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THE STUDY OF THE EFFECTIVENESS OF RESOURCE PLANNING IN OIL AND GAS INDUSTRY

by

Mohammad Nazhri Bin Mohammad Hashim

Dissertation submitted in partial fulfilment ofthe requirements for theBachelor of Engineering (Hons)(Civil Engineering)

DECEMBER 2014

Universiti Teknologi PETRONASBandar Seri Iskandar31750 TronohPerak Darul Ridzuan

I

CERTIFICATION OF APPROVAL

THE STUDY OF THE EFFECTIVENESS OF RESOURCE PLANNING IN OIL AND GAS INDUSTRY

ByMohammad Nazhri Bin Mohammad Hashim15422

A project dissertation submitted to the Civil Engineering ProgrammeUniversiti Teknologi PETRONAS in partial fulfilment of the requirement for the BACHELOR OF ENGINEERING (Hons) (CIVIL ENGINEERING)

Approved by,

________________________(Supervisor: Ir. Idris Othman)

UNIVERSITI TEKNOLOGI PETRONASTRONOH, PERAKDECEMBER 2014

CERTIFICATION OF ORIGINALITY

This is to certify that I am responsible for the work submitted in this project, that the original work is my own except as specified in the references and acknowledgements, and that the original work contained herein have not been undertaken or done by unspecified sources or persons.

_______________________(Mohammad Nazhri Bin Mohammad Hashim, ID: 15422)

ABSTRACT

Enterprise Resource Planning (ERP) is currently being addressed as a foundation for the integration of organization-wide information systems. ERP systems tie together entire organizations operations such as accounting, finance, human resources, manufacturing and distribution, etc. Furthermore, they also connect the organization to its customers and suppliers through the different stages of the product or the process life cycle. There are very few studies led to the implementation of ERP systems in the oil and gas industry, particularly for the major player in the industry. The focus so far has been on client organizations, engineering and design firms. The objective of this paper is to investigate the suitability and the implementation status of ERP systems in oil and gas field work. The methodology engaged is a mix of literature review, market studies and detailed questionnaire survey, where it also includes a survey questionnaire which takes all the factors in to count and before starting actual survey a pilot study for this questionnaire was done, which confirms its acceptance. Based on previous study done by some few researchers, it is found that the majority of either the client, Service Company or the contractor firms have awareness about the ERP systems but very few organizations have so far implemented such systems. The major reason is that the implementation of any ERP system needs a huge investment in time, money and resources. Nonetheless, when implemented to solve the right problems, these ERP systems can be a powerful tool for business improvement. The study shed light on the barriers to the implementation of ERP systems in the oil and gas industry and also highlights valuable lessons learned and benefits gained by companies that have such systems in place.

TABLE OF CONTENT

CERTIFICATION OF APPROVAL..I

CERTIFICATION OF ORIGINALITY.II

ABSTRACTIII

TABLE OF CONTENTSIV

LIST OF TABLES..VII

LIST OF FIGURES.VIII

CHAPTER I: INTRODUCTION...1

1.1.Introduction to Enterprise Resource Planning.......1

1.2.Background.3

1.3.Problem statement..5

1.4.Objectives.............................5

1.5.Scope of study.6

CHAPTER II: LITERATURE REVIEW AND/OR THEORY7

2.1Resource Planning in Oil and Gas Industry..7

2.2Benefits of implementing the ERP systems..8

2.3Disadvantages.9

CHAPTER III: METHODOLOGY/PROJECT WORK........13

3.1Work Base...........................13

3.2Data Evaluation..............................15

3.3Questionnaire..16

3.3.1Draft16

3.3.2Proper form of Questionnaire17

3.4Data Collection.........................18

3.4.1Primary Data...18

3.4.2Secondary Data..19

3.5Data Analysis Method.20

3.5.1Percentage Method (Statistical Analysis)..................20

3.5.2Average Index.21

3.5.3SPSS (Correlation test, Cronbach test & Validity test)..22

3.5.2.1Correlation Test...22

3.5.2.2Cronbach Test (Reliability Test).23

3.5.2.3Validity Test24

3.6Project Timeline..25

CHAPTER IV: RESULT AND DISCUSSION..27

4.1Introduction.....27

4.2Respondents Description...28

4.3Respond Towards The Purpose Of This Project.28

4.3.1.Research Question 1: The benefits sought from implementing ERP in Oil and Gas organization29

4.3.2.Research Question 2: The extent on which the critical factors present during the ERP implementation.32

4.3.3.Research Question 3: The perceptions of project managers and team members as to the benefits and concerns of implementing ERP in Oil and Gas organization...39

4.3.4.Research Question 4: The extent in which selected decision-making processes were used in the organizations decision to implement ERP.45

4.3.5.Advice/comments on the current system from industrialist47

4.4Work flow of suggestion to conduct ERP system.............................48

CHAPTER V: CONCLUSION AND RECOMMENDATION..50

5.1Introduction.50

5.1The Problem Statement...51

5.3Conclusion..51

5.4Recommendation52

REFERENCES.53

APPENDICES A: Draft Questionnaire (FYP I).55

APPENDICES B: Questionnaire Form (FYP II)59

APPENDICES C: Correlation Calculation..66

APPENDICES D: Cronbachs Alpha (Reliability) Calculation70

APPENDICES E: Validity Calculation...74

TABLES

TABLE 1: FACTORS OF THE ERP EFFECTIIVENESSTABLE 2: CRONBACHS ALPHA CONSISTENCYTABLE 3: GANTT CHART FOR FYP I AND FYP IITABLE 4: KEY MILESTONE FOR FYP I AND FYP IITABLE 5: RESPONDS ON THE BENEFITS SOUGHT FROM THE IMPLEMENTATION OF ERP SYSTEM IN THE ORGANISATION (N=13)TABLE 6: AVERAGE INDEX FOR RESEARCH QUESTION 1TABLE 7: CORRELATION RESULT FOR RESEARCH QUESTION 1TABLE 8: RELIABILITY AND VALIDITY RESULT FOR RESEARCH QUESTION 1TABLE 9: CRITICAL FACTORS OCCURS DURING THE IMPLEMENTATIONTABLE 10: AVERAGE INDEX FOR CRITICAL FACTORTABLE 11: CORRELATION RESULT ON RESEARCH QUESTION 2TABLE 12: RELIABILITY AND VALIDITY RESULT FOR RESEARCH QUESTION 2TABLE 13: CONCERNS OF IMPLEMENTING ERP IN OIL AND GAS ORGANIZATIONTABLE 14: AVERAGE INDEX FOR CONCERNSTABLE 15: CORRELATION RESULT ON RESEARCH QUESTION 3TABLE 16: RELIABILITY AND VALIDITY RESULT FOR RESEARCH QUESTION 3TABLE 17: RESPONSE TOWARDS THE DECISION MAKING PROCESSTABLE 18: IMPLEMENTATION OF SYSTEM

FIGURES

FIGURE 1:FLOW OF WORK BASEFIGURE 2:PROCESS OF DATA EVALUATIONFIGURE 3: SPEARMANS COEFFICIENTFIGURE 4: CRONBACHS ALPHA COEFFICIENTFIGURE 5: VALIDITY COEFFICIENTFIGURE 6: ERP IMPLEMENTATION METHOD MODULE /OR SOP

CHAPTER 1INTRODUCTION

1. Introduction To Enterprise Resource Planning

In order to stay competitive in a dramatically changing business environment, organisations have to enhance their business practices and operational procedures through information technology such as enterprise resource planning (ERP) (e.g. Al-Mashari, 2003; Rao, 2000; Somers and Nelson, 2004; Tsai et al., 2007b), e-commerce (e.g. Aciar et al., 2007; Ahmed et al., 2007; Chuang et al., 2007), e-finance (e.g. Tsai et al., 2006), Knowledge management (e.g. King, 2007), business process reengineering (e.g. Lee et al., 2007), etc. Leem and Kim (2002) point out that information technology is an important weapon in the fight to improve and keep an enterprises competitive edge in an ever-changing business environment. According to Gupta (2000), he considers that the ERP system is an integrated information technology that uses common databases and consistent cross-functional information flow which enables organisations to integrate information from various departments. Moreover, Hong and Kim (2002) found that these demands have prompted more and more firms to shift their information technology strategies from developing in-house information systems to purchase application software, like ERP systems, to generate synergies and enchase operating efficiency. Wallace and Kremzar (2001) also mentioned that operating a business in a rapidly changing and highly competitive environment is the primary purpose of implementing an ERP system. Although implementing an ERP system may be costly and time-consuming, its benefits are worthwhile. Therefore, ERP systems can be considered as critical tools that can enhance business operations.

