Choosing Proper Vendors, System Requirements, And Benefits In ERP Essay.

Discuss about the ERP in Business.

In the report, the methods of choosing a proper ERP system by a particular organization has been mentioned for taking informed decisions. In the discussion section of the report, the business processes of the chosen organization has been discussed. Here, the chosen organization ash been chosen as Cadburys. The system requirements of the mentioned company has been evaluated.

The methods of choosing the proper vendors of the ERP implementation has been taken into context in the subsequent section of the report. Further, three methods by which the businesses can increase their business efficiency has been evaluated. The level of efficiency that was achieved by the organization due to the implementation has been explained in the next section. The security risks and data breaches hat ar associated with the technology are evaluated in the report. For addressing the mentioned issues, adequate recommendations have been provided in the report.

Business processes

Cadburys is one of the largest manufacturers of chocolate around the world and was founded in 1824.

The supporting business processes as well as the primary business processes comes under the basic business processes.

The following elements comes under the primary business processes of Cadburys:-

• Outbound sales logistics
• Operations
• Marketing
• Service

The following elements comes under the supporting business processes of Cadburys:-

• Procurement
• Human resources
• Technology department (Zach Munkvold and Olsen 2014)
• Firm infrastructure

Outbound sales logistics

Cadburys stores, distributes and receives warehouse materials in the outbound sales logistics. In Mutiara, the headquarters are located. At the later storage and distribution faculties of the company, the items that are not ready for production are sent off. The products and services are distributed to the customers through the outbound sales logistics. To keep the goods in good shape, Cadburys transports their products on land rather than taking transporting the product through mail, sea or air medium. The company has invested in large L Lorries to avoid empty runs and so that the products can be transported over a long distance without any problems (Morschett, Schramm-Klein and Zentes 2015). The other giant companies like Tesco and Giant already use this service. The products which are left as excess are all sent off to the other branches of the mentioned company.

Operation business process

Through this business process, the services and products of the company are made by transforming the inputs (raw materials). Cadburys has to deal with a number of raw materials as the company manufacturers a large variety of products such as confectionary, ice cream, chilled diaries and chocolate (Sadrzadehrafiei et al. 2013).  The final products are then made from the raw materials like whipped cream, milk and cocoa. They are then stored in a freezer where theya re layer packaged as final products.

Business Processes

Marketing business procedure         .

Through this business process, the customers are helped with the decision to get the products and services from Cadburys. While making the product, the company has to take into consideration several customer sentiments like Halal considerations. On every consumer product, proper labelling needs to be provided. Cadburys has managed to attract a lot of customer bases with their efficient marketing strategies despite being a huge organization with a lot of departments (Ptak and Schragenheim 2016). The company invest in shopping malls, giant roadside commercials or TV advertisements.

Service business process

In this business process, the post-sale services are provided such as repairments and maintenance. For placing their product reviews, the company has allowed consumers to post their reviews on their official website. From the feedbacks, the company assesses the effectively of each product. Through service business process, the company managed to reduce the sugar content of its products by 30% and reduced the salt content by 73% (Malaurent and Avison 2015).

Human resources

The recruitment and hiring processes of the candidates of the company are managed by this business department of the company. The HR processes are responsible for providing the benefits and payments to the prospective employees (Sustainment 2014). By offering a number of opportunities and positions, the company manages to attract a huge number of employees. Cadburys also takes care of the duties and rights of its workers.

Procurement

In the procurement business process, Cadburys has to make sure that its suppliers are always present so that its manufacturing units can get the raw materials properly and in time.

Technology development

            This business processes related to this department manages the research and development of the products of Cadburys. As per the requirements of the customer, this business process aims at improving the products and services of the company (Nagpal, Khatri and Kumar 2015). For managing the energy consumption, the warehouses uses solar panels.

System requirements

For managing the clients and stakeholders efficiently, Cadburys urgently needs an IT system. Cadburys was urgently in a need of a system that can enhance their accounting procedures, optimize their business processes expand their lines of business globally and set up a business network all around the world (Matende and Ogao 2013). For carrying out its internal customer management efficiently and managing its financial transactions, Cadburys needed an infrastructure that could track time. For automating the organisational flow, the company needed a system which can help it in decision making effectively (Leon 2014). The various departments of the company also needed to be integrated into a single hub. Without the need for incremental updates, Cadburys needed an up-to-date system that can operate in real time. The company needed a common database that can support all the applications that was previously used by the company. Cadburys also needed a system that had consistent looking modules used by various departments and the elaborate integration with the existing systems was required.

Outbound Sales Logistics

With the new integrated system the functional requirements of the mentioned company are written as follows;-

• Supply Chain Management
• Customer Relationship Management
• Managerial Accounting
• Human Resources
• Financial Accounting (Shatat 2015)
• Data Services

A transactional database and management portal were the required functional components of the company.

