EFFECTIVENESS OF ENTERPRISE RESOURCE PLANNING (ERP) IN

STARATEGIC HUMAN RESOURCES PLANNING IN PUBLIC SECTOR

1.1 Background of the study

Information is no more competitive advantage in waves and stages of societal

development. The first being agrarian, then industrial, followed by information

wave and most recent is human capital (mind). When information get into human

mind it becomes knowledge that turns to tool for societal advancement. This then

behooves that an exposure to same source of information but processed

differently in human minds will result into different results as witnessed in

developed and underdeveloped nations. Professional information based on

services of governance is fast growing in the high technology information sector.

But the management of services rendered is largely unexplored area of strategic

management.

Realization of stable and strong human capital management solution that will

meet organizational needs for current and future needs are basic requirement in

many public sector organizations. A flexible rewards and recognition program

that will keep employees motivated and engaged Comprehensive training

opportunities that will enable employees to continue to grow and contribute to

your organization an effective program to manage employee absences. When

employees are absent or focused on other issues, productivity suffers. And

instead of managing your core business, you spend your time administering

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absence and leave policies and worrying about how presenteeism is affecting

productivity as well as employee morale. ERP stands for Enterprise Resource

Planning. It refers to integration of several data sources of a given

organization into a single and unified computer system. This means

that a software that caters for different departments in an

organization (for instance Human Resources as well as the public

relations, legal department investor relations and so on) needs to be

developed. Also, the various departments need to communicate with

each other effectively. A soundly developed ERP system can have a

significant payback if the companies invest properly.

A good ERP can increase efficiency across the board resulting in timely

distribution of information, better customer relationship and

consultative decision making process that takes into consideration all

aspects of the organization.

Now that Enterprise Resource Planning (ERP) has shown itself to be a source of

significant business value, many organizations public sector inclusive are looking

to extract even more from their existing ERP systems. Shifts in corporate

structure and new compliance requirements are driving the need for improved

access to information, process clarity and cost savings.

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In order to realize greater return on investment (ROI) in ERP systems, ERP

applications need to be tailored to more effectively support adaptive business

processes and help drive growth. Enterprise Resource Planning solutions

strategically position Public sector services technology assets to align with and

adapt to business processes, reducing total cost of running public sector services

and improving responsiveness, quality and ROI.

Public sector is vast and being a consumer of taxes and impact on quality of life,

and major consumer of private sector, they serve as major demonstration of

technological innovator to the world at large. Historically, the public sector has

always been the vanguard of innovator for major new technologies; ERP is no

exception in Nigeria, and a driver for enabling research in academia and private

sector. This role will continue and the story of technological revolution will and

trajectories will continue

Successful technological innovation relies on where innovator has been drawn

from on knowledge of users in order to relate the innovation to users’

requirements to satisfy latent demand to provide functionality that is extremely

welcome. Many public sector services are being inundated with pressure from

private sector, the financial sector operatives, inventory, treasury and investment

operatives, supply chain, public sector budgeting, Human resources budgeting ,

career management and employee life cycle management.

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Getting a robust ERP system is a necessity for public sector to position itself for

effective performance and challenges in service delivery

Furthermore, internal dimensions of use of project champions to see them

through inevitable challenges and difficult that may arise in the organization

during the process of implementation and adoption of new technology and/or

ERP solution. As part of the initiatives in ERP is complementary assets that

should be in place during the process of implementation is control which will help

enhance value in the technology. While public sector organization may be seen

to have the asset listed above, these may not be the sum of assets and individual

skills but more importantly the management structures, information flow and

ability to retain staff. At the moment, much public sector governance is focus on

improved service deliver. Innovation now focus on efforts to change, while many

public services fall within competitive range of stimulus for innovation, some

public services are competing feature in both public and private provision along

side each other. The level of competition may vary but the existence create a

niche that worth studying

‘Marketization’ is the theme of many government policies to public services.

Motivated to sometimes for simple expediency to save cost, to produce and

operate cheaper services, to make public service more responsive to customer

and introduce more advance management philosophies. Public services do often

exit in complex supply chain services, inventories and arrangement with several

player most of which are commercial firm.

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So public services are liable to vary in terms of how far they are subject to

pressure similar to those involved in market selection and in the mainstream of

innovation analyses. Therefore this forms a base and provides an excellent

ground for studies of public sector

ERP solution research. While Public sector may have high level of

intermediation. Mostly the stake holder must have a buying in any technological

innovation hence it will go no-where. The End Users in most cases do have

limited say in the process. Therefore making diffusion and roll-out a difficult and

complex process. This development is another reflection of role of professionals

in many areas of service delivery in public sector

Public sectors are usually organized in many MDA’s. Empirically, it would often

be inappropriate to the establishment as the unit of analysis in ERP survey. Many

ERP implementations are roll-out from the centre on a planned established

centrally.

This research will utilize Structural equation modeling (SEM) statistical technique.

