the organisations studied.
Similarly, there appears to be little or no significant presence for the marketing
department in the printing industry in Pakistan. For enterprises in this sector,
increasing their client list was achieved mainly through word-of-mouth advertising.
There were no hoardings on the streets, no advertisements in any media, whether
paper or electronic, and no advertising campaigns. What they did have was a sales
force. In the printing industry, a sales executive is termed an “account executive”.
Account executives are assigned targets every month, for example three new clients to
be introduced with their jobs this month. These targets are set by the sales manager.
The logistics cost involved in landing a client is borne by the company through the
sales manager who processes the petrol bills and other claims for the individual
account executives on his sales force by passing the claims to the finance department
for payment.
The managers and directors have no system installed which performs job
scheduling, reporting, document managing or quotation handling. However, when
these missing functionalities were pointed out to the managers, their responses in
terms of expressed levels of interest were as shown in Table V. As can be seen from
their responses, even although the management was not using any such information
systems to manage their daily office activities, they all appreciated the need for such
systems. The directors of these organisations were asked to comment on the current
allocation of budget for the IT department to assist the business. Table VI describes

Organisation name Level of importance Satisfaction level (per cent)

PF2 1 80
Table IV. PF1 2 30
Level of perceived PF4 1 20
significance and PF3 2 70
satisfaction with HR PF5 2 25
department Overall satisfaction 45

Level of interest (per cent)
Organisation Scheduling Reporting Document management Automated quotations

PF1 80 95 95 70
PF5 90 95 70 70
Table V. PF4 85 100 85 80
Levels of interest for PF3 100 100 90 90
management information PF2 90 95 90 90
sub systems Overall interest (average) 87 97 86 80

Effectiveness of
Allocation of budget, 2005 (per cent)
IT budget as a Existing technology Maintenance of New technology ERP systems
percentage of total enhancements existing systems and research
Organisation budget (percent) (percent) (percent)

PF1 10 20 50 30
PF5 12 15 40 45 153
PF4 8 30 50 20
PF3 15 20 40 40
PF2 12 15 45 40 Table VI.
Overall Budget allocation within
budget the printing enterprises
(average) 11.4 20 45 35 under study

the current budget allocation for each organisation. As can be seen from Table VI,
about 35 per cent of the IT budget was being set aside for research, which was quite a
lot. The reason behind this is the recent need for technological changes to take place in
the organisation. All organisations have realised their need to compete based on
technological business support.

3.2 Analysis of results
ERP is an expensive solution and with the existing budget for new development in
these five organisations, a bottleneck situation was evident. This is because ERP
requires steady investment over the first ten years, during which integration tends to
settle down for the organisation and a maintenance cost is incurred from there
onwards. The organisations in focus were asked whether they were willing to increase
their existing budget of new research and development to implement ERP. Nearly all
organisations expressed mixed views in this regard.
A lot of research on ERP was conducted after the interviews in order to plot down
the printing industry of Pakistan on an ERP mapping. Firstly, an essential component
of ERP is the marketing and sales tool, like employee reach, sales force automation, etc.
Apparently, this area has been found to be ignored in the printing industry.
An ERP system was presented to the organisations, tailored to match the business
needs on the basis of the first phase of research conducted. Figure 9 describes the scope
of the ERP used. On the basis of Figure 9, the scope shown in Figure 10 has been
defined for ERP in the Pakistan printing sector. As can be seen from Figure 10, there
are certain modules which are missing from the actual system. These modules have
been removed because they were inconsistent with the business practice needs of the
printing industry in Pakistan.
The finance module is one of the two most important modules that can be deployed
for this industry. If an implementation of ERP is undertaken for any of the printing
firms discussed, the finance module should be the first one to be implemented. The
accounts receivable and accounts payable will handle customers’ payments. They will
operate as a transaction processing system, and will have direct connectivity, if
possible, to the systems deployed by suppliers.

JEIM
21,2

154

Figure 9.
Scope of an ERP system

Figure 10.
Modiﬁed scope of an ERP
system for the printing
industry in Pakistan

The asset accounting module will handle the ﬁxed assets of the organisation. All
machinery, its key characteristics, electronic documentation, purchase dates, cost,
depreciation methods, life span, etc., would be entered in this module. The module will
automatically calculate the depreciation at the end of the year according to the
parameters set in it.
The cash management and forecasting module will keep track of all incomes and
expenses. It will basically be an automated version of the cash book. The forecasting
module has been removed since the printing companies in Pakistan have a very small
forecast period due to the increasingly tactical level and rate of competition. The cost
element and Cost centre accounting module has also been removed since all costs are
accumulated and included under a general expense account in printing.

