A STUDY ON THE EFFECTIVENESS OF ERP SYSTEM

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1.1 THEORITICAL BACKGROUND OF THE STUDY
Information Technology (IT) has become a vital and integral part of
every business plan. From multi-national corporations who maintain
mainframe systems and databases to small businesses that own a single
computer, IT play a role. The reason for the omnipresent use of
computer technology in business can best be determined by looking at
how it is being used across the business world. For many companies
email is the principal means of communication between employees,
suppliers and customers. Email was one of the early drivers of the
Internet, providing a simple and inexpensive means to communicate.
Over the years, a number of other communicate tools have also evolved,
allowing staff to communicate using live chat system, online meeting
tools and video-conferencing systems. Voice over internet protocol
(VOIP) telephones and smart-phones offer even more high-tech ways for
employees to communicate. When it comes to managing inventory,
organizations need to maintain enough stock to meet demand without
investing in more than they require.
Inventory management systems track the quantity of each item a
company maintains, triggering an order of additional stock when the
quantities fall below a predetermined amount. These systems are best
used when the inventory management system is connected to the point-
of-sale (POS) system. The POS system ensures that each time an item is
sold, one of that item is removed from the inventory count, creating a
closed information loop between all departments. The days of large file
rooms, rows of filling cabinets and the mailing of documents is fading
fast. Today, most companies store digital versions of documents on

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servers and storage devices. These documents become instantly available
to everyone in the company, regardless of their geographical location.
Companies are able to store and maintain a tremendous amount of
historical data economically, and employees benefit from immediate
access to the documents they need. Storing data is only a benefit if that
data can be used effectively.
Progressive companies use that data as part of their strategic planning
process as well as the tactical execution of that strategy. Management
Information System (MIS) enable companies to track sales data,
expenses and productivity levels. The information can be used to track
profitability over time, maximize return on investment and identity areas
of improvement. Managers can track sales on a daily basis, allowing
them to immediately react to lower-than-expected numbers by boosting
employee productivity or reducing the cost of an item. Companies are
using IT to improve the way they design and manage customer
relationship. Customer Relationship Management (CRM) systems
capture every interaction a company has with a customer, so that a more
enriching experience is possible. If a customer calls a call centre with an
issue, the customer support representative will be able to see what the
customer has purchased, view shipping information, call up the training
manual for that item and effectively respond to the issue. The entire
interaction is stored in the CRM system, ready to be recalled if the
customer calls again. The customer has a better, more focused
experience and the company benefits from improved productivity.

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1.2 STATEMENT OF THE PROBLEM
This study envisages a systematic project analysis of the effectiveness
of ERP System in SFO Technologies, a flagship company of NeST
Conglomerate, believes in delivering quality services and products to
clients from all corners of the world. SFO provides solutions to markets
as diverse as Healthcare, Communication, Industrial and Transport as an
effective tool in streamlining all domains of its organizational structure
such as management, administration and cost effective production.
1.3 REVIEW OF LITERATURE
ERP is a Rising Need of Enterprises, is a strategic tool helping an
organization to gain an edge over its competitors by helping in
successfully integrating its key business operations, synchronizing,
planning and optimizing the resources available in the existing extremely
competitive environment. Its use has a much broader scope in today’s
world rather than of just planning the use of the enterprise resources.
Organizations (especially those which are borderless) face many
difficulties in quickly making out the information required. The
integration of the business processes improves coordination between
bodies, streamlines workflows and processes and benefits them in terms
of retaining and satisfying customers by delivering their orders “just-in-
time” and keeping them well informed about their orders current status
rather than keeping them waiting for just a small piece of information.
ERP has the effect of making an enterprise more time sensitive. Another
benefit is of better marketing opportunities. ERP penetrates one segment
after the other and addresses solution to many debacles existing in an
enterprise.

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Different ERP System have been made to facilitate organization in
Enterprise Resource Planning Leading ERP giants making ERP systems
are Microsoft, Oracle, PeopleSoft and JD Edwards, SAP AG etc. These
systems link the order, inventory, sales, purchase, manufacturing, supply
chain and warehouse management modules in an enterprise for better,
fast and accurate information availability to every single operation and
action taken at any place by any person depends on consistent and
updated information availability. Whatever a person needs can be
immediately accessed by him subject to the delegated authority. ERP
function has thus helped individuals.
They also enhance management decision making by making future
projections about sales during a certain period of a certain products.
Management would then be able to make decisions whether to
increase/decrease production of that particular product which in turn
would help save resource from being wasted which could be used for
other purpose e.g. for making other products. They also help managers
make decisions about introducing some new value added features to an
existing ‘hot demand’ product to enhance sales further. This is how
product quality is also enhanced. Inventory costs reduction must be
given a great importance in every organization. ERP helps reduce
inventory costs by better planning and forecasting of requirements. ERP
system helps getting higher return on Investment (ROI) in a fast manner.
While there are absolute benefits, an ERP system also poses significant
challenges in the areas of information security and business continuity
planning. Above mentioned things point to a very critical step, the right
choice of an ERP for your enterprise! Off all the ERP systems exiting in

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the market, all seem to be performing the same function but the one best
suiting your requirement needs to be picked up in order to achieve
required results. The choice depends upon the structure and type of the
organization e.g. financial, manufacturing etc. This is why some
organizations experience higher benefits as compared to others because
they’ve made the right choice and are able to make the right use of their
systems.
Even though Y2K didn’t become the disaster that many people expected,
it gave rise to the concept of making sure software was properly
implemented. In addition to dealing with software issues, ERP can also
help companies integrate their operations. At the same time, it is
important to realize that there are a number of challenges involved with
utilizing ERP. Perhaps one of the greatest of these challenges is cost.
Enterprise Resource Planning tools are outside the price range of many
organizations.
It is important to understand that ERP tools must be customized to meet
the needs of the company. In most cases, it will not be useful when it
first purchased. Each company has unique needs, and ERP tools must be
able to meet them. A number of companies run into problems when they
attempt to customize the software.
To summarise, ERP has a great importance and ERP systems have
become the biggest need of today’s organizations to survive. They
provide tremendous benefits provided the Critical Success Factors of
ERP system implementation are kept in mind.

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Enterprise resource planning (ERP) is a cross-functional enterprise
system driven by an integrated suite of software modules that supports
the basic internal business processes of a company. ERP gives a
company an integrated real-time view of its core business processes such
as production, order processing, and inventory management, tied
together by ERP applications software and a common database
maintained by a database management systems.
ERP systems track business resources (such as cash, raw materials, and
production capacity) and the status of commitments made by the
business (such as customer orders, purchase orders, and employee
payroll), no matter which department (manufacturing, purchasing, sales,
accounting, and so on) has entered the data into the system. ERP
facilitates information flow between all business functions inside the
organization, and manages connections to outside stakeholders.
Implementation of ERP System, is a complex exercise, involving many
process alterations and several legacy issues. Organizations need an
implementation strategy encompassing both pre implementation and
implementation stages. The fallout of a poor strategy is unpreparedness
of employees, implementation not in conformity with wider business
strategy, poor business process redesign and time and cost overrun.
ERP IMPLEMENTATION LIFE CYCLE
There are no clear separating lines between these phases and in many
cases one phase will start before the previous phase is complete.
Different phases of the ERP implementation are pre-evaluation
screening, package evaluation, project planning phase, gap analysis, re-

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engineering, customization, implementation team training, testing, going
live, end user training, post implementation.
 Pre-evaluation screening: There are hundreds of ERP vendors-
of all sizes and shapes- all claiming to have the solution that is
ideal for the organization.. It is better to limit the number of
packages that are evaluated to less than five. Getting help from
external consultants and most importantly finding out what
package is used by similar companies
 Package evaluation: Important points to be kept in mind while
evaluating ERP software include functional fit with the company’s
business process, degree of integration between the various
components of the ERP system, flexibility and scalability,
complexity, User friendliness, quick implementation, ability to
support multi-site planning and control, Technology- client/ server
capabilities , database independence, security. Availability of
regular updates, amount of customization required, local support
infrastructure, availability of reference sites. Total costs, including
cost of licence, training, implementation, maintenance,
customization and hardware requirements
 Project Planning Phase: The implementation team members are
selected and task allocation is done. This phase will decide when
to start the project, how to do it and when project is supposed to
be completed
 Gap analysis: This is arguably most crucial phase in the success
of the ERP implementation. Put very simply, this is the process
through which companies create a complete model of where they

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are now and where they want to be headed. The trick is to design a
model, which both anticipates and covers any functional gaps. It
has been estimated that even the best ERP package, custom
tailored to companies needs meets only 80% of the functional
requirements. The remaining 20% of these requirements present a
problematic issue for the company’s BPO. One of the most
affordable, albeit painful, solutions entails altering the business to
“fit’ the ERP package
 Re-engineering: It is in this phase that human factors are taken
into account
 Customization: The Company needs to know which processes
have to change in the process of implementation. SAP for
instance, has pre-configured industry specific templates that can
be tweaked for each individual company (Accelerated SAP or
ASAP solution). Sage MAS 500 ERP system provides a set of
customization tools which includes a software development kit
and customizer
 Implementation Team training: How to implement it. For the
company to be self-sufficient in running the ERP system, it should
have a good in-house team that can handle the various situations.
Select employees with the right attitude-people who are willing to
change, learn new things and not afraid of technology – and good
functional knowledge
 Testing: In this phase we test real case scenarios. The system is
configured and now you may come back with extreme case of
system overloads, multiple users logging on at the same time with
the same query, users entering invalid data, hackers trying to

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access restricted areas and so on. The test cases must be designed
specifically to find weak links in the system and these bugs should
be fixed before going live
 Going Live: This is the phase where ERP is made available to the
entire organization. On the technical side the work is almost
complete: data conversion is done, databases are up and running
and on the functional side, the prototype is fully configured and
tested and ready to go operational. Once the system is “live” the
old system is removed and the new system is used for doing
business
 End User Training: on how to use the system. This phase starts
much before the system goes live. The participants should be
given overall view of the system and how each person’s action
affect the entire system In addition to this general topics , each
employee is trained on the job or task that he / she is supposed to
performance the system goes live
 Post implementation: Once the implementation is over the
vendors and hired consultants will go. There should be enough
employees who are trained to handle the problems that might crop
up. There should be people within the company who have the
technical prowess to make the necessary enhancements to the
system as and when required. The system must be upgraded as and
when new versions or new technologies are introduced. Here, the
organization should think in terms of the incremental benefits of
the enhancements because with any upgrade or enhancements.

