Introduction to Enterprise Resource Planning (ERP) System
Conduct research on AIS/ERP System.
Enterprise Resource Planning refers to the business process management software that allows the business to use a process that is integrated with various applications to manage the functioning of the business. This type of software specifically integrates all the business functions together and helps the organization in producing valuable output for the organization. This software adequately uses the technological resources in attaining effectiveness in the activities of the organization. This process specifically integrates the functions of the process of operations including planning, development, manufacturing, marketing and sales in one database and user interface (Hou, 2016).
Further, the below mentioned report provides a brief introduction about the business process of ERP system that is suggested to the “Modern Library” for initiating their activities successfully. The report comprises of the business process detailing about selection of ERP/ AIS system so as to help the organization in initiating an informed decision for the organization. Further, the report also explains the business requirements for the process and the system requirements as well. It also explains the system requirements and the software and vendor selection. The latter part of the report also explains the three ways with which the company can utilize these technologies to improve the efficiency of the business. It also explains the level of efficiency of technological implementation and potential risks and securities. Mitigations with respect to risks were suggested in the report. More details about the reports are discussed below:
The business process of an ordinary library is a single line business that involves manual recording of the inventory and creating assumptions for the storage of inventory with the business. Further, the management under this process faces difficulty in evaluating the actual quantity of resources held with the library as the assumed number differs from the actual one; this creates difficulty in preparing budget and recording the quantity of inventory in the books of accounts (Siqueira, et. al., 2017). In the current era, modern library uses an orthodox technique of recording the inventory that is discussed below:
The above mentioned diagram explains the standard model of the managerial process that is being used in the library. This process is currently used by the organization. However, one can easily identify many flaws in the system used by the organization; use of this process also hinder the growth of the company in the external environment as it reduces its efficiency to work competitively. This model is the standard linear business model for any library, although this model was in use by organizations but till the time when there was no competitions and innovation present in the environment. Thus, it should be noted that now the company cannot use the same process and believe that it will help them in achieving success in the market. The Modern Library should use the ERP system for better functioning of the internal process. This process helps the organization to go cost efficient in the company by reducing the costs of wastage and decreasing the number of mistakes as well. The process provides efficiency to the business due to which that helps the management in handling the issues properly (Cusumano, Kahl, and Suarez 2015).
Business Process of Modern Library
The process of enterprise resource planning has now been looked after as the need of the environment. This system helps the organizations to increase the efficiency in the activities of the library by inputting all the available resources in the process and collectively implementing all business functions through one source only. The enterprise resource planning system helps the business processes in effectively managing the operations of the business and implementing success. Further, relating the functions to the business requirement of Modern Library, it should be noted that above mentioned business process used by the organization is inefficient and reduces the working capacity of the company, so introduction of this process in the organization will help the organization in effectively managing the business. In the complex business environment, it has become the need of the organizations to use this process effectively operating all the activities (Silver 2017).
Further, the business of library look like a small business process that can be easily managed but, the matter of fact is that the company many times faces critical issues in managing the business that affects the growth of the business. So, with the use of ERP system the library can easily manage their activities and compete in the external environment as well. Along with the internal functions of the business, the company needs to effectively manage the front line activities in the organization. If the is having qualified resources but the front line employees are unable to allocate in the environment then these resources are of no use. Thus, the business process of the company should help the employees to allocate the resources at the right time when required. Furthermore, talking about the core business activity of the library business, it should be noted that the ERP system induces the use of programming software in allocating the stoc and developing the business functions as well (Khan, and Faisal 2015).
Lastly, it should be noted that the business process of Modern Library requires the ERP system because it will help the employees in effectively managing their activities and innovating various functions as well. This process will also reduce the repetitive tasks done the by the employees that will reduce the time in performing certain acts in the organization. Thus, due to these requirements, the Modern Library should use the ERP system (Wease, et. al., 2018).
The ERP system implementation in the library business is not easy for the organization to formulate as this process requires accumulation of many activities that collectively fulfill the requirements of the management. Thus, the below mentioned points discusses about the system requirements of the ERP:
Benefits of Implementing an ERP System
Accounting and financial: One of the major system requirements of ERP system engagement is that it automates and evaluates the typical accounting operations into one. The ERP system induced in the company will help the management in allocating the accounting work under one single department and relating all the activities efficiently. Thus, with the help of such implementation and follow back process, the deviations and mistakes will ultimately decrease. The software will also help the business process in effectively preparing payroll, account payable/ receivable etc. in cost as well as time effective manner. Accuracy is also enhanced with the help of this process (Habadi, et. al., 2017).
Human capital Management: The ERP system is required by the management of the company to successfully implement the human resource activities in the library. ERP will help the library to increase the job satisfaction of the employees by providing them all the information related to job description and company description as well. According to its name, enterprise resource planning, the software will help the company to increase the performance management (Ali, and Miller 2017).
Material Management: The ERP system of the library will effectively manage the working capital of the organization by fixing the account balance to be maintained all the time. This process also effectively records the inventory and checks the balance with the warehouse as well. A library has various books so this process will solve the difficulty of the management in recording the number of books attained with the organization and finding out the number of lost books as well. Further, this process will also check the inventory present at the warehouses and the stores and calculate it with the actual total inventory present with the organization (Tvrdíková 2016).
Customer service management: The system requires the employees to effectively operate with the software and its functions as well. The system will help the organization in introducing valuable capabilities in the process and providing them to the clients as well so as to satisfy their needs. If the system is properly welcomed by the employees and used in the process then it will dive better level of satisfaction for the customers along with increase in their level of satisfaction (Mu, Kirsch, and Butler 2015).
It is the most important job for the organization to select the right type of ERP system and the vendor as well. It is should be noted that the company stands upon its business process only and if that process is corrupt or incorrect for the organization the it will subsequently lose its effect in the target market. Once an ERP system is installed in the organization there is no turning back for the organization. Thus, it is important for the organization to look sensitively at the matter and select the best ERP system that matches their business process and system requirements as well. In order to select qualified ERP software, the management should initially understand the type of internal structure of the company and then analyze then evaluate the external aspects affecting the internal capabilities of the organization (Jain,and Sharma 2016).
System Requirements of ERP
The company should select adequate software by looking after all these factors present in the environment. The library should also examine the drawbacks in the currently system used by the organization and then aim to select the best method that occupies all the drawbacks and initiates a process that eliminates the repetition of mistakes in the organization. The ERP system includes huge investment costs so the company cannot easily change the system once implemented in the organization. The company should also initiate a system that the employees can easily adopt without facing any difficulty. This system should be easy to use by the management. The purpose of this system is reducing the workload and time invested by the employees in performing certain tasks in the organization. Thus, it is the most crucial decision in management for implementing the ERP system in the organization (Alavi, and Yoo 2015).
- Conversation, not checklist: the old-style method used to select the software program is the ordinary process that many times makes the company to take wrong decision for the organization relating to ERP software system. This process of selection does not evaluates all the process of the organization due to which they fail to recognize various important aspect. This results in failure for the organization to perform well by using ERP software. Further, in order to evaluate the system, the library needs to seek the advice of the stakeholders, faults in the program etc. Considering all these points, the company should select the program that excludes the shortcoming and provide a better approach to the organization for managing the work. The company should also go into in depth conversation with vendor who will be acting as a partner with them after the library purchases the software (Hasan 2017). The company should critical analyze the type of software and vendor they want for the organization. Also, they should discuss with the vendor about the best type of software that would fit with the organization. The company should clearly state their requirement to the vendor so that they can also understand their needs and provide them satisfaction accordingly. Management of Modern Library should effective explain their requirements of the business model to the vendor, and the vendor should also not only act as a salesperson but also guide the company related to the process, motivate them and advise them as well (Seethamraju 2015).
- Fix, and then automate: If an organization will implement changes in the organization irrespective of the issues that they are facing, then the process will get highest priority to fail. As the process will not achieve its actual efficiency just because it did not get proper circumstances to survive. Thus, the company should initially try to fix the issues present in the organization, once when all the problems are solved then the company should welcome the ERP system in the organization. By automating the process in positive circumstances, the company would gain the confidence of the employees for the new process and apply them effectively in the organization. This process will effectively help the organization in resolve the issues and implement the process that can effectively affect the organization (Ptak, and Schragenheim 2016).
- Evaluate the people, not just the product: This aspect explains information about the vendor from whom the library is going to purchase the software. The company should evaluate the credibility of the vendor and their image in the target market. If the vendor has good brand in the market then only the company should approach them. Further, it should be noted that when the organization is buying software, then it is buying the current and future version of the tool. This will create a partnership with both the organizations, thus in order to perform well the company needs to evaluate the function of the vendor of software in the market (Kulkarni, et. al., 2015).
Some more aspects that the company should consider while selecting the vendor are discussed below:
- Flexible contract terms: the software contract should be flexible in itself. The contract should not hamper the working of both the companies; it should provide optimum space to both the organization to implement actions according to their will.
- Domain expertise: There is vast difference between building software and attaining a true domain experience. The experience shows that how the vendor started their business and maintained their image in the competitive advantage as well (Manthou, Stefanou, and Tigka 2015).
- Post-sale support: it is important to choose the right type of software and the vendor as well. If the vendor is not capable to effectively resolve the issues of the company related to the software then the post-sale service becomes ineffective. The vendor should be true to the client in all case and it should also provide post-sale support to the Modern Library (Bradford 2015).
Lastly, it should be noted that the best fitting software for the Modern Library is SAP. It is an ERP system acquisition model that is known best in the industry for providing diversified managerial services to the company in the market. The company can also make use of SAP Business One software to increase competency.
There are particularly three ways to utilize the software in the Modern Library that are discussed below:
- In front desk: the front desk of the organization includes the work of receptionists and salesmen serving to the coming visitors. The system can help the employees in initiating their activities effectively. As if the employees do not remember the customers that have rented the book at a particular time and if they do not remember which book is kept at what place and information related to inventory. The ERP system that the company is going to include feature that calculate, optimize and note the amount of inventory kept with them and the stock that they need to purchase (Jinno, Abe, and Iizuka 2017).
- In back office management: in back office, the employees uses this software in such a way that it will help them to reduce repetition of work and perform the task on time. Further, the system will effectively help the organization in recoding the transactions, it should be noted that as this process reduces half of the manual work of the employees so now they can focus on implementing innovation in the business process of the company (Ahmad, and Cuenca 2013).
- Creating security for the organization: This process will help the organization in storing the information in cloud. This will help them in eliminating the security threat, also with the digitalization of work; the company can easily contact the customer any time by using their contact information stored in the system. This process provides and stores various other information about the customers including their punch in and punch out timing (Al-Mashari, and Al-Mosheleh 2015).
It should be noted that the Modern Library can easily attain success by implying positive features of ERP software in their business. It should be noted that pre-implementation of the ERP software the company used to record the data manually and there was lack of innovative technology in the business. The employees were engrossed in performing similar task again and again. This results in decrease in efficiency of the employees of the company. But with the use of this process, the employees started recording the data in the cloud; this resulted in decrease in repetition of tasks (Dixit, and Prakash 2011). Further the software also organized various activities of the organization that resulted in better achievement of organizational objective. Thus, sales of the company were subsequently increased. As the company used to record data manually so the library used to face difficulties when an employee committed any mistake. This process reduced the mistakes in the organization and it also helped the organization in finding the number of lost books and taking active measures against them as well (Velcu 2010).
- Selection of inadequate software: One of the biggest risks for the business software is to select the wrong type of software that does not match to the activities of the organization. As all the software have different specifications and composures according to their processes. As the library business not require software that is innovative, but it need software that helps the business in effectively storing and recording the information and eliminating repeated work. Thus the company should look for these specifications in the vendor and the software. Also the vendor should be reliable (Sudhaman, and Thangavel 2015).
- Customization: Software is received to the organization after several tests and improvements. All organizations want to adopt software that is different and stand out in performing its functions in the organization. Sometimes, the organizations asks the vendor to innovate the software in order to help the organization achieve better level of satisfaction, however this innovation lets the company pay huge amount and still not show its effectiveness in the system. Innovation many times makes it difficult for the employees to adopt and implement. Also the vendor do not hold liability if the company asks for customization in the software (Ram, Corkindale, and Wu 2013).
- No clear vision: For a company it is hard for them to create differentiation and competitive advantage in the target market without using ERP software. But implementation of this software because all other organizations present in the environment are using it then the company cannot implement it effectively. The organization should implement the software because it is the need of their process not to follow the crowd (Leon 2014).
- Exposure of sensitive data: when a software is exposed to the activities of the organization then big files are transferred to the cloud software and the internal prick sensitive information is also stored in that cloud. So, if any hacker tries to corrupt the software then they can easily take into account all the information stored in the software. Providing the internal data of the organization to other organization puts the company at a risk of possession (Katerattanakul, Lee, and Hong 2014).
Selecting the Right Type of ERP System and Vendor
Although there is presence of many drawbacks in the installation and use of ERP software in the business, but it can be effectively sought by the management by effectively participating in the process. Further, the mitigations of the risks are discussed below:
- The management should check the programming of the ERP software on a regular basis so as to effectively find out the deviations on time and take measures relating to it.
- The company should also initiate a fixed plan that should include the ways to implement the ERP software in the activities of the organization.
- The company should look in advance for the vendor in order to select particular software for the organization. The company should also look for the after sale services provided by the vendor.
- The company should try customizing the software under the surveillance of the vendor; they should not ask to initiate any innovation that can hamper the growth of the company in future (Ha, and Ahn 2014).
- The company should train the employees to effectively make use of this without complaining.
Thus, with the help of these mitigations the company can easily uses the ERP software in business.
Thus in the limelight of the above-mentioned events, it should be noted that the ERP software is very important for an organization s it helps them in achieving efficiency and competitiveness in the target market. The above mentioned report explains the importance and the use of the ERP software in a library business. The report explained advantages, risks and mitigations for the use of ERP software for the organization. With the help of this the Modern Library can effectively achieve success in the market. The report explained the need of the business and system to adopt this type of software in the organization. It also explained the implementation of a particular type of software and the selection of vendor in the market as well. Lastly, it should be noted that this process supports the activities of business and eliminates repetition of work and error in the organization as well.
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