The executive information system would look after the whole finance department. Effectiveness of
The system will manage all these other subsystems, and will allow the administrator to ERP systems
set up new users, provide administrative rights, etc. The system will aid the finance
manager, who will be able to check the situation in each area of the finance department.
It will also provide a set of reports to the finance manager based on various views and
criteria. The financial consolidation module has been removed, since it is already
incorporated inside the executive information system. 155
The general ledger module will act as the main accounting record for the business
and will use the existing manual double-entry bookkeeping. All transactions that occur
in the company (for example purchase of raw materials, payment of expenses, etc.) will
be recorded in the general ledger, which will automatically update a standardised
profit and loss account and the balance sheet. The product cost accounting module has
been removed since the product in this case is a piece of printed paper being produced
in bulk quantity.
The profitability analysis module will be able to provide a good view of the amount
of profit earned based on the investment per project. It can “slice and dice” the
information in a variety of hierarchies, just like a Rubik cube. The main aim of
profitability analysis in ERP is external market segment reporting.
The operations and logistics section is the second most important area to be worked
upon in the implementation of an ERP system for the printing industry of Pakistan.
The inventory management module will provide updates on the status of the inventory.
This component deals with the following tasks:
.
Managing material stock on quantity basis – All transactions that affect the stock
level are entered live as well as the stock updates caused by this. The current
view of the stock level can be checked at any time, and this includes paper that
may have been ordered from a supplier and has not yet been received (link with
purchase orders) or paper that is currently under quality inspection (link with the
QC department).
.
Planning, entry and documenting all goods movements – There may be internal
or external movements of paper rolls and inks. For example, finished printed
material may be transferred from the warehouse to the client (external) or from
one warehouse to another (internal).
.
Performing physical inventory – Various methods such as periodic inventory,
continuous inventory, cycle counting, etc., can be incorporated for regular
physical inventory checks. In the printing industry, inventory checks on paper
may be performed at different levels of production for example an inventory
check can be done at the quality control stage and get recorded into the system
under the QC inspection heading.

The material requirements planning module is like a computerised inventory control
and production planning system. It will use the bill of material (BOM) as its basis. A
BOM describes different components that together create a product. It includes all
sub-assemblies, components, raw materials that go into a parent assembly, showing
the quantity of each constituent required to make that assembly. In the printing
industry, this may be paper, binding cloth, binding glue, ink, etc. Hence if a new paper
is needed for a book, BOM would assist in raising an automated purchase order and a

JEIM production order for that paper. BOM is directly linked to the inventory management
21,2 system. The materials management module in the printing industry will probably be
the most effective module for this industry, since paper means the world to a printer,
and a printer wastes most of it. The module will ensure that they have the right paper,
in the right place, at the optimum quantity and price.
The plant maintenance module will ensure that the printing machines are working
156 at optimum capacity and are being constantly monitored with regular maintenance
checks. The production planning module will have a series of activities associated with
it from scheduling to resource allocation, etc. The module will be operated by the
operations manager who will be able to plan out which machine is to be used for which
job. The project management module, on the other hand, will assist the operations
manager to set up deadlines, allocate resources and update the status of a project. This
module will have a web-based view so that clients can check the current status of their
jobs online.
The purchasing module will work in the following way. When a job quotation gets
approved by the client, the speciﬁcations of the job will be entered into the system. The
system will automatically check to see whether the BOM has given any alerts for any
shortages of paper or ink. If there is an alert, a purchase order will be generated and
e-mailed to the supplier with the highest rating. A copy of the purchase order will be
kept in the system as well.
The quality management module will be linked to the vendor evaluation module.
The QC module will have a list of test cases to be performed on inks and paper once a
batch is received. It will also have the sampling speciﬁcations needed for every type of
paper and ink. Once the tests are performed, the system will decide on the basis of the
results whether the batch should be approved or not. If the batch is approved, the
vendor’s rating is increased. The shipping module will provide the user with an online
interface from where he can keep track of the exact location of his delivery. The module
will have complete planning of logistics built into it, which would help the manager
decide which vehicle and driver should be used to send the shipment to the client.
The HR system may be designed after the above systems have been implemented,
as it has a low priority. A human resource time accounting module can be implemented
that will identify which employee has been working fewer hours than can be allocated.
Every employee will be given a swipe card to use when signing in and signing out. The
payroll module will be connected to this module which will have an employee’s
complete information, previous trainings, salary, bonuses given, etc. One thing to note
here is the fact that in the printing industry of Pakistan, employees are not paid at an
hourly rate but on the basis of a monthly salary. The system will thus only tell whether
an employee has been attending his workplace, and whether he has been punctual so
that bonuses can be allocated.
At this stage a personnel planning module will be quite irrelevant as well since there
will be only two or three employees working in the HR department and they will not
have enough time to maintain a personnel planning system. However, a travel expenses
module for the sales force will be quite effective as it will allocate a budget for
travelling which could be claimed by the account executive.
As already observed, there is absolutely no utilisation or designation of a marketing
department, as such, in the printing industry of Pakistan. However, the sales