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Advantages of ERP (Enterprise Resource Planning) System:
 Complete visibility into all the important processes, across various
departments of an organization (especially for senior management
personnel).
 Automatic and coherent workflow from one department/function
to another, to ensure a smooth transition and quicker completion
of processes. This also ensures that all the inter-departmental
activities are properly tracked and none of them is ‘missed out’.
 A unified and single reporting system to analyse the
statistics/status etc. in real-time, across all functions/departments.
 Since same (ERP) software is now used across all departments,
individual departments having to buy and maintain their own
software systems is no longer necessary.
 Certain ERP vendors can extend their ERP systems to provide
Business Intelligence functionalities that can give overall insights
on business processes and identify potential areas of
problems/improvements.
 Advanced e-commerce integration is possible with ERP systems –
most of them can handle web-based order tracking/ processing.
 There are various modules in an ERP system like
Finance/Accounts, Human Resource Management,
Manufacturing, Marketing/Sales, Supply Chain/Warehouse
Management, CRM, Project Management, etc.
 Since ERP is a modular software system, it’s possible to
implement either a few modules (or) many modules based on the
requirements of an organization. If more modules implemented,
the integration between various departments may be better.

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 Since a Database system is implemented on the backend to store
all the information required by the ERP system, it enables
centralized storage/back-up of all enterprise data.
 ERP systems are more secure as centralized security policies can
be applied to them. All the transactions happening via the ERP
systems can be tracked.
 ERP systems provide better company-wide visibility and hence
enable better/faster collaboration across all the departments.
 It is possible to integrate other systems (like bar-code reader, for
example) to the ERP system through an API (Application
Programing Interface).
 ERP systems make it easier for order tracking, inventory tracking,
revenue tracking, sales forecasting and related activities.
 ERP systems are especially helpful for managing globally
dispersed enterprise companies, better.
Disadvantages of ERP (Enterprise Resource Planning) Systems:
 The cost of ERP Software, planning, customization, configuration,
testing, implementation, etc. is too high.
 ERP deployments are highly time-consuming – projects may take
1-3 years (or more) to get completed and fully functional.
 Too little customization may not integrate the ERP system with
the business process & too much customization may slow down
the project and make it difficult to upgrade.
 The cost savings/payback may not be realized immediately after
the ERP implementation & it is quite difficult to measure the
same.

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 The participation of users is very important for successful
implementation of ERP projects – hence, exhaustive user training
and simple user interface might be critical. But ERP systems are
generally difficult to learn (and use).
 There may be additional indirect costs due to ERP implementation
– like new IT infrastructure, upgrading the WAN links, etc.
 Migration of existing data to the new ERP systems is difficult (or
impossible) to achieve. Integrating ERP systems with other
standalone software systems is equally difficult (if possible).
These activities may consume a lot of time, money & resources, if
attempted.
 ERP implementations are difficult to achieve in decentralized
organizations with disparate business processes and systems.
 Once an ERP systems is implemented it becomes a single vendor
lock-in for further upgrades, customizations etc. Companies are at
the discretion of a single vendor and may not be able to negotiate
effectively for their services.
 Evaluation prior to implementation of ERP system is critical. If
this step is not done properly and experienced technical/business
resources are not available while evaluating, ERP implementations
can (and have) become a failure.
Benefits of ERP
 Efficiency- an ERP system eliminates repetitive processes and
greatly reduces the need to manually enter information. The
system will also streamline business processes and makes it easier
and more efficient for companies to collect data.

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 Integrated Information- Instead of having data distributed
throughout a number of separate databases, all information is now
located in a single location. Data is also kept consistent and up-to-
date.
 Reporting- ERP software helps make reporting easier and more
customizable. With improved reporting capabilities, your
company can respond to complex data requests more easily. Users
can also run their own reports without relying on help from IT.
 Customer Service- It’s easier to provide high-quality customer
service using an ERP system. Sales and customer service people
can interact with customers better and improve relationships with
them, through faster, more accurate access to customers’
information and history.
 Security-A new system will improve the accuracy, consistency
and security of data. Restrictions to data can also be enhanced.
Modules of ERP System
In organization, ERP helps to manage business processes of various
departments & functions through centralized application. We can make
all the major decisions by screening the information provided by ERP.
There are many vendors in market which are providing traditional ERP
solutions or Cloud based ERP solutions. Though implementation
platforms or technologies are different, there are common & basic
modules of ERP which can be found in any ERP System. Depending on
organizations need required components are integrated & customized
ERP system is formed. All the below mentioned modules can be found
in any ERP system:

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 Human Resource
 Inventory
 Sales & Marketing
 Purchase
 Finance & Accounting
 Customer Relationship Management(CRM)
 Engineering/ Production
 Supply Chain Management (SCM)
 Human Resource Module(HR):
Human Resource module helps to HR team for efficient management of
human resources. HR module helps to manage employee information,
track employee records like performance reviews, designations, job
descriptions, skill matrix, time & attendance tracking. One of the
important sub module in HR module is Payroll System which helps to
manage salaries, payment repots etc. It can also include Travel Expenses
& Reimbursement tracking. Employee Training tracking can also
managed by ERP.
 Inventory Module:
Inventory module can be used to track the stock of items. Items can be
identified by unique serial numbers. Using that unique numbers
inventory system can keep track of item and trace its current location in
organization. Inventory module includes functionalities like inventory
control, master units, stock utilization reporting etc. There may be
integration of inventory module with purchase module of ERP.

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 Sales Module :
Typical sales process includes processes like Sales queries & enquiry
analysis & handling, quotation drafting, accepting sales orders, drafting
sales invoices with proper taxation, dispatch/Shipment of material or
service, tracking pending sales order. All these sales transactions are
managed by sales module of ERP. CRM module can take help of Sales
module for future opportunity creation & lead generation.
 Purchase Module:
As name indicates, purchase modules take care of all the processes that
are part of procurement of items or raw materials that are required for
organization. Purchase module consist of functionalities like
supplier/vendor listing, supplier & item linking, sending quotation
request to vendors, receiving & recording quotations, analysis of
quotations, preparing purchase orders, tracking the purchase items,
preparing GRNs(Good Receipt Notes) & updating stocks & various
reports . Purchase module is integrated with Inventory module
& Engineering/production module for updating of stocks.
 Finance & Accounting module:
Whole inflow & outflow of money/capital is managed by finance
module. This module keeps track of all account related transactions like
expenditures, Balance sheet, account ledgers, budgeting, bank
statements, payment receipts, tax management etc. Financial reporting is
easy task for this module of ERP. Any Financial data that is required for
running business is available on one click in Finance module.

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 Customer Relationship Management (CRM) module:
CRM department is helps to boost the sales performance through better
customer service & establishing the healthy relationship with customers.
All the stored details of customer is available in CRM module.
CRM module helps to manage & track detailed information of the
customer like communication history ,calls, meetings, details of
purchases made by customer, contract duration etc. CRM module can be
integrated with Sales module to enhance sales opportunities.
 Engineering / Production module:
Production module is great help for manufacturing industry for
delivering product.
This module consist of functionalities like production planning, machine
scheduling, raw material usage,(Bill of material)preparation, track daily
production progress production forecasting & actual production
reporting.
 Supply Chain Management (SCM):
SCM module manages the flow of product items from manufacturer to
consumer & consumer to manufacturer.
Common roles involved are manufacturer, Super Stockiest, Stockiest,
distributors, retailers etc. SCM involves demand & supply management,
sales returns & replacing process, shipping & transportation tracking etc.
Today many SMBs face challenges in their process automation. ERP is
the great help for such organizations. ERP can efficiently streamline the
business operations of organization. Above introduction of modules can

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help you to choose & customize the ERP modules depending on your
organizations requirements.
1.4 SCOPE OF THE STUDY
The study focuses on an objective evaluation of the Effectiveness of ERP
in SFO Technologies. The project is designed to cover the analysis of the
quality and effectiveness of the ERP System prevailing in the
organization. The study aims to find the strategic advantages that the
company has gained due to the implementation of the ERP package.
Moreover the study envisages to provide the necessary information and
data for streamlining ERP operations in SFO Technologies as of now
and to formulate strategies for enhancing the efficacy of ERP System in
the Organization.
1.5 OBJECTIVES OF THE STUDY
Primary Objectives
 To study the effectiveness of ERP system at SFO Technologies,
Bangalore.
Secondary Objectives
 To find out whether the ERP system helps in improving the
coordination across functional departments.
 To find out whether there is an association between the
availability of accurate information using ERP system and
reduction in operational cost.
 To find out whether the ERP system provides timely and accurate
information.

