Enterprise Resource Planning Analysis - Essay Example

?Harris Kamran Information Technology and Management Journal s 3 April ERP Journal Enterprise Resource Planning is a system of software and the associated hardware that is designed to computerize business processes in order to provide business solutions to the companies that wish to integrate Information Technology in their organizational structure (Logan 2007). The aim of ERP is to make the business processes more efficient and effective so that the overall yield of the business can be increased, along with reducing the errors incurred during business dealings (Logan 2007). The traditional business set up is concerned with various functions, or departments, in an organization, especially the large scale organizations, and many medium and small business as well, with each department more or less having its own organization and structure suited to its needs (Logan 2007). Whereas this set up might work on a departmental level owing to the different nature and function of each department, the problem arises when the various functional groups have to interact with each other and work as a whole, which is inadvertent in an organization (Logan 2007). One obvious reason is the difference in the framework of each department’s operating systems and structure (Logan 2007). Customer information is often duplicated so that every department has a copy in order to avoid any unnecessary interactions between various frameworks (Logan 2007). This can cause various problems, such as erroneous data entry, records, and an overall mismatch in the production of the company, resulting in the loss of revenue (Logan 2007). The solution is, therefore, an integrated set up with a uniform framework of operating system that can be accessed by any department and used according to their own needs (Logan 2007). This is called ERP software system. It is essentially one database that houses all the data of the company, updated and renewed in real time to avoid any errors, and easily modified to suit the needs of the various functional groups of the company (Logan 2007). Since it is highly modifiable, it can be tweaked on a basic level, and does not need to be redesigned if a change or modification is necessary (Logan 2007). Other benefits include using shared management reporting tools (Logan 2007). The most important feature is the ability of the company to view the client in a single view by using this system rather than in fragmented views of the various departments (Logan 2007). However, the implementation of this system can be very costly and time consuming, especially if the company is large scale and multinational (Logan 2007). It also requires skilled personnel who need to be trained first (Logan 2007). Also, to update the information and to carry out constant monitoring of the system, increased workforce with increased number of hours is required (Logan 2007). Sometimes , the results might also not be successful due to many reasons, such as too much customization of the products, and a decreased emphasis on education and re-organizing the business and staff (Logan 2007). However, it remains a lucrative business, with SAP leading the provision of ERP in the industry (Logan 2007). Another useful way in which Information Technology can be made use of in the business sector is that of employing it to reduce the carbon footprint of the companies (Bannister 2010). Around fifty percent of the carbon emitted in the UK comes from the businesses alone (Bannister 2010). This means that if the business sector works out a way to reduce the carbon emission, it can have a great and positive impact on the overall climate of the country and of the world (Bannister 2010). For this purpose, Information Technology can be beneficial in two ways: direct and indirect. To understand how important it is to try and reduce the carbon footprint, it should be noted that O2 UK produces 400k tones of CO2 every year, HSBC produces 800k tones, and Tesco produces 4.1million tones of CO2 every year (Bannister 2010). In a case study involving Tesco, it was calculated that whereas IT produced only 4% of the CO2, it could help reduce it by 20% (Bannister 2010). Some of the direct ways to achieve that is to utilize virtual conferences more than physically traveling or flying to location, which would produce tones of CO2 (Bannister 2010). Another way would be to digitalize the data and the company records so that less physical waste is produced and less is needed to be disposed (Bannister 2010). This would mean a major cut down on the CO2 produced as a result of waste disposal. Companies like O2 are striving to reduce the CO2 emission and protect the environment through this and other ways. For example, O2 has planned to provide sustainable products and services, reduce energy consumption by 10%, reduce water consumption by 20%, reduce travel by 30%, support young people by involving 40% of the staff, and reduce waste by 50% (Bannister 2010). It should be noted that energy production and consumption is the largest contributor to CO2 emission in any business (Bannister 2010). The indirect methods by which IT can help reduce the carbon footprint are evident from the case study of Tesco. The company has over 4000 stores in 14 countries worldwide (Bannister 2010). This means language barriers, different operating systems, manual data entry with multiple databases and a huge chance for