department may have an order management system installed which can be linked to Effectiveness of
the client’s ERP system if he has one. Clients could order online through a website ERP systems
which would enable the costing module and provide updates on the job status. A
pricing module can also be utilised in this way. The current market prices are placed
into the system for paper, electricity units, etc. This assists the sales manager in setting
up the parameters for automated quotations. One more area which can be seen as a
prospective advantage for the printing industry of Pakistan is the general management 157
module. This would provide a bird’s eye view for the managers and directors of the
printing press on the performances of the sales, marketing, finance and HR
departments. A document management module may be installed at this point, which
handles contracts with distributors and suppliers, etc.

3.3 Benefits to be derived
On the basis of the overall company business information that could be made available
through implementation of the selected ERP modules recommended above, the
directors and shareholders can perform strategic business planning for competitive
advantage within their industry. This will also enhance the company vision, as it will
be better equipped to focus on achieving economies of scale in technology and size.
The following long-term benefits can be expected through implementing ERP in the
printing industry of Pakistan:
.
External, not internal, focus – Printing companies will have the advantage of
looking at clients, competitors, suppliers and even other industries and the
business relationships and similarities with the outside world. Traditionally,
their strategies have all been focused on internal processes and issues, but once
ERP is implemented, they can communicate with the systems of other
organisations and learn from them.
.
Adding value, not cost reduction – The printing industry of Pakistan is at a stage
where everyone is competing against each other on cost. The majority of the
medium-scale organisations are trying to go forth and increase in size, but are
not able to because of the intensely low costs being offered by large-scale
organisations. What the large-scale firms are losing is quality and value.
Through ERP, better quality control can be established, which can assist
organisations in ensuring a quality standard.
.
Sharing the benefits – Efficiency gains in the printing presses will be shareable
in the organisation, with suppliers and customers. In the Pakistan printing
industry, the prevailing mindsets, sustained by old working regimes, have
prevented any system benefits being realised and shared even within the
organisation where departments have left each other in an unclear situation. This
reduces mutual benefits and would not allow them to be sustained, but since ERP
makes everything transparent, the roots and scale of any benefits would then be
clear and could be enjoyed by everyone in the firm.
.
Understanding clients – An understanding of what clients can do with the
printed material that they have received, what value they can get from it, what
problems they might encounter in gaining that value, etc., can be interpreted
through ERP. This would make clients feel more comfortable in dealing with the

JEIM printing firm and in return, the printing firm would end up with a higher client
21,2 retention rate.
.
Incremental development – ERP systems are not built overnight. However, this is
actually not a disadvantage, since the company does not have to allocate the
complete budget for entire ERP packages all at once. ERP systems are
implemented module by module. To an extent this is like developing applications
158 by experimentation but also appropriating them incrementally to the various
aspects of the business through evolutionary module-by-module customisation,
evaluation and integration.
. Business-driven innovation from technology-driven innovation and process
support – Probably the most important factor that will be achieved through ERP
is that the company would realise its business potential after its technological
information infrastructure has been suitably empowered with ERP-enabled
management information. The pressures of the marketplace will drive
developments within printing firms at this stage. This would tend to cast
doubt on the idea of competitive advantage from IT, but, in practice, it means
that new or existing ERP will be providing or enabling a business opportunity or
idea to be converted into reality. Hence, technology-driven ideas will eventually
give rise to business innovation.
.
Future enhancements – ERP systems can be further expanded. Printing firms
can build better supply chain management systems and customer relationship
management systems for business processes support. This would obviously take
a long time to evolve because people running Pakistani printing firms are
time-poor, like to see quick results, and are extremely cost-benefit conscious.
Managers will need to understand that the benefits to be achieved will take some
time to be realised, but that they would assuredly be forthcoming. The
traditional “short-termist” mindsets will soon give way to a sense of cautious
acceptance of incremental integration of new MIS technologies such as ERP
towards longer-term sustained business advantage.

