How to Implement ERP at Emerson Produce - Case Study Example

Selection of a suitable ERP Enterprise Resource planning (ERP) is an IT systems product that can be utilized across an enterprise. It allows firms to align strategy, firm structure, process and technology by breaking down the traditional firm silos and their integration into a tightly integrated horizontal structure (Monk & Wagner, 2008). The system can be utilized in processes such as financial, manufacturing, human resources, distribution and payroll (Bernroider, 2008). Selection of a suitable ERP system ought to involve a thorough analysis of available systems. This needs to start with a good understanding of critical success factors (Carol & Iris, 2003). These are things that one needs to do well in order to be successful (Monk & Wagner, 2008). Any requirement that cannot be mapped directly to critical success factors is not critical. Once critical success factors have been mapped out, the next step is defining the measurement of success. The ERP success is dependent on its ability to save money via streamlining operations, increasing market share and revenues (Bueno & Salmeron, 2008). The ability of an ERP to streamline operations, increase market share and revenues act as a motivator for staff during the implementation and allows the project to be on track in addition to focusing effort on attainment of important business objectives (Carol & Iris, 2003). For the case of Emerson Produce the ERP chosen should be able reduce costs, increase efficiency, track suppliers, track orders from individual supermarkets, control distribution to stores, develop online shop and allow online delivery (O’Sullivan & Ciaola, 2008). The next step is the understanding of the existing business process and seeking opportunities for business process improvement. Thus, the ERP system chosen should be able to integrate the existing computer systems being used at the Emerson Produce. Thus, Emerson Produce will need to be precise in order to be able to compare the various ERP that are available and chose ERP system, which specifically meets their requirements (Bueno & Salmeron, 2008). This will rule out any ambiguity that could otherwise arise if the firm is not precise in its requirements (Carol & Iris, 2003). The firm will further need to focus on unique requirements, which may vary from one ERP vendor to another (Monk & Wagner, 2008). Since it is unlikely for a firm to get an ERP that may meet all the requirements, the firm may need to prioritize its requirements in order to choose an ERP that best meets their needs. To have a successful ERP in place, Emerson Produce will need to manage the scope, the budget and timing of the system (Calisir, Gumussoy & Bayram, 2009). Emerson Produce may need to work with a structured methodology such as published by the project management institute (PMI). The employees of Emerson Produce will need also to be involved in the process of ERP system selection (Bernroider, 2008). This may involve consideration of the employee knowledge and the potential contribution of the employees. The firm will need to allocate an internal champion to an ERP project (Carol & Iris, 2003). This will ensure that employees become committed and agree with the system selected. The Emerson Produce management will also need to identify and manage any risks that may arise by implementation of the ERP at the firm. Functions of ERP One of the major functions of ERP is that it integrates many processes allowing firms to save time and expense. Thus by implementing an ERP system, Emerson Produce will be able to attain its objective of cost reduction and time saving. The system will allow Emerson Produce to make decisions faster and with reduced errors (Calisir, Gumussoy & Bayram, 2009). For instance, the firm will be able to forecast its sales, track order, track revenue and match purchase orders. Another major function of ERP is its ability to centralize business data. Thus, the firm will be able to centralize its business data even as it expands its operations. This will allow Emerson Produce to eliminate the need of synchronizing changes between multiple systems such as finance, marketing, sales and human resources applications (Bueno & Salmeron, 2008). The centralized system will also enable Emerson Produce to standardize its product naming/coding. In addition, centralization provided by ERP system will allow n Emerson Produce to have a comprehensive view of its business since information will be available in real time to management at any place and any time to enable them make informed decisions (Carol & Iris, 2003). Centralization of business data through ERP system will also allow Emerson Produce management to protect the firm’s sensitive information by consolidating multiple security systems into a single structure. On-line store Some ERP systems come with tools for building an on-line store. Thus, proper choice of the vendor will allow Emerson Produce to implement an ERP system that has tools for building an online store. For instance, an ERP system from Ecommerce Solutions has an online store, which allows firms to fully customize their ecommerce website (Bueno & Salmeron, 2008). By buying such a system, Emerson Produce will be able to integrate its website with the ERP system and run an online store without the need of buying an application for online store separately (Calisir, Gumussoy & Bayram, 2009). Other vendors such as NetSuite provide number one cloud ERP software suite which are full featured systems that comes with financial, customer relationship management (CRM), inventory and e-commerce software in a single system (Carol & Iris, 2003). If Emerson Produce chooses to obtain its ERP system from such a vendor, it might be able to start an online shop without the need of an additional application (Glenn, 2008). In addition, it will be able to monitor its inventory, finances and customers in an easier manner (Jacobs & Weston, 2007). Managers will also be able to access any information at any time from anywhere. How to meet the unique needs of Emerson produce There are three types of