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 To provide suggestions on the basis of findings from the data
analysis.
1.6 HYPOTHESIS
Null Hypothesis
H0: There is no association between the availability of accurate
information using ERP system and reduction in operational cost
at SFO Technologies.
Alternative Hypothesis
H1: There is an association between the availability of accurate
information using ERP system and reduction in operational cost
at SFO Technologies.
1.7 INDUSTRY PROFILE
The Electronics manufacturing services (EMS) industry took off after the
late 1970s when Solectron was established. Electronics manufacturing
services (EMS) is a term used for companies that test, manufacture,
distribute, and provide return/repair services for electronic components
and assemblies for original equipment manufacturers (OEMs). The
concept is also referred to as electronics contract manufacturing (ECM)
at the time, most electronics manufacturing for large-scale product runs
was handled by in-house assembly. These new companies offered
flexibility and eased human resources issues for smaller companies
doing limited runs. The business model for the EMS industry is to
specialize in large economies of scale in manufacturing, raw materials
procurement and pooling together resources, industrial design expertise
as well as create added value services such as warranty and repairs. This

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frees up the customer who does not need to manufacture and keep huge
inventories of products. Therefore they can respond to sudden spikes in
demand more quickly and efficiently.
The development of Surface Mount Technology (SMT) on printed
circuit boards (PCB) allowed for the rapid assembly of electronics. The
early 1990s saw OEM's rapidly installing SMT lines. EMS players like
SCI and Aver struggled to exist as OEMs would pull contract or change
vendors constantly. By the mid-1990s the advantages of the EMS
concept became compelling and OEMs began outsourcing PCB
assembly (PCBA) in large scale. By the end of the 1990s and early
2000s many OEMs sold their assembly plants to EMS aggressively
vying for market share. A wave of consolidation followed, as the more
cash-flush firms were able to buy up quickly both existing plants as well
as smaller EMS companies.
There are abundant opportunities for Electronic Manufacturing Services
(EMS) providers thanks to increases in complexity and evolving
markets, such as the Internet of Things (IOT) space. Unfortunately, EMS
providers are increasingly challenged with rising manufacturing costs
and original equipment manufacturer (OEM) price pressures. This has
forced them to look internally for smart, cost-saving strategies that also
act as technology enablers.
Electronics design, functionality, and component sizes have evolved
rapidly. These innovations will have a direct effect on manufacturing
techniques. EMS providers, although known for their manufacturing
prowess, must be diligent about maintaining flexible and responsive
production. Volume forecasting mismatches and dynamic OEM orders

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also pose constant challenges to EMS providers’ resource planning and
optimization strategies.
Plus, EMS service providers face ever-increasing pressure for fully
automated manufacturing sites, zero-tolerance for defects, and
converging OEM and contract manufacturing models. The future will
have to be adaptive, flexible, have scalable manufacturing with smaller
production runs, and have increased dependence on robotic technology
and artificial intelligence. Many manufacturers have learned hard lessons
from carrying too much inventory or having long lead times. Neither
situation bodes well for EMS providers’ competitive positioning or profit
margins. Because of this, smart factories and increased automation are
becoming common in the EMS market. Many EMS providers are
automating and using robotics to lower labour costs and to create smart
factories.
EMS providers also need to prove that they can meet stringent financial
business requirements in order to compete effectively in an increasingly
competitive environment. Given the competition, EMS providers are
looking to demonstrate growth strategies and to offer a variety of smart
services for the constantly changing needs of its customer base.
It's easy to overlook just how quickly “common wisdom” about the
manufacturing industry can become outdated. The Asian markets
became so saturated with manufacturing in the last decade that it's
ultimately changing the face of the entire market. Costs-of-living in
Asian cities with manufacturing centres are now approaching Western
levels, which has -predictably-eliminated most of their cost savings.
Some are scrambling to set up shop in even cheaper countries; others are
beginning to reconsider the wisdom of outsourcing halfway around the

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world. They're doing this even while the industry itself, and its needs,
are also changing.
Major Trends Worth Noting in the Electronic Manufacturing
Services Industry
 Automotive Electronics
“Smart Cars” are quickly becoming the new rage among auto
manufacturers. A few years ago, it was only the high-end “luxury”
brands including hook-ups for smartphones and tablets.
Now? We're likely only a few years from seeing those become
“standard” options. In fact, they may even come to supplant more
expensive audio setups in low-cost cars. After all, from a manufacturing
perspective, it's a lot cheaper to include an iPod dock than it is to include
a full radio/audio player.
And in the meantime, electronics are expected to comprise forty
percent of car component costs in 2015.
Or, at the high-end, we're now seeing brands like Lexus talking about
full “Heads up Displays” integrated ontointo their front windshields, to
create a driver's view that, in many ways, looks like the sorts of HUDs
we see on military equipment. Research in this sector is undoubtedly
going to cause a boom.
 Medical Electronics
Another industry showing plenty of growth, and no reason to predict
much else, is the medical field. Rapidly-developing countries are buying
up medical equipment about as fast as anyone can produce it. They're
also looking into setting up their own shops, especially in India, which
already has a thriving (if often unlicensed) biomed field.

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Parallel to this, of course, is the never-ending drive by the high-tech
nations to keep developing better medical hardware.
Either way, current estimates by Frost's are that the electronics
manufacturing sector will be worth nearly $40 billion by the end of the
decade. It's a wide-open field with room for practically any quality
manufacturer.
 Green Technologies
Being Green isn't just for hippies and disaffected Xers anymore. As
climate change statistics continue to mount, there's increasing pressure
from all areas – consumers, businesses, and governments – to look into
more eco-friendly manufacturing solutions. The various carbon cap or
carbon trading plans being implemented are also helping to drive this
push.
With major programs being launched to drive research in the field,
manufacturing concerns who can get their ISO certifications in place
could see a lot of interest, even in countries that aren't at the low end of
the global manufacturing cost scale.
 American Reshoring
Remember when we said Asian outsourcing wasn't much cheaper
anymore? According to The Boston Consulting Group, manufacturing in
America is now only five percent more expensive than Asian
manufacturing when all hidden costs are considered.
Considering the major difference in quality assurance and reliability a
company gets from domestic manufacturing, that 5% starts looking like a
small price to pay to avoid a (literal) world of supply line hassles.

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Mexico also continues to grow as a manufacturing base... however, its
ongoing political and criminal instability are a serious barrier to
investment.
1.8 COMPANY PROFILE
SFO Technologies, a flagship company of NeST Conglomerate, believes
in delivering quality services and products to clients from all corners of
the world. SFO provides solutions to markets as diverse as Healthcare,
Communication, Industrial and Transport. The areas of operation cover
 Manufacturing Services
 Products & Technologies
 Engineering & Software
 Systems Integration
SFO Technologies has a global presence with front end operations in all
continents and the products and services are targeted at technology fields
as diverse as Embedded Software, Middleware, Applications, Digital
Electronics, and RF & Wireless, Wire harness, Power Supplies, Fibre
Optics & Optronics and mechanical/plastic packaging.
SFO Technologies is headquartered in Kochi and has manufacturing
units, robust software development centres and R&D cells spread over
Kochi, Trivandrum and Bangalore. SFO is able to offer turnkey
solutions, product development and maintenance, R&D support, and
custom services in diverse domains and technologies.
SFO Technologies-Hardware & Software
SFO Technologies is the flagship company of the 300 million dollar
NeST Group of companies with more than 4000 employees. Focused on
expansion and growth, NeST Group is a highly diversified business

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conglomerate and is also one of the largest exporters and EMS
manufacturers in India. SFO Technologies, which operates in the
Healthcare, Telecom, Industrial and Energy & Transportation sectors,
aims to offer a one-stop solution in design, engineering, software
development and Electronic Manufacturing Services. The NeST Group
has a strong presence in futuristic computer & communication
technology areas like networking, fibre optics, RF & Microwave and
software. SFO Technologies has hardware and software facilities
adhering to world class standards, spread across Trivandrum, Cochin,
Bangalore and Mysore in India and in the USA.
Advantage of working with SFO Technologies
SFO Technologies believes in endeavouring to stay one step ahead on
the continually evolving technology curve. The SFO mantra is ‘concept
to product’ and it advocates delivering a holistic solution to customers
wherein a concept is focused on, designed, taken through to prototyping
and then low -volume trial runs are conducted for proof of concept. SFO
Technologies has an in-house R&D centre with advanced equipment’s
for quick turnaround facility. The manufacturing units are equipped to
handle large volume captive manufacturing.
SFO Technologies is focused on staying on the cutting edge of
technology and towards this has adopted advanced measures like VLSI
design and embedded software in operations. SFO’s products have been
used in NASA space mission, latest Boeing and Airbus aircrafts, black
box of aircrafts, access control systems at metros, thermal power
stations, and optical networks and in ultrasound and CT scanners.

