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Internal and External Operating Environment of Thirsty Swagman

Question:

Discuss about the Implementation of ERP systems in Swagman.

The paper focuses on the implementation of cloud based ERP within the company “Thirsty Swagman” which is one of the tour operators that specializes in pub-themed and festival tours. The company was founded in the year 2007 by Kenneth Hart. It is identified that the company provides different types of tour services including La Tomatina tours, Oktoberfest tours, Stuttgart beer festival, Kinga Bar Hopper, Beer or bust, Spanish Bar made, zero gravity party, beer in space as well as round the world pub tour (Thirsty Swagman 2018).   However, the management team of the company analyzes that they face difficulty in managing the data as well as information of the clients due to the increase in popularity of the company among the people. Therefore, the management team of the organization requested the top management of the company to sponsor budget for implementing cloud based ERP system within the company.

The paper illustrates internal as well external operating environments of the company. The proposal identifies the problem for IS/IT and justifies the choice of the proposed system that is cloud based ERP system. The paper explains system analysis, system design, system implementation testing as well as development. In addition to this, the paper also elaborates post-implementation activities as well as discusses other activities like project management, risk management and change management. 

The company “Thirsty Swagman” is one of the tour operators that mainly specialize in various festival tours as well as pub themed tours. It is identified that in the year 2008, the company started its journey by offering “Around the world” pub crawl. The mission as well as vision of the company is provided below:

The main mission of the company is to offer best, most unforgettable travel experience to the people which is accomplished by providing life-changing learning adventures. The company is deeply committed to be the benchmark in offering service excellence as well as experimental enriching program with added values at very much competitive price.

The vision of the company includes the following:

Service excellence: Thirsty Swagman is mainly committed to provide proper service to the customers in a timely manner.

Accountability: The company mainly pledges abide by its moral code of various ethical practices in all company as well as social activities.

Pioneering spirit: The Company is mainly driven by the thirst of courage as well as knowledge for exploring places.

ERP System Implementation at Thirsty Swagman

ERP system is utilized within the company in order to manage the departments that are elaborated below:

HR management system: The ERP system is mainly utilized for streamlining the human resource as well as capital information (Le and Han 2016).

Financial accounting module: The module is managed for recording the expenditure, assets as well as revenue of the company with the help of the ERP system

Customer relationship management: The ERP system helps in offering prober opportunity to the customers for boosting sales. In addition to this, ERP system stores proper information including addresses as well as contact details.

Quality management module: It is identified that with the help of the ERP system the company monitors the tourism services that is provided to the customers (Shukla et al. 2016).

Marketing management system: With the utilization of ERP system, the company helps in managing marketing campaigns.

Billing and order management system: Billing as well as order management system is one of the smooth error-free ordering procedure that helps in improving the accuracy by eliminating errors due to the utilization of ERP system (Pai and Rane 2014).

Enterprise controlling module: It is identified that ERP system is mainly utilized for controlling the enterprise by analyzing the success factors as well as performance indicators. 

It is identified that the company “Thirsty Swagman” manages the internal operation environment effectively by following appropriate management style. Some of the approaches of leadership which are utilized by the company include values of the employees, effectiveness of communication as well as both positive as well as negative nature. Due to proper internal operation environment, the company is able to maintain the following:

Operations: The organization manages various operational as well as organizational operations effectively so that the customers can consider the company as reliable.

Strategic risks: In order to maintain the internal operation environment within the company, the business appropriately manages strategic risks properly as this threat or risks can be able to later the way in which the products are perceived by the customers (Abdinnour and Saeed 2015).

Innovation: The business generally requires innovation for competing properly in the market and it is mainly done with the help of proper promotional activities, marketing plan as well as staff training and welfare.

Financial status: As an internal function, the organization manages the financial structure of the business which is dependent on the financial systems as well as on the business transactions.

Benefits and Challenges of the ERP System

Risks associated with employees: The Company is able to manage the risks that are associated with the employees properly for maintaining the internal operation environment effectively (Shatat 2015).

The external operations of the company are as follows:

Economic environment: In order to maintain external operation environment effectively, the organization manages sudden as well as short term changes in demand as well as impact on productivity, capacity and utilization.

Competitor flexibility: The competitor flexibility is managed by the organization as external operation so that efficient and better quality of competitors faces pressure in delivering operation (Chou et al. 2016).

Technological change: In order to manage the environment of external change appropriately, the technological change within the company is managed appropriately especially in markets where the lifecycle of the product is short.

Legal and environmental change: Greater legislations and regulations of the environment generally help in placing new challenges for various operations and objectives in order to maintain proper external environment (Shen, Chen and Wang 2016).

The company “Thirsty Swagman” uses ERP system in order to manage the operations of the organization. In addition to this, with the help of the ERP system, the company is able to improved collaboration, saves money, attracts customers, improves financial condition and assists in simplifying regulatory compliance. However, in spite of the advantages there are number of problems that the company faces due to the use of ERP system. The problems that the company faces include:

Improper ERP performance: It is identified that one of the biggest issue that the company face across is that after the implementation of in-house ERP, they generally require fair amount of power with appropriate efficiency (Chang et al. 2015). With increase number of customers, the company needs to invest much in servers which is considered an obstruction in the path of progress.

Enhanced cost of operation: The In-house ERP system that is used by the company “Thirsty Swagman” generally required hardware in order to support it properly with knowledgeable staff for maintaining as well as installing it. It is identified that hiring of new staff for the company like Thirsty Swagman wont came at very much low cost.

Limited access of information: The Company has only limited information access due to the use of ERP system and as a result it is found that the company generally struggles in order to find out the correct information (Tarhini, Ammar and Tarhini 2015).

Cost-Benefit Analysis of ERP Implementation

Less security: Due to the information system nature, it is quite difficult to manage internal security of data due to improper access of information. In order to make it secure, proper ERP accounts needs to be created.

Cost benefits analysis

Cost benefit analysis for the implementation of ERP system in Thirsty Swagman is provided below:

Hardware

 $         25,000.00

Software

 $           2,000.00

Development team salaries

 $         53,000.00

Training

 $         16,000.00

Total Development Cost

 $         96,000.00

Hardware

 $       180,000.00

Software

 $              600.00

Operational Labor

 $       115,000.00

Total Operational Cost

 $       295,600.00

Approximate salary savings

 $       130,000.00

Reduced operating cost

 $     2,400,000.00

Total Benefit

 $     2,530,000.00

Discount Rate Used

5.00%

Project Cost-Benefit Analysis

Analysis Variables:

Discount Rate Used

5.00%

Annual Benefits

 $2,530,000.00

Annual Operational Costs

 $   295,600.00

One-Time Development Cost

 $     96,000.00

Year of Project

0

1

2

3

4

5

TOTALS

Economic Benefit

$0.00

 $      2,530,000.00

 $     2,530,000.00

 $       2,530,000.00

 $     2,530,000.00

 $   2,530,000.00

Discount Rate

1.0000

0.9524

0.9070

0.8638

0.8227

0.7835

PV of Benefits

$0.00

$2,409,523.81

$2,294,784.58

$2,185,509.12

$2,081,437.26

$1,982,321.20

NPV of all BENEFITS

$0.00

 $      2,409,523.81

 $     4,704,308.39

 $       6,889,817.51

 $     8,971,254.78

 $  10,953,575.98

 $10,953,575.98

One-Time COSTS

 $(96,000.00)

Recurring Costs

$0.00

 $       (295,600.00)

 $       (295,600.00)

 $         (295,600.00)

 $       (295,600.00)

 $     (295,600.00)

Discount Rate

1.0000

0.9524

0.9070

0.8638

0.8227

0.7835

PV of Recurring Costs

$0.00

 $       (281,523.81)

 $       (268,117.91)

 $         (255,350.39)

 $       (243,190.85)

 $     (231,610.33)

NPV of all COSTS

 $(96,000.00)

 $       (377,523.81)

 $       (645,641.72)

 $         (900,992.12)

 $    (1,144,182.97)

 $  (1,375,793.30)

 $ (1,375,793.30)

Overall NPV

 $  9,577,782.67

Overall ROI

6.9616

The study is generally conducted by the company in order to analyze that whether the project is possible under certain circumstances or not. It is identified that an economic feasibility study is generally done on the work for analyzing if the cloud based ERP system implementation will be completed within the budget that is estimated. The study is generally based on cost benefit analysis in the project with the return of investment of 6.9%. 

The company “Thirsty Swagman” wants to meet strategic goals of the organization by resolving all the issues as well as challenges that it faces due to the use of ERP system for managing the functions as well as operations of the company. In order to resolve the issue, the higher management of the organization wants to implement cloud based ERP system (Sykes, Venkatesh  and Johnson 2014). It is identified that the implementation of cloud based ERP system not only resolves the issues but also assists in providing greater availability, support, scalability, as well as improved security to the organization. The points that are elaborated below help in supporting the strategic goal of the organization and also assist in providing benefit.

Decreased operating costs: If the cloud based ERP system is implemented within Thirsty Swagman, then the company needs to pay only a monthly fee which helps in cutting the cost of implementation to be far lower (Esendemirli,  Turker and Altuntas 2015). It is identified that even the operating cost of the company will be reduced if the system is implemented correctly.

Enhanced access of information: If the company “Thirsty Swagman” uses cloud based ERP system then the information will be easily accessed with the help of internet irrespective of time and place. This will be helpful in enhancing the overall business operation of the company by making accessing of information much easier also outside the office premises.

Increased security: The use of cloud based ERP system within the company will be able to provide enhanced security over other types of options with many other providers who take different type of enhanced measures in order to make sure that the data on their solution is quite safe.

Conclusion

Less requires resources: If cloud based ERP system is implemented within the company, then the company does not need to spent budget on any type of additional capital for networking hardware (Mukti,  Tripathi and Rawani 2014).

Scalability: It is identified that one of the main benefits of implementing cloud based ERP system is that, the system is quite easy for scaling services in order to meet the needs as well as requirements of the customers.

System analysis is considered as a procedure that is utilized for collecting as well as interpreting different types of facts, identifying problems as well as decomposing cloud based ERP system into number of its components. The procedure of system analysis is mainly conducted for studying the cloud based ERP system so that proper objective of the system can be identified (Nwankpa and Roumani 2014).This technique is generally considered as one of the problems solving technique as it generally helps in improving the operation of cloud based ERP system by ensuring that all its components are working efficiently within the system for accomplishing the purpose of the company. The system analysis is mainly undertaken for looking critically within the system for analyzing the benefits as well as challenges that is created due to the utilization of the system.

System design

The procedure of system design is undertaken for replacing the existing ERP system with cloud based ERP system by defining the various modules as well as components so that the new system will be able to meet the demands as  well as needs of the customers. Before the planning phase, it is very much important to understand the working of the existing system so that proper focuses on the design of the new system will be created in order to meet the objectives of the company (Maas,  Fenema and Soeters 2014). The system design procedure mainly focuses on the type of system, its processes as well as technology that is used. In this procedure, the architecture, modules, interfaces as well as data for a system that is used are illustrated. In addition to this, it is identified that the system design procedure helps in satisfying the requirements and needs of the business through the design or implementation of cloud based ERP system.

The cloud based ERP system can be developed properly by following the step that are provided below:

Design the hardware system: The hardware system that is necessary for developing the cloud based ERP system must be set up as much as possible.

Designing test scripts: The test script must be designed properly by step by step process within a proper discipline and other with appropriate cross functional (Shatat 2014).

Plan for transfer data: Proper planning about the transfer of data from legacy system to the new cloud based ERP must be done.

Keeping log: Proper log must be maintained in order to keep all the discovered issues properly. Proper information about how and when they will be fixed is determined from the logs.

Match with the environment: Proper match with the environment is generally made by continuing running tests, updating data problems as well as by setting the configuration switches (Walker 2015).

Involving people: More number of people must be involved within the project so that they can learn about the issue that is not recognized by the core team.

Designing report: Proper designing as well as testing of report is necessary for collecting as well checking information which is not present.

The developed cloud based ERP system can be tested by utilizing the steps that are elaborated below:

User acceptance testing: The user acceptance testing is done in order to identify any major issues that prior to the system go live. It is also considered as an opportunity to the users continuity before prior to the training of the users.

Quality acceptance testing: It is identified that quality acceptance testing is mainly done by the departmental heads in order to analyze any quality related issues within the system (Mir and Pinnington 2014).

Performance testing: This testing is generally undertaken in order to analyze the performance of the system and its impact on the organization.

 The cloud based ERP system is implemented within the company “Thirsty Swagman” by following the steps that are elaborated below:

 Define ERP strategy: The step that is taken by the company for the implementation of ERP is to identify the needs as well as requirement of the company as well as its business objectives accurately (Turner 2016).

 Better utilization of resources: Implementation of cloud based ERP system will be helpful in impacting the entire cycle of business and thus it is advisable to involve all the project stakeholders within the initial stages so that the resources are properly utilized.

Ensure tight control of the budget: The implementation of Cloud based ERP may require substantial investment and therefore company needs to control the budget properly.

Develop performance metrics: During the implementation of cloud based ERP, the company needs to develop proper performance metrics for measuring the impact that is created by cloud based ERP.

 The activities that are involved with the post implementation of cloud based ERP within the company “Thirsty Swagman” is elaborated below:

Review training: The training must be reviewed from time to time so that the adoption of cloud based ERP system must be done successfully.

Establishment of system governance structure: The system governance structure is properly established by aligning the requests of the users (Kerzner 2017). When a proper governance structure is established, a method of initiation for judging as well as aligning requests.

Maintenance plan: In the post-implementation phase, the company needs to create proper maintenance plan in order to maintain the implemented cloud based ERP system within the company.

 System evolution planning: It is quite important to keep the implemented cloud absed ERP system fresh as well as evolving for allowing the business to operate properly at peak performance (Sears et al. 2015). 

Project management is defined as a discipline that helps in initiating, planning, executing as well as controlling the work of the team in order to achieve proper goals for meeting specific success criteria at proper specified time. The company manages the project by utilizing the steps that are elaborated below:

Proper planning: The project manager must plan the project effectively by defining its goal and objectives (Too and Weaver 2014). The tasks that re related with the project must be defined by building the team effectively so that the entire project must be managed appropriately.

Project tracking: The project must be tracked effectively so that the entire project must be completed within properly time and budget.

Use of project management software: In order to track as well as schedule project, it is quite important to utilize proper project management software (Svejvig and Andersen 2015). With the help of the software both time as well as budget of the project is maintained

Time management: Appropriate time management is quite important in order to complete the entire project on time. Therefore it is very much important to track the time of the project.

Risks

Description

Impact

Probability

Mitigation measures

 Improper estimation of budget

 Due to improper estimation of budget, the project manager will face difficulty in completing the project on time (Heizer 2016).

High

Medium

 The budget of the project must be estimated by analyzing markets appropriately for cost of the materials.

 Improper management

 Due to improper experience of the project manager, it is quite difficult for them to complete the entire project on time and budget.

Medium

Medium

 Experienced project managers must be hired in order to complete the entire project on proper time and budget.

Improper training to the employees

 Due to improper training, the employees of the organization are not able to operate the new system properly therefore training is quite important.

High

Medium

 Proper raining must be provided to the employees of the organization so that they can be able to work effectively (Lock 2014).

Inaccurate planning

 Due to improper planning, it is not able to manage as well as track the project effectively and as a result the project will face number of obstruction in the path of progress.

 High

High

Proper planning is quite important for completing the project effectively on proper time and budget (Laudon and Laudon 2016).

Change identification

Purpose

Change analysis

Change request approval

Change tracking

 Appropriate training facility

 Proper training facility is provided so that the workers can operate the system effectively

 If the workers are able to work properly with the new system

 Project manager

 Weekly track must be kept to ensure that proper training facility is provided.

 Seminars for workers

 The seminars are generally arranged for providing information to the workers (Kerzner 2017).

If the team members of the project have proper information about the newly implemented system

Project manager

 Monthly seminars must be arranged for the workers.

Implementation of management strategies

Management strategies are generally implemented in order to manage the project effectively

 If the project is manage appropriately

Project manager

 Proper track must be kept on the management strategies for ensuring that the strategies are appropriate for managing project (Walker 2015).

Conclusion

It can be concluded from the entire assignment that implementation of cloud based ERP system within the organization “Thirsty Swagman” is quite useful. Due to the implementation of cloud based ERP, all the challenges as well as issues that the organization faces have been resolved. In addition to this, it is analyzed that the use cloud based ERP helps in enhancing flexibility, scalability as well as security of the information and data. The paper analyzes system design as well as system analysis in order to implement the system effectively. It is identified that the paper elaborates steps that are quite important for the development, implementation as well as testing of cloud based ERP. Moreover, the paper analyzes the risks associated with the project and provides proper mitigation strategies for resolving the issues as well as challenges. 

References

Abdinnour, S. and Saeed, K., 2015. User perceptions towards an ERP system: Comparing the post-implementation phase to the pre-implementation phase. Journal of Enterprise Information Management, 28(2), pp.243-259.

Chang, B., Kuo, C., Wu, C.H. and Tzeng, G.H., 2015. Using Fuzzy Analytic Network Process to assess the risks in enterprise resource planning system implementation. Applied Soft Computing, 28, pp.196-207.

Chou, H.W., Lin, Y.H., Lu, H.S., Chang, H.H. and Chou, S.B., 2014. Knowledge sharing and ERP system usage in post-implementation stage. Computers in Human Behavior, 33, pp.16-22.

Esendemirli, E., Turker, D. and Altuntas, C., 2015. An Analysis of Interdepartmental Relations in Enterprise Resource Planning Implementation: A Social Capital Perspective. International Journal of Enterprise Information Systems (IJEIS), 11(3), pp.27-51.

Heizer, J., 2016. Operations Management, 11/e. Pearson Education India.

Kerzner, H., 2017. Project management metrics, KPIs, and dashboards: a guide to measuring and monitoring project performance. John Wiley & Sons.

Laudon, K.C. and Laudon, J.P., 2016. Management information system. Pearson Education India.

Le, M.D. and Han, K.S., 2016. Understanding the Impact of ERP System Implementation on Firm Performance–Focused on Vietnamese SMEs. International Journal of Software Engineering and Its Applications, 10(9), pp.87-104.

Lock, M.D., 2014. The essentials of project management. Ashgate Publishing, Ltd..

Maas, J.B., Fenema, P.C. and Soeters, J., 2014. ERP system usage: the role of control and empowerment. New Technology, Work and Employment, 29(1), pp.88-103.

Mir, F.A. and Pinnington, A.H., 2014. Exploring the value of project management: linking project management performance and project success. International journal of project management, 32(2), pp.202-217.

Mukti, S.K., Tripathi, P. and Rawani, A.M., 2014. Identification of factors and indicators for success measurement of ERP system. International Proceedings of Economics Development and Research, 75, p.117.

Nwankpa, J. and Roumani, Y., 2014. Understanding the link between organizational learning capability and ERP system usage: An empirical examination. Computers in Human Behavior, 33, pp.224-234.

Pai, A. and Rane, S., 2014. Development and implementation of maintenance management module of enterprise resource planning in maintenance of power plant. International Journal of System Assurance Engineering and Management, 5(4), pp.534-543.

Sears, S.K., Sears, G.A., Clough, R.H., Rounds, J.L. and Segner, R.O., 2015. Construction project management. John Wiley & Sons.

Shatat, A.S., 2014. Critical Success Factors in Enterprise Resource Planning (ERP) System Implementation Stages: An Exploratory Study in Oman. In International Conference Image Processing, Computers and Industrial Engineering, Kuala Lumpur, Malaysia.

Shatat, A.S., 2015. Critical success factors in enterprise resource planning (ERP) system implementation: An exploratory study in Oman. Electronic Journal of Information Systems Evaluation, 18(1), pp.55-89.

Shen, Y.C., Chen, P.S. and Wang, C.H., 2016. A study of enterprise resource planning (ERP) system performance measurement using the quantitative balanced scorecard approach. Computers in Industry, 75, pp.127-139.

Shukla, S., Mishra, P.K., Jain, R. and Yadav, H.C., 2016. An integrated decision making approach for ERP system selection using SWARA and PROMETHEE method. International Journal of Intelligent Enterprise, 3(2), pp.120-147.

Supramaniam, M., Abdullah, A. and Ponnan, R., 2014. Cost analysis on ERP system implementation amongst Malaysian SMEs. International Journal of Trade, Economics and Finance, 5(1), p.72.

Svejvig, P. and Andersen, P., 2015. Rethinking project management: A structured literature review with a critical look at the brave new world. International Journal of Project Management, 33(2), pp.278-290.

Sykes, T.A., Venkatesh, V. and Johnson, J.L., 2014. Enterprise system implementation and employee job performance: Understanding the role of advice networks. MIS quarterly, 38(1).

Tarhini, A., Ammar, H. and Tarhini, T., 2015. Analysis of the critical success factors for enterprise resource planning implementation from stakeholders’ perspective: A systematic review. International Business Research, 8(4), p.25.

Thirsty Swagman. (2018). Thirsty Swagman. [online] Available at: https://www.thirstyswagman.com/ [Accessed 9 Jan. 2018].

Too, E.G. and Weaver, P., 2014. The management of project management: A conceptual framework for project governance. International Journal of Project Management, 32(8), pp.1382-1394.

Turner, R., 2016. Gower handbook of project management. Routledge.

Walker, A., 2015. Project management in construction. John Wiley & Sons.

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