Quoted fromAsk.com, 2014,There are different definition on Resource Planning actually, but basically it is derives as a Resource plan, or also mentioned as Enterprise Resource Planning, is a detailed summary of all types of resources required to complete a specific task. It can be easily defined as summary of the level of resources needed to complete a project. It specifies the exact quantities of labour, equipment and materials needed to complete a project. [1]

Some of the reason why Resource planning is important or essential was due to the following facts:

1. It will lead to conservation of extinguishable resources.1. It will lead to equal and judicious use of any resource big or small.1. It will lead to a country which is resource sufficient itself1. It will also lead to the betterment of the stakeholders of these resources too.

0. Background Origin of "Enterprise Resource Planning",In 1990, Gartner Group first used the acronym ERP as an addition of material requirements planning (MRP), later manufacturing resource planning and computer-integrated manufacturing. Without substituting these terms, ERP came to symbolize a larger whole that imitates the growth of application integration beyond industrial.

Not all ERP packages advanced from a industrial core. Dealers variously began with accounting, maintenance, and human resources. By the mid1990s ERP systems addressed all core enterprise purposes. Governments and nonprofit organizations also began to use ERP structures.

Developers now make more effort to assimilate mobile devices with the ERP system. ERP dealers are lengthening ERP to these devices, along with other business uses. Practical stakes of modern ERP concern integration hardware, applications, networking, supply chains. ERP now covers more functions and roles, including decision making, stakeholders' relationships, standardization, transparency, globalization, etc.

Quoted from Wikipedia (2014),

An ERP system covers the following common functional areas. In many ERP systems these are called and grouped together as ERP modules:

1. Financial accounting: General ledger, fixed asset, payables including vouchering, matching and payment, receivables cash application and collections, cash management, financial consolidation

1. Management accounting: Budgeting, costing, cost management, activity based costing

1. Human resources: Recruiting, training, rostering, payroll, benefits, 401K, diversity management, retirement, separation

1. Manufacturing: Engineering, bill of materials, work orders, scheduling, capacity, workflow management, quality control, manufacturing process, manufacturing projects, manufacturing flow, product life cycle management

1. Order Processing: Order to cash, order entry, credit checking, pricing, available to promise, inventory, shipping, sales analysis and reporting, sales commissioning.

1. Supply chain management: Supply chain planning, supplier scheduling, product configurator, order to cash, purchasing, inventory, claim processing, warehousing (receiving, putaway, picking and packing).

1. Project management: Project planning, resource planning, project costing, work breakdown structure, billing, time and expense, performance units, activity management

1. Customer relationship management: Sales and marketing, commissions, service, customer contact, call center support - CRM systems are not always considered part of ERP systems but rather Business Support systems (BSS).1. Data services : Various "selfservice" interfaces for customers, suppliers and/or employees. [17]

Problem statement

The problem statement for this study was to find the following:1. What are the benefits from implementing ERP in Oil and Gas organization?1. The extent on which the critical factors present during the ERP implementation.1. What are the point of view of the project managers and team members regarding the benefits and the concerns of dealing with ERP in Oil and Gas organization?1. What is the extent when selected decision-making procedures remained used in the organizations decision to implement ERP?

Objectives

This study is mostly focus on three (3) purposes:1. To accumulate the knowledge of doing resource planning in order to achieve the most effective of Resources Planning in Oil and Gas organization1. To derive steps and foreseen the weaknesses or disadvantages in doing resources planning 1. To provide a proof using analytical skill in determining the effectiveness of doing resource planning in Oil and Gas organization.

Scope of study

The scope of study for this research project is to observe the phenomenon of ERP system among the organization in the Oil and Gas industry. Most research on the ERP system was done for the local company or the onshore type of company, usually the construction company. In hoping that this research study can be the pioneer of the ERP study in oil and gas industry. As for this moment, to authors knowledge there has not been a study on the ERP system on the company that using the ERP system. As a result, no critical literature review is done for this project, although author did study others researchers paper works on the local company that is not based on the oil and gas field. To compare and use their work for this project is not a fair comparison as their field of work is different and the scope of work is not the same. Decisions were made that this project will be the stepping stone for future researcher to continue the study on the ERP system for the oil and gas organization.To authors opinion, in this study, the involvement of the people who work in the organization is most important to achieve the target if they were to use the ERP system, which is why author decide to involved or to approach some of the staff in the organization chose by author for the questionnaire and interview session. The targets were the project manager, top management, team members of the project that they working on and contractors who work with the service provider or the operator type of organization. Some of the scopes were to measure the acknowledgment of the staff member in the organization toward the ERP system, along with the benefits that comes with it and critical factors that affect either the organization or the staff themselves.

CHAPTER 2 LITERATURE REVIEW AND/OR THEORY

1. Resource Planning in Oil and Gas IndustryThe resources selected for review consisted of books, journal articles, white papers, dissertations, and dissertation abstracts. In the information technology community, a white paper is an informational document offering an overview of a technology, product or issue, including its importance and business benefits. The reason behind this study is to have some research on what is the positive impact of implementing effective resource planning towards the management system, and to see if this theory might increase organizations ROI (Return of Investment) and revenue for that year.According to Jacobs and Weston Jr. (2007), a key to ERP is the way in which users can tailor the application so it is intrinsically easy to use. ERP systems can reduce cycle time, accelerate information distribution, improve financial management, lay the groundwork for e-commerce and make tacit knowledge explicit provided they are properly implemented in a business organisation (Davenport, 2000). In addition, ERP systems are capable of reshaping business structures thanks to their ability to solve the challenges created by portfolios of supposedly disconnected and uncoordinated business applications (Davenport, 1998). Moreover, ERP integrates application programmes for a range of business functions including sales, accounting and manufacturing using a common database that serves as the integrating mechanism (Olhager and Selldin, 2003). Thus, ERP incorporates logistic, capital and information via an information technology system so that management teams can obtain first-hand information about a business operations. Furthermore, ERP can provide suggestions for management teams making decisions and assist them in figuring out an optimal solution. However, ERP system implementation can be both expensive and time-consuming (e.g. Abdinnour-Helm et al., 2003; Kumar et al., 2003). Therefore, choosing a suitable ERP package necessitates considering the degree to which the configured ERP system matches with users working style and practice and the extent of congruence between what is provided by the ERP system and user task requirements. Further, if the right ERP solution is selected, it can be an excellent decision support tool that will be a gruelling process for companies and provide a competitive advantage. (Citation: Tsai, Lee, Chen and Wei Hsu, 2009)ERP systems could be used in the oil and gas industry for the following general purposes:1. To improve responsibilities in relation to customers1. To strength supply chain partnerships1. To enhance organizational flexibility1. To improve decision-making capabilities1. To reduce project completion time and cost

1. Benefits of implementing the ERP systemsThe following benefits could be gained by implementing the ERP systems:1. Provide an integrating working environment.1. Enable automation1. Availability of information from field level until the management level1. Integration in applications in any departments1. Flexibility and facility to standardizing process or to accommodate changes and globalization.1. Achieve balanced people, process and technology changes across all areas.1. Apply planning and program management practices throughout the program life cycle of a project.

1. DisadvantagesDisadvantages of implementing the ERP systems based on previous research and study done by researcher around the globe:1. High implementation cost. It can range from some hundred thousand dollars in small companies to a billion dollar for large multinational companies (these numbers including training and consulting).1. Delay on return on investment. The benefits of ERP may not be shown until after companies have had it running for some time (Calogero, 2000).

61

TABLE 1: FACTORS OF THE ERP EFFECTIVENESSFACTORRESEARCHERKEY STATEMENTGAP

Review on Enterprise Resource Planning Implementation Roadmap: Project Management Perspective Gholamzadeh Chofreh F. A. Goni M. Shaharoun S. Ismail

The practitioners need to be led by a coherent roadmap for the implementation of ERP systems. An investigation of the literature review discloses that current ERP roadmaps do not relate a inclusive project management, which contains of process group and the nine knowledge areas, as a practice to implement a complex project. Does not resembles of personal view from the project managements point of view /or their perceptions What are the decision making process during the implementation

Motivations for enterprise resource planning (ERP) system implementation in public versus private sector organizations JOYCELYN L. HARRISON (2004) Factors regarding benefits sought through ERP system implementation and critical factors surrounding successful ERP implementation were identified The perception of project team members satisfaction with modules implemented and their concerns about implementing ERP software What is the comparison between these 2 sector Why the differentiation between these 2 sector exist

FACTORRESEARCHERKEY STATEMENTGAP

Enterprise resource planning: Implementation proceduresand critical success factors Elisabeth J. Umble Ronald R. Haft M. Michael Umble Many ERP implementations have been classified as failures because they did not achieve predetermined corporate goals Identifies success factors, software selection steps, and implementation procedures critical to a successful implementation. What are the concern for the system to be implemented In which factor did the critical success takes place the most

