Some applications of openerp odoo an erp system in enterprise business and finance management a case study of vietnam mikgroup joint stock company

VIETNAM NATIONAL UNIVERSITY, HANOI INTERNATIONAL SCHOOL GRADUATION PROJECT SOME APPLICATIONS OF OPENERP(ODOO) – AN ERP SYSTEM IN ENTERPRISE BUSINESS AND FINANCE MANAGEMENT: A CASE STUDY OF VIETNAM MIKGROUP JOINT STOCK COMPANY Student’s name: Vu Le Minh Hanoi - Year 2020 VIETNAM NATIONAL UNIVERSITY, HANOI INTERNATIONAL SCHOOL GRADUATION PROJECT SOME APPLICATIONS OF OPENERP(ODOO) – AN ERP SYSTEM IN ENTERPRISE BUSINESS AND FINANCE MANAGEMENT: A CASE STUDY OF VIETNAM MIKGROUP JOINT STOCK COMPANY SUPERVISOR: Assoc Prof Dr Nguyen Hai Thanh STUDENT: Vu Le Minh STUDENT ID: 15071562 COHORT: MIS2015A MAJOR: Management Information System Hanoi - Year 2020 LETTER OF DECLARATION I hereby declare that the Graduation Project “Some applications of OpenERP(Odoo) – an ERP system in enterprise business and finance management: A case study of Vietnam MIKGroup Joint stock Company” is the results of my own research and has never been published in any work of others During the implementation process of this project, I have seriously taken research ethics; all findings of this projects are results of my own research and surveys; all references in this project are clearly cited according to regulations I take full responsibity for the fidelity of the number and data and other contents of my graduation project Hanoi, 04/06/2020 Student ACKNOWLEDGEMENT Firstly, I am using this opportunity to express my deepest gratitude and special thanks to Assoc Prof Dr Nguyen Hai Thanh who directly instruct and guide me beside of his busy schedule during weeks of graduation thesis period Without the teacher's instructions, I think that it would be very difficult for me to accomplish my graduation thesis Secondly, I would like to express my gratitude to our thesis coordinator- Mrs Nguyen Thi Thuy who has given her valuable time to inform me of the essentials for graduation thesis Finally, I would also like to extend special thanks to the staffs of MIK for their full co-operation and support during my graduation thesis The thesis with the specific case of MIKGroup was a great chance for me to learn and professionaly develop Therefore, I consider myself a very lucky individual who have been helped.I am also grateful for having a chance to meet wonderful people and professionals who supported me through this graduation thesis period TABLE OF CONTENT SUMMARY OF GRADUATION THESIS 10 ABSTRACT 12 Chapter OVERVIEW 13 1.1 The necessity of the topic 13 1.2 The goals of the thesis 14 1.3 Research subject 14 1.4 Scope of research 14 1.5 Methodology 15 1.6 Main content 15 Chapter THEORETICAL FOUNDATIONS AND RELATED WORKS 17 2.1 Definition terms 17 2.1.1 Definition of business resources 17 2.1.2 Definition of business functions 17 2.1.3 Definition of business plan and planning 18 2.1.4 Definition of ERP method 21 2.2 Optimization and Customization of an ERP system 21 2.2.1 Overview 21 2.2.2 ERP classification 23 2.2.3 Factors in ERP selection 25 2.3 Advantages of ERP system 27 2.4 Applying an ERP adoption 28 2.5 Literature review 30 Chapter BUSINESS ACTIVITIES OF VIETNAM MIKGGROUP JOINT STOCK COMPANY 33 & PROBLEM STATEMENT 33 3.1 Overview of the company 33 3.1.1 General information 33 3.1.2 Business activities 33 3.1.3 Current system situation of MIKGroup 38 3.2 Current situation of ERP in Vietnam and MIKGroup 40 3.2.1 Current situation of ERP in Vietnam 40 3.2.2 Current situation of ERP in MIKGroup 42 3.3 Research process 42 3.4 Problem statement 43 3.5 Proposed ERP system 45 3.5.1 Choosing ERP software 45 3.5.2 Constructing to replace current system 47 3.5.3 Constructing comprehensive system 51 Chapter RESULTS AND DISSCUSION 55 4.1 Results 55 4.1.1 ERP software 55 4.1.2 Current system 55 4.1.3 Comprehensive system 57 4.2 Limitation and the next research direction 60 Chapter CONCLUSIONS 62 REFERENCE 64 APPENDICES 66 TABLE OF NOTATIONS AND ABBREVIATIONS Abbreviation Meaning ERP Enterprise Resource Planning MIKGroup Vietnam MIKGroup Joint stock Company HRM Human Resources Management CRM Customer Relationship Management SCM Supply Chain Management SLA Service Level Agreement ROA Return Of Asset ROE Return Of Equity ROS Return On Sales RO Return On Investment LIST OF TABLES Table 2-1 Potential effects of ERP adoption (Carlo and Sara,2018) 27 Table 3-1 Business result of MIKGroup 2016-2018 (Unit: Million VND) 34 Table 3-2 Source of revenues of MIKGroup 2016-2018 (Unit: Million VND) 35 Table 3-3 List of projects has been carried out by MIKGroup 35 Table 3-4 Main partners of MIKGroup 37 Table 3-5 Current software of MIKGroup 39 LIST OF CHARTS AND FIGURES Figure 2-1 Plan level 19 Figure 2-2 Flow of information in planning (Raphael, 2008) 20 Figure 2-3 Planning process (Armstrong, 1982) 20 Figure 2-4 The full lifecycle ERP adoption reference model (Chuck, 2019) 29 Figure 3-1 Organizational structure of MIKGroup 38 Figure 3-2 Research process 43 LIST OF PICTURES Picture 3-1 Module for human resource management (OpenERP) 48 Picture 3-2 Accounting module interface (OpenERP) 48 Picture 3-3 Document-storage interface (OpenERP) 48 Picture 3-4 Real estate and building management module (OpenERP) 49 Picture 3-5 Users setting (OpenERP) 49 Picture 3-6 Group creation (OpenERP) 50 Picture 3-7 User creation and modification (OpenERP) 50 Picture 3-8 Employee information by HR department (OpenERP) 51 Picture 3-9 Comprehensive system with full of modules (OpenERP) 52 Picture 3-10 Menu of accounting user (OpenERP) 53 Picture 4-1 Expense creation (OpenERP) 57 Picture 4-2 Cash reporting in Accounting module (OpenERP) 57 Picture 4-3 Sign module with signing a contract (OpenERP) 60 Chapter RESULTS AND DISCUSSIONS 4.1 Results 4.1.1 ERP software The choice of Odoo/OpenERP for ERP system and the replacement for the current system help MIKGroup to approach with a professional and reputational provider The implementation and operation are efficiency and less-costly while they already have experience from various businesses in many specific field MIKGroup has minimized the time consuming for the implementation as well as the business disruption Odoo/OpenERP with the professional deployment team can install and customize the system, so that MIKGroup can reach the cost-effective for choosing this solution The flexibility of Odoo/OpenERP as an open sources software help the company to customize and expand its functions and modules anytime As the expansion of a business, the development of the management system is essential to ensure the stability and fluently of a company which can be guaranteed by Odoo/OpenERP Also, the feedback from the staffs that they can easily understand and use the software through its simple interface Otherwise, Odoo/OpenERP allow them to remodify the interface, so that could make them feel familiar The propose of OpenERP/Odoo from the author may not be the best suggestion, but it contributes an option for MIKGroup to determine what kind of ERP system they need The flexibility is the most concerned characteristic that MIK should aim for when they look for an ERP system Through the selection of OpenERP/Odoo, the company could understand that an open-source ERP software is reasonable and suitable for MIKGroup – a medium-size business 4.1.2 Current system 55 New system will replace for the current system but still keep the basic functions as the current software New applications ensure the operation of the company but better for the administrator to control and plan on the integrated system Each module integrates with another and all of them are controlled and decentralized to the user based on their roles According to an employee at management level of MIKGroup, the planning and controlling could be easier in fully integrated system Source-defined data and decentralization can control issues of responsibility of employees Following lower level managers at HR department that HR operation is now improved Before, the accounting department have to calculate the salary for each employee through excel but now, the attendance of staffs will be storage and auto calculated through the integration of modules in OpenERP/Odoo It is quite complicate to make a comment about the module of property management system or property sale and purchase, which are the replacement for the landsoft and landsoft building application The staffs of MIKGroup made a point that it will need so much customization before applied and it may affect the business processes of the customer service department Those two modules are the most important of the company, so that the comment only can be make when the project is implemented Furthermore, the comment of most employees in the survey show that the document module allows the operation of MIKGroup tackling faster The staffs can store their documents and manage it base on their role or allow another to read it if they need The management level of the company can check it if they want and other department can take document in need if they allowed The contribution of this hypothetical replacement for the company is the basic setup of OpenERP/Odoo MIKGroup may concern about many risks and problems, such as disruptions or non-suitable processes while implementing this system, but this 56 replacement show that it is possible to modify, customize to meet the requirement of the company The replacement of current system shows the potential of an integrated system which is share the same database but still ensure the main functions, security and permissions as the MIK’s current software For the example of the integration of the system, with the connection from user to employee, any expense of employee now would be recorded then link to the accounting department The mistake in data may not appear anymore Picture 4-1 Expense creation (OpenERP) Picture 4-2 Cash reporting in Accounting module (OpenERP) Base on the expenses of employee, the expenses which are proved will be noticed and reported in the report table of cash flow of accounting department 57 4.1.3 Comprehensive system According to midlevel employees of MIKGroup, the company can gain many benefits if they have more modules as functional applications, so that the business could maximize its operation by applying more module for automation and systematization:  Sign: Faster operating and processing in sending, signing and approving document without meeting face to face in MIKGroup  Rental: Increase the efficiency of accounting department by create rental