vendors that one can select from when in need of an ERP system. They include generic/horizontal, vertical and custom type system. Generic or horizontal type applies across various industries (Calisir, Gumussoy & Bayram, 2009). Vertical system applies to a specified industry while custom is built specifically to the specification of the firm concerned. ERP systems do not fit neatly fit the needs of a firm. They often need more knowledge, effort and skill to adapt them to the specified needs of a certain firm. Tailoring of this complex ERP systems, vary from firm to firm (Bueno & Salmeron, 2008). One factor that determines the extent of tailoring is the degree of fit between the features and functions of the package and the business process of the specified firm (Glenn, 2008). In the case of Emerson produce, it will need to carry out extensive modifications of basic ERP package. This will need to be developed by a third party independent software vendor to meet Emerson Produce’s unique needs. With such modifications (bolt-ons), Emerson produce will attain greater feature function fit with lower configuration effort, without losing the advantages of ongoing vendor support. Implementation of a custom system at Emerson produce will allow it to meet its unique needs (Bernroider, 2008). This will allow it to have a system which is specifically build in accordance to the specification of Emerson produce’s management (Glenn, 2008). However, such a system may be rigid and may not be easily updated. To avoid such circumstances from arising, Emerson produce will need to implement a vertical system that applies across specified industry. Another factor that may influence the amount of tailoring is then firm’s willingness to adapt its practices to the package when the two differ (Calisir, Gumussoy & Bayram, 2009). In this case, Emerson produce may have to face a painful choice when it decides to adopt a package that works differently than they do. The ability of the ERP to be updated and costs involved The extent to which the ERP system is modified by the third party will determine the ability of the ERP to be updated at a lower cost. In order to attain this, Emerson produce will need to implement an ERP system that needs little modifications (Bueno & Salmeron, 2008). Such a system may be a vertical one that provides ERP solutions in distribution businesses that Emerson Produce deal in. If such a system is implemented, Emerson Produce will require limited tailoring of the system by the third party and hence reduce the cost of updating it (Calisir, Gumussoy & Bayram, 2009). The likely costs in such cases will only involve modifications to suit changing needs of the business (Glenn, 2008). However, implementation of a custom ERP system may require a complete building of the whole system in order to meet the changing needs of the firm. How to implement ERP at Emerson Produce In order to implement a functional ERP system at Emerson Produce, the business case foundation need to be understood well. This should entail better understanding of critical success factors and how to measure success (Glenn, 2008). The next step should entail program management of vendor and internal client resources, project planning, and budgeting (Moon, 2007). Once this is done, the Emerson Produce will need to conduct a comprehensive business process re-engineering and workflow definition. This will need to be followed by incorporation of a six sigma, and other industry-specific skill sets into the overall business transformation (Bueno & Salmeron, 2008). Emerson Produce management will then need to manage technical and infrastructure improvements (Schneider, 2010). The firm will then need to align the ERP implementation with business requirements such as cost reduction, increasing efficiency, tracking suppliers, tracking orders from individual supermarkets, control of distribution to stores, Web based selling and Online delivery. Once the system is implemented, the firm will need to conduct frequent independent risk management and mitigation planning (Calisir, Gumussoy & Bayram, 2009). The management will also need to oversee organizational change management, communications, and training activities during the implementation process. The management will need to ensure business and technology integration between the core ERP system and other processes, systems, and stakeholders. Finally, the management will need to define ERP measures of success and optimize measurable business benefits. References Bernroider, E. (2008). IT governance for enterprise resource planning supported by the DeLone–McLean model of information systems success. Information & Management, 45(5), 257-269 Bueno, S., & Salmeron, J. (2008). Fuzzy modeling enterprise resource planning tool selection. Computer Standards & Interfaces, 30(3), 137-147 Calisir, F., Gumussoy, C., & Bayram, A. (2009). Predicting the behavioral intention to use enterprise resource planning systems: An exploratory extension of the technology acceptance model. Management Research News, 32(7), 597 – 613 Carol, B. & Iris, V. (2003) Managing the next wave of enterprise systems: Leveraging lessons from ERP. MIS Quarterly Executive, 2(1), 45-57. Glenn, G. (2008). ERP 100 success secrets: enterprise resource planning 100 success secrets--100 most asked questions: The missing ERP software, systems, solutions, applications and implementations guide. New York: Lulu.com Jacobs, E., & Weston, F. (2007). Enterprise resource planning (ERP)—A brief history. Journal of Operations Management, 25(2), 357-363 Monk, E., & Wagner, B. (2008). Concepts in enterprise resource planning, 3rd Ed. London: Cengage Learning EMEA. Moon, Y. (2007). Enterprise Resource Planning (ERP): a review of the literature. International Journal of Management and Enterprise Development, 4(3), 235-264 O’Sullivan, J., & Ciaola, G. (2008). Enterprise resource planning: A transitional approach from the classroom to the business world. London: McGraw-Hill Schneider, G. (2010). Enterprise resource planning: An introduction for financial managers. 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