Efficient implementation of an enterprise resource planning system in a large company Kevin Rudy (2010) Alex Afshar (2010) Jayant Ghosh (2010) The reality of streamlined post implementation operations within large companies is often not achieved. ERP success or failure in large companies is determined during implementation. Does not show the work flow of how the steps being taken What is the analytical analysis to prove success of the work done

Enterprise resource planning (ERP) systems: a research agenda Majed AlMashari (2002) Proposing a novel taxonomy for ERP research Presents the current status with some major themes of ERP research relating to ERP adoption, technical aspects of ERP and ERP in IS curricula How effective is the system towards the organization beneficiaries

FACTORRESEARCHERKEY STATEMENTGAP

Enterprise Resource Planning (ERP): a review of the literature Young Moon (2007) To serve three goals. First, it will be useful to researchers who are interested in understanding what kinds of questions have been addressed in the area of ERP. Second, the article will be a useful resource for searching for research topics. Third, it will serve as a comprehensive bibliography of the articles published during the period. How many organization have successfully implement and gain the benefits from the system throughout the year from Jan 2000 till May 2006 What is their response towards the changing of system in the organization itself, especially the team member, top management, and managers

IMPACT OF ERP SYSTEMS ONSMALL AND MID SIZED PUBLIC SECTOR ENTERPRISES Ashim Raj Singla (2008) It has been observed that ERP systems prove to be a failure either in the design or its implementation Success or failure of ERP system can be estimated on the basis of impact of ERP on that organization How much training provided to the member of the organization during the implementation Has the implementation receive support from the top management and what are the perceptions towards the implementation

CHAPTER 3METHODOLOGY/PROJECT WORK

1. Work Base

In this chapter, the methodology and procedures used to conduct this study are described. The collection and analysis of survey data will serve to capture pertinent information as provided by ERP implementation project managers and team members in Oil and Gas organizations especially in Malaysia.

The following research questions will serve to guide this study.1. What were the benefits sought in the implementation of ERP system in Oil and Gas company?1. To what extent were critical factors present during the ERP implementation?1. To what extent were the respondents satisfied with performance of the implemented ERP modules? How did satisfaction differ between to have the Resource Planning in their management and not to have it? 1. What are the concerns regarding the ERP implementation as perceived by the implementation team members?1. To what extent were selected decision-making processes used in the organizations decision to implement ERP?1. Which modules did the organization intend to implement versus those actually implemented and why?

Data was collected via a survey designed by the author. Additional questions were added based on the review of literature on ERP system implementation. As the instrument was developed, it was periodically reviewed by ERP professionals and modified based on their suggestions. Suggestions on the content, clarity, and appearance of the instrument were made based on feedback from these professionals. The four-section instrument was composed of four parts which included: expected results and benefits, implementation critical factors for success, modules implemented, and implementation concerns.

FIGURE 1:FLOW OF WORK BASE

1. Data EvaluationThere are several activities comprising six (6) main activities in performing this project, they are as follow:1. Research on the background of the ERP system and history: analyse previous related journals1. Cultivate few questionnaires survey purpose1. Gather the data (primary and secondary data)1. Record the data acquired from the participants1. Compute, give suggestion and prepare project report towards the analysed data.1. Writing thesis on the findings for Final Year Project (FYP) final report.

Objective achieved, no.Objective achieve, yes!

FIGURE 2:PROCESS OF DATA EVALUATION

1. Questionnaire

3.3.1 DraftToday ERP (Enterprise Resource Planning) is accepted by big organization such as the Oil and Gas Company but many medium level Institutes are enable to decide upon proper implementation of ERP. ERP system, which evolved them from Manufacturing Resource Planning have many advantages, but some failures stories also. This paper reviews the factors effecting the ERP implementation in oil and gas industries. It also includes a survey questionnaire which takes all the factors in to count and before starting actual survey a pilot study for this questionnaire was done, which confirms its acceptance.1. Factor CategoriesThis questionnaire considers all the factors effecting implementing ERP in engineering institutes and most probably all these factors are taken according to their suitable priority. It includes major factors and all these factors are taken as questions which can be answered in five different ways (Strongly Disagree, Disagree, Neutral, Agree, strongly Agree) according to which ERP implementation can be measured.1. ClassifiersAccording to the factors in the Questionnaire the respondents can be classified in those who work with the project management team or related to the management services.1. Category Factor Variables

1. Manpower Q2. Some period of training must be providedQ4. Employees and employer should have a good understanding of ERP systemQ15. Need active participation of employees and employer1. Expenses, Infrastructure & Work cultureQ3. Current system is satisfy enoughQ5. Organization restructure should be requiredQ14. Organization has to analyse their Non-value added activities1. Objectives and Goals Q6. ERP system increase the efficiency of work processesQ8. Will enhance the transparency in the systemQ9. Result in easy availability of informationQ10. Will decrease work load and Manpower requirementQ11. The top authority must understood how the data is flowing between various departmentsQ13. Better resource utilizationQ16. Will reduce paper work

3.3.2 Proper form of QuestionnaireIn performing this study, the tools needed to acquire data are questionnaire form, online survey form and interview questions based on results. The tools or questionnaire for this project can be refer to the Appendix B.

1. Data Collection

The Data used for this study is classified into main and sub data. Though the main data is acquired by questionnaires and online survey, sub data is collected from resources such as journals from websites and books, previous paperwork and thesis done by those who did resource planning research in other type of the industry, in order to get the glimpse of how resource planning effect those organization.

1. Primary DataAttained from existing literatures as a module for this topic, a list of questionnaire was prepared and given to the respondents who participate from the previous draft questionnaire survey during FYP 1. There are three (3) sections in the questionnaire, as follow:1. Section A consists of details of the respondent. 1. Section B multiple choice questions focus on effect and reasons why the implementation of enterprise resource planning is essential for the respondents company to sustain their growth. Judgement was made by the respective respondent whether it is applicable for their organization to maintain the current system or improvisation need to be made to ensure their system running effectively.1. Section C open-essay (interview) questions to get the respondents opinion regarding the existing practice implemented at the company.

1. Secondary DataSome of journals, paperwork and thesis related to this study are looked up as reference. Those materials are largely obtained from UTPs Information Resource Centre (IRC), library and e-Resources. In addition to that, previous research done by some of the students from India, United Stated of America and even from Taiwan, are obtained and to be used as reference in order to get deeper knowledge regarding the functions and how it help the organization to improve their management system on the resource. Although the field of study for their research is different, which related to civil engineering organization and some were to be in term of economic based study, but the method and purpose is comparable which is to develop the new idea of how significant the resource planning towards the sustainability of the organization if they want to stay in the line.

1. Data Analysis Method1. Percentage Method (Statistical Analysis)

Percentage (P) = %

The formula for Percentage:

Where, is number of respond from participants is total number of respondent who author manage to obtained their feedback

All this data will be analyse in the manner of percentage (%) and average index form of analysis. Some correlation test, validity test and Cronbach alpha (reliability) test will be conduct to ensure the authors credibility when computing and concluding the data. The explanation will be given in clause 3.5.2 SPSS (Reliability test, Cronbach test and Validity test) and the data will be presented in Chapter 4: Result and Discussion.

As for research question 4, the data provided is only to show on what type of response towards the decision making process in term of percentage (%) form.

1. Average IndexFor author to conclude the expectation and the knowledge of team member, manager or person who involve in certain project, some qualitative data will be gathered to determine the value of index. Obtained from data sample that was distributed, an average index were compute using formula below. Some adjustment was made on how the weightage were concluded for author to elaborate in term of average index form:

1 Never; 2 Rarely; 3 Sometimes; 4 Often; 5 Very Often.

The Average Index Formula:Average Index (AI) =

Where, is weighing given to each risk factor by respondentsn is the frequency of the respondentsNis the total number of respondents

With the rating scale (Majid & McCaffer, 1997), as shown below, Research question 1 will be using from 1 (Not Expected and Not Realized); 3 (Expected but Not Realized, Not Expected but Realized); 5 (Expected and Realized). As for Research question 2 and 3 will be using from 1(No); 3 (Somewhat) and 5 (Yes). :

1 = Never/Strongly disagree (1.00 < Average Index < 1.50) 2 = Rarely/disagree (1.50 < Average Index < 2.50) 3 = Sometimes/Neutral (2.50 < Average Index < 3.50) 4 = Often/agree (3.50 < Average Index < 4.50) 5 = Very often/strongly agree (4.50 < Average Index < 5.00)

1. SPSS (Correlation test, Reliability test & Validity test)

Created by one of the top analysis software today, IBM, the letters SPSS means Statistical Package for the Social Sciences.

