Uun Widhi Untoro: The Importance of ERP in the Globalization Era

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THE application of Enterprise Resource Planning (ERP) in Indonesia is increasing, with a rise in profitability and a reduction in a company’s operational costs. ERP can present entirely integrated realtime data. Uun Widhi Untoro, the president director of PT IFS Solutions Indonesia, explained that: “The ERP system will be more in demand in line with the dynamics and development of information technology.”  

Educating companies on the importance of the ERP system is indeed not as easy as ABC. It takes determination and hard work. In the 1990s, for example, very few companies here were willing to apply ERP, more so in family or first generation companies. They thought that they could proceed without the support of information technology (IT), because their perception or way of thinking was still of the old paradigm. So, in their opinion, their companies did not need an integrated system.  

Slowly but surely, under the auspices of PT IFS Solutions Indonesia, established in 1997 and with its headquarters in Sweden, Untoro started offering the ERP system to a number of companies. Initially many rejected it. However, his perseverance and persistence paid off. The man who acquired an IT education in a self didactic way finally achieved success. One by one companies became interested and ultimately applied ERP.  

Today, dozens of companies use the ERP system, such as PT Parit Padang, PAL, Pusri, Soho Industri Farmasi, Lautan Luas, Olympic Furniture, Ateja, HM Sampoerna, Sosro and Petrokimia Gresik. At present, his company is preparing the necessary software for other types of companies, such as agribusiness, trading and oil and gas as per their requirements.   In any company, Untoro said, IT has become a necessity. It is neither complementary nor just for the sake of appearances. Why?

Because not only company managements care about IT but also employees. IT has turned into a strategic tool to enhance competitiveness, increase profitability, cut down on operational costs and expand market share. “If previously IT was chucked into a corner, called the EDP or MIS Department, now it is placed at the level of an operational director, even CEO. They are moving in that direction. If a senior employee joins a company that does not avail of IT, such a company is considered second-rate,” said the man who loves traveling.  

Technology development is progressing rapidly, fueled by strong market demand, and this keeps IFS Solutions on its toes to always fulfill the relevant requirements. Naturally, this company has to come up with breakthroughs in the application system as an answer. “IFS always strives to deliver the best system, such as through its IFS Solutions 7, which is the seventh generation application system and the most sophisticated. It enables the user to build architecture based on SOA (Service-Oriented Architecture),” he explained.  

Today, IFS’ core business covers distribution, manufacturing, maintenance, engineering and human resourcing. The company is also preparing the necessary software for agribusiness, trading and oil and gas companies. In developing its business further, IFS also works in partnership with a number of prominent providers, such as Oracle, SAP, Artajasa and Lintasarta.  

With his extensive IT knowledge, Untoro has become the driving force of the company. He acknowledges, however, that the success of IFS is also due to the quality of the company’s personnel. Although the company is deeply immersed in technology, IFS is able to alter the employees’ way of thinking from the technical side to the technocommercial side.

Employees at this company are taught to understand not only technical problems but also commercial ones. “Our objective is to develop technocommercial people,” he said. Although it is understood by employees, it is not easy to initially change the mind-set of programmers, who mostly care about technology matters rather than commercial issues. But with great patience it has been achieved.  

Untoro’s success is closely related to a life philosophy that he strongly adheres to. For him, success does not just miraculously happen without a struggle. Hard work is needed to achieve success. “The key is simply hard work, keep learning and praying. That is my asset in reaching my achievements.”  

Furthermore, the application of the ERP system in IFS’ clients is a relatively long process that takes time. To apply the system it is not only about understanding the business process of the client, but also concerns the capability to predict the dynamics of the client’s company in the future. The aim of all this is to optimize the ERP system and at the same time adopt a new application without totally revamping the existing one.  

The next step is to decide the required application system. The system used must at least be related to the next phase of the ERP system. That is why, Untoro said, IFS has a continuance module that can be developed, such as Business Performance, Customer Relationship Management, Quality Management, Document Management, Supply Chain Management, Project Management and Business Modeller.  

Through these modules the ERP system can be expanded into several applications required by the client, such as e-procurement for the procurement of goods, web store for online sales and employee development for employee training and skill enhancement.  

The last step is an education program for everyone in the client’s company, from top management down to the bottom level so that they understand how to apply the system. “We continue with the education program until they really comprehend how to operate the ERP system. We also provide training for employees on how to maintain the system,” explained Untoro, adding that the investment for ERP application program is more than US$150,000.  

Although the investment is high, many benefits can be obtained from the implementation of the ERP system. Through this system, he said, one client, PT Soho Industri Farmasi, can easily control all its products, from stock, production capacity to the monitoring of expired products. While at Petrokimia Gresik the application of ERP greatly helps in making available integrated online distribution data. 

“From the viewpoint of business performance, the ERP system can evaluate key performance indicators (KPI) of a company. As a result, the presence of ERP is required more and more in this globalization era that prioritizes information technology,” said Uun Widhi Untoro. (Burhan Abe)  

The Jakarta Post, August 15, 2007    

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