error, different billing procedures, different office requirements, and so on (Bannister 2010). Unless the company has access to quick, uniform, and accurate data sets and facts and figures, it would be very difficult to measure the carbon footprint of the company, the ways to decrease it, and the effectiveness of the employed methods (Bannister 2010). What was needed was a centralized database with uniform and computerized data entry option, access to the data worldwide, and the implementation of an IT system with no additional costs and less time to operate (Bannister 2010). ecoSoftware was one such solution (Bannister 2010). The company is now looking to integrate real time billing systems, and internal tracking systems through the use of IT (Bannister 2010). The role of IT and its importance in the business and management sector are emphasized by Mark de Chazal, a projects, sales, and programme manager for ten years in Rolls-Royce company (n.d.). He has delivered the importance of the integration of business and IT, regardless of the complexity and new advancements in the field (Chazal n.d.). In fact, his stance remains that the simpler the programme or technology will be, the easier it would be to integrate it into the system, and the less the chances would be of error (Chazal n.d.). According to Chazal, the experiences one acquires during project management are vital to the success of the future projects, and IT can enhance that success if it is amalgamated into the existing system of legacy, which has been around for a long time, and works (n.d.). Listening to the advice of the workers is just as important (Chazal n.d.). To introduce IT into the system, the first step should be to study the existing system, and list the reasons of its framework and set up (Chazal n.d.). Then, list the changes that need to be implemented, and the improvements that need to be made (Chazal n.d.). It is only after these two preliminary steps that the experts would know which IT programme to install for the respective company (Chazal n.d.). The programme, which is just a tool, should be designed for the company and meet its requirements; the variety and possibilities are overwhelming, but a good manager should not be daunted by them (Chazal n.d.). IT should first be used to fulfill the needs, and then the wants (Chazal n.d.). Therefore, the aim of the manager should be very clear; to meet the needs of the business (Chazal n.d.). If the aim is implementation, a certain kind of programme, or any other issue, then the project is most likely to fail once it is operative (Chazal n.d.). All the steps of the process; the designers, developers, and the end users, should be catered to (Chazal n.d.). Since it is a time consuming process, and may pose problems initially, the manager should have a foolproof contingency programme (Chazal n.d.). The implementation of the system is the hardest step, so it should be carried out very carefully, and with the right IT tools (Chazal n.d.). Communication is the key, especially between the business manager and the IT manager, since both are working to achieve the same end (Chazal n.d.). Also, there should be backup plans to substitute in case the original implementation plan fails (Chazal n.d.). This is very important and should not be overlooked. To improve the success rate, the concept of multi-skilling should be used (Chazal n.d.). The use of IT or computing as a service and a process instead of as an end product, as has been discussed in the paper, is termed as clouding (Hall-Roberts 2012). This means that businesses use processes of Information Technology, often provided by a third party over which the company might not have control or power, to streamline their business and make it more effective and efficient (Hall-Roberts 2012). These technologies, which are to be used as a service, should be easy and quick to set up, so that not much change in the company’s infrastructure is required, and not much funding either (Hall-Roberts 2012). The benefit is that they are modifiable, so that the same basic programme can be used for different departments and to cater to different needs just by making minor changes to the software (Hall-Roberts 2012). This means these software are also multi-tenanted (Hall-Roberts 2012). Since they are computerized, these processes are durable and long-lasting, as they are safe from physical wear and tear (Hall-Roberts 2012). The greatest benefit, however, is the fact that these programmes convert the business functions into virtualized business processes, so that there is a huge cut down on the cost of the functions, their energy consumption, and their maintenance, while making them easy to access and easy to use (Hall-Roberts 2012). Clouding is applicable both in the public and the private sectors, as it effects the processes, applications, platforms, and infrastructure of these sectors (Hall-Roberts 2012). The third-party clouding providers are also categorized according to the provision of services in these four layers (Hall-Roberts 2012). However, there are a few hurdles to the implementation of clouding. The most important is that of the willingness and readiness of the end users to make use of these technologies, and not demand the traditional functions (Hall-Roberts 2012). The companies themselves need to convert their infrastructure completely to clouding in order to reap the maximum benefits (Hall-Roberts 2012). There are