It is globally used for analysing statistical data especially for social science. Other than that, SPSS software were also used by some of the researcher in different field such as market researcher, health researchers, survey companies, government, education researchers, marketing organizations, data miners, and etc. In this study, author decides to use only the correlation test method to determine the correlation between 3 types of employee in the organization chose by author, referring to the purpose of this study, correlation test method is enough to serve the purpose of this study.

1. Correlation TestIt is a technique to measure how closely the number/possibilities related. In a simple meaning, Spearmans rank correlation coefficient is a nonparametric measurement between 2variables. Spearmans rank evaluate how closely a relationship between the variables. A perfect Spearman correlation of +1 or 1 occurs when each of the variables is a perfect monotone function of the other If there are no repeated data values. The coefficient of Spearmans is suitable for discrete and continuous variables. The definition of Spearman correlation is shown below.

FIGURE 3: Spearmans coefficient

Interpretation; Close to -1 - Negative correlation. Close to 0 - No linear correlation. Close to 1 - Positive correlation.

1. Cronbach Test (Reliability Test)

In statistics, Cronbach's alpha (Reliability Test) is a coefficient of internal consistency. It is commonly used as an estimate of the reliability of a psychometric test for a sample of examinees. A "high" value for alpha does not imply that the measure is unidimensional. If, in addition to measuring internal consistency, you wish to provide evidence that the scale in question is unidimensional, additional analyses can be performed. Exploratory factor analysis is one method of checking dimensionality. Technically speaking, Cronbach's alpha is not a statistical test - it is a coefficient of reliability (or consistency).

FIGURE 4: Cronbachs alpha coefficient

TABLE 2: Cronbachs alpha consistencyCronbachs alphaInternal consistency

> 0.9Excellent

0.7 < < 0.9Good

0.6 < < 0.7Acceptable

0.5 < < 0.6Poor

< 0.5Unacceptable

1. Validity TestValidity of an assessment is the degree to which it measures what it is supposed to measure. This is not the same as reliability, which is the extent to which a measurement gives results that are consistent. Within validity, the measurement does not always have to be similar, as it does in reliability. When a measure is both valid and reliable, the results will appear as in the image to the right. Though, just because a measure is reliable, it is not necessarily valid (and vice-versa). Validity is also dependent on the measurement measuring what it was designed to measure and not something else instead. Validity (similar to reliability) is based on matters of degrees; validity is not an all or nothing idea. There are many different types of validity.

FIGURE 5: Validity Coefficient

1. Project Timeline

TABLE 3:Gantt Chart for FYP I and FYP IINoActivity (FYP I) 2014

MayJuneJulyAugust

12345678910111213141516

1. Title selection

2. Literature review

3. Extended proposal

4. Acquire knowledge

5. Proposal Defence

NoActivity (FYP II) 20142015

SeptOctNovDecJan

12345678910111213141516

1. Project Work ContinueS

1. Submission of Progress Report

1. Pre-SEDEX

1. Submission of Draft Final Report

1. Submission of Dissertation (soft bound)

1. Submission of Technical Paper

1. Viva

1. Submission of Project Dissertation (Hard Bound)

= Key Milestone = Semester Start

S

TABLE 4: Key Milestone for FYP I and FYP IINoActivityFYPDate (Week)

1. Topic selected13 June 2014 (Week 1)

1. Literature review studies9 June 2014 (Week 12)

1. Extended proposal submission27 June 2014 (Week 6)

1. Proposal defence presentation 25 July 2014 (Week 9)

1. Draft of final report submission18 August 2014 (Week 13)

1. final report submission25 August 2014 (Week 14)

1. Questionnaire distribution and literature review on the topic221 September 2014 (Week 1)

1. Result analysis done2 November 2014 (Week 7)

1. Progress report done6 November 2014 (Week 7)

1. Draft of final report submission10 December 2014 (Week 11)

1. Submission of Dissertation (soft bound)17 December 2014 (Week 12)

1. Submission of Technical Paper17 December 2014 (Week 12)

1. Submission of Project Dissertation (Hard Bound)9 January 2015 (Week 15)

CHAPTER 4RESULT AND DISCUSSION

3. IntroductionIn this chapter 4, data that has been gathered and analyse will be discuss. This chapter will be divided into seven major sections in order to answer the purpose of this study which is: Introduction, Research Question 1, Research Question 2, Research Question 3, Research Question 4, Research Question 5, and Summary. The problem statement for this study was to find the following:1. What are the benefits from implementing ERP in Oil and Gas organization?1. The extent on which the critical factors present during the ERP implementation.1. What are the point of view of the project managers and team members regarding the benefits and the concerns of dealing with ERP in Oil and Gas organization?1. What is the extent when selected decision-making procedures remained used in the organizations decision to implement ERP?

3. Respondents DescriptionThe respond for the survey data were collected throughout September to October 2014. A total of 20 questionnaires form was given through various sector of the oil and gas industry within the management department and some were the technical department. Throughout the period of giving and collecting back the form, only 13 feedbacks were able to be collected and not all the forms or questionnaire were answered completely. These surveys were done with the collaboration of the staffs either known by author direct and indirectly through helps from friends. These respondents whom work and volunteer for answering the questionnaire, is currently working with some of the top listed company in the oil and gas industry. Such as Shell, Topgen Resources Sdn Bhd; a company own by local personality in Tronoh, Perak, who dealt with the downstream operation of the industry, Petrofac, Shclumberger, Petronas and Halliburton. All of these participants details will not be provided for public viewing as stated in the terms and condition of the survey form before they agreed to participate in answering the questionnaire. The respondents were group into 3 which is Manager (M), Top Manager (TopM) and Team Member (TM). These 3 types of respondent will be taken for their statistical data in order for author to generate the datas in clause 4.3.Research question 1 will be categorize in sequence from 1 (Not Expected and Not Realized); 3 (Expected but Not Realized, Not Expected but Realized); 5 (Expected and Realized). As for Research question 2 and 3 will be using from 1(No); 3 (Somewhat) and 5 (Yes). As for research question 4, the data provided is only to show on what type of response towards the decision making process in term of percentage (%) form.

3. Respond Towards The Purpose Of This Project1.

4.3.1. Research Question 1: The benefits sought from implementing ERP in Oil and Gas organization.For author to answer research question 1, it is necessary for the respondent to involve in answering questionnaire in appendix B, section B, Part 1: Expected Results and Benefits in order to determine whether they realize the benefits mentioned. Involve personal are required to indicate they expected and realized, expected but not realize, not expected but realized or not expected and not realize in the question given. The analysed results were shown in Table 3 in the Responds on the benefits sought from the implementation of ERP system in the organisation.TABLE 5: Responds on the benefits sought from the implementation of ERP system in the organisation (N=13)BenefitsExpected and RealizedExpected but Not RealizedNot Expected but RealizedNot Expected and Not Realized

n%n%n%n%

Redesigned business processes.753.8215.417.7323.1

Eliminated redundant tasks.969.217.7215.417.7

Realized a return on investment.861.5215.400323.1

Software that is easily adaptable to business changes.538.5430.717.700

Improved customer relationship or supply chain management969.2215.417.700

Overall reduced operational costs.1292.317.70000

The ability to produce better reports with the information need.861.5215.4323.100

Increased standardization of processes.753.8323.1215.417.7

Improved internal communication.538.5215.4215.4323.1

As from Table 3, it indicates that overall reduced operational costs (12, 92.3%) had the highest number of positive response from the participant along with eliminated redundant task and improved customer relationship or supply chain management (9, 69.2%) for the Expected and Realize result. The responds for the benefit of software that is easily adaptable to business changes (4, 30.7%) gets the highest responds for the Expected but Not Realize result. With addition to the survey, 23.1% (3) response that the ERP implementation did not have the ability to generate a better reports with the information they acquire while 23.1% (3) respondent believe that ERP system not only improved internal communication, but also does not help to redesigned business processes as well as make them realize the return in investment.The average index for the Table 3 is shown below. The benefits is rank from 1 9 to have the idea on which give the best value of the system towards the company interest. As per table 5, the most benefits gained from the ERP system is the reductions of operation cost, and the rest as follow.

