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ERP Implementation at ABC Mining Company
Student Name
College
Course Code and Name
Instructor Name
Assignment Due Date
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Executive Summary
An integrated mining firm based in eastern India, ABC Mining Company intends to
install an ERP to eradicate inefficiency and competition forces. The company was founded in
1956 to improve the efficiency in its exploration, processing and sale of mineral ores through a
move that seeks to digitize most of its operations, much of which is still manual. This report also
outlines the analysis ofAnalyzing the company's profile, the potential threats and opportunities
arising from the global competitors and new entrants in the market, technological threats, and the
effectiveness of using emerging technologies and ethical factors. However, this paper also
presents a suitable change management plan developed from Kotter's model to support ERP
implementation and post-ERP-implementation benefits.
Contents
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ERP Implementation at ABC Mining Company.............................................................................1
Executive Summary.........................................................................................................................2
ERP Implementation at ABC Mining Company.............................................................................4
Company Background.....................................................................................................................4
Potential Challenges from Global Competitors and New Entrants.................................................5
Threat of New Entrants................................................................................................................6
Bargaining Power of Suppliers....................................................................................................6
Bargaining Power of Buyers........................................................................................................7
Threat of Substitute Products.......................................................................................................7
Competitive Rivalry.....................................................................................................................8
Emerging Technologies Impacting Operations...............................................................................8
Internet of Things (IoT)...................................................................................................................8
Artificial Intelligence (AI)...........................................................................................................9
Blockchain Technology...............................................................................................................9
Table 2: Emerging Technologies Impacting Operations.......................................................10
Benefits of Advanced ERP Solution..........................................................................................10
Potential Ethical Issues and Strategies to Overcome Them..........................................................11
Data Privacy and Security.........................................................................................................11
Transparency and Communication............................................................................................11
Intellectual Property and Vendor Relations...............................................................................12
Environmental and Social Responsibility..................................................................................12
Strategies for Overcoming Ethical Issues..................................................................................13
Change Management Plan for ABC Mining Company.................................................................14
Step 1: Establish a Sense of Urgency........................................................................................14
Step 2: Form a Powerful Coalition............................................................................................14
Step 3: Create a Vision for Change...........................................................................................15
Step 4: Communicate the Vision...............................................................................................15
Step 5: Remove Obstacles.........................................................................................................15
Step 6: Create Short-Term Wins................................................................................................16
Step 7: Consolidate Gains and Produce More Change..............................................................16
Step 8: Anchor the Changes in Corporate Culture....................................................................16
Recommendation...........................................................................................................................17
Conclusion.....................................................................................................................................17
References......................................................................................................................................18
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ERP Implementation at ABC Mining Company
Introduction
ABC Mining Company is a state-owned company incorporated in 1956 with its main
operational area in Odisha. It has established its six regional offices for delivery of managing 23
mining centres and processing plants in Odisha. Although Y's has been effective in the past, it
has weaknesses in organizational performance because the company relies on manual methods to
coordinate flows, thereby limiting its ability to respond to increasing market demands and
competition. In response to these issues, the organization of ABC intends to incorporate a new
ERP system to facilitate its functioning and improve the system. In present work, they have
included the critique of the implement with significant consideration of the elements like
challenges that may occur, the technological implication, and ethical concerns and the appraisal
and change management plan.
Company Background
ABC mining company has obtained mining leases from Odisha state government, dealing
in mining, processing, and marketing of mineral ores including iron ores, manganese ores and
chromites. These minerals are used the production of the steel, sponge iron, pig iron,
ferromanganese and ferrochrome industries. Overall, in the fiscal year 2015-2016, the company
has been operating at annual revenue of USD 50 million and has visions to double this figure
within the period of three to four years. The company employs the following organizational
structure which consists of the Corporate Office and six offices responsible for their activities of
the 23 Mining Centers and Processing Plants. They are largely manual resulting in various
challenges in managing information as well as in sales, and maintenance of the mechanizations.
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These are worsened by delays in the flow of information, recurrent breakdown of machineries
that lead to several problems including delay in dispatching orders and under utilization of
production capacities.