This enables testing and estimating causal relationships using a combination of

statistical data and qualitative causal assumptions. Structural Equation Models

(SEM) encourages confirmatory rather than exploratory modeling; thus, it is

suited to theory testing rather than theory development. It usually starts with a

hypothesis, represents it as a model, operationalises the constructs of interest

with a measurement instrument, and tests the model. The causal assumptions

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embedded in the model often have falsifiable implications which can be tested

against the data. With an accepted theory or otherwise confirmed model, SEM

can also be used inductively by specifying the model and using data to estimate

the values of free parameters. Often the initial hypothesis requires adjustment in

light of model evidence.

Among its strengths is the ability to model constructs as latent variables

(variables which are not measured directly, but are estimated in the model from

measured variables which

are assumed to 'tap into' the latent variables). This allows the modeler to

explicitly capture the unreliability of measurement in the model, which in theory

allows the structural relations between latent variables to be accurately

estimated. Factor analysis, path analysis and regression all represent special

cases of SEM.

The concept of strategic human resources management (SHRM) holds

considerable promise for improving government performance. However, to

realize this promise, it is necessary to invest the concept with clear meaning.

This Thesis explores unresolved issues regarding the meaning of SHRM and its

relevance to public organizations. Arguing that the value of the concept is

undermined by tying it too closely to strategic planning, the article offers an

expanded, two-pronged understanding of SHRM. The personnel office, in

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addition to helping the agency implement strategic initiatives, also carries out an

integrated personnel program guided by a coherent theory about what it should

be doing and why

The concept of strategic human resources management (SHRM) is well

established in business literature.[1] It refers to ongoing efforts to align an

organization's personnel policies and practices with its business strategy. The

recent interest in SHRM reflects a growing awareness that human resources are

the key to success in both public and private organizations. Yet, despite this

growing awareness, the relevance of SHRM to public organizations is far from

clear. Government agencies rarely operate in competitive markets and thus do

not develop business strategies in the same sense that private organizations do.

And because they function within larger systems of authority, they do not enjoy

the same degree of autonomy that private organizations do to alter their

personnel policies or provide performance-based incentives to employees. Given

these inherent differences, SHRM cannot be transferred successfully from the

private to the public sector without tailoring its design and implementation to the

unique characteristics of public organizations (Jonathan , 2002)

The concept of strategic human resources management (SHRM) is well

established in business literature.[1] It refers to ongoing efforts to align an

organization's personnel policies and practices with its business strategy. The

recent interest in SHRM reflects a growing awareness that human resources are

the key to success in both public and private organizations. Yet, despite this

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growing awareness, the relevance of SHRM to public organizations is far from

clear. Government agencies rarely operate in competitive markets and thus do

not develop business strategies in the same sense that private organizations do

STATEMENT OF THE PROBLEM

There are presently growing needs on how to manage effectively the Human

resources in public sector. The growing need of efficiency in operations and

incessant loss of fund in terms of ‘ghost worker’

Furthermore, the need to integrate other software to the database of several

public sector human resources is ever growing - biometric and identity

management There are several developmental needs that spans recruitment of

right employees, compensation, benefits, appraisal, reward , training and

managing the resources till the point of retirement. These needs call for robust

dependable tools, processes and strategy that will accommodate the need. With

the globalization of information and the need for public sector to compete within

the realms of prevailing economy, expectation of every social organization and

corporation is to position her human resources well to be efficient and have the

capacity to function profitably. Generally, with the emerging economy, large and

growing numbers of state and local agencies are using strategic planning as a

basic way of doing business. This research will focus on why government and

other social organization fail to adopt strategic planning or why they are compel

to do so. Moreover, this research will examine the fundamental to the search for

the establishment and sustenance of a new social order and economic

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organizational framework that will bring about a new strategy for improved public

service delivery in a society that is presently beset by corruption, inefficiency and

other causal factors of poor micro and macro economic performance. The study

therefore was designed to access the effectiveness of enterprise resource

planning in strategic human resources management.

RESEARCH QUESTIONS

1. Will transferring SHRM from private sector to public sector be

significantly adopted?

2. Will SHRM be of significant relevance to government agencies?

3. Will federal agencies engage in strategic human Resources planning?

4. Will set goals, mission and policies of social organization significantly

impede public sector SHRM?

5. Will legislative intent as well as the chief executive's policy or political

agenda significantly influence SHRM?

6. Will externally-oriented and diverse range of stakeholders significantly

influence issues of mutual concern in Public sector SHRM?

7. Will internally-oriented need significantly bring together a cross-

functional team of agency in setting SHRM internal priorities and

objectives in social organizations?

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8. Will SHRM significantly Enhanced performance in Public sector?

9. Will SHRM significantly resolve problem-specific process in public

sector?

10.Will SHRM approach significantly rely upon primary purpose of

adaptability rather than accountability in public sector?

11.Will SHRM be a significant valuable management tool for adjusting a

public organization to its external environment and keeping it focused on

desired future states?

12.Will performance management of ERP systems mandated from above

and monitored by budget and planning offices significantly influence

ERP Project?

13.Will right remuneration significantly motivate key user in SHRM

implementation in public sector?