TABLE 6: Average index for Research Question 1Rank of BenefitsBenefitsAverage index

1Overall reduced operational costs.4.846

2The ability to produce better reports with the information I need.4.231

3Eliminated redundant tasks.4.231

4Improved customer relationship or supply chain management4.154

5Increased standardization of processes.3.923

6Realized a return on investment.3.769

7Redesigned business processes.3.615

8Software that is easily adaptable to business changes.3.077

9Improved internal communication.3.077

As for the Spearmans test, the result is shown below. From the correlation test for Research Question 1, it is notify that Top Management and Management is more correlated rather than relation between Manager and Team Member, or Team Member and Top Management. The calculation method used Microsoft Excel to ease authors research. Refer to Appendices C: Correlation test for Research Question 1.TABLE 7: Correlation result for Research Question 1M & TMTM & TopMTopM & M

Correlation-0.30786-0.297370650.8680528

TABLE 8: Reliability and Validity result for Research Question 1Reliability Test0.28799

Validity Test0.53332

4.3.2. Research Question 2: The extent on which the critical factors present during the ERP implementation.

In research question 2, respondent were asked to give their opinion in term of Yes, Somewhat, or No answer. Provided in the table 4 below, the analysis of total respondent were done in percentage (%) and number.TABLE 9: Critical factors occurs during the implementationNoYesSomewhatNo

1There was effective end-user training.3 (23.1%)5 (38.5%)4 (30.7%)

2The project manager was influential with upper management.5 (38.5%)2 (15.4%)3 (23.1%)

3There was a clearly defined scope for the implementation project.6 (46.2%)3 (23.1%)4 (30.7%)

4The implementation project manager was skilful in project management.5 (38.5%)3 (23.1%)2 (15.4%)

5The project had the support of business unit managers.6 (46.2%)5 (38.5%)3 (23.1%)

6End-users were involved during the implementation.3 (23.1%)5 (38.5%)3 (23.1%)

7Our organization mapped and reengineered our business processes to match the ERP processes.5 (38.5%)3 (23.1%)4 (30.7%)

8The ERP software was modified to meet our needs.5 (38.5%)4 (30.7%)2 (15.4%)

9The organization was prepared to manage change.3 (23.1%)6 (46.2%)2 (15.4%)

10The project team was knowledgeable about ERP and business processes.4 (30.7%)7 (53.8%)2 (15.4%)

11The implementation had top management (executive level) support.8 (61.5%)3 (23.1%)2 (15.4%)

12Top management was kept abreast of the project status.6 (46.2%)4(30.7%)3 (23.1%)

13The project had skilled consultants.6 (46.2%)4 (30.7%)3 (23.1%)

14The ERP vendor was involved in our project.3 (23.1%)6 (46.2%)4 (30.7%)

Note. Not all respondents completed every survey item.

By comparing both critical factor of table above for the Yes and No section, it is founded that the highest response of Yes from these respondent were top management was kept abreast of project status (6, 46.2%), The project had skilled consultants (6, 46.2%), The project had the support of business unit managers (6, 46.2%), There was a clearly defined scope for the implementation project (6, 46.2%) and the implementation had top management (executive level) support (8, 61.5%). While for the No section, There was effective end-user training (4, 30.7%), Our organization mapped and reengineered our business processes to match the ERP processes (4, 30.7%), and the ERP vendor was involved in our project (4, 30.7%) received the highest qualitative data.

Question 1 asked the critical factor for There was effective end-user training. 3 (23.1%)of the respondents indicated that there was effective end user training at the end of the system and somewhat of the respondent (5, 38.5%) were not sure while the rest (4, 30.7%) disagree. Question 2 asked the critical factor for The project manager was influential with upper management. 5 (38.5%) of the respondents indicated that their project manager has some influential with the top management. Only 2 (15.4%) are somewhat unsure and the rest (3 23.1%) says no to it.Question 3 asked the critical factor for There was a clearly defined scope for the implementation project. 6 (46.2%) of the respondents indicated that the scope was clearly define and among the respondent, somewhat 3 (23.1%) respondent unsure whether it define the scope clearly while 4 (30.7%) were not agreed.

Question 4 asked the critical factor for The implementation project manager was skilful in project management. 5 (38.5%) of the respondents indicated that they agreed that their project manager a skilful in project management, and some respondent was at least somewhat not very sure whether their project manager have what it takes. While 2 (15.4%) respondent indicate their project manager were not skilful. Question 5 asked the critical factor for The project had the support of business unit managers Majority (6, 46.2%) of the respondents indicated that their organization was supported by the business unit manager. Among the respondent, only 23.1% (3) did not have their business unit managers supports. Question 6 asked the critical factor for End-users were involved during the implementation. 23.1% (3) of the respondents indicated that their organization involve the end user when implementing the ERP system. While other 3 (23.1%) respondent says that their organization did not use end user. 5 (38.5%) respondent are somewhat either use or did not use end user. Question 7 asked the critical factor for Our organization mapped and reengineered our business processes to match the ERP processes. 5 (38.5%) of the respondents indicated that they mapped and reengineered their business processes to match the ERP processes. 3 (23.1%) indicates that it is somewhat to be consider match. While only 4 respondents (30.8%) admit that it did not match the ERP process.

Question 8 asked the critical factor for The ERP software was modified to meet our needs The majority of the respondents indicated that the ERP software was modified to meet their needs (5, 38.5%), although 15.4% (2) indicated that they were using the existed ERP software as it is.Question 9 asked the critical factor for The organization was prepared to manage change A number of 3 (23.1%) respondents indicated that they are prepared for the changes, and somewhat is either prepare or not sure of themselves (6, 30.8%). The rest of the respondent (2, 15.4%) says that they were not ready for the change. Question 10 asked the critical factor for The project team was knowledgeable about ERP and business processes .Majority of the respondent are somewhat (7, 53.8%) agreed that their project team was knowledgeable about ERP and business processes. Among the respondent, 15.4% (2) indicated that their project team does not have the knowledge about ERP and business processes. Question 11 asked the critical factor for The implementation had top management (executive level) support At least 8 (61.5%) of the respondents indicated that the implemented ERP system had top management support. Among the respondent only 2 (15.4%) respondent admit the system does not have the support from the top management and somewhat (3, 23.1%) were unsure either the system had the support.

Question 12 asked the critical factor for Top management was kept abreast of the project status 6 (38.5%) of the respondents indicated that their top management was kept abreast of the project status. At least only 23.1% (3) respondent indicates that their top management were not given the update of the project status, while other were somewhat prepared for the new system.Question 13 asked the critical factor for The project had skilled consultants. At least 6 (38.5%) of the respondents indicated that the project that use ERP system had skilled consultants. Among the respondent only 4 (30.8%) respondent admit the current project does not have the skilled consultants and somewhat (3, 23.1%) were unsure either they had.Question 14 asked the critical factor for The ERP vendor was involved in our project. 3 (23.1%) of the respondents indicated that the ERP vendor was involved in their project. At least only 30.8% (4) respondent indicates that the ERP vendor was involved in their project, while other were somewhat (6, 38.5%) not sure either the vendor involve in their project.

The average index for the critical factor for Research Question 2 is shown below. As per shown in table 8, the most critical factors occurs during the implementation were the support from the top management among other factor. It is agreed by most of the respondent that their ERP system had high support by the higher authority. The rest as per shown below. TABLE 10: Average index for Critical factorRankCritical FactorsAverage Index

1The implementation had top management (executive level) support.3.923

2The project had the support of business unit managers.3.692

3Top management was kept abreast of the project status.3.462

4The project had skilled consultants.3.462

5The ERP vendor was involved in our project.3.462

6There was a clearly defined scope for the implementation project.3.308

7The project team was knowledgeable about ERP and business processes.3.308

8The ERP software was modified to meet our needs.3.00

9Our organization mapped and reengineered our business processes to match the ERP processes.2.923

10The implementation project manager was skilful in project management.2.769

11The organization was prepared to manage change.2.692

12There was effective end-user training.2.615

13The project manager was influential with upper management.2.615

14End-users were involved during the implementation.2538

As for the Spearmans test, the result is shown below. From the correlation test for Research Question 2, it is notify that Top Management and Management is more correlated rather than relation between Manager and Team Member, or Team Member and Top Management. The calculation method used Microsoft Excel to ease authors research. Refer to Appendices C: Correlation test for Research Question 2. In this result, it is clear that the difference is quite big for the management (M) and Team Member (TM); and Team Member (TM) and Top Management (Top Management). The reason is because of the factors that the respondents that involve were from different background, company and not have similar field as some of them were operator, and some were service. TABLE 11: Correlation result on Research Question 2M & TMTM & TopMTopM & M

Correlation0.018209-0.001059310.55016876

TABLE 12: Correlation result on Research Question 2Reliability Test0.87595

Validity Test0.9359

4.3.3. Research Question 3: The perceptions of project managers and team members as to the benefits and concerns of implementing ERP in Oil and Gas organization.Based on the questionnaire given to the respondents, the research question can be answered and interpret using analysis result from Table 5. TABLE 13: Concerns of implementing ERP in Oil and Gas organizationNoConcernsYesSomewhatNo

n%n%n%

1Was your organization technologically prepared to implement?646.2538.5215.4

2Has ERP implementation necessitated the requirement of a new skill set among employees in terms of computer proficiency?1076.9323.100

3Was your implementation timetable reasonable?753.8215.4323.1

4Was your organization prepared for the external/public's reaction to the implementation?323.1538.5215.4

5Was the implementation project adequately staffed to meet the project deadlines?323.1430.8215.4

6Did you use some other measure of success (other than return on investment) for the implementation?646.2538.5215.4

7Would you consider the ERP implementation in your organization to be a success?861.5215.417.7

8Was employee morale positively changed by ERP implementation?323.1538.5538.5

9Was the implementation project adequately funded?646.2430.8323.1

10Did you realize the expected return on your ERP investment?323.1430.8323.1

11Do you have the same organization leader (i.e., CEO) as when the ERP software was implemented?430.8323.1646.2

12Was your organization prepared for the internal/employees' reactions to the implementation?430.8215.4538.5

Note. Not all respondents completed every survey item.