25
Vision
“Be the global leader in providing end-to-end solutions in Engineering
and Manufacturing for both hardware and software products in the high
value added markets”
SFO Technologies believes in building lasting relationships with clients
in order to maximize customer satisfaction. Each solution is crafted with
the utmost care, keeping every requirement of the client in mind. The
competitive pricing structure enables clients to gain maximum value
from a project whether it is completed at the client’s site or at SFO’s
facilities. The aim is to build lasting relationships with clients by
providing responsive service, support and training at onsite
manufacturing locations.
CSR @ SFO - a culture
SFO Technologies is focused on growth both for the company and its
employees. At SFO, CSR is at the heart of corporate culture. There’s a
total commitment to contributing to the welfare of society. SFO has a
strong policy backed by established procedures, for environment and
employee health and safety. Apart from charitable contributions, SFO
makes conscious efforts to reduce global warming by using lead free
components, recyclable materials, and embracing energy conservation
measures.
Market Segments
SFO matchless expertise in Healthcare
SFO is aware of the critical requirements of healthcare industry from its
past 15 years of experience in catering to the demanding requirements of
this market for life critical applications.
SFO is well equipped to support healthcare OEM’s following needs:

26
 Domain knowledge
 ISO 13485 certified facility
 Long term storage and retrieval of device history records
 Traceability to manufacturing lots, component lots, equipment
used and operator level.
 Experienced IPC Class 3 soldering
 Exhaustive documentation
 Stringent quality assurance program
 Product life Cycle support
In the area of Healthcare, SFO Technologies has been providing services
to top 4 global healthcare OEMs. Clients place their trust in SFO for
design, value engineering, quality manufacturing and also for the any-
place delivery capability.
SFO has matchless expertise related to Healthcare in the following areas:
1. Software Services – Ultrasound, CT modalities
2. Product Development/VA/VE Services
 Ultra sound scanner
 User Interface product
 Power supplies
 Re-engineering of legacy healthcare products.
 Conversion from Non- ROHS to ROHS
3. Manufacturing services
 PCBAs for X-ray, MRI and CT modalities
 HLAs – Ultrasound, ECG, Baby warmer, and Bed side controls
etc.
 Custom wire harness
 MRI Coils

27
 Custom power supplies.
Landline, Cellular, Data & Cable TV - 22 years expertise
SFO Technologies caters to varying requirements of following segments
of communication industry.
 Landline and Cellular Telecommunication
 Data Communication
 Cable TV Networks.
SFO has over 22 years of experience and domain knowledge in this
industry. SFO has created TL 9001 certified manufacturing facilities
with class 10,000 clean rooms to specifically cater to communication
market.
SFO’s R&D centre had developed a series of electronic and fibre optics
products as an ODM to cater to the requirements of this requirement.
SFO’s expertise and experience in communication domain cover a wide
range of products and services:
Software Development Services
SFO runs dedicated off-shore development centre for meeting the
software requirements of communication industry.
The expertise of SFO ranges from low frequency analog, Bluetooth,
Zigbee, Wi-Fi, Wi-Max, Element Management System, Business
Operating Support System etc.
Product Design and Engineering Services
 RF and Wireless Products up to 10 Gbps modulation range which
is being upgraded to 40 Gbps.
 Fibre Optic active products such as EDFA, Fibre Optic Intrusion
Prevention Systems (FIPS), Laser Transmitters etc.

28
Manufacturing
 EDFA
 TOSA, ROSA,
 RF Transceivers
 Fiber Optic Intrusion Prevention Systems (FIPS)
 Fiber optical cable assemblies
 1xN Splitters from 1x2 to 1x64
 Attenuators
 FDMS
 Patch Panels
 Cable Modems
 Set top box
Communication industry undergoes rapid of changes and innovations
day by day. SFO Technologies, at its design centre, keeps our
technology and process up to date to meet the challenging demands.
Product & Software Development for multiple industries
Right from inception, SFO Technologies has been catering to the
Industrial vertical, in product development as well as software
development and services.
SFO has gained extensive experience and knowledge in realizing
products and solutions to various sectors of industries like laboratory
instrumentation, measurement, control, automation and monitoring of
various process industries, manufacturing automation and
SFO is well versed with the special requirements of these industrial
applications such as domain knowledge, ruggedized design, quality
requirements of mission critical applications and compliance to relevant
industry standards and protocols.

29
Software Solution Experience
 Control framework for semiconductor manufacturing process
automation.
 Measurement, control, monitoring and man-machine
communication for process industries.
 Field proven building blocks and algorithms to quickly configure
customized solutions.
Hardware Design, Value Engineering Experience
 Various types of I/O cards
 ATMs
 Ticket vending machines
 Fare collection gates
 Flow controller
 Bar code reader
 Control panels and consoles
 Ruggedized custom power supplies
 Wireless temperature monitoring system
SFO manufactures PCBAs, sub-assemblies, control panels, consoles,
kiosks and high level assemblies for
 Process automation in airport navigation
 Refineries, metro rails and energy systems
 Fuel dispensing equipment’s
 Banking automation like ATM
 Office automation
 Biometric systems
 Barcode analysers for inventory management systems
 Control PCBAs for power tools

30
 Security systems
Aerospace & Defence - Design & Value Engineering
SFO has its own footprint in the field of aerospace and defence. SFO is
well equipped to meet the demanding requirements of defence and
aerospace like
 Domain knowledge
 Ruggedized design and manufacture for harsh environment
 Traceability to manufacturing lots, component lots, equipment
used and operator level.
 Configuration management
 IPC Class 3 soldering
 Stringent EMI/EMC requirements
 Exhaustive documentation
 Stringent quality assurance program
 Product life Cycle support
 Low volume/high mix
The list of satisfied customers includes leading Tier 1 OEMs to aircraft
manufacturers, defence equipment manufacturers, and defence research
labs from all over the world. SFO is also collaborating with international
universities in their research and development programs.
SFO provides manufacturing, design and value engineering services for
Cable & core harness, PCBAs, sub-assemblies, EMI/EMC cabinets for
 Aircraft seating and lighting
 Defence products for advanced strategic programs
 Power and signal distribution cables in aircraft
 Under water communication modules for defence

31
SFO comprehensive solutions for Energy sector
SFO Technologies has been serving the energy sector with its software
development, hardware design and manufacturing services right from its
inception. Over the years, SFO has gained considerable domain
knowledge and expertise in fossil power generation, transmission and
distribution, non-conventional energy sectors such as fuel cells, wind
energy and solar power.
SFO understand the specific needs of energy sector like high reliable
ruggedized solutions, compliance to industry standards and long term
product life cycle support.
SFO’s experience in providing its software solutions, hardware design
and manufacture of cable & wire harness, power supplies, PCBAs, sub-
systems, cabinets and consoles and fully integrated systems for:
 ANSI/IEC Smart meters
 Smart grid
 Substation automation of power grid.
 Thermal power plant automation
 Wind pitch controllers
 Turbine controller for wind energy
 Power converters for Solar Energy
 SCADA
Innovations in Transportation by SFO
Major innovations in the transportation world are mainly driven by
electronics. The major areas include engine controls, fare collection and
signalling in rail transport sector, power train, comfort functions,
navigation, passive and active safety and the emerging fields of

32
infotainment and communication in automotive sector and toll collection
in transportation infrastructure.
SFO Technologies is an active participant in all segments of
transportation such as highway infrastructure, automotive, rail, metro
and aviation.
SFO understand the special needs of transportation sector and
accordingly created capability, infrastructure and processes to meet
them. :
 Life critical applications.
 Ruggedized design for harsh environment.
 TS 16949 and AS 9100 certified facilities
 End to end traceability
 Compliance to industry standards
SFO helps customers to provide a wide range of cost effective solutions
and services in both hardware and software. The services provided fall in
the following areas.
Manufacturing PCBA’s and cable wire harness for
 Energy distribution and power distribution cables for Airbus.
 Electronic Control Units (ECU for automotive).
 Instrument clusters for automotive.
 Fare collection Gates, token dispenser and ticket vending
machines for metro.
 Signalling and engine control for rail transport.
Software competencies in:
 Body control modules.
 Telematics & Infotainment.
 Process / Standard Compliance.

33
 IP/ Frameworks.
 Various platforms like Black fin, SHARC, ST9 series etc.
 Device Drivers and Middleware like HDD, CD, DVD, CAN, LIN,
Audio library etc.
 RTOS in Win CE 6.0, 7.0, VDK, Android.
 Network Protocols for CAN, LIN, MOST, KWP2000.
Services
SFO Technologies - Robust R&D for new products & reengineering
SFO Technologies has a very robust R&D center which aims at
synchronized design between competencies thus ensuring a smooth and
hassle free experience for clients. Customers are assisted to establish
proof of concept. Not only are new product designs introduced but the
re-engineering of products which are functionally or technologically
obsolete, is also undertaken.
The R&D center works in synergy with manufacturing facilities and
provide services like proto type, pilot production and reliability &
compliance testing.
The capabilities include
 Electronics and Optronics
 RF & Wireless
 Custom power supplies
 Embedded firmware , FPGA 7 VLSI
 Ergonomic mechanical and enclosure designs
At SFO, the value engineering services aims to achieve:
 Functionality improvement and cost reduction.
 Compliance and validation.
 Obsolescence removal and life extension.

