Analyzing The Impact Of Enterprise Systems In Achieving Operational Excellence: An Essay.

Information systems have transformed businesses and business processes. Managing information assets has become increasingly important to business organisations. The many systems that used to act in isolation are now been integrated across the enterprise to achieve enterprise objectives. You are required to write a report analysing the impact of enterprise systems in helping businesses in your sector achieve operational excellence.

Your report should be no more than and should cover:

• A comprehensive analysis of enterprise applications
• The drivers of enterprise systems from a business perspective
• The challenges that enterprise applications pose for end-users and how enterprise applications in an organisation such as Tesco take advantage of new internet-based technologies
• The benefits to a modern business in your industry, of employing enterprise systems, such as ERP, to achieve operational excellence Your primary responsibility is to produce a report detailing the improvements that have been made to handling business information by the introduction of enterprise systems.

Enterprise System and its importance

Information system has swept away the traditional methods of storing and accessing data. With advent in technology an evolution of organized system has been witnessed for collection, storage and organization of data providing the advantage of accessing the information anytime anywhere. Elaborating one can call it a network of systems where people create, store, and access and distribute data for the employees and member of the organization. Such systems provide great advantage to an organization in the market. It increases the information literacy among the learners promoting better thinking skills, forming opinions, evaluating sources, and making individuals more confident.

Figure 1: Information System

Source: (Media1.britannica.com, 2017)

Information system has become integral part of every modern and developing organization. It helps different organization to handle the dissemination of their different kinds of data in varied ways. Some of the good examples of information system are knowledge management system, transaction processing system, database management system, office information system and many more.

These were initially developed to integrate and bring the vast fragmented information in a large and complex firm for the better functional and operational benefits.

The report here discusses the enterprise systems their types and related applications which benefits the organization. The report clearly pictures the impact of such a system in a firm through several parts in the report.

Enterprise systems can be described as large scale systems or software that provides small and big firms ability of better information flow, business process, data analytics and reporting in complex firms. This application software is customizable and can be molded according to organizations need (Bi 2014). In general they are packaged enterprise application software (PEAS). Much earlier to its introduction into the business systems all the related data of organization used to be scattered in the computer systems all round the geographical locations, business units, offices and factories (Waring, Wainwright and Skoumpopoulou 2016.). The enterprise package includes Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and Supply Chain Management (SCM). Such kind of systems uses software platforms on which they are built like SAP’s NetWeaver and Oracle’s Fusion.

Figure 2: Anatomy of Enterprise System

Source: (Maaw.info, 2017)

Enterprise systems are very much important for improving the functioning of any business. Enterprise system helps in integrating the whole functioning of each and every department of the business. It places the whole business in a rightly functioning format which automates the procedures of the organization as now the operations of the organization are standardized (Papajorgji 2015). It improves the financial performance while reducing the extra cost and loss bore on inventory and resources. This proves how efficient and important an ES is for the Organization.

With involvement of ES in an Organization the management and officials are able to incorporate the right and the best practices suited for the organization. This leads to improvement in the overall working and functioning of the organization. The Enterprise System proves out to be beneficial, as it provides better follow up, planning and forecasting of the resources that are required to operate (Panetto 2016).  Some of its popular benefits can be traced as follows:

• Storing business information in usable format
• Incorporation of right practices
• Automation of customer services
• Scaling of the resources available
• Securing customer data
• Reduction of operation and inventory cost
• Real-time access to the information
• Standardization of processes
• Improved supply chain management
• Customer service necessitates maximizing the reliability of the IT Infrastructure

Advantages of the Enterprise Systems

The ES system application software package comprises of Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and Supply Chain Management (SCM).

Enterprise Resource planning software deploys various functions in a single system so that a perfect streamline information process takes place in the organization all over. The ERP system works and collaborates with help of shared database which shares all the data being created or processed across the whole organization (Sudhaman and Thangavel 2015). The different business units take advantage of the data and information present in this database.

The different activities of business operations like manufacturing, product planning, cost management and service delivery are reviewed on its basis. One can call them manual and complex interfaces. Such system reduces customer response time, order cycle time and delivery speed. Time consumed by the Cash-to-Cash cycles reduces with help of automated financial transaction. It also reduces the time acquired for settlement of financial data around the year end (Usmanij,  Khosla and Chu 2013). In accordance to the decide levels of functioning and the data utilized, which is uniform for the whole organization, reflects the present operating condition the organization is having. The standardized procedures and shared database allows the perfect governance of the organization. The reports generated through the system is checked and analyzed by the experts who provide clear picture of the performance of the different units of the business firm. These assumptions and analysis helps in to take advantage of the present market condition and opportunities prevailing.