Question 1 asked Was your organization technologically prepared to implement? 6 (46.2%) of the respondents indicated that their implementation team was ready for the implementation and some of the respondent (5, 38.5%) were not sure while the rest (2, 15.4%) were un prepared for the new system to be implement in their organization. Question 2 asked Has ERP implementation necessitated the requirement of a new skill set among employees in terms of computer proficiency? 10 (76.9%) of the respondents indicated that their ERP implementation necessitated the requirement of a new skill set among employees in terms of computer proficiency. Only 3 (23.1%) are at somewhat when it comes to the requirement of new skills. Question 3 asked Was your implementation timetable reasonable? 7 (53.8%) of the respondents indicated that their implementation timetable was reasonable. Among the respondent, 3 (23.1%) were not agreed that the implementation were timetable reasonable while 15.4% (2) were somewhat agreed/not agreed.Question 4 asked Was your organization prepared for the external/public's reaction to the implementation? 5 (38.5%) of the respondents indicated that their organization was at least somewhat prepared for the external/public's reaction to the implementation. Among them were at least prepare (3, 23.1%) for the publics reaction and others were not (2, 15.4%).

Question 5 asked Was the implementation project adequately staffed to meet the project deadlines? 4 (30.8%) of the respondents indicated that their organization was at least somewhat technologically prepared for the implementation. Among the respondent agreed that the implementation is adequately staffed to meet the project deadline while other did not agreed (2, 15.4%)Question 6 asked Did you use some other measure of success (other than return on investment) for the implementation? 6 (46.2%) of the respondents indicated that their organization used some other measure of success for their implementation. While 2 (15.4%) respondent says that their organization did not use other method. 5 (38.5%) respondent are somewhat either use or did not use other measurement for their return of investment.Question 7 asked Would you consider the ERP implementation in your organization to be a success? 8 (61.5%) of the respondents indicated that they considered their implementation to be success. 2 (15.4%) indicates that it is somewhat to be consider success. Only 1 respondent (7.7%) admit that it did not work as expected.Question 8 asked Was employee morale positively changed by ERP implementation? The majority of the respondents indicated that morale was not positively changed by ERP implementation (5, 38.5%), although 23.1% (3) indicated that morale was positively changed by ERP implementation.

Question 9 asked Was the implementation adequately funded? 6 (46.2%) of the respondents indicated that their implementation was adequately or somewhat adequately funded (4, 30.8%). The rest of the respond says that the system was not adequately funded in their current company. Question 10 asked Did you realize the expected return on your ERP investment? 3 (23.1%) of the respondents indicated that their organization agreed that they realize about the return of investment that they made on ERP while at least somewhat (4, 30.8%) realized their expected return on their investment. Among the respondent, 23.1% (3) indicated that their organization did not realize the expected return on the investment. Question 11 asked Do you have the same organization leader (i.e., CEO) as when the ERP software was implemented? At least 6 (46.2%) of the respondents indicated that their organization did not has the same leader as when the ERP software was implemented. Among the respondent only 4 (30.8%) respondent has the similar leader when ERP was implemented and somewhat (3, 23.1%) were un sure either the leader were the same or not.Question 12 asked Was your organization prepared for the internal/employees' reactions to the implementation? 5 (38.5%) of the respondents indicated that their organization was not prepared for the internal/employees reactions to the implementation. At least only 4 respondent indicates that their internal/employees were ready for the implementation, while other were somewhat prepared for the new system.

The average index for Research Question 3 is shown in table below. As per shown in table 11, the most concerns of implementing ERP in Oil and Gas organization were requirement of new sets skill among the employee. It is agreed by most of the respondent that their ERP might require them to have new skills. The rest as per shown below.TABLE 14: Average index for ConcernsRankConcernsAverage Index

1Has ERP implementation necessitated the requirement of a new skill set among employees in terms of computer proficiency?4.538

2Was your organization technologically prepared to implement?3.615

3Did you use some other measure of success (other than return on investment) for the implementation?3.615

4Would you consider the ERP implementation in your organization to be a success?3.615

5Was the implementation project adequately funded?3.462

6Was your implementation timetable reasonable?3.385

7Was employee morale positively changed by ERP implementation?2.692

8Do you have the same organization leader (i.e., CEO) as when the ERP software was implemented?2.692

9Was your organization prepared for the external/public's reaction to the implementation?2.462

10Was your organization prepared for the internal/employees' reactions to the implementation?2.385

11Did you realize the expected return on your ERP investment?2.308

12Was the implementation project adequately staffed to meet the project deadlines?2.231

As for the Spearmans test, the result is shown below. From the correlation test for Research Question 3, it is notify that Top Management and Management is more correlated rather than relation between Manager and Team Member, or Team Member and Top Management. The calculation method used Microsoft Excel to ease authors research. Refer to Appendices C: Correlation test for Research Question 3.TABLE 15: Correlation result on Research Question 3M & TMTM & TopMTopM & M

Correlation0.2810330.2360060.49593349

TABLE 16: Correlation result on Research Question 3Reliability Test0.87065

Validity Test0.9331

4.3.4. Research Question 4: The extent in which selected decision-making processes were used in the organizations decision to implement ERP.

As for the fourth question the respondents who participated in this survey were asked to give their best answer for were asked to respond to Questions 2 and 3 in Section C, in Appendix B, related to their decision to implement an ERP system. In Section C, the question that were asked were, Regarding the decision to implement the ERP system, which best describes the decision making process. The analysed data is shown in table 6.TABLE 17: Response towards the decision making processProcessNumber/Percent

Strategic Business Planning Process10 (76.9%)

Formal Organizational Readiness Process Model7 (53.8%)

Business Case Analysis8 (61.5%)

Other3 (23.1%)

Note. Not all respondents completed every survey item.10 out of 13 respondents (76.9%) indicated that they used a Strategic Business Planning Process in their decision to implement their ERP System. 7 out of 13 respondents (53.8%) indicated that they used a Formal Organizational Readiness Process Model in their decision to implement their ERP System. Lastly, 61.5% (8) of the respondents indicated that they used Business Case Analysis or some other tool in their decision making process.

TABLE 18: Implementation of systemImplementation made byNumber of response (n/%)

IT Department1 (7.7%)

Business Process Leaders/ Business Unit Managers3 (23.1%)

Top Management8 (61.5%)

Outside Consultants?1 (7.7%)

Note. Not all respondents completed every survey item.Based on the data in Table 6, the most response for that indicates implementation of ERP were made by top management (8, 61.5%), follow up by Business Process Leaders/Business Unit Managers (3, 23.1%). As for the others, IT Department 1 (7.7%) has shown that they also responsible for the proposal of implementing the ERP system into their organization along with Outside Consultant 1 (7.7%).

4.3.5. Advice/Comments on the current system from industrialist At this section, author gathered all the respond either from verbally (some interviews were done either through mobile or confronting the respondent) and conclude in the result below. Some adjustment of the words and the structure sentence were made from the origin to associate with authors thesis but the meaning and the stress is the same to maintain the validity and honesty of the interview result. The results were separate accordingly to provide a better view of what are the comments lean into. MANAGEMENT 1. Equipped team member with business reengineering knowledge. Provided with strong support from management to lead.1. Propose a head plan. Ensure that the top management is acknowledge on this matter and agree to provide extra budget for this. 1. Ensure all contracts, agreements in documented. Ensure the first change on the management to be made and complete it first-hand before others. To avoid conflicts, all team members must agree and work together for the configurations work.COMMUNICATION 1. Do not undermine the organization. 1. Provide a strong scope of work and avoid unnecessary matter. Give continues training for the users and the IT department for longer term of support.