34
 Ergonomics improvements.
New Product Introduction (NPI) - holistic solutions through SFO
At SFO Technologies, New Product Introduction (NPI) is given
immense importance since seamless transfer to manufacturing stage,
defect free manufacturing, process yield and productivity depends on
how well the product and process are engineered at NPI stage. Each
product is conceptualized and produced after detailed discussions with
clients in order to give maximum satisfaction on delivery. The aim is to
provide a holistic solution to customers, and to help them launch the
product within the scheduled lead time.
The NPI activity covers wide range of services such as:
 DFM/DFT
 Component engineering
 Test engineering, test software development and test jig
fabrication
 Process development
 Process documentation
 Production line set up and qualification
 FMEA
 Proto part approval process
 Product qualification and manufacturing release
 Engineering change management
 Obsolescence management
NPI is executed in 3 stages
Proto – There are two kinds of protos that are provided.

35
Design proto / Rapid proto - This is the proto delivered when the
design is not ready for final production and at SFO it’s ensured that this
proto is delivered within 2-3 weeks.
Manufacturing proto – This is the initial stage of NPI, where a small
lot of PCBAs will be manufactured for process and quality validation.
Pilot – This is the stage where a higher quantity lot is chosen for
manufacturing in order to complete the entire process validation. All
documents are prepared for production transfer.
Production - The final stage, i.e., volume production is started after the
qualification of proto, pilot and compliance certification.
SFO Technologies a leading EMS company in India
SFO Technologies is a leading EMS company in India today. This has
been achieved only through fruitful partnerships with leading OEM’s
and Fortune 500 companies. The 560,000 sq.ft manufacturing facilities
are very conveniently located in Cochin (Special Economic Zone) and
Bangalore.
The SFO manufacturing model is completely tuned to the needs and
requirements of customers. SFO has a powerful manufacturing
engineering proficiency that helps customers with a seamless transfer of
new product introductions. A comprehensive range of manufacturing
services is offered as a one-stop solution to customers in the areas of:
 Digital Electronics
 RF/Microwave assemblies
 Wire Harness
 Fiber optics and Optronics assemblies
 Power supplies & magnetic
 Sheet Metal/plastic enclosures

36
 High level product assemblies
Post Sale Support - SFO end to end service
Post-sales support is an important element in SFO’s end to end service
model. SFO ensures that all products are defect free and reliable during
the life of the product. In the unlikely event of any product or service
needs attention, SFO ensure that they are addressed promptly by repair
or replacement. SFO has an established RMA process to get defect parts
to factory, provide repair services and promptly delivery back to
customers any global locations.
Post sale support services also covers retention of device history records
throughout life of the product, arranging spare parts, providing early
warning on obsolescence for last time buy option.
Software development for varied industry segments
SFO Technologies has been able to grow into a trusted development
partner for customers from diverse industry segments. The design
facility staffed by skilled engineers has been instrumental in providing
concept-to-product services to clients.
SFO has set up world class development centers at Trivandrum, Cochin
and Bangalore besides maintaining front-end operations on all
continents. The organization provides holistic, integrated solutions in
such diverse domains and technologies as
 Embedded System Development, including hardware design and
product development
 Industrial and Process Automation
 Aviation software
 Automotive software
 Enterprise solutions

37
 Insurance software integration.
 Consumer Electronics
 Medical Instrumentation
 Broadband network management solutions
 Multimedia and Networking
 Security Solutions
Expertise
Electronics - Manufacturing and Test equipment’s @ SFO
SFO Technologies’ electronic facility, which is geared to produce the
finest range of digital products, is equipped with the latest and the most
sophisticated manufacturing and test equipment’s. This facility meets all
the quality standards specified by the Healthcare, Communication,
Industrial and Aerospace industries. Highly skilled engineers manage all
the production and quality departments.
At SFO, manufacturing capabilities include
 Multiple Surface Mount, Through Hole and Chip on board lines.
 High level assembly, mechanical integration and total box build.
 Separate ROHS and Non ROHS line
 IPC Class 3 Soldering
 Conformal coating
 No clean, water wash capability
 AOI, ICT, FCT and X-ray Inspection
 Flying probe testing
 Environmental Cycling Chambers
RF & Wireless Assembly
SFO Technologies has a dedicated facility for RF, wireless & microwave
components, sub-systems and HLA which is equipped with extensive

38
test and measurement devices such as Spectrum/Network Analysers, RF
signal generators, sweep oscillators etc. The facility has the capability to
build rigid, flex and ceramic substrates assembly and thick film hybrid
microcircuit assembly and also provide die-bonding and wire bonding.
SFO has the entire range of T&M equipment for RF testing up to 10GHz
which is manned by skilled technicians who have been given specific
training in this area.
Optronics- patch cords, attenuators, PLC splitters, laser
transmitters & receivers, TOSA, ROSA and EDFA
SFO Technologies has an ultra-modern integrated facility for
manufacturing active and passive fiber optic products. The
manufacturing facilities have developed expertise over 20 years in
critical areas such as:
 Class 10,000 clean
 CoC assembly
 Chip on board assembly
 Precision active alignment
 Laser welding and hermetic sealing
 Multi fiber polishing and connectorisation
 Test and evaluation capability up to 10GHz
 Reliability and evaluation test facilities
 Fiber Management
SFO Optics facility has experience in building wide and varied product
range includes patch cords, attenuators, fused and PLC splitters, laser
transmitters &receivers, TOSA, ROSA and EDFA.

39
Cable & Wire Harness for healthcare, aerospace, automotive sectors
SFO maintains an integrated manufacturing facility for custom wire
harnessing and over-moulding which is equipped with automatic wire
stripping, cutting, crimping, soldering, laser stripping and cross section
analysis equipment and test facilities.
SFO There’s also a wide range of test instruments, state-of-the-art
reliability test facilities and a programmable functional test capability.
SFO provides cable assemblies for healthcare, aerospace, automotive
and industrial applications and also FRC assemblies, RF & coaxial cable
assemblies, HV cable assemblies and socket assemblies.
SFO has the capability to economically fabricate moulds and fixtures
with minimum lead time.
A world-class facility for Precision Tool Making
SFO Technologies possesses a world-class facility for all types of
precision tooling. The plant has a capacity for operating for 30,000
machining hours per month and manufacturing 100 moulds/dies per
year. There’s a Pro/E based mould design center with mould flow
analysis and a highly efficient ERP system. A very high precision
machining accuracy of 2 micron and multi axis machining is sustained.
The tool room is fully equipped to conduct mould flow analysis and high
precision testing with an aim to ensure the highest quality for all
products.
A fully integrated facility for Mechanical Engineering
SFO maintains a fully integrated facility for
 Surface treatment such as degreasing, passivation and plating
 Laser Cutting for rapid proto development
 Sheet metal fabrication

40
 Stamping
 Welding
 Mechanical sub-assemblies, cabinets and racks.
 Wet and dry painting
 Plastic injection moulding
SFO’s mechanical engineering team is well experienced and familiar
with all the latest tools such as AutoCAD, Pro-E and Solid Works. The
engineering team is responsible for translating customer 2D/3D models
into detailed engineering drawings, appropriate process development,
NPI services and documentation.
Tools and Molds
SFO has dedicated team for tool and mold design where mold flow
analysis and finite element analysis is conducted. SFO can also fabricate
and all types of precision tooling. SFO can deliver tools with 2 micron
accuracy from world class tool room with high precision, multi-axis
CNC milling, wire EDM, and sink EDM along with conventional milling
and grinding operations
SFO’s mechanical product manufacturing experience include precision
parts, sub-assemblies, fully integrated, cabinet, racks, enclosures,
consoles and complex mechanical systems for critical applications such
healthcare, energy, industrial, communication, defense, aerospace and
transportation.
SFO integrated plastic injection moulding facility
SFO has an integrated plastic injection moulding facility capable of
producing precision plastic parts and products using plastic parts using
variety of raw materials. This facilities expertise covers:
 Converting customers part drawings into mould design.

41
 Fabrication and qualification molds
 Plastic injection moulding using state of art machines from 25T to
700T
 Ultrasonic welding
 Screen printing
 Integrated product assembly.
SFO’s plastic injection moulding experience includes plastic enclosures
for smart energy meter, automotive vehicles, and medical equipment
and, precision plastic parts for ATM machines.
Design and manufacture of Power Supply & Magnetics
SFO Technologies design and manufactures highly reliable UL custom
power supplies, fan tray solutions and magnetic components like coils
and transformers for filters. These products are supplied to mission
critical applications such as healthcare, communication, process control
and transportation where fault tolerant power supplies decide the
reliability of the equipment.
SFO engineering team is well experienced in variety of power supply
designs and they can translate customer specifications into reliable
products. Manufacturing facility for power supplies is equipped with
dedicated power supply testers, hi-pot testers and burn-in chambers.
Apart from power supplies, SFO’s also design and manufacture variety
of magnetic components such as chokes, filters, transformers, torrid and
CT assemblies. SFO can custom design magnetic products for customers
from their specifications. The manufacturing facility for magnetics is
well equipped with manual and automatic winding machines and test
equipment’s.