3.4 Questionnaire and interviews – Stream 2
The primary focus in this phase was on the interviews, and the questionnaire was used
only in a few areas. The organisations in focus were pre-informed about ERP and its
advantages via various website references. Hence, the managers were well aware of the
business aspects that ERP can cater for. The analysis of the results received from the
first stream of interviews was given to the directors, the advantages to be attained
from ERP were pointed out and the purpose of this stage was simply to check their
level of acceptability. Some foreign printing companies who had implemented ERP in
neighbouring countries like India and China were also discussed with the managers.
Their websites were shown, the various aspects of their ERP-enabled business support
were identified, and potential benefits highlighted.
.
Out of the five organisations that were targeted for this research, three have
agreed to increase their budget in order to opt for an ERP adoption plan. This
was the first instance, after this research had been running for some time, that a
certain level of acceptance of the idea was noted. Table VII demonstrates this.

.
The marketing and sales departments and the HR departments were discussed Effectiveness of
with the managers of the organisations. A success story was also discussed with ERP systems
each of the managers of a company named Pragati in India. The managers had
their own view of the situation. According to them, Pakistan’s quality standards
are being compromised within the printing sector. Advertising is a means of
telling customers that the company has some really good quality standards
which the clients should take into consideration. But it appears to be the 159
experience of the Pakistan printing sector that advertising makes little impact on
most of their client base and can in fact prove counter-productive, since most
clients do not value quality in the printed artefact beyond basic readability and
believe that quality is sacrificed by lower prices and even more so by advertising
costs involved in announcing lower prices. Accordingly the advertising process
was set aside at this stage in this study.
.
When the HR department and its low level of IT investment was discussed, it
was found that the reason why HR was not appropriated much significance was
because HR was considered to be a support function of the business. Once again
the mindset of the departmental managers is that they believe that they can
handle the HR functions of an organisation, each for their own teams in a
distributed fashion, and two to three employees in the HR department can
accomplish the remaining functions.

4. Conclusions
In order to be able to answer the research question in focus – i.e. “What is the
effectiveness of introducing enterprise research planning systems in the printing
industry as applicable to our case study sector, namely the printing industry in
Pakistan?” – we have conducted an analysis of the Pakistan printing industry. The
existing scope of IT has been identified, the potential advantages have been mapped
based on the findings, and feedback has been received. This was done in order to
determine whether or not ERP should be introduced in the printing industry in
Pakistan, and if so how it could best be deployed for maximum possible impact for all
stakeholders.
The research showed that all the functional categories identified in the literature for
ERP can be introduced in the printing industry. However, within each category, not all

Allocation of budget (2005)
IT budget as a percentage New technology and Increase in the budget
Organisation of total budget research (percent) (2006; percent)

PF1 10 30 30
PF5 12 45 50
PF4 8 20 –
PF3 15 40 –
PF2 12 40 35 Table VII.
Overall budget Allocation of budget
(average) 11.4 35 with ERP

JEIM its modules can be adopted for this industry. This empirical study also showed that not
21,2 all companies were eager to implement an ERP system in their organisation. However,
based on the research conducted and the level of interest observed, it is clear that the
majority of the enterprises in this case study have decided that they will be deploying
ERP.
The research has also shown that the benefits of some areas of ERP are still to be
160 fully understood by the stakeholders. This is primarily because of the dominance of the
traditional methods of doing business and resistance to change. A deeply rooted
risk-averse disposition in some of the companies has been noted through the findings
of this research, in that some are apprehensive about first-mover strategies so they are
keen on implementing ERP only after it has been successful in other organisations
within the same business sector.
ERP is equipped with a lot of advantages. Modules for finance, operations and
administration should be the first to be implemented, depending on the internal
priorities of an organisation. ERP can then be expanded to other sectors of the
business. It was also discovered that an online web-based quotation system would
attract lots of customers since no company in Pakistan is offering such a service, which
can be offered at a very low implementation cost. The enterprises under study now
have an opportunity to look into ERP solutions as the basis also of first-mover
advantage within their sector.

References
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Derek, S. (1998), “The hidden cost of enterprise software”, CIO Enterprise, Section 2, January 25.
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and Accounting, Academic Press, London.
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Further reading
Ensyncsolutions (2004), “The ERP lifecycle”, available at: www.ensyncsolutions.com/
erp_lifecycle.htm (accessed 11 December 2005).

Corresponding author
Shafqat Hameed can be contacted at: s.hameed1@bradford.ac.uk

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13. Effectiveness Of Erp Systems

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