PROJECT MANAGEMENT 1. Do not provide only 1 consultancies and 1 technical member as it would bring some bite back if anything happen.1. Make up or prepare a determinant team member for the project before it start. 1. As a project manager, the support of all top management is required not only the General manager or stakeholders.1. Provide early training for software implementation. 1. Make up a team or several and send them for training or seminar for team building. Avoid any lingeration if there is no chemistry between themGENERAL 1. Prepare some knowledge beforehand.1. Provide an early users involvement before the start of the implementation. Provide also the organization interest in details.1. Provide at least 2 years of continues training, consultancies at site. 1. Have some sharing knowledge and do not afraid of approaching those who have succeeded in implement the system. Send the team member for training for the long term instead of depend on the consultancies expertise only. 1. Have long term test, continuously.1. Provide some changes in the organizations way of doing business before making up with the implementation1. Work flow of suggestion to conduct ERP systemAfter details observation and analyse the responds from participants in clause 4.3.5, authors decide to produce a modules to help a better understanding on how the process of implementing the system for the organization should/can be done

ERP Implementation SOPAcquire more knowledge and testimonial from local and abroad company who succeeded in implementing the system. Get the approval and full support of all stakeholders and the top managementDo not afraid of approaching seniors or people from the industries regarding the ERP systemIf not approve due to insufficient data and not convincing.To avoid having to lose 1 team who did not have chemistry during training, choose several teams for future interest. At least 2 years of ongoing training ERP system has different components for different company depends on their objective. Having continuous test will help the system to achieve its objective during its early initiates.Provide all the documentation including the contingency plan for unexpected event. Select team member with full determination. Change the way of the management think.Do not specific into 1 consultancy only to avoid any unnecessary incident if anything happen to the chosen consultant. Do some serious Homework!!!Approach People on the ERP success implementationGive an insight of the overall ERP system towards the organizations interest to stakeholdersHave a continuous test for the system to achieve the objectiveProvide good background consultants with history. Choose with companys best interest. Prepare details of documented form/process on how it is going to be implemented.Equipped self with concrete knowledge beforehand

Select few teams to undergo training especially the IT department for long term interest with the chosen consultant

FIGURE 6: ERP Implementation method /or SOP

CHAPTER 5CONCLUSION AND RECOMMENDATION

5.1 IntroductionThis paper examined the Effectiveness of Resources Planning in Oil and Gas organization. An examination of the literature on development of ERP implementation roadmaps reveals that it can be viewed from the project management perspective because it is known as an efficient and effective methodological planning and calculated management. The ERP implementation roadmap might be designed by considering project management knowledge areas and process focused. The nine knowledge areas include integration, time, cost, scope, quality, human resources, risk management, communication and procurement. In addition, the ERP process focused on initiating, planning, executing, monitoring controlling and closing. In order to implement ERP system successfully for gaining the competitive advantage, the practitioners need to be guided by a coherent ERP implementation roadmap which embeds project management approach. However, based on existing publications, it can be concluded that there is less number of ERP roadmaps which consider and apply project management knowledge areas and process focused. Therefore, there is a need of research which highlights and develops an effectiveness of Resources Planning in Oil and Gas organization.

5.2 The Problem StatementThe purpose of this study was to determine the following:1. The benefits sought from implementing ERP in Oil and Gas organization.1. The extent on which the critical factors present during the ERP implementation.1. The perceptions of project managers and team members as to the benefits and concerns of implementing ERP in Oil and Gas organization.1. The extent in which selected decision-making processes were used in the organizations decision to implement ERP.

5.3 ConclusionFrom the study, it is found that most of the oil and gas industry is beginning to have the ERP implementation within their organization which takes back few years ago. Majority of these companies, especially those who involve in this project were hoping to get full benefits from the ERP implementation as mention in literature review. The top benefits, based on the research, were to have overall reduced operational costs.As for the critical factors, the implementation had top management (executive level) support had the highest acknowledgement from the team member, which indicates its potential importance when implementing ERP system. Necessity in new skill set among employees in terms of computer proficiency gets the highest vote to determine the perception of project manager and team member in the organization.Strategic Business Planning Process was chose as the most preferable decision making process when implementing ERP and support by top management.

5.4 Recommendation

As per quoted in the problem statement, this project is purposely to have the idea of whether Enterprise Resource Planning have been acknowledge by those who work in the oil and gas industry. Normally ERP were used by those company that does not related to Oil and Gas industry, but as new challenges arise and competition getting tougher, it is a necessary for the organization to find an alternative to stay in the track. Base from the results, analysis that was done, including the conclusion, author of this project would like to recommend a few things. Research recommendation,1. Author recommend for the industry to always have changes in their organization with time as new elements need to be discover in order to get the maximum profit for the organization.1. It is a necessary for the top management, managers and team worker to involve and work together to accomplish the objective of implementing ERP in the organization.1. Ensure there is ample time for the ERP too be fully developed within the organization to get the maximum benefit from it.Future work recommendation,1. Author strongly recommends to further the research of ERP in oil and gas industry within the scope of its effectiveness in reducing the cost and increase the profit to see whether it does achieve its purpose or not.1. Author also recommends for the differential in using various ERP software to determine which has the maximum potential to be implement by oil and gas industry

REFERENCES

1. Ask.com. (2014). What Is Resource Planning? [Online]. Available: http://www.ask.com/question/what-is-resource-planning2. A. Gholamzadeh Chofreh. (2014). Review on Enterprise Resource Planning Implementation Roadmap: Project Management Perspective. [Online]. Available: https://www.academia.edu/6174731/Review_on_Enterprise_Resource_Planning_Implementation_Roadmap_Project_Management_Perspective3. Calogero, B. (2000). Who is to blame for the ERP Failure. Sun Server Magazine, June, PCI Publications, Austin, TX. Nov.3.20004. Gupta, A. (2000) Enterprise resource planning: the emerging organizational value systems, Industrial Management and Data Systems, Vol. 100, No. 3, pp.114118.5. Hong, K.K. and Kim, Y.G. (2002) The critical success factors for ERP implication: an organizational fit perspective, Information and Management, Vol. 40, No. 1, pp.2540.6. Joycelyn, H.L. (2004) Motivations For Enterprise Resource Planning (Erp) System Implementation In Public Versus Private Sector Organizations, University of Central Florida7. King, W.R. (2007) Keynote paper: knowledge management: a systems perspective, Int. J. Business and Systems Research, Vol. 1, No. 1, pp.528.8. Lee, C-H., Huang, S-Y., Ou, C-S. and Chiu, L-Y. (2007) The impact of BPR/BPO strategy, internet-based technology investment and BPR type on BPR performance, Int. J. Business and Systems Research, Vol. 1, No. 3, pp.317342.9. Leem, C.S. and Kim, S. (2002) Introduction to an integrated methodology for development and implementation of enterprise information systems, The Journal of Systems and Software, Vol. 60, No. 3, pp.249261.10. Majid, M. Z., & McCaffer, R. (1997). Discussion of Assessment of Work Performance of Maintenance Contractors in Saudi Arabia. 91.11. Rao, S.S. (2000) Enterprise resource planning: business needs and technologies, Industrial Management and Data Systems, Vol. 100, No. 2, pp.8188.12. Ray R. (2011) Enterprise Resource Planning: Text & Cases, pp. 552 554.13. Somers, T.M. and Nelson, K.G. (2004) A taxonomy of players and activities across the ERP project life cycle, Information and Management, Vol. 41, No. 3, pp.257278.14. Tsai, W-H., Lin, T.W., Chen, S-P. and Hung, S-J. (2007b) Users service quality satisfaction and performance improvement of ERP consultant selections, Int. J. Business and Systems Research, Vol. 1, No. 3, pp.280301.15. Tsai, Lee, Chen and W-H, (2009) A study of the selection criteria for enterprise resource planning system, Int. J. Business and System Research, Vol. 3, No. 4, pp. 45816. Wallace, T.F. and Kremzar, M.H. (2001) ERP: Making It Happen: The Implementers Guide to Success with Enterprise Resource Planning. New York, NY: John Wiley & Sons, Inc.17. Wikipedia. (2014, 25 June). Enterprise resource planning [Online]. Available: http://en.wikipedia.org/wiki/Enterprise_resource_planning 18. Zaiontz. C., (2014) Real Statistics Using Excel: Cronbachs Alpha [Online].Available: http://www.real-statistics.com/reliability/cronbachs-alpha/

APPENDICES A

Draft Questionnaire (FYP I)

QUESTIONNAIRE

THE STUDY OF THE EFFECTIVENESS OF RESOURCE PLANNING IN OIL AND GAS INDUSTRY

Objectives:1. To highlight the beneficial of having resource planning system in the organization.1. To indicate improvement that can be made towards the system.1. To suggest some of the possible approach in resource planning for the Malaysian oil & gas industry in general particular.

Instructions:1. Please fill in the space available and tick () in the respective box.1. All information will be treated as CONFIDENTIAL and shall be used for academic purposes only.1. All the data information will be on aggregated basis and no individual data will be published.1. Please be considerate and honest in answering each question.