42
High Level Assemblies & Box Build - fully integrated facility at SFO
Technologies
One of the differentiator of SFO is its expertise and experience in
realizing high level assemblies and complete box build using its
vertically integrated manufacturing facilities at multi-locations such as
 Electronics
 Power supplies and magnetics
 Wire harness
 Mechanical fabrication and tooling
 Plastic Injection Mouldings and moulds
 Software
In order to build, assemble and test HLAs and Box builds, SFO has
developed capability for engineering, software development,
procurement, assembly, integrate, test and compliance to international
standards by third party agencies. SFO team has the required domain
knowledge of the end use application of such products in healthcare,
communication, energy, industrial and transportation markets.
SFO’s past experience in HLA and box build include:
 Energy meter
 Wind pitch controller
 Ultrasound machine
 ECG machine
 Baby warmer
 ATM kiosks
 Metro fare collection gates
 Token dispenser
 Ticket vending machine

43
 Set top Boxes
 Fiber Distributions Management System
 EDFA
 Fibre intrusion detection
Quality
SFO Quality - Global standards to exceed customer expectations
SFO is wholly committed to quality, excellence and performance and
works towards exceeding customer expectations at every stage. SFO
Technologies offers holistic solutions, carefully designed to customer
specifications and consistently maintaining very high levels of quality.
The quality policy states: “ We are committed to comply with customer
requirements and Quality Management System Requirements and shall
strive to continually improve the effectiveness of our Quality
Management System to exceed customer expectations " In fact, attaining
best results in quality has become a part of SFO’s organizational culture.
SFO’s quality policy - customer centric to maximize satisfaction
The foundation of all activities at SFO is commitment to quality. SFO’s
quality policy is customer centric and aims to maximize customer
satisfaction. SFO has been persistently developing process improvement
measures as it is believed that the quality of a software system is
governed by the quality of the process used to develop it.
SFO Technologies has made substantial progress towards getting
certified for TS 16949, ISO 27001 and Nadcap.
SFO Quality Excellence - ISO 13485, AS 9100, TL 9000 & ESD S
20:20
SFO Technologies has secured ISO 9001:2008 certifications for all its
divisions. The continued quest for excellence in quality has led to many

44
awards being conferred on SFO at the national level. Customers have
recognized SFO’s contributions in this field and have bestowed many
awards and recommendations on the company in the international arena.
SFO Technologies takes its commitment to the environment very
seriously. SFO also meets all EICC (Electronic Industries Code of
Conduct) requirements.
Besides ISO 9001 certificate, various divisions are certified to industry
specific certificates like ISO 13485, AS 9100, TL 9000 and ESD S 20:20
based on their manufacturing domain.
Recently, the Finished Medical Device (FMD) facility was certified to
ISO 13485, which is an international recognition of compliance with the
FDA Quality System Regulations and unique medical industry
standards, facilitation of global business, and improvement of process,
product, and service quality. In addition, the ISO 13485 certification
satisfies a significant portion of the EU Directive requirements for
marketing medical devices in Europe. ISO 13485 is an international
standard, recognized throughout the world for establishing a business
management system specific to the medical device industry.

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2.1RESEARCH METHODOLOGY
Research Methodology is the chapter in which we are able to get a clear
view on how the various researches were conducted for the subject
matter under study and the various methods used for the collection of
data. On the basis of primary data collected from respondents in SFO
Technologies on the basis of interview and questionnaire. Secondary
data have been obtained from selected websites and books. The analysis
of the data collected has been done with the help of specific statistical
tools. Interpretation has been made on the basis of the analysis.
2.2 SOURCES OF DATA
a. Primary Data
Data observed or collected directly from first hand experiment.
The primary data for the study has been collected from the
questionnaire provided to 66 employees at SFO Technologies,
Bangalore who are the end users of the ERP System
b. Secondary Data
Published data and the data in the past or other parties are called
secondary data. The secondary data for the study has been
collected from various administrative reports, business magazines,
various websites as well as official websites of SFO Technologies.
Both primary as well as secondary data have been used as tool for
data collection for the study and the sample size as well as
sampling method used is also identified in this chapter of research
methodology. The Research Design of the study has been
primarily analytical based on primary data collected from the
respondents in SFO Technologies, Bangalore on the basis of
interview and Questionnaire.

46
Secondary data have been obtained from selected websites and books.
The analysis of the data collected has been done with the help of specific
statistical tools. Interpretation has been made on the basis of the analysis.
2.3 SAMPLING DESIGN
A sample design is a definite plan for obtaining a sample from a given
population. It refers to the technique or the procedure the researcher
would adopt in selecting items for the sample. Sample design may as
well lay down the number of items to be included in the sample i.e., the
size of the sample.
 UNIVERSE/POPULATION
Universe refers the total of the items or units in any field of inquiry,
whereas population refers to the total items about which information is
desired. Quite often there may not be any difference between population
and universe, and as such the two terms are taken as interchangeable.
The universe as well as the population of the study comprised of the
employees at SFO Technologies, Bangalore.
 TYPE OF SAMPLING
The sampling method used for the project to derive data is convenient
sampling method. Convenience sampling is a non- probability sampling
technique where subjects are selected because of their convenient
accessibility and proximity to the researcher. Convenient sampling is a
type of non-probability sampling technique. Non probability sampling
focuses on sampling techniques that are based on the judgments of the
researcher.

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 SAMPLE SIZE
Sample refers to those respondents selected which are representative of
the total population that gives a miniature cross-section. Algebraically,
from the total population of N, if a part of it is selected, n(which is<N),
according to some rule for studying some characteristic of the
population, the group consisting of these n units is known as ‘sample’.
Sample size refers to the number of items to be selected from the
universe to constitute a sample. The sample size for this study is 66.
2.4 DATA COLLECTION TOOL
In this study, a structured questionnaire is used for collecting data. A
structured questionnaire is a questionnaire in which there are definite,
concrete and pre-determined questions. The questions should be stated in
advance and not constructed during questioning. Structured
questionnaires also have fixed alternative questions in which responses
of the informants are limited to the stated alternatives. Thus a highly
structured questionnaire is one in which all questions and answers are
specified and comments in the respondent’s own words are held to the
minimum.
TOOLS USED FOR DATA ANALYSIS
 SIMPLE PERCENTAGE ANALYSIS
In this method, percentage is calculated based on the responses given by
the respondents. This method is used to describe relationship.
Percentage = No. of responses
Total No. of respondents
100

48
 CHI SQUARE TEST
Chi Square test is a statistical tool used in the context of sampling
analysis for comparing a variance to a theoretical variance. Chi Square
test is applicable in large number of problems. The test is a technique
through the use of which it is possible for all researchers to (i) test the
goodness of fit; (ii) test the significance of association between two
attributes, and (iii) test the homogeneity or the significance of population
variance. In this study Chi Square test is used to test the significance of
association between two attributes.
Chi Square Formula:
χ2
= ∑
(𝑶𝒊−𝑬𝒊)𝟐
𝑬𝒊
𝒏
𝒊=𝟎
d.f = (c-1) (r-1)
Where,
O = Observed frequency
E = Expected Frequency
r = No. of Rows
c = No. of Columns
2.5 REFERENCE PERIOD
The reference period of the study of the project has been from April
2017 to May 2017.

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3.1 ANALYSIS AND INTERPRETATION
Data analysis and interpretation based on the questionnaire provided to
the employees of SFO Technology, Bangalore.
Table 3.1 –Quality of Current ERP System
Rating Frequency Percent
Excellent 13 19.69
Very Good 29 43.93
Average 23 34.84
Below Average 0 0
Poor 1 1.51
Total 66
Source: Primary Data
Figure 3.1 – Quality of Current ERP System
Inference:
Table 3.1 and Figure 3.1 represents the Quality of Current ERP System
where 19.69 % falls in the class of Excellent,43.93% falls in the class of
Very Good,34.84% falls in the class of Average, None falls in the class
of Below Average and 1.51% falls in the class of Poor.
19.69
43.93
34.84
0 1.51
0
5
10
15
20
25
30
35
40
45
50
Excellent Very Good Average Below Average Poor
Percent
Rating
Quality of Current ERP System

50
Table 3.2-Current system help in availability of data access with
timely and accurate information.
Highly Improved 13 19.69
To a certain extent 28 42.42
Somewhat 21 31.81
To a limited extent 4 6.06
Not at all 0 0
Total 66
Figure 3.2 –Current system help in availability of data access with
timely and accurate information
Inference:
Table 3.2 and Figure 3.2 represents current system help in availability of
data access with timely and accurate information where 19.69 % falls in
the class of Highly Improved, 42.42% falls in the class of To a certain
extent, 31.81% falls in the class of Somewhat, 6.06% falls in the class of
To a limited extent and None falls in the class of Not at all.
19.69
42.42
31.81
6.06
0
0
5
10
15
20
25
30
35
40
45
Highly Improved To a certain extent Somewhat To a limited extent Not at all
Percent
Rating
Current system help in availability of data access with
timely and accurate information

