ERP-BASED SME BUSINESS LEARNING ENVIRONMENT
Karoliina Nisula
Department of Business Information and Logistics, Tampere University of Technology,
Korkeakoulunkatu 10, Tampere, Finland
Keywords: Business Education, Business Simulation, Learning Environment, ERP, SME.
Abstract: Small and medium size enterprises are an important and growing part of the economy. They lack an
adequately skilled workforce. Higher education is claimed to provide students with theoretical knowledge
rather than skills. Enterprise resource systems, business simulation games and the practice enterprise model
are all practical, experiential learning environments. Each of them solves different learning challenges but
does not provide a comprehensive learning environment. This paper presents a simulated learning
environment that merges the three environments together, allowing students to learn the daily operations of
SMEs in a practice-focused manner. In addition, the instructor can create learning situations appropriate for
the learning objectives at hand. The paper describes experiences of the first pilot from both the student and
the teacher perspective. An initial evaluation shows positive learning outcomes on the long-term
memorizing of declarative knowledge among the low and average students.
1 INTRODUCTION
Small and mid-size enterprises (SMEs) are an
important and a growing part of the economy. They
need skilled employees that are work-ready when
they are hired (Woods and Dennis 2009). Higher
education is claimed to produce graduates who have
good theoretical knowledge but lack practical skills
(Martin and Chapman 2006, Holden, Jameson and
Walmsley 2007). Regardless of the long term
efforts to bring education closer to the business,
there still seems to be a gap between the skills of the
business graduates and the requirements of business
life (Jackson 2009).
“Rich environments for active learning” are
broad instructional systems that stimulate study
within authentic contexts and create a feeling of
knowledge building communities (Grabinger and
Dunlap 1995). They utilize interdisciplinary learning
activities with realistic tasks.
This paper presents an active learning
environment that supports the learning of the skills
needed in SMEs. It is based on experimental
learning theory that views learning as a continuous
and iterative cycle of concrete experience, reflection,
conceptualization and testing the concepts in new
situations (Kolb 1984).
Enterprise resource planning (ERP) systems are
used for acquiring the practical experience
(Targowski and Tarn 2006). Business simulation
games are also experiential learning environments
(Lainema 2009). Another, less IT-focused learning
environment is the practice enterprise model, which
aims at teaching entrepreneurship skills through a
business-to-business network where student teams
run simulated SME companies (Kallio-Gerlander &
Collan, 2007).
These learning environments are used to
accomplish different business learning objectives
(Nisula and Pekkola 2011). ERP systems focus on
IT skills and business process understanding (Jaeger,
Rudra, Aitken, Chang and Helgheim 2011) whereas
business simulation games focus on strategy and
decision-making (Faria, Hutchinson, Wellington and
Gold 2009). The practice enterprise model
emphasizes entrepreneurship, teamwork and
communication (Kallio-Gerlander and Collan 2007).
This paper argues that the learning environments
should be combined into one to promote all skills at
the same time. The paper presents the new combined
SME business learning environment, and reports an
initial evaluation of its success.
2 SME BUSINESS LEARNING
ENVIRONMENT
ERP systems give a good technical environment for
233
Nisula K..
ERP-BASED SME BUSINESS LEARNING ENVIRONMENT.
DOI: 10.5220/0003893202330238
In Proceedings of the 4th International Conference on Computer Supported Education (CSEDU-2012), pages 233-238
ISBN: 978-989-8565-07-5
Copyright
c
2012 SCITEPRESS (Science and Technology Publications, Lda.)
hands-on learning of different disciplines and
business IT-systems. They illustrate the integration
between different business processes in practice. On
their own, however, their pedagogical benefits are
limited (Seethamraju 2011). They remain only a tool
and need a case study to work on (Markulis, Howe
and Strang 2005).