orders, schedules, deliveries and invoices This module is also necessary for Poverty management module of MIKGroup  Planning: Time management and performance of employees of MIKGroup is improved, reminded and avoid confusion by schedules planning with advanced chart  Purchase: This module can benefit the procurement department of MIKGroup which have no current specific software Improving purchase and inventory performance with procurement rules depending on stock levels, logistic rules, sales orders, etc  Timesheets: This module benefit MIKGroup when employees of company always have unstable workplace or work from home so that they can work anywhere with the tracker and being recognized  Surveys: This module benefit MIKGroup to gain the thinks, the examination of employees to develop the company better by creating surveys to poll and take responding from employees  Expenses: Through expense report and online basement, accounting department of MIKGroup can manage the expenses by creating, validating or refusing online with no missed 58  Dashboards: Helping MIK to make a better report with specific information or data so that every department can be easier to achieve the goal or analysis of data Employees of MIKGroup feedback that if these modules are applied, the operation and business processes would be speeded up They can manage better and avoid many risk or any difficult situation, such as a contract need a sign from the director who is not there, or validate the expenses of employees with just few step Accountants of MIKGroup believe that they will be benefited the most if this system is implemented because of the integration of the system Any module related to accounting will be connected to accounting module, so that it makes accountant can their work faster and more effective In the purpose of optimize and faster the business processes of MIKGroup, the author proposes the comprehensive system with more modules is the suggestion for the company to upgrade its processes As the describe of each module, those modules could benefit the company in many processes It is also a recommendation for MIK to concern about the benefit of systematization with more modules compared to the basic business functions of the current system An example of sign module, which could be used to faster the processes of MIKGroup The contracts would be made when the company creates users and employees, in this point, only the manager level could sign for that contract Because of sign module, the contract now could be signed online through the system, there will be no necessary for the one, who need to sign, have to appear or manually sign it 59 Picture 4-3 Sign module with signing a contract (OpenERP) This could benefit MIKGroup while the management level employee is not always present at the company to sign or prove every document 4.2 Limitation and the next research direction This study still remains some unavoidable drawbacks as follows:  The construction of the system of this study is quite simple The modules and applications is customized base on the basic function of Odoo/OpenERP The purchase modules from the third party and the deep customizations are not able to make  The cost estimate of implementation and operation is relative It can be change based on the provider and situation of the company when the company applies the ERP system  The result of this case study is relative and is also comments from the high level manager of MIKGroup, due to the short study time, so there are many more complex issues and risks not mentioned Therefore, in the future, the construction will be further determined The business models and operation processes will need to be identified deeper base on each department or room The customizations will need the third party to redevelop and modify modules, applications and system based on those processes and model Source 60 code of Odoo/OpenERP will need to be concern and rebuild if necessary to fit the business According to the comments, all employees, who have done the survey, believe that the system will work but need plenty of customization before it can be used SUMMARY OF CHAPTER Chapter presents the hypothetical results based on the surveys, reviews and comments from the company’s employees Those studies, comments and assessments are also sent back and used for reference in the implementation of the company's ERP system Besides, in this chapter, the author also introduces limitations on the scope and content of research lead to the further research directions 61 Chapter CONCLUSIONS Vietnam is a developing country where economy is developed based on domestic enterprises, so that the stability and development of businesses are the basis for economic growth Hence, the efficiency in managing information, planning and operating is the top concern of businesses Through this study, the author has described the basis concept of enterprise resource planning (ERP) and factors influencing to choose its selection help companies to understand the values and benefits that an integrated system can bring to businesses The study is based on the specific case of MIKGroup using Odoo/OpenERP software The results achieved in the study are as follows:  Firstly, concepts and theories related to business