legal issues as well, such as software licensing and legacy applications (Hall-Roberts 2012). Technologically, the challenges include security of the saved data, its accessibility and migration from one programme to another, the bandwidth allocation of the company, and offline modes, and various other legal issues (Hall-Roberts 2012). If IT is integrated into the system, it would require workplace modifications as well, such as mobile devices, workstation changes, and other services, such as training, self service, and help desk (Hall-Roberts 2012). The benefits include a power cut down, cost effectiveness, immediate operation, convenience, usefulness to the business, and collaborative work (Hall-Roberts 2012). The challenges include initial investment, which would not be returned for many years, and training of the personnel for the system (Hall-Roberts 2012). The implementation of IT systems and their integration into a company are complex processes that require professional help and expertise (Baldwin 2012). This is because the needs of every company and organization are different. Those needs are to be analyzed, and an appropriate programme needs to be selected (Baldwin 2012). Even after this step, that system or process might need to be modified according to the requirements of the company, since there are very few ready-to-use software in the market that can just be used out of the box. This is where consultants come into the picture. A consultant is an expert in a specific field, such as IT management and systems integration, who gives a professional and trained advice and provides his services for the implementation of that help through various steps and procedures (Baldwin 2012). Companies hire consultants to help them develop an integrated IT system for their framework (Baldwin 2012). The different areas of expertise for a consultant might include, but are not limited to, service management, risk management, case management, enterprise information management, customer relationship management, and enterprise solutions (Baldwin 2012). A consultant is also required because of the ever-changing environment of the business sector (Baldwin 2012). A consultant ascertains the modification of the programme in accordance with those changes. Some sectors in which change is inevitable include the business market, economy, and hence the cost of the raw materials and finished products, competitors, legal sector, technology itself, methods of sales, and the quality of services and products (Baldwin 2012). To meet these changes, the consultant needs to have the appropriate technical skills, the adaptability and flexibility to cater to these evolving trends, availability to make those changes when needed, and the power to make appropriate and hard decisions (Baldwin 2012). There are many reason why a company should hire a consultant instead of taking decisions themselves and then simply hiring trained personnel to implement those decisions (Baldwin 2012). The consultants win because of their knowledge, their track record of success, the overall cost effective nature of the processes they implement, the complexity of the programme and solutions, risk and change management, and competitive pressure from other companies who would be hiring consultants (Baldwin 2012). The consultants can work as solution providers, experts, and collaborators (Baldwin 2012). The sequence of systems integration starts with identifying the needs and opportunities, initiating the process through proposals and plans, identifying requirements through collection of data and writing of plans, developing solutions and options, implementation through testing, and closing of the process after review and evaluation (Baldwin 2012). Capgemini is a Systems Integrator, and as such faces a set of challenges (including scale, variability of technology and business domain, dynamic team formation) that is subtly different to those faced by either product development teams or in-house development organisations. XP, Scrum, RUP; all the methods had strengths and weaknesses, and none were suitable for adoption on their own as a standard method for development/integration of large complex systems. Scrum offered a solid foundation, but needed augmentation in order to provide a complete framework; XP and RUP provided a rich set of practices which could be used to fill the gaps in Scrum. Thus was born Agile RUP. Agile RUP is an innovative differentiator for Capgemini's development capability. It provides us with a way of working that can adapt to all of the systems development situations that we encounter whatever the scale, distribution model, technology or business sector. Continuous improvement is built in to the method and it will continue to advance as it evolves into the foreseeable future. The preceding discussion on the integration of Information Technology into the business management sector, both public and private, has emphasized on the fact that it is crucial for businesses, especially the multinational, across-the-border large business companies, to steer away from the traditional legacy system of operation, and delve into the world on IT and computers, for a myriad of benefits and positive outcomes. The lecture series that has been discussed in the paper has touched some very important and crucial aspects of this shift in the business management. The discussion, however, has been brief, and has just skimmed over these