A Customer Relationship Management can be defined as software which provides a set of strategies, practices, and technologies which an organization can utilize to analyze and manage a firm’s relation with the customer through interaction. The data shared is analyzed over the whole lifecycle of the customer. This helps in assisting the customers better and improve the relation with them and driving the business to the other level (Balaban and DUMITRA?CU 2014). It develops the medium-term relationship in whole with the customer. The software has to deploy superior customer loyalty improve the bottom-line profits and the cost incurred on the sales and services being provided to the customer.

The CRM has a customer database where all the interest, wants and needs are captured and maintained avoiding any kind of duplication. The database is updated regularly and is connected to other unit’s computing devices from where the data are inherited. This reduces any chances of loss of Knowledge present in the organization once the employee leaves or is promoted (Venturini and Benito 2015). The customer relationship management is very important for an organization as it improves the business sense of the organization by better understanding the customers and their needs. Such an improvement then adversely increases the revenue generated thus profiting the organization.

Supply chain management tracks down the movement of information, materials and finances in process and provides a clear picture of how the movement is taking place. The movement goes on from supplier to the manufacturer then to the wholesaler next to the retailer and then finally to the customer. The management here takes care of the entire movement integrating and coordinating the flow among companies and customers (Marinagi, Trivellas and Sakas 2014). The supply chain management software looks after this process. It consists of modules and tools which are utilized in the execution of the supply chain transactions, controlling the associated process, managing the supplier relationship and taking care of inventory management.

Different Enterprise applications

The process stated above are coordinated and integrated to improve the business operations and planning. The system works in real-time environment which enables the management to react actively in situation of demand and supply change. The SCM acts directly on the inventory management by reducing the inventory levels, spoilage, holding costs and lead times. This system aids in increasing the profitability by avoiding lost sales, reduction of costs, and in serving the customer in a more comprehensive manner (Nettsträter 2015). Some of the additional benefits provided by the SCM are improved forecasting and decision making. Its efficiency in information sharing, forecasting replenishment and collaborative planning will in near future lower the processing cost and time or improved order frequency.

The business enterprises and organizations face several challenges, gaps and downfalls which require dealing with as they might damage the business in the long run. Those gaps have to be identified to deal with it. Some of those drawbacks that serve as the drivers in to implementing the Enterprise System are:

Documentation: The business earlier went around with paper documentation process which was tedious and hectic procedure. The documentation procedure was highly vulnerable to errors (Dorantes, Peters and Richardson 2013). This way of documenting did not support sharing of the data and information documented. The supply of such data allows better decision making. It provides sense of the similarities and gaps in the business units along with the summary of the whole operation process going on in the organization.

Operational excellence: Every business needs excel in their profit and productivity. This excel can be achieved by managing the process happening from the raw material purchase up till the delivery of the product to the customer. For the large and complex organizations it becomes difficult to manage all the process across the organization thus requires an easeful process which provides all data and updated results at single place after which operational decision could be managed (Feldman 2015).

Future Forecasting: All the data and information required for forecasting and decision making in an organization is spread across the different business unit. This makes it difficult for the organization to take an appropriate decision.

The enterprise system is very essential and provides much lubricity to the business process in the organization. Yet there are many other factors which pose certain challenges for the business people to adopt such system in their daily processes. The challenges that the ES needs to overcome are:

Complexity: The system itself with such intricate methodologies and tools becomes very complex for people to understand. Any organization adopting such a system may have to additional pay to the vendor for taking care of the technicalities or may have to a separately hire a team who would always be there to look after any situation occurring (Bhattacharya 2016). The business officials trying to work out a problem on their own or taking some kind of shortcut to make the system work may end up disturbing the whole system. Cloud Computing and other such elements add more to the complexity.

Security: The ES implementation requires a database where all the data could be stored and which is accessible to all the related staff. The database stores all information and data related to the process which the employs update regularly and then it is accessed according to needs (Giachetti 2016). Such a system becomes very much prone to injection attacks of malware and other viruses which may infect the system as well as its connected database.

Mobility: The ES system provides liberty to the employees and its related user to access, store or manage data from any place at any time of the day. Such a usage requires much more enhanced working system with an advanced infrastructure (Niu 2014). The user may tend to use such systems on their mobile devices which need to be updated to better infrastructure supporting devices.

The ES works wonder for the larger and much complex organization which uses it for its overall development. The big giant like TESCO takes complete advantage of Enterprise System and other related Internet-based technology for their prosperity (Sedera 2016). Irrespective of the company’s background the Business minds do opt for such systems so that they can solidly translate new concepts, keep supply chain profitable, wining as many customers as possible. The TESCO is one if the biggest supermarket retailers. They use Information System or specifically Enterprise resource planning system which helps them manage the information from the past, present and future to deal every aspect in present and enhance productivity of the company. The information system used here helps in efficiently running the whole organization. The Company also uses the CRM system to manage and analyze their customer for better pricing analysis and application of certain loyalty schemes.