Table 1: ABC Mining Company Structure
Corporate Office
(CO)
Regional Offices
(RO)
Mining Centers
(MC)
Processing Plants
(PRP)
1 6 23 23
Potential Challenges from Global Competitors and New Entrants
0
2
4
6
ERP Sytem Implementation Problems
Mean Standard deviation
Figure 1: ERP system implementation problems
The graph above shows the critical problems that ABC can face during the implementation of of
the ERP. These issues are further examined using the Porter’s Five Forces model.
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Threat of New Entrants
Barriers to entry are high mainly because of the excessive capital costs and the need for
compliance with a strict legal framework. But what has this established is that factors such as
technology and instability in the prices of raw materials are some of the ways of reducing the
barriers that are present in the market thus allowing new entrants to gain their foothold in the
market. These may include: Competitors may adapt new technologies and processes of
production or service delivery since new entrants can question its market share (Bruijl, 2018;
Rodriguez et al., 2019). For instance, advanced automation and AI-driven procedures new
entrants get into provide improved efficiency in mining and cost reduction.
Bargaining Power of Suppliers
In the mining industry, suppliers are stakeholders who offer crucial services and
equipment that companies need to carry out mining activities. Bargaining power of supplier is
generally high as often the equipment and services required are specific also for the
manufacturing of specialized vehicles (Bruijl, 2018; Rodriguez et al., 2019). It can extend even
further in the case where suppliers align their capacities, or where there are restricted choices for
fundamental intermediates. As for its strategic sourcing, ABC should expect ERP system to offer
sound SRM features that will help negotiate with upstream to obtain improved clauses, apprise
the vendor’s performance, and ensure delivery of superior quality materials on time. According
to Rodriguez et al. (2019) ABC could enhance supply chain by implementing data analytic and
predictive maintenance modules within the ERP to decrease the vulnerability of their business
caused by supply disruptions thorough reducing risks associated with the reliance of the firm’s
most important suppliers.
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Bargaining Power of Buyers
In the mining industry, the bargaining powers are relatively high in the case of buyers,
but especially, the large industrial buyers can exert much pressure on prices due to the volume of
demand they can provide. This power is particularly aggressive in the markets where there is a
tendency of having other substitute suppliers of comparable or better goods and services that
demonstrate comparative better terms (Langenwalter, 2020). To overcome this threat, ABC
needs to incorporate its erp system to enhance the crm. This is in line with information systems
study by Huang & Palvia (2001). A better system of order tracking and offering company-
specific tailored solutions supplemented by quick and efficient services might work to the
advantage of ABC in comparison to the other players. In addition, this ERP system will also be
useful in giving the ABC ‘’a better understanding of the market trends, and needs of the
customers in order to meet their demands.
Threat of Substitute Products
A primary threat in the mining industry due to substitution products is realized when
industries and technologies change. For instance, improvement in material science possibly
exhibit radical change through substitution of traditional mineral ores (Langenwalter, 2020). In
the same manner, recycling technologies can play a role in decreasing a demand of fresh mined
raw materials. In response to this threat, ABC’s ERP system should enhance product
development and grow the company through diversification. Thus it can be accessed that
exploration of new applications of the existing products in ABC can be done with the help of
investments on research and development (R&D) and by using the data retrieved from the ERP
system about the emerging markets for similar products.
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Competitive Rivalry
The mining industry is further highly competitive due to the presence many players that
are operating and competing in the field. Not only global and local giants but also medium and
even small-scaled companies differ by the cost, quality, and timing of delivering their products
(Langenwalter, 2020). As such competitiveness, it becomes imperative for ABC to continue to
manage cost and become operationally efficient. It is for this reason that the implementation of
ERP at ABC should seek to add order to its operations, contain avoidable costs, and improve
efficiency in the mining centers and processing plants. Consequently, the ERP can collect real-
time data from the different functions to provide real-time decision support and promptly
manage resources.
Emerging Technologies Impacting Operations
There are three technological advancements that have the potential to affect ABC’s
business almost immediately: IoT, Artificial intelligence, and Blockchain technology. This
section delineates how each of them may affect the proposed ERP implementation, examines the
feasibility of each of the technologies and makes a recommendation on a suitable technology to
the ABC Mining Company.