resources, functions, planning and ERP system, such as definitions, characteristics and classifications have been studied The studies of other authors on related issues have also reviewed  Secondly, the author has collected data and analyzed the current situation of management system of a mid-size enterprise in Vietnam – MIKGroup Join Stock Company Subsequently, the author has proposed a selection and implementation of an ERP software (Odoo/OpenERP) to solve the three problems that have been stated (see page 43-44)  Thirdly, the analytic results of a comprehensive ERP system have shown it could help in achieving a better performance of management and operation for the business Selection of the ERP software improves the company’s efficiency in business and finance management Thus, the company is able to recognize new opportunities and expand its business Also, through the research, the author has had a chance to consolidate basic and professional knowledge of ERP system and the applications Besides, additional skills 62 in searching and synthesizing methods, approaches, analysis and problem solving of the author have been improved 63 REFERENCE English references: Anbuudayasankar, S P., Ganesh, K., Mohapatra, S., Sivakumar, P., 2014, Enterprise Resource Planning: Fundamentals of Design and Implementation Springer International Publishing Ashutosh, M & Kapil S., 2010, Configuring SAP ERP Sales and Distribution Wiley Pub Armstrong, J S.,1982, The value of formal planning for strategic decisions: review of empirical research Berry, T J., 2004, Hurdle: The Book on Business Planning Harcourt Brace Professional Publishing Carlo, C., Sara, T., 2018, Enterprise Resource Planning and Business Intelligence Systems for Information Quality Springer International Publishing Chuck, C H L., 2019, Managing Enterprise Resource Planning Adoption and Business Processes Cambridge Scholars Publishing Clifford, F G & Erik, W L.,2017, Project Management: The Managerial Process McGraw-Hill Education Hany, E & Ahmed, O K., 2017, Enterprise Resource Planning, Corporate Governance and Internal Auditing An Institutional Perspective Springer International Publishing Jay, R G., 2014, Designing Organizations Strategy, Structure, and Process at the Business Unit and Enterprise Levels Jossey-Bass 10 Kenneth, C L & Jane P L.,2017, Management Information Systems: Managing the Digital Firm 15th Edition 11 Lineke, S., 2014, A Guide to ERP Benefits, Implementation and Trends Bookboon 64 12 Maria, M C., 2010, Enterprise Information Systems Design, Implementation and Management Organizational Applications 13 Raphael, D (auth.), David, L & Gilbert, O & Christos, V.(eds.)., 2008, Service Chain Management: Technology Innovation for the Service Business SpringerVerlag Berlin 14 Thomas, R., 1997, Controlling: Concepts of Management Control, Controllership, and Ratios Springer-Verlag Berlin Heidelberg 15 Louie, A., 2017, What is ERP Software? Analysis of Features, Types, Benefits, Pricing, viewed April 2020 https://financesonline.com/erp-software-analysisfeatures-types-benefits-pricing/ Vietnamese references: 16 GiaCat Admin., 2018, Giải pháp ERP hiệu quả, viewed 13 March 2020 from https://giacat.vn/kien-thuc-erp/giai-phap-erp-hieu-qua/ 17 Truong, B Q & Phuong, H M., 2018, Sự tương tác giữa ERP và BPM, viewed 13 March 2020 http://www.tapchicongthuong.vn/bai-viet/su-tuong-tac-giua- erp-va-bpm-54249.htm 18 An, M H & Ha, L V.,2018, Giải pháp triển khai hệ thống hoạch định nguồn lực doanh nghiệp ERP doanh nghiệp Việt Nam, viewed 14 March http://www.tapchicongthuong.vn/bai-viet/giai-phap-trien-khai-he-thong-hoachdinh-nguon-luc-doanh-nghiep-erp-tai-cac-doanh-nghiep-viet-nam-28984.htm 19 Mekongsoft., 2019, Thực trạng ứng dụng phần mềm quản lý doanh nghiệp ERP theo yêu cầu Việt Nam, viewed 14 March https://mekongsoft.com.vn/tintuc/kien-thuc-kinh-doanh/thuc-trang-ung-dung-phan-mem-quan-ly-doanhnghiep-erp-theo-yeu-cau-tai-viet-nam-a487.html 20 PhanmemketoanERP., 2018, Thực trạng thử dụng ERP Việt Nam , viewed 14 March https://phanmemketoanerp.com/tin-erp/thuc-trang-su-dung-erp-taiviet-nam/ 65 APPENDICES Appendix Survey of the interface of Odoo/OpenERP by Google form Appendix Survey of the document module which replaces for E-Office by Google form 66 Appendix Survey of the new accounting module (for accounting department) by Google form Appendix Survey of the new HR application (for HR department) by Google form Appendix Survey of the new building software (for customer services department) by Google form 67 Appendix Survey of the comprehensive ERP system with more modules by Google form Appendix Survey of the ERP system by Odoo/OpenERP by Google form 68 69 .. .VIETNAM NATIONAL UNIVERSITY, HANOI INTERNATIONAL SCHOOL GRADUATION PROJECT SOME APPLICATIONS OF OPENERP( ODOO) – AN ERP SYSTEM IN ENTERPRISE BUSINESS AND FINANCE MANAGEMENT: A CASE STUDY OF VIETNAM. .. LETTER OF DECLARATION I hereby declare that the Graduation Project ? ?Some applications of OpenERP( Odoo) – an ERP system in enterprise business and finance management: A case study of Vietnam MIKGroup. .. contents of the study include a review of ERP system and related applications, research about the IT system and operational status of MIKGroup Joint stock Company, data analysis, and applications of