With proper software modules the company also needed to support its back end processes:-

• Price Configuration
• Business Needs Assessments
• Project Planning
• Redundant Task Reduction
• Supply Chain Management
• Financial Data Management
• Distribution Process Management

For companies which are planning to adopt an ERP system like Cadburys, there are several criteria that needs to be fulfilled for selecting the proper vendor and software. Implementing an ERP system property is a complicated task and the command needs to find an initial investor, a software expert and has to consider the fact that the project will run for several months. The implementation can potentially change the existing business processes. Some of the criteria for selecting a proper vendor and software are written as follows:-

• Need to fulfil the functional requirement- In the analysis process, the functional requirements of the mentioned company needs to be mapped according to its infrastructure capability (Hoch and Dulebohn 2013). In the initial phases of the implementation, the main requirements need to be prioritized and complex processes (time consuming) need to be phased out for the subsequent stages.
• Platform flexibility/scalability – After the functional requirements are analysed, the company needs to make sure that the ERP system it is adopting has standard features and is upgradable in the future (Chou et al. 2014). To prevent any limitation of the system in the future, this aspect of flexibility and scalability will allow the company to stay future proof.
• Simple UI- To maximise the productivity of Cadburys, the company needs to adopt a system that will allow the transactions to be made easily and search for data efficiently. To achieve this, Cadburys need to implement a system that has an easy user interface. This will allow the prospective company to perform customer services properly.
• Innovative technology- Companies like Cadburys should implement a system that does not become obsolete in a few years. If the technology is not advanced enough, this can cause the companies to form a bottleneck that will prevent their expansion in the future. The cloud based ERP systems are the latest ERP systems that are present in the market now.
• Competitive and flexible pricing- Cadburys need to make sure that the vendor they are choosing for the ERP implementation return their investments which they are expecting in a few years. The company should check if they want to go with subscribed payment like cloud systems or onetime payment like on premise ERP systems. The company should make sure that the cost gets distributed over time.
• Source code which is customizable- Cadbury needs to make sure that the vendor they are choosing for the ERP solution will let them tweak with the source code as they have to deal with a huge variety of products. The standard languages need to be used by the vendor which will allow Cadburys to use their access control as per their requirement.
• Vendor analysis- Cadburys need to get a proper background check of the vendor before choosing the ERP system. The vendor details need to be analysed and their history needs to be assessed.

There are several ways in which ERP can assist in business efficiencies. Three such ways are written as follows:-

• For better financial controls- Every company has the financial department at its heart. Managers are provided with the task of keeping this department under control. The ERO systems can act as a hub for the manager to keep the financial department in check. The management can get deep insights and comprehensive visibility in the performance of the organization. The ERP system will allow the organization to manage its accounting and run in parallel with the business analytics. The new system will allow the company to enhance their capability of risk management and financial controls as well as increase the profitability of the organization.
• Cost benefits- Every organization tries to find way to maintain their efficiencies by cutting their costs. In this factor, an ERP system can help to increase business efficiency by bringing in adequate cost benefit factor to the organization. The organization will be able to decrease its inefficiencies with administrative and inventory and will be able to reduce the costs. The communication between various departments will become easier preventing the organization from investing in extra infrastructures. The organization will be able to save cost and money as it won’t require developing different data centers for different departments. The organization will be able to access a centralized database. The ERP system will help the organization to achieve business efficiency by reducing the operating costs. The system will be able to merge all the elements of the business into one single centralized system. This will allow the organization to reduce their costs in unprofitable areas and improve the business processes. The ERP system will be able to decrease the inventory and control costs. By reducing the operating costs, the organization will be able to enhance its marketing capabilities as well as customer service support.
• Management integration- Different department of the organization are integrated into a single program by the ERP that lets the users access a centralized database having information on figures, invoices, orders and client information. The users who will be accessing the system will need proper training on the system and will be able to perform changes in real time. The management will be able to properly store information and the data would not get lost in any spreadsheet or applications.

Initially, the company faced some difficulty with the new system but the company regained its efficiency over time.

During the initial days, the company manufactured excess products due to some IT related issues which costed the company over $11 million. The company’s warehouses were packed with chocolates at the starting of the year due to the wrong implementation of the SAP ERP (Sykes, Venkatesh and Johnson 2014). Cadburys was planning on saving over $500 million dollars from the implementation of the new ERP system but the plan did not go accordingly.

The company improved the efficiency of the system over the years. To reduce the number of inefficiencies the company desperately needed a system for managing its fast paced growth. Cadburys managed to increase the business efficiencies of several department with the SAP ERP implementation (Leyh and Sander 2015). It allowed the company to maintain and track its progress by including the marketing variables. The new system allowed the company to improve the management system of its warehouses and enhance the branched structure of its offices. The implementation of the SAP ERP was time consuming in the beginning but the successful installations were a lot quicker saving the company a lot of money and time. The SAP ERP system allows Cadburys to improve its internal processes which was pressurized by the stakeholders of the company for quite a while. As the new system allowed the company to check its progress and assess if it is in the right track, it helped the company to design an enhanced customer service system (Supramaniam, Abdullah and Ponnan 2014). The company also benefitted from the system’s cross functional implementation for improving process efficiency. Also, after initial research, the company chose the SAP ERP system as it was a renowned brand. This allowed the company to streamline their process of installation without any issues. Cadburys also benefitted for the vendor connected portal which allowed it to check the movement of its inventories and make appropriate decisions accordingly.

