ERP IMPLEMENTATION IN TATA STEEL: FOCUS ON BENEFITS AND ROI

Sanjay Kumar, Management Development Institute, Gurgaon, Haryana, India, skumar@mdi.ac.in

Anurag Keshan, B.E. Manipal Institute of Technology, Manipal, India

INTRODUCTION

The case deals with the implementation of ERP systems in a major steel plant in India. The case covers the following three phases

Phase 1: SAP implementation in the Order generation and fulfillment process. Period 1998-99 to 1999-2000.

Phase 2: SAP implementation in the entire plant covering the finance and accounts, procurement, materials management and costing functions. Other business processes were also covered. Period 2000-01 to 2002-03.

Phase 3 : ERP audit and benefits evaluation for enhancement of the ERP systems period 2003 to 2005-06, before approving additional investment in the SCM modules and upgradation of the ERP software.

The case focuses on the need for the ERP implementation, the goals for ERP implementation at each stage, the actual implementation of the ERP system in each phase, and the actual benefits achieved by the company as evaluated during the audit process. The ERP audit and ROI
calculation was done so that the IT department could get approval of fresh investment required for implementation of Advanced Planning Systems for Supply Chain Management and also for ERP upgradation.