Internet of Things (IoT)
Internet of Things (IoT) means integration of physical objects with the internet or with
other devices around them, get command, receive command, exchange information. In the era of
mining, IoT where all the equipment can be monitored, the location of assets could also be
ascertained through IoT. On this respect, based on Chofreh et al. (2020), impact of IoT on ERP
implementation is significant together with Ghadge et al. (2020). First, IoT improves data
gathering; real-time data then flows to the ERP system, offering a view of operational
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performance in a constantly updated format. It can massively enhance leadership decision and
operational effectiveness. Secondly, IoT, also, helps in predictive maintenance, where the health
of equipment is monitored, the likelihood of failure detected, and maintenance work carried out
so that the losses incurred on equipment that is not being used because it is being repaired are
low.
Artificial Intelligence (AI)
Artificial Intelligence (AI) features machine learning and Data analytics for decision-
making over processes as a form of efficiency. Mining operational applications: AI can be
applied in exploration, prediction of minerals and also in improvement of safety measures
(Katuu, 2020). On one side, ERP systems contribute to the development of smarter AI
applications, while on the other side, AI affects several aspects of ERP implementation. AI can
help to extract lots of information from the data which is being processed by the ERP system and
enhance decision making (Wu et al., 2016, Ge et al., 2019, Ghadge et al., 2020). In addition, AI’s
proven ability to perform repetitive and mundane jobs like entering data or generating reports
can redeploy human capital to more critical tasks.
Blockchain Technology
Smart contracts are another application of blockchain technology used in providing a
secure and centralized record for all the transactions to be made and for storage of all the data.
Analyzing blockchain's applicability in the mining industry, the authors highlighted that it would
allow for tracking and verifying the origins of mineral products (Ivanov et al., 2020). On the use
of blockchain and its impact on ERP, several issues can be highlighted with some significance.
ERP security concerns can be addressed through integrating blockchain where structural data can
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be safely managed within the ERP system and the client’s data can be safe from hackers or other
unauthorized personnel.
Table 2: Emerging Technologies Impacting Operations
Technolog
y
Data
Gatherin
g
Decisio
n
Makin
g
Predictive
Maintenan
ce
Operationa
l
Performan
ce
Safety Securit
y
Complian
ce
IoT High Mediu
m
High High Mediu
m
Low Low
AI Medium High Medium High High Mediu
m
Medium
Blockchai
n
Technolog
y
Low Mediu
m
Low Medium Low High High
Benefits of Advanced ERP Solution
The use of business intelligence in the functionality of the advanced ERP incorporates
new solutions, including: The Internet of Things and big data analytics, which will be beneficial
to ABC Mining Company. Business intelligence and analytic tools in an implemented ERP
platform can mine data and provide historical data and trends reports suitable for decision
support. BI can also capture the business KPI and give executive summaries that show
operational competence, so that the management can note the weak areas (Umble et al. , 2003).
Internet of Things improve the managing of assets, thus maximizing the utilization, and most
importantly, maintaining the machinery and equipment.
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Potential Ethical Issues and Strategies to Overcome Them
Discussing the ABC Mining Company’s case and the necessity of implementing an ERP
system, the following ethical issues arise. They are vital to resolving and handling in the best
interest of efficiency and effective implementation of the company without compromising on
integrity and reputation. This section is devoted to the ethical dilemmas in the ERP
implementation, as well as the ways they can be solved.
Data Privacy and Security
Data privacy and protection can be considered one of the major ethical concerns, when it
comes to ERP execution. A critical aspect of every company is that ERP systems store and
process extensive and sensitive information, and this involves touching the personal details of
employees, organizational, and organizational financial records and other crucial business data
(Baki & Çakar, 2005; Munoko et al., 2020). It becomes possible to access information from the
unauthorized area, or someone else may hack into the information system, which would imply
serious ethical and legal consequences. To address these concerns, ABC Mining Company needs
to have adequate data encryption policies and procedures adopted that will allow only personnel
with necessary access rights to particular information.