51
Table 3.3-User-friendliness of the ERP System
Excellent 11 16.66
Very Good 31 46.96
Average 23 34.84
Below Average 1 1.51
Poor 0 0
Total 66
Figure 3.3-User-friendliness of the ERP System
Inference:
Table 3.3 and Figure 3.3 represents user-friendliness of the ERP System
where 16.66% falls in the class of Excellent, 46.96% falls in the class of
Very Good, 34.84% falls in the class of Average, 1.51% falls in the class
of Below Average and None falls in the class of Poor.
16.66
46.96
34.84
1.51 0
0
5
10
15
20
25
30
35
40
45
50
Percent
Rating
User-friendliness of the ERP System

52
Table 3.4-Impact of ERP on the workload of the employees
Figure 3.4 – Impact of ERP on the workload of the employees
Inference:
Table 3.4 and Figure 3.4 represents the Impact of ERP on the workload
of the employees where 10.6% falls in the class of Excellent, 42.42%
falls in the class of Very Good, 39.39% falls in the class of Average,
7.57% falls in the class of Below Average and None falls in the class of
Poor.
10.6
42.42
39.39
7.57
0
0
5
10
15
20
25
30
35
40
45
Percent
Rating
Impact of ERP on the workload of the employees
Excellent 7 10.60
Very Good 28 42.42
Average 26 39.39
Poor 0 0
Total 66

53
Table 3.5- ERP system helps in integrating the functional
departments in the organization
Figure 3.5– ERP system helps in integrating the functional
departments in the organisation
Inference:
Table 3.5 and Figure 3.5 represents the ERP system helps in integrating
the functional departments in the organisation where 9.09% falls in the
class of Strongly Agree, 39.39% falls in the class of Agree, 37.87% falls
in the class of Neutral, 13.63% falls in the class of Disagree and None
falls in the class of Strongly Disagree.
9.09
39.39 37.87
13.63
0
0
5
10
15
20
25
30
35
40
45
Strongly agree Agree Neutral Disagree Strongly disagree
Percent
Rating
ERP system helps in integrating the functional
departments in the organisation
Rating Frequency Per cent
Strongly agree 6 9.09
Agree 26 39.39
Neutral 25 37.87
Disagree 9 13.63
Strongly disagree 0 0
Total 66

54
Table 3.6- ERP system save time when compared to the conventional
system
Figure 3.6–ERP system save time when compared to the
conventional system
Inference:
Table 3.6 and Figure 3.6 represents ERP system save time when
compared to the conventional system where 19.69% falls in the class of
Highly, 28.78% falls in the class of To a certain extent, 16.66% falls in
the class of Somewhat, 24.24% falls in the class of To a limited extent
and 10.6% falls in the class of Not at all.
19.69
28.78
16.66
24.24
10.6
0
5
10
15
20
25
30
35
Highly To a certain extent Somewhat To a limited extent Not at all
Percent
Rating
ERP system save time when compared to the
conventional system
Rating Frequency Per cent
Highly 13 19.69
Somewhat 11 16.66
Not at all 7 10.60
Total 66

55
Table 3.7- ERP implementation helps in reducing the Operational
cost
Figure 3.7– ERP implementation helps in reducing the Operational
cost
Inference:
Table 3.7 and Figure 3.7 represents ERP implementation helps in
reducing the Operational cost where 27.27 % falls in the class of High,
33.33% falls in the class of to a certain extent, 30.3% falls in the class of
Somewhat,7.57% falls in the class of to a limited extent and 1.51% falls
in the class of Not at all.
27.27
33.33
30.3
7.57
1.51
0
5
10
15
20
25
30
35
Percent
Rating
ERP implementation helps in reducing the Operational
cost
Highly 18 27.27
Somewhat 19 30.30
Not at all 1 1.51
Total 66

56
Table 3.8-Need for updating the current system
Figure 3.8– Need for updating the current ERP System
Inference:
Table 3.8 and Figure 3.8 represents need for updating the current ERP
System where 66.66% falls in the class of Yes and 33.33% falls in the
class of No.
66.66
33.33
0
10
20
30
40
50
60
70
Yes No
Percent
Rating
Need for updating the current ERP System
Yes 44 66.66
No 22 33.33
Total 66

57
Table 3.9- ERP system is flexible for changes happening in the
organization
Figure 3.9– ERP system is flexible for changes happening in the
organization
Inference:
Table 3.9 and Figure 3.9 represents ERP system is flexible for changes
happening in the organization where 12.12% falls in the class of Strongly
agree, 27.27% falls in the class of Agree, 54.54% falls in the class of
Neither Agree/Disagree, 3.03% falls in the class of Disagree and 3.03%
falls in the class of Strongly disagree.
12.12
27.27
54.54
3.03 3.03
0
10
20
30
40
50
60
Strongly agree Agree Neither
Agree/Disagree
Disagree Strongly disagree
Percent
Rating
ERP system is flexible for changes happening in the
organization
Agree 18 27.27
Neither Agree/Disagree 36 54.54
Disagree 2 3.03
Strongly disagree 2 3.03
Total 66

58
Table 3.10- Organisation provides adequate infrastructure for the
support of current ERP system
Figure 3.10– Organisation provides adequate infrastructure for the
support of current ERP system
Inference:
Table 3.10 and Figure 3.10 represents Organisation provides adequate
infrastructure for the support of current ERP system where 71.21% falls
in the class of Yes and 28.78% falls in the class of No.
71.21
28.78
0
10
20
30
40
50
60
70
80
Yes No
Percent
Rating
Organisation provides adequate infrastructure
for the support of current ERP system
Yes 47 71.21
No 19 28.78
Total 66

59
Table 3.11- ERP system helps in reducing the error rate
Figure 3.11– ERP system helps in reducing the error rate
Inference:
Table 3.11 and Figure 3.11 represents ERP system helps in reducing the
error rate where 9.09% falls in the class of Highly, 43.93% falls in the
class of To a certain extent, 34.84% falls in the class of Somewhat,
12.12% falls in the class of To a limited extent and None falls in the
class of Not at all.
9.09
43.93
34.84
12.12
0
0
5
10
15
20
25
30
35
40
45
50
Highly To a certain
extent
Somewhat To a limited
extent
Not at all
Percent
Rating
Reduction in error rate
Highly 6 9.09
Somewhat 23 34.84
Not at all 0 0
Total 66

60
Table 3.12- ERP system provides useful reports for the working of
the organisation
Figure 3.12– ERP system provides useful reports for the working of
the organisation
Inference:
Table 3.12 and Figure 3.12 represents ERP system provides useful
reports for the working of the organisation where 27.27% falls in the
class of Strongly agree, 53.03% falls in the class of Agree, 18.18% falls
in the class of Neutral,1.51% falls in the class of Disagree and None falls
in the class of Strongly disagree.
27.27
53.03
18.18
1.51 0
0
10
20
30
40
50
60
Strongly agree Agree Neutral Disagree Strongly
disagree
Percent
Rating
ERP system provides useful reports for the
working of the organisation
Agree 35 53.03
Neutral 12 18.18
Disagree 1 1.51
Total 66

61
Table 3.13- Current system provide support for CRM
Figure 3.13– Current system provide support for CRM
Inference:
Table 3.13 and Figure 3.13 represents Current system provide support
for CRM where 13.63% falls in the class of Excellent, 30.3% falls in the
class of Very Good, 50% falls in the class of Average, 6.06% falls in the
class of Below Average and None falls in the class of Poor.
13.63
30.3
50
6.06
0
0
10
20
30
40
50
60
Percent
Rating
Current system provide support for CRM
Excellent 9 13.63
Very Good 20 30.30
Average 33 50
Poor 0 0
Total 66

62
Table 3.14- ERP system helps in increasing the Performance level of
employees
Figure 3.14– ERP system helps in increasing the Performance level
of employees
Inference:
Table 3.14 and Figure 3.14 represents ERP system helps in increasing
the Performance level of employees where 12.12% falls in the class of
12.12
45.45
15.15
25.75
1.51
0
5
10
15
20
25
30
35
40
45
50
Percent
Rating
ERP system helps in increasing the Performance level
of employees
Highly 8 12.12
Somewhat 10 15.15
Not at all 1 1.51
Total 66

63
Table 3.15-Features and functionality of ERP system is easy to learn
Figure 3.15– Features and functionality of ERP system is easy to
learn
Inference:
Table 3.15 and Figure 3.15 represents features and functionality of ERP
system is easy to learn where 6.06% falls in the class of Strongly agree,
53.03% falls in the class of Agree, 33.33% falls in the class of
Neutral,7.57% falls in the class of Disagree and None falls in the class of
Strongly disagree.
6.06
53.03
33.33
7.57
0
0
10
20
30
40
50
60
Strongly agree Agree Neutral Disagree Strongly disagree
Percent
Rating
Features and functionality of ERP system is easy to learn
Agree 35 53.03
Neutral 22 33.33
Disagree 5 7.57
Total 66

64
Table 3.16-Training for ERP can be beneficial for achieving the task
Figure 3.16-Training for ERP can be beneficial for achieving the
task
Inference:
Table 3.16 and Figure 3.16 represents the Training for ERP can be
beneficial for achieving the task where 7.57% falls in the class of
Excellent, 69.69% falls in the class of Very Good, 22.72% falls in the
class of Average, None falls in the class of Below Average and in the
class of Poor.
7.57
69.69
22.72
0 0
0
10
20
30
40
50
60
70
80
Percent
Rating
Training for ERP can be beneficial for achieving the task
Excellent 5 7.57
Very Good 46 69.69
Average 15 22.72
Below Average 0 0
Poor 0 0
Total 66

65
Table 3.17- ERP system help to have coordination with the
stakeholders
Figure 3.17- ERP system help to have coordination with the
stakeholders
Inference:
Table 3.17 and Figure 3.17 represents ERP system help to have
coordination with the stakeholders where 15.15% falls in the class of
15.15
31.81 30.3
16.66
6.06
0
5
10
15
20
25
30
35
Percent
Rating
ERP system help to have coordination with the
stakeholders
Highly 10 15.15
Somewhat 20 30.30
Not at all 4 6.06
Total 66

66
Table 3.18-Security Measures of the ERP system
Figure 3.18- Security Measures of the ERP system
Inference:
Table 3.18 and Figure 3.18 represents Security Measures of the ERP
system where 30.3% falls in the class of Highly, 43.93% falls in the class
of To a certain extent, 19.69% falls in the class of Somewhat, 6.06%
falls in the class of To a limited extent and None falls in the class of Not
at all.
30.3
43.93
19.69
6.06
0
0
5
10
15
20
25
30
35
40
45
50
Highly To a certain
extent
Somewhat To a limited
extent
Not at all
Percent
Rating
Security Measures of the ERP system
Highly 20 30.30
Somewhat 13 19.69
Not at all 0 0
Total 66

67
Table 3.19- Overall experience and view of the ERP system by the
employees
Figure 3.19-Overall experience and view of the ERP system by the
employees
Inference:
Table 3.19 and Figure 3.19 represents Overall experience and view of
the ERP system by the employees where 24.24% falls in the class of
Very Successful, 59.09% falls in the class of Successful, 6.06% falls in
the class of Disappointing, 10.6% falls in the class of No opinion.
24.24
59.09
6.06
10.6
0
10
20
30
40
50
60
70
Very Successful Successful Disappointing No opinion
Percent
Rating
Overall experience and view of the ERP system by the
employees
Very Successful 16 24.24
Successful 39 59.09
Disappointing 4 6.06
No opinion 7 10.60
Total 66

68
CHI-SQUARE TEST
To test the relationship between the availability of accurate information
and reduction in operational cost using the system the following
hypothesis is formulated.
Null Hypothesis
H0: There is no association between the availability of accurate
information using ERP system and reduction in operational cost.
Alternative Hypothesis
H1: There is an association between the availability of accurate
information using ERP system and reduction in operational cost.

69
OBSERVED FREQUENCY (Table 3.21)
[i= Availability of accurate information, ii=Operational cost]
EXPECTED FREQUENCY (Table 3.22)
[i= Availability of accurate information, ii=Operational cost]
i
ii
Excellent Very
good
Average Below
Average
Poor Total
Highly 5 9 4 0 0 18
To a certain
extent
3
11 7 2
0 23
Somewhat 4 6 9 0 0 19
To a
limited
extent
1
2 0 0
2 5
Not at all 0 0 1 0 0 1
Total 13 28 21 2 2 66
i
ii
Excellent Very
good
Average Below
Average
Poor Total
Highly 3.54 7.63 5.72 0.54 0.54 18
To a certain
extent
4.53
9.75 7.31 0.69
0.69 23
Somewhat 3.74 8.06 6.04 0.57 0.57 19
To a
limited
extent
0.98
2.12 1.59 0.15
0.15 5
Not at all 0.19 0.42 0.31 0.03 0.03 1
Total 13 28 21 2 2 66

70
Calculation Table (Table 3.23)
Oi-Observed Frequency, Ei-Expected Frequency
 Calculation: χ 2
= ∑
(𝑶𝒊−𝑬𝒊)^𝟐
𝑬𝒊
𝒏
𝒊=𝟎
=36.217
 Degree Of Freedom = (Row-1) * (Column - 1) = (5-1) * (5-1) = 16
 Level of Significance = 5 %
 Table Value (@ level of significance 5% and degree of freedom 16)
is 26.296
 Calculated Value = 36.217
Oi Ei Oi-Ei (Oi-Ei)^2 (Oi-Ei)^2)/Ei
5 3.54 1.46 2.1316 0.602146893
9 7.63 1.37 1.8769 0.245989515
4 5.72 -1.72 2.9584 0.517202797
0 0.54 -0.54 0.2916 0.54
0 0.54 -0.54 0.2916 0.54
3 4.53 -1.53 2.3409 0.516754967
11 9.75 1.25 1.5625 0.16025641
7 7.31 0.31 0.0961 0.013146375
2 0.69 1.31 1.7161 2.487101449
0 0.69 -0.69 0.4761 0.69
4 3.74 0.26 0.0676 0.018074866
6 8.06 -2.06 4.2436 0.526501241
9 6.04 2.96 8.7616 1.450596026
0 0.57 -0.57 0.3249 0.57
0 0.57 -0.57 0.3249 0.57
1 0.98 0.02 0.0004 0.000408163
2 2.12 -0.12 0.0144 0.006792453
0 1.59 -1.59 2.5281 1.59
0 0.15 -0.15 0.0225 0.15
2 0.15 1.85 3.4225 22.81666667
0 0.19 -0.19 0.0361 0.19
0 0.42 -0.42 0.1764 0.42
1 0.31 0.69 0.4761 1.535806452
0 0.03 -0.03 0.0009 0.03
0 0.03 -0.03 0.0009 0.03

71
Interpretation
The calculated value (36.217) is greater than table value (26.296). Thus
the null hypothesis is rejected. So there is an association between the
availability of accurate information using ERP system and reduction in
operational cost.
3.2 LIMITATIONS OF STUDY
i. Employees were not able to provide full information because of
their busy schedule.
ii. Lack of seriousness and personal bias has affected the study to
find the effectiveness of ERP system.

72
4.1 FINDINGS
 Majority (43.93%) of the employees is satisfied with the Quality
of ERP system.
 Most of the employees (42.42%) agree that the ERP system helps
in availability of data access with timely and accurate information.
 Majority (42.96%) of employees says that ERP system is user
friendly.
 Employees (39.39%) says that ERP system helps in integrating the
various functional departments in the organisation.
 Majority (39.39%) of the employees say that ERP system helps in
reducing the workload of employees.
 Most (30.30%) of employees having the opinion that the ERP
system helps in reducing the operating Cost.
 Most (28.78%) of employees says that the system helps in
reducing the time when compared to the conventional system in
the organisation.
 Good percent (71.21%) of the employees say that the organization
provides adequate infrastructure and facilities that supports the
ERP system.
 More than half (66.66%) of the employees say that there is a need
for updating the current ERP system.
 Employees (43.93%) to a certain extent says that there is high
reduction in error rate in performing the task.
 Great number (30.30%) of employees have an opinion that the
current system provide support for CRM.
 Majority (31.81%) of the employees say that the system support
full coordination with the stakeholders of the organization.

73
 The majority of employees (53.03%) agree that the current ERP
system’s features and functionality is easy to learn.
 45.45% of the employees are of opinion that ERP system helps in
improving the productivity and performance level of the
employees.
 Majority (69.69%) of employees satisfied with ERP training
provided by the organization.
 Most (43.93%) of employees agreed that Full-fledged security
measures has been implemented for the various user accounts
which is very much useful.
 Majority (59.09%) of employees were pointed out that it has been
successful in experience with the ERP system.
4.2 SUGGESTIONS
 Periodic evaluation can be conducted to evaluate the performance
of ERP system, which will help to find out the problems and
rectifying them as early as possible.
 The organization should be in a position to support the employees
whenever they feel problems in doing task with ERP assistance.
4.3 CONCLUSION
SFO Technologies being, a flagship company of NeST Conglomerate,
believes in delivering quality services and products to clients from all
corners of the world. In such a scenario real time decision making is the
most desired phenomenon for having an edge. This has been made
possible by the IT revolution and innovative launch of ERP, which
provides integration of all functions of an organization on a common
platform. This reduces the redundancy and duplication while adds the

74
transparency. Being an ERP implemented firm, there were highly
reduction in the operational cost, workload can be reduced, timely
accessing of data, sufficient training has been conducted in a full-fledged
manner, better Customer relationship has been maintained. This has been
made possible by the IT revolution and innovative launch of ERP, which
provides integration of all functions of an organization on a common
platform. This reduces the redundancy and duplication while adds the
transparency. Successful implementation not only integrates the
functions of organization but makes most judicious use of all available
resources saving millions of rupees. Realising its far reaching benefits
the defence forces have decided to adopt this technology.

75
BIBLIOGRAPHY
Websites:
 http://www.erpwire.com
 http://www.erppandit.com
 http://www.sfotechnologies.net
Books:
 Garg, Vinod Kumar and N.K VenkitaKrishan (2011).Enterprise
Resource Planning: Concept and Practice PHI Learning Pvt.Ltd.,
Delhi.
 Leon, Alexis.Enterprise Resource Planning (Sep.07).Tata
McGraw Hill, New Delhi.
 Murthy, C.S.V. (2008). Enterprise Resource Planning: Text and
Case Studies. Himalaya Publications House, Delhi.

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