StatementStrongly DisagreeDisagreeNeutralAgreeStrongly Agree

Do you think the ERP has following benefit

Q1. Should be in the organization

Q2. some period of training must be provided

Q3. Current system is satisfy enough

Q4. employees and employer should have a good understanding of ERP system

Q5. Organization restructure should be Required

Q6. ERP system increase the efficiency of work processes

Q7. Facilitate timely flow of information

Q8. Will enhance the transparency in the system

Q9. Result in easy availability of information

Q10. Will decrease work load and Manpower requirement

Q11. The top authority must understood how the data is flowing between various departments

Q12. Redundancy in the data base will be reduce

Q13. Better resource utilization

Q14. Organization has to analyse their Non-value added activities

Q15. Need active participation of employees and employee

Q16. Will reduce paper work

Q17. ERP implementation will consume a lot of time

1. Suggestion on the improvement of the survey. (Criteria, business, level of management, etc)Give opinion.

1. May I contact you again for future involvement in another questionnaire form regarding ERP implementation in your organization?

APPENDICES B

Questionnaire Form

QUESTIONNAIRE

THE STUDY OF THE EFFECTIVENESS OF RESOURCE PLANNING IN OIL AND GAS INDUSTRY

Objectives:1. To highlight the beneficial of having resource planning system in the organization.1. To indicate improvement that can be made towards the system.1. To suggest some of the possible approach in resource planning for the Malaysian oil & gas industry in general particular.

Instructions:1. Please fill in the space available and tick () in the respective box.1. All information will be treated as CONFIDENTIAL and shall be used for academic purposes only.1. All the data information will be on aggregated basis and no individual data will be published.1. Please be considerate and honest in answering each question.

SECTION A: DETAILS OF THE RESPONDENTInstruction: Please write or place a tick () at the space/box provided below

1. Name:

1. Gender: MaleFemale

1. Age (years old):25-3031-3536-4041-45

46-50Over 50

1. Working duration in- the current company: Less than 10 years10 years or more

1. Job position: ManagementProject team membersOthers (specify: ..)

1. Highest education: Bachelor Master Doctor

1. Major field of study: Industrial & Civil EngineeringMechanics

Petroleum Engineering Geology

Business Administration Petrochemistry

Finance & Accounting Management System

Others (specify: ..........)

SECTION B: RESPOND FOR THE IMPLEMENTATION OF THE ERP SYSTEMInstruction: Based on your experience undergoing projects in your current company, please tick () at the provided box.Part 1: Expected Results and BenefitsPlease complete the stem sentence with the statements below and answer if the benefit was1. "Expected and Realized" 2. "Expected but Not Realized" 3. "Not Expected, but Realized" 4. "Not Expected and Not Realized"

BECAUSE OF IMPLEMENTING ERP SOFTWARE, MY ORGANIZATION HAS...NoExpected and RealizedExpected but Not RealizedNot Expected but RealizedNot Expected and Not Realized

1Redesigned business processes.

2Eliminated redundant tasks.

3Realized a return on investment.

4Software that is easily adaptable to business changes.

5Improved customer relationship or supply chain management

6Overall reduced operational costs.

7The ability to produce better reports with the information I need.

8Increased standardization of processes.

9Improved internal communication.

Part 2: ERP Implementation Critical Factors for SuccessPlease indicate the extent to which the statements below are true for your organizations implementation.NoYesSomewhatNo

1There was effective end-user training.

2The project manager was influential with upper management.

3There was a clearly defined scope for the implementation project.

4The implementation project manager was skilful in project management.

5The project had the support of business unit managers.

6End-users were involved during the implementation.

7Our organization mapped and reengineered our business processes to match the ERP processes.

8The ERP software was modified to meet our needs.

9The organization was prepared to manage change.

10The project team was knowledgeable about ERP and business processes.

11The implementation had top management (executive level) support.

12Top management was kept abreast of the project status.

13The project had skilled consultants.

14The ERP vendor was involved in our project.

Part 3: Implementation ConcernsPlease answer the questions below regarding your implementation.NoYesSomewhatNo

1Was your organization technologically prepared to implement?

2Has ERP implementation necessitated the requirement of a new skill set among employees in terms of computer proficiency?

3Was your implementation timetable reasonable?

4Was your organization prepared for the external/public's reaction to the implementation?

5Was the implementation project adequately staffed to meet the project deadlines?

6Did you use some other measure of success (other than return on investment) for the implementation?

7Would you consider the ERP implementation in your organization to be a success?

8Was employee morale positively changed by ERP implementation?

9Was the implementation project adequately funded?

10Did you realize the expected return on your ERP investment?

11Do you have the same organization leader (i.e., CEO) as when the ERP software was implemented?

12Was your organization prepared for the internal/employees' reactions to the implementation?

SECTION C: CURRENT PRACTICE OF ERP SYSTEMInstruction: Please specify your answers at the space provided below.1. What problems did you encounter, if any?

1. Regarding the decision to implement the ERP system, which best describes the decision making process, please check all that apply:1. Strategic Business Planning Process1. Formal Organizational Readiness Process Model1. Business Case Analysis1. Other, Please Specify:

1. The decision to implement was proposed by (please check only one):1. IT Department1. Business Process Leaders/ Business Unit Managers1. Top Management1. Outside Consultants?

1. What advice do you have for others who are considering an ERP system implementation?

-End of questionnaire-

APPENDICES C

Correlation Test for Research Question 1No. of respondent

ManagerM3

Team MemberTM8

Top ManagementTopM2

Q1Q2Q3Q4Q5Q6Q7Q8Q9

MM1555055555

M2555355555

M3555355553

TMTM1355335511

TM2355335531

TM3555335331

TM4153505353

TM5513555355

TM6511553333

TM7111555533

TM8111555333

TopMTopM1555055555

TopM2355055555

AverageQ1Q2Q3Q4Q5Q6Q7Q8Q9

M555255554.333333

TM3334.253.6254.753.753.252.5

TopM2.7555055555

M & TMTM & TopMTopM & M

Correlation-0.30786-0.297370650.8680528

Correlation Test for Research Question 2No. of respondent

managerM3

team memberTM8

top managementTopM2

M & TMTM & TopMTopM & M

Correlation0.018209-0.001059310.55016876

Q1Q2Q3Q4Q5Q6Q7Q8Q9Q10Q11Q12Q13Q14

MM155555555555553

M205555355555555

M335535150335151

TMTM130133515335113

TM230133013335551

TM313103333331131

TM411353335351113

TM533313301113331

TM630311331113333

TM713101113333333

TM811505113035333

TopMTopM155555050055553

TopM255555555135551

AverageQ1Q2Q3Q4Q5Q6Q7Q8Q9Q10Q11Q12Q13Q14

M2.666667554.333333335353.3333334.3333334.3333335553

TM21.3752.251.6252.752.3751.62532.1252.754.3753.6253.6253.875

TopM555552.552.52.545554

Correlation Test for Research Question 3No. of respondent

managerM3

team memberTM8

top managementTopM2

M & TMTM & TopMTopM & M

Correlation0.2810330.2360060.49593349

Q1Q2Q3Q4Q5Q6Q7Q8Q9Q10Q11Q12

MM1555555555555

M2555515055355

M3555355515311

TMTM1551335113311

TM2350333533355

TM3151303331011

TM4333303315111

TM5333103011130

TM6333113511133

TM7355011533033

TM8155011533011

TopMTopM1555015535510

TopM2555555555555

AverageQ1Q2Q3Q4Q5Q6Q7Q8Q9Q10Q11Q12

M5554.333333333.66666753.3333333.66666753.6666673.6666673.666667

TM2.754.252.6251.751.1252.753.37522.51.1253.3753

TopM5552.535545532.5

APPENDICES D

Reliability Test for Research Question 1Cronbach alphak9

var19.8462

nVar26.67456

managerM30.287986

team memberTM8

top managementTopM2

C1C2C3C4C5C6C7C8C9Total

MM155505555540

M255535555543

M355535555341

TMTM135533551131

TM235533553133

TM355533533133

TM415350535330

TM551355535537

TM651155333329

TM711155553329

TM811155533327

TopMTopM155505555540

TopM235505555538

Total474949405463555143451

Var2.6982253.4082842.7928993.6094672.1301780.2840240.9467461.6094672.36686419.84615

Reliability Test for Research Question 2Cronbach Alpha

n

managerM3

team memberTM8

top managementTopM2

k14

var39.89349

Var213.7751

0.875954

Reliability Test for Research Question 3Cronbach Test

n

managerM3

team memberTM8

top managementTopM2

k12

var33.8107

Var167.456

0.87065

APPENDICES E

Validity Test for Research Question 1Validity

validity =

=

=0.53332

Validity Test for Research Question 2Validity Test

validity =

=

=0.9359

Validity Test for Research Question 3Validity Test

validity =

=

=0.9331

1