Conclusion 

Enterprise System is forecasted to replace the present legacy software system. Such systems are spread all over the organization which also makes it poorly connected. Besides, the operational integration is better cultured through enterprise system. The future forecasting with the technologies gives insight to the management system so that any shortage can be dealt earlier than it impacts the organization. The challenges noted previously though pull back organizations from the change to be implemented. Yet the utility it showcases impresses much audience that is the larger complex organizations.

The ES may not be much fruitful to the small-medium sized organizations as their information, supplies, business units, and operations are at much lower scale making such systems expensive to be maintained. The system may give them advantage but at much higher cost. The ES systems SCM, ERP and CRM described here provide much advantage as it brings innovation and efficiency in the system. These positive impacts will help the business flourish and prosper. Conclusively, future development in the Information System may evolve this process to be more efficient.

References

Balaban, M.I. and DUMITRA?CU, D.D., 2014. THE ADVANTAGES OF THE CRM–TYPE SYSTEMS FOR RESOURCES PLANNING AND MANAGEMENT IN COMPANIES. In Proceedings of the INTERNATIONAL MANAGEMENT CONFERENCE (Vol. 8, No. 1, pp. 117-127). Faculty of Management, Academy of Economic Studies, Bucharest, Romania.

Bhattacharya, P., 2016. Strategy Implementation using Enterprise Systems: The Case of a large Utilities Service Provider. MERC Global’s International Journal of Management, 4(2), pp.29-37.

Bi, Z., Da Xu, L. and Wang, C., 2014. Internet of things for enterprise systems of modern manufacturing. IEEE Transactions on industrial informatics, 10(2), pp.1537-1546.

Dorantes, C.A., Li, C., Peters, G.F. and Richardson, V.J., 2013. The effect of enterprise systems implementation on the firm information environment. Contemporary Accounting Research, 30(4), pp.1427-1461.

Feldman, G., Shah, H., Chapman, C. and Amini, A., 2015, July. Enterprise Systems Upgrade Drivers: A Technological, Organisational and Environmental Perspective. In PACIS (p. 83).

Giachetti, R.E., 2016. Design of enterprise systems: Theory, architecture, and methods. CRC Press.

Maaw.info. (2017). Cite a Website - Cite This For Me. [online] Available at: https://maaw.info/ArticleSummaries/DavenportERPGraphic.gif [Accessed 19 Apr. 2017].

Marinagi, C., Trivellas, P. and Sakas, D.P., 2014. The impact of information technology on the development of supply chain competitive advantage. Procedia-Social and Behavioral Sciences, 147, pp.586-591.

Media1.britannica.com. (2017). Cite a Website - Cite This For Me. [online] Available at: https://media1.britannica.com/eb-media/66/65066-004-9D71D3EC.jpg [Accessed 19 Apr. 2017].

Nettsträter, A., Geißen, T., Witthaut, M., Ebel, D. and Schoneboom, J., 2015. Logistics Software Systems and Functions: An Overview of ERP, WMS, TMS and SCM Systems. In Cloud Computing for Logistics (pp. 1-11). Springer International Publishing.

Niu, N., Da Xu, L., Cheng, J.R.C. and Niu, Z., 2014. Analysis of architecturally significant requirements for enterprise systems. IEEE Systems Journal, 8(3), pp.850-857.

Panetto, H., Zdravkovic, M., Jardim-Goncalves, R., Romero, D., Cecil, J. and Mezgár, I., 2016. New perspectives for the future interoperable enterprise systems. Computers in Industry, 79, pp.47-63.

Papajorgji, P. ed., 2015. Automated Enterprise Systems for Maximizing Business Performance. IGI Global.

Sedera, D., Lokuge, S., Grover, V., Sarker, S. and Sarker, S., 2016. Innovating with enterprise systems and digital platforms: A contingent resource-based theory view. Information & Management, 53(3), pp.366-379.

Sudhaman, P. and Thangavel, C., 2015. Efficiency analysis of ERP projects—software quality perspective. International Journal of Project Management, 33(4), pp.961-970.

Usmanij, P.A., Khosla, R. and Chu, M.T., 2013. Successful product or successful system? User satisfaction measurement of ERP software. Journal of intelligent manufacturing, 24(6), pp.1131-1144.

Venturini, W.T. and Benito, Ó.G., 2015. CRM software success: a proposed performance measurement scale. Journal of Knowledge Management, 19(4), pp.856-875.

Waring, T., Wainwright, D. and Skoumpopoulou, D., 2016. Enterprise Systems Adoption: A Sociotechnical Perspective on the Role of Power and Improvisation. International Journal of Systems and Society (IJSS), 3(1), pp.49-66.