14.Will inadequate change management process significantly affect

transition of SHRM initiatives?

15.Will inadequate quality assurance significantly affective delivery and

selection of appropriate SHRM tool?

16.Will adopting SHRM significantly save cost of running public sector

operations?

17.Will political instability significantly affect SHRM in public sector?

18.Will awareness and adoption of information system audit of ERP

software significantly affect delivery of SHRM goal?

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19.Will inadequate technical skill and competence significantly affect

adoption and development of SHRM?

20. Will lack of requisite training significantly impede HRMS in public

implementation?

RESEARCH HYPOTHESES

The following hypotheses were tested:

1. Transferring SHRM from private sector to public sector not be

significantly adopted

2. SHRM will not be of significant relevance to government agencies

3. Federal and State government will not significantly engage in strategic

human Resources planning?

4. Set goals, mission and policies of social organization will not significantly

impede public sector SHRM?

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5. Legislative intent as well as the chief executive's policy or political agenda

will not significantly influence SHRM?

6. Externally-oriented and diverse range of stakeholders will not significantly

influence issues of mutual concern in Public sector SHRM?

7. Internally-oriented need not significantly bring together a cross-functional

team of agency in setting SHRM internal priorities and objectives in social

organizations?

8. SHRM will not significantly Enhanced performance in Public sector?

9. SHRM will not significantly resolve problem-specific process in public

sector

10.SHRM approach will not significantly rely upon primary purpose of

adaptability rather than accountability in public sector

11.SHRM will not be a significant valuable management tool for adjusting a

public organization to its external environment and keeping it focused on

desired future states

12.Performance management of ERP systems will not be significantly

mandated from above and monitored by budget and planning offices b to

influence ERP Project

13.Right remuneration will not significantly motivate key user in SHRM

implementation in public sector

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14. Inadequate change management process will not significantly affect

transition of SHRM initiatives

15. Inadequate quality assurance will not significantly affective delivery and

selection of appropriate SHRM tool

16.Adopting SHRM will not significantly save cost of running public sector

operations

17. Political instability will not significantly affect SHRM in public sector

18.Awareness and adoption of information system audit of ERP software

will not significantly affect delivery of SHRM goal

19. Inadequate technical skill and competence will not significantly affect

adoption and development of SHRM

20. Lack of requisite training will not significantly impede HRMS in public

implementation

DELIMITATION OF THE STUDY

This study was delimited to the following:

1. This research focuses on public sector.

2. Five States in Nigeria that have adopted and/or implementing ERP

solutions (Lagos State government, Lagos State Internal Revenue

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services, Osun State Government, Rivers State, Balyesa state

Government and Ondo State Government.

3. Software utilized for effectiveness of ERP in HRMS are Oracle HRMS ,

SAGE and SAP

4. Sample questionnaires were utilized and information garnered were

analyzed

5. The use of descriptive and inferential statistics.

All hypotheses were tested at 0.05 level of significance

SIGNIFICANCE OF THE STUDY

Human Resources Management System family of applications automates the

entire recruit-to-retire process, so you can align your workforce with strategic

objectives. A single integrated data model provides an up-to-the-instant

accurate view of human resources-related activities, including recruiting,

performance management, learning, compensation, benefits, payroll, time

management, and real time analytics. Even though the literature on ERP system is

significantly wide, there is still a gap, which may be filled with additional research in this

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field (Al-Mashari, 2002). Raimond & al. (2002) state that more research regarding ERP

in government and public organizations is needed. The authors believe that more

empirical research needs to be conducted in order to understand how the implementation

of ERP has an impact on human resources.

This theis aims at investigating the impact of ERP systems on organizational processes

and on top managers’ behaviour in public sector organizations by analysing a case-study

of an Italian region which introduced such a system. This research will contribute in the

existing literature on ERP systems in public sector organizations by providing some

preliminary results of a survey conducted in the five states in Nigeria. As suggested by

Roque (2008a) looking back at the problems faced by others in implementing similar

projects may help reducing the probability to face the same problems. Some of the

advantages of the ERP system are the enhanced communication

mechanism within an organization, which usually results in efficiency. It

is also possible to install security features in an ERP system to curb

malpractices such as industrial espionage as well as harmful insider activities, which

would include embezzlement and elimination of ‘Ghost’ workers

LIMITATION OF THE STUD Y

Among the major letdowns of an ERP would include lack of strategies or policy to

protect data contained in ERP as well as inadequate investment in the system to include

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training and maintenance. Success of the ERP is not premised on how good the software

is, but also the skills and the experience of the workforce. And not all companies may

have their business processes fit into the ERP system. This research

focuses on the effectiveness of ERP on Strategic Human Resources Management with the

assumption it has positive effect on the operations of public sector operations. A

disadvantage of many modern techniques of data gathering is that the use of web

questionnaire restrict sample to people who have the right type of connection ( email) . A

remedy is the adoption of a simultaneous questionnaire that are hand distributed.

DEFINITION OF TERMS

ERP – Enterprise Resource Planning

SHRM – Strategic Human Resources Planning

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