Transparency and Communication
The second of the ethical dilemmas is related closely to the first one and includes the
need to provide full disclosure and not conceal any information regarding ERP implementation.
This may make employees have negative attitude and respond with lots of resistance and mistrust
because they feel that change in their role and responsibilities have been brought about by the
transformation (Ogbuke et al., 2020). Thus, the ethical considerations are quite clear and suggest
that it is in ABC’s best interest, as well as in the best interest of its employees and customers, to
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have clear and honest communication about the implementation process, as well as any
foreseeable changes and shifts in roles and responsibilities and the benefits of the new system.
Fairness and Equal Opportunity
Due to the far-reaching changes that ERP implementations bring regarding business
operations, there are repercussions in the area of roles and tasks. In this transition there also
exists high possibility of an employee feels he or she was unjustly treated or for some other
reason feels he/she is disadvantaged. In order to avoid such an ethical issue, ABC needs to take
certain steps that include: The Company must involve all the employees during the process of
ERP implementation.
Intellectual Property and Vendor Relations
This paper also reveals that there are a number of ethical concerns in the area of
intellectual property and vendors of ERP. ABC Mining Company needs to guarantee embedding
requirements to vendors concerning the right to own data and all the other rights that come with
it as well as prohibition of using proprietary information (Ogbuke et al., 2020). When selecting
vendors, one needs to avoid engaging contractors that engage in unethical business practices and
whose business is not in compliance with industry standards and regulatory requirements.
Environmental and Social Responsibility
The use of an ERP system can also be associated with ethical issues regarding
environmental and social sustainability, as well as the potential consequences of automation
when it comes to job preservation (Alsharari, 2022). The adoption of new technologies into the
digital processes of production and managerial services might result in the higher rates of e-
waste generation and higher energy usage. ABC should ensure unprotected resources are
disposed or recycled appropriately and that it should use energy-efficient hardware and software
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(Umple et., 2003). In addition, the company needs to consider additional external factors,
including sociological factors like the effect on local people and likely hood of displacing
employees through automation facilitated by ERP.
Strategies for Overcoming Ethical Issues
To facilitate a successful ERP implementation and address the ethical issues discussed,
ABC Mining Company should adopt the following strategies:To facilitate a successful ERP
implementation and address the ethical issues discussed, ABC Mining Company should adopt
the following strategies:
Develop a Comprehensive Ethical Framework: Conduct the organizational audit to
identify the relevant policies and procedures that are in compliance with the company’s
ethical standards that relate to data privacy, transparency, fairness and social
responsibility. The conceptual framework presented here should underlie all facets of the
ERP implementation project and be disseminated to all the stakeholders involved in it.
Implement Strong Data Protection Measures: Embrace more sophisticated methods in
Computer Integrated and Security systems this in protecting critical data. The following
sub-processes should be considered as best practice to be implemented: Update
periodically security procedures and controls; conduct security awareness for employees.
Promote Transparent Communication: Engage employees in Ernst & Young’s ERP
implementation process by informing them about major strategies. Conduct meetings
with the latest information, send instructional presentations and reports through the
available company channels and establish places where people can post their inquiries
and get answers.
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Change Management Plan for ABC Mining Company
Two of the crucial aspects of ERP implementation shall be discussed specifically with
reference to ABC Mining Company and these are: Change management. On this premise, it is
important that whoever is in charge of this initiative follows a systematic plan rather than a
random approach in order to address the potential resistance. The auditors accepted a “change
readiness assessment” to highlight the need of assessing and planning for the change that is
expected in the next year.
Step 1: Establish a Sense of Urgency
The first step in Kotter’s model is establishing awareness that change is needed / is
inevitable. To initiate the change, ABC Mining Company must educate all the stakeholders on
why ERP systems are necessary through demonstrating the weakness of the existing systems and
the strength of the ERP systems. Some of the risks involve presence of complacency and
resistance to change since most companies develop comfort zones where they feel most
comfortable.
Step 2: Form a Powerful Coalition
Creating supporters among key individuals of the organization is a key process for the
change initiative. It should comprise general managers, directors of departments and other well-
regarded employees, who will be seen as leaders in the implementation of the ERP program. One
risk seen is that there is no loyalty exhibited by important persons in an organization (Spathis &
Constantinides, 2003). To overcome this, ABC should take time to approach the stakeholders at
the earliest opportunity of considering the idea should incorporate them in the making of those
decisions and show them the suitability of their support.
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Step 3: Create a Vision for Change
The vision for ERP is to identify and promote the specific changes that will occur as a
result of the implementation of this system and set the tone for endeavours. The vision should
therefore be an expression of how conditions are desired to be in the future with special emphasis
on how the functionality of the ERP system would realize efficiency, accuracy, and especially
growth. One of the risks at this stage is that the vision in the company corresponds to no one, or
it corresponds to a neighbor’s cow.
Step 4: Communicate the Vision
The expectations need to be communicated clearly because the involvement of all
employees is critical for implementing the change. This entails notifying the people affected
through the electronical system’s various outlets including E-mails, newsletters, Town Hall
meetings, and updates on the Intranet to ensure that those affected by the message receive it
repeatedly. One can say that one of the main issues is communication that can be formed with
gaps and then provide a weak signal to doctors and patients. To counteract this, the management
of ABC should create a clear communication strategy that details the main messages, media
platforms, and specific time frame for reporting on the progress.
Step 5: Remove Obstacles
A critical step for changing a system or organization is to define and address obstacles to
the change. Challenges include lack of automated systems for employees who perform routine
tasks, lack of training, and possibly workers’ unwillingness. To overcome these challenges, ABC
should learn about its change readiness, far and near, to determine the level of resistance and
design specific interventions. Giving thorough preparation, updating and improving the
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accusations, and engaging the employees in the change process can minimize the level of
resistance.
Step 6: Create Short-Term Wins
Enduring short-term benefits converts ERP implementation towards long-term efforts
resulting from achieving those short term goals that can be celebrated. These should be clearly
apparent, overt, and linked with the overall aims and objectives of the project (Kim et al., 2005).
Some of the challenges are as follows; Establishing measurable goals and targets; this is a great
challenge in that way and time consciousness is a major issue.
Step 7: Consolidate Gains and Produce More Change
When we obtain these results, the next step is to re-assert control so that sustaining the
change becomes possible. This entails sustaining progress gained from short-term successes to
formally create and embed greater and lasting reforms. One of the possible risks is the reduction
of activity rates due to tone down effect after several successful campaigns. In this regard, ABC
should continue applying pressure and maintain measurable goals as a means of enforcing
constant evaluation of progress.
Step 8: Anchor the Changes in Corporate Culture
The organizational change that accompanies the ERP implementation has to be sustained
in order to achieve success consistently. That entails correcting and supporting the new
behaviours and practices through policy, procedure, and performance management. Towards
this, a challenge is the continuity of those old established routines and unrelenting creep of
recalcitrance to change in the display of new behaviours (Kim et al., 2005). ABC needs to
incorporate new processes tied to the implementation of ERP continuously, make employees
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knowledgeable and familiar with the changes and consistently demonstrate the new expected
behavior themselves.
Recommendation
The following recommendations are based should be undertaken by ABC company:
Go ahead and fix the ERP systems’ problems and the need to become more competitive.
This can be finessed by adopting technologies like, IoT and AI for improved operational
efficiency and predictive maintenance.
Ensure more reliable measures of protecting data so that data on patients is not exposed
without permission.
Encourage open dialogue to review any chances of sabotage by employees.
It is important that the above strategy undergoes transition through Kotter’s change
management model for proper absorption and implementation of the new system.
It is crucial to evaluate and optimize processes to ensure that the business reaps the fruits
of its ERP implementation for a long time.
Conclusion
The development of an ERP system can help ABC Mining Company address issues of
inefficiencies and deserve customers’ loyalty to remain competitive in the market. The global
competitors may pose challenges to the company, new entrants may disrupt the conducting
business and the company has to factor in the ethical issues which come with new advancement
in technology to ensure the ERP adoption. Therefore, following a structured change management
plan by using Kotter’s model will allow for a smooth transition to the new system, while
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integrating the changes into the organization’s working culture and making lasting
improvements.
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