Operation Business Process

The company eventually manage to increase its system efficiencies despite the problems faced by it during the implementation phase of the ERP system.

There are several security breaches that have occurred in companies using an ERP system. Some of the potential risk factors re written as follows:-

With the dawn of the information age, cyber-attacks have been a constant risk for organisations using IT systems. The cyber attacks hve grown with the years and the ERP system, being an IT system is no exception (Rajnoha et al. 2014). The attackers usually attack the ERP system to steal confidential data or consumer data. Most of the times, they use malwares to bloat the system.

Sometimes, the ERP systems fall prey to the age old DDoS attacks or Distributed Denial of Service. They usually attack by overwhelming the target website by a lot of misidentified traffic. A number of online devices are used which are known as botnets. The attack does not intend on beaching the security perimeters of the ERP system or stealing confidential information. Rather, the attacks are targeted towards making the entire system immobile. After the DDoS attack, the cyber attackers can then use other malicious activities to attack the security perimeter using the DDoS attack as a cover (Shaul and Tauber 2013).  It is significantly different from DOS attacks as in the former attack single network is used to exploit a vulnerability of a software like exhausting its CPU and RAM usage. The DDoS attacks on the other hand use a collection of connected devices to attack the server of the system occasionally getting remote control. This is a serious security flaw for ERP systems that are cloud based as the major business functionalities of the company are shifted to the cloud server (Arvidsson, Holmström and Lyytinen 2014). A single DDoS attack can cripple an entire company which is using a cloud based ERP system.

The next security issue is related to delayed updates. Most of the companies that are operating now run with the risk of using an outdated ERP system.  If the system that is used by the company is not updated properly, it runs a risk of getting viruses or frequent crashes. Updates are necessary for any ERP software (Nwankpa 2015). They are necessary for not only introducing new features but also patching the vulnerabilities that have been discovered. As hackers are finding innovative ways to perform their attacks, keeping up to date with the latest system is absolutely necessary. Hence regular updates should be provided by vendors on a periodic basis.

Marketing Business Procedure

Full rights of accessibility id the next security flaw of ERP systems. There is a significant threat from in house risks. The full accessibility of the ERP system should not come as a default system. Audit logs need to be tracked to check if unauthorised users are accessing information that they should not. Companies that does not maintain a checklist for authorization such as new promotions and hire generally fall under this security issue (Ruivo et al. 2013).  The employees need to be monitored who has access to change the entire system. The requirements and needs of the business should coincide with the user’s permission and access levels.

Single authentication can lead to potential breaches in the ERP system. ERP systems nowadays have grown in capability and can manage not only business related information but also sensitive information (Nwankpa 2014). With the rise in cyber-attacks, the companies that are using single password system for accessing ERP systems should evaluate if it is really that much secure. It is essential to secure information from malicious attackers and password stealing is a prime target for these attackers (Ahmad and Cuenca 2013). Most of the companies are slowly moving to the two process authentication where a token and a password is used as the authentication factor.

Companies like Cadburys which are planning to incorporate ERP system in their business processes need to consider the following recommendations:-

• Issues related to architecture- Just like traditional ERP systems, cloud based ERP systems face the same architectural problems with module implementation. To prevent the mismanagement of data, the company needs to make sure that the ERP system properly integrates with the existing applications (Ram, Corkindale and Wu 2013). The mutitenacy issues need to be checked by Cadburys as well.
• Security issues with data- As Cadburys implemented the SAP ERP system that is cloud based, the company faces the constant threat from cyber-attacks. The hacker can compromise the entire system if one module is violated as the entire system is interconnected with other departments (Nour and Mouakket 2013). The attacker can also be an ex-employee of the company who can use the authentication keys of the company (provided that the company forgot to remove the authentication after his resignation). Advanced cyber security features and a cyber-security expert is necessary for securely implementing the ERP system.
• Issues related to authentication- To prevent the loss of critical information, Cadburys need to properly monitor the employees who access the ERP system. The employee passwords and login IDs need to be tracked to check if the users are properly complying with the authentication (Ahmad, M.M. and Cuenca, 2013). The person who is running an inventory should not be able to check client information.

Conclusion

To conclude the report, it can be stated that the implementation of an ERP system in a prospective company has been mentioned in the report. The business process of Cadburys manufacturing company has been explained in the discussion section. The system requirements of the company has been evaluated and the methods of choosing the proper vendor for the ERP implementation has been explained. The report has discussed the implementation of the ERP system in Cadburys and has discussed its implication on the mentioned company. The ways in which ERP helps to enhance the business efficiencies has been explained as well.  A number of security flaws and potential reasons for data breaches related to the mentioned technology has been evaluated and explained. Proper recommendations have been provided to address the security flaws in the report

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Service Business Process

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