Business simulation games contain a dynamic
and interactive case. They are widely used for
learning active decision-making and teamwork
(Faria et al. 2009). They typically focus on top
management strategic decision-making or a specific
business operation. They lack the SME perspective
and a view of day-to-day operations. Many business
simulation games utilize the ERP mindset or ERP-
like system and some are even built on a commercial
ERP system (Léger 2006, Ben-Zvi 2007). The
challenge of business simulation games, however,
lies in modelling the real life situations without
oversimplifying them (Hofstede 2010, Goosen,
Jensen and Wells 2001).
In the practice enterprise model, the students
work in a virtual SME company without actual
transfer of goods or money. Unlike business
simulation games, the practice enterprise model does
not have pre-planned scenarios or contain an
element of competition. The business environment is
provided by an administrator who acts as the
authorities, the bank, the insurance company, etc.
The students trade with other similar student-run
enterprises (Kallio-Gerlander and Collan 2007). The
aim is to form customer-supplier-relationships,
negotiate agreements and market to other virtual
companies run by students.
The practice enterprise model lacks extensive
raw material and consumer markets. The learning
situations arise mostly from the student company
cooperation. The practice enterprise model is strong
on practical day-to-day SME operations and
interaction between real people. But as there is no
consumer market to create the initial demand, the
trade between student enterprises soon becomes
artificial (Santos 2006, Miettinen and Peisa 2002).
Jackson (2009) and Fernald, Solomon, &
Bradley (1999) have investigated industry-relevant
business competencies. Nisula and Pekkola (2011)
compared their findings with the learning goals of
the three experiential learning environments to find
that an optimal learning environment combines
features and benefits of all three.
3 SYSTEM OVERVIEW
The core of the SME business learning environment
is an open source ERP system Pupesoft used by
commercial SME companies (Devlab Oy). There are
three layers in the environment: The external layer is
visible to the general public. The internal layer
contains the activities inside each company and it is
run in the ERP system. The system layer contains
the data traffic caused by transactions between the
companies.
3.1 External Layer
The external layer of the learning environment is
built with web-pages. It is a fictitious market area
with providers of basic infrastructure: real estate,
electricity, telephones, insurance, transportation and
health services. The raw market consists of
wholesalers with a wide product offering. The
students start and run their companies in this
environment.
The media of the market area is a web
publication that contains imaginary local news as
well as real-life external news. A virtual online
banking provides financing. The learning
environment’s tax authorities are accessed with an
electronic tax account which is a replica of the
official Finnish electronic tax account (Finnish tax
administration 2009).
3.2 Internal Layer
All companies run their internal operations in the
Pupesoft ERP system. The system structure is
illustrated in figure 1. The ERP systems of the
various student companies, support companies, bank
and the tax officials appear separate to the end users,
but they reside in the same database. Access is
managed with user rights and profiles.
Figure 1: The learning environment database structure.
3.2.1 User Roles and Profiles
There are three user roles in the database: student,
teacher and administrator. The profiles assigned to
Pupesoft ERP
Business
game
Teacher
reporting
Bank
Tax account
CSEDU2012-4thInternationalConferenceonComputerSupportedEducation
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these roles define which activities are available to
each user.
The student profile is adjusted to the students’
skills and learning goals. The profile grows as the
student’s learning increases.
The teacher profile enables monitoring the
students’ learning process through standard ERP
reports and user statistics.
The administrator sets up the companies and the
user accounts, sets the ERP parameters and acts as a
help desk on technical problems. In addition, he/she
runs the learning environment acting as the banker
and managing the support companies. He/she
communicates through different e-mail aliases to
create the illusion of communicating with several
companies
.
3.2.2 The Business Game Element
The business game element is administered in the
ERP system. It e-mails automated consumer
purchase orders to the student companies. The
frequency and intensity of the purchase orders can
be adjusted to emulate the market fluctuations of the
consumer market.
The business game element produces two types
of purchase orders: Random orders are created
regardless of the student company’s business
performance. The amount of work and profit are
equal in all student companies. Routine orders are
related to how professionally the student company is
running its business operations. A well performing
student company gets financially more valuable
orders than another company with a lower
performance
.
3.3 System Layer
The system layer transfers financial data between
ERP and bank systems. The data transfer creates a
closed ecosystem with double-entry book-keeping.
Every external transaction is recorded in two
companies. This provides the basis for the business
game indicators as it populates the companies’ ERP
systems with income and cost data. It also enables
the administrator and the facilitating teachers to stay
up-to-date on the student companies’ activities. The
facilitating teachers get company reports based on
transactional data rather than the students’
interpretation of the situation.
4 EVALUATION
The first version of the learning environment was
piloted in the Tampere University of Applied
Sciences (TAMK) School of business and services
in 2010-2011. Before this pilot, the practice
enterprise model had been in use since 2005. The
pilot was run with 170 business students in 17
simulated companies. 12 teams were first-year BBA
students and five teams were second-year BBA
students. The student teams started a simulated
business-to-business company and operated it for a
year. In addition to their other business studies they
worked 4-8 hours a week in their companies. The
curriculum integrated disciplinary lectures into the
student company life cycle. The teams had
supervising teachers who coached and mentored
them in the learning environment.
The learning process was based on Kolb’s
experiential learning model. The student companies
were divided into three departments of 3-4 students:
marketing, logistics and accounting. Each student
worked in a department for a period of time to gain
practical experience and reflect on that. They also
followed lectures, which helped them to
conceptualize their experiences. At the end of each
period, the department roles rotated. The students
taught each other the tasks of their new departments.
They were able to test their skills in new situations,
which, again, completed Kolb’s learning cycle. Each
student worked in all the departments during the
academic year. This gave them a full overview of a
company’s business processes (Nisula and Pekkola
2011).
The pilot was evaluated through the learning
outcomes as well as student and teacher feedback.
The evaluation was done with two groups of first
year students, each containing 117 students. The first
group, class of 2009, used the practice enterprise
model. The second group, class of 2010, used the
SME business simulation.
The learning outcome was evaluated through the
acquisition of declarative, disciplinary knowledge. It
was measured with open-end and multiple-choice
questions. The evaluation had three phases: a pre-
understanding, a mid-term and an end test. The end
test was given 3 months after the end of the
academic year in order to measure longer term
learning effects.
Feedback from the students and the teachers was
collected through web questionnaires at mid-term.
The teachers also had a face-to-face feedback
session in the end of the academic year.
4.1 Effects on Learning
Both the practice enterprise group and the simulation
ERP-BASEDSMEBUSINESSLEARNINGENVIRONMENT
235
group gained similar average scores in the pre-
understanding test (62%) and the mid-term test (70-
71%). In the long-term efforts the simulation group
scored slightly higher with 62% against the 58% of
the previous practice enterprise model group.
When looking at the distributions of the scores,
however, some more distinctive results can be
found. Figure 2 shows the score distribution for the
pre-understanding test in the beginning. On both
groups the score distribution follows approximately
the same bell shaped curve.
Figure 2: Score distribution on the pre-understanding test.
Figure 3 shows that at mid-year the same trend
continues. The practice enterprise group has a
slightly wider range of scores in both highs and lows
whereas the simulation groups’ scores were more
focused on the average 60-70% range.
Figure 3: Score distribution on the mid-term test.
In the figure 4, at the year end, there is a difference
between the groups. The curves are identical in the
high scores, but the low and average scores are
better in the simulation group. This seems to indicate
that the high performers score well regardless of the
learning environment where as the low and average
performers benefit from the simulation environment.
This evaluation shows some promising signs of
improvements in the long term memorizing of the
low and average performing students. However,
alone it does not provide enough evidence to show
the SME business simulation’s superiority to the
practice enterprise model.
Figure 4: Score distribution on the year-end test.
This evaluation was restricted to the learning
goals of the disciplinary expertise which is just one
learning objective among many. A study on the
efforts on other learning objectives is an interesting
area for further research.
4.2 Student Feedback
At mid-term the students were given a web-
questionnaire with a set of statements as well as
some open end questions. There were 101 responses.
The best average scores on a Likert-type scale
(1=strongly disagree, 5= strongly agree) were on
applying theory to practice and making studying
versatile (4,1). Integration between the simulation
environment and the curriculum also scored well
(3,8). Moreover, students appreciated the simulation
in creating the big picture of the business processes
(3,8). The poorest scores were on the motivational
aspect (3,2) and the uneven distribution of workload
(2,8). The uneven work load is a typical challenge in
a team-oriented learning method.
In the open-end questions the most frequently
mentioned positive sides reflect Kolb’s learning
cycle: practical, hands-on approach, combining
theory with practice and versatility, variation and
change to traditional studying methods. Also, team
work was seen as a positive factor. Critical feedback
focused mostly on the uneven distribution of work
load, simplification vs. reality, technical problems
and communication challenges.
4.3 Teacher Feedback
The supervising teachers’ feedback reflected the
students’ reaction. According to the teachers the
students had learned to use the systems quickly. On
the other hand, this learning environment seemed to
require more intensive coaching and guiding.
The teachers felt more uneasy with the IT
orientation than the students. They also found the
Pre-understanding test
0 %
20 %
40 %
60 %
0 20 40 60 80 100
score
% of all scores
2009
2010
Mid-term test
0 %
20 %
40 %
60 %
0 20406080100
score
% of all scores
2009
2010
End test
0 %
20 %
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0 20406080100
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2009
2010
CSEDU2012-4thInternationalConferenceonComputerSupportedEducation
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new environment challenging because it required a
lot of general business and IT knowledge. Most of
them, however, found it motivating to learn new
things together with the students. They appreciated
the increased opportunities to combine theory with
practice by using examples of the learning
environment in their lectures. The increased
visibility to the student teams’ activities was also
mentioned as a benefit.
5 RELATED SYSTEMS
ERP systems have been used as a teaching tool for
approximately 10 years (Targowski and Tarn 2006).
ERP systems can provide a nerve system to integrate
different disciplines and remove redundancies
between them (Joseph, George 2002). Yet ERP
systems remain mechanical tools for training rather
than a comprehensive environment for deep learning
(Seethamraju 2011).
Business simulation games are widely used in
strategic management courses (Faria et al. 2009).
INDUSTRYPLAYER (Faria et al. 2009) is a global
online multiplayer game. INTOPIA (Thorelli 2001)
focuses on international business. MICROMATIC
simulates a small manufacturing company
(Washbush and Gosen 2001) whereas CYCLOAN
runs a branch office of a service company
(Scherpereel 2005). These are only a few examples
of the wide range of business simulation games.
RealGame is an example that contains some
ERP-like functionality even though it is not based on
a commercial ERP system (Lainema and Makkonen
2003). ERPSim is a combination of the SAP
environment and simulated events caused by student
teams’ business decisions (Léger 2006).
An ERP-based business simulation game is a
good learning environment for diverse simulations
that resemble running real-life operations. However,
the business simulation games tend to focus on the
top management decision making or a specific
functional area. They are not optimal in learning the
day-to-day SME operations.
6 CONCLUSIONS AND FUTURE
RESEARCH
The main difference between the new SME learning
environment and the related systems is twofold:
First, the new SME learning environment excels the
related systems because it combines their specialized
features for an improved result. Second, it is a
flexible, comprehensive environment where the
instructor can choose how to incorporate it into
learning.
The learners become active participants in the
learning process. They repeat Kolb's learning cycle
several times and have opportunities to reflect their
experiences. In addition to simple task delivery, the
learners face unexpected, instructor created
problems that do not always have simple solutions.
The first evaluation on the learning results
indicates improvements in the long-term
memorizing of disciplinary declarative knowledge.
It is particularly interesting that the improvements
were found amongst the low and average scoring
students. However, more research is needed to
study the learning outcomes on other business skills.
Based on the feedback the new learning
environment appears to be a motivating environment
to students and teachers alike. The learning
environment requires the teachers to expand to
outside their comfort zone both professionally and
mentally. A deeper research into the effects on the
teachers’ work would be of interest.
The learning environment is still only a tool for
teaching and learning. The teachers and students
give it meaning. It is crucial that it is integrated into
other teaching and the whole curriculum.
Curriculum integration of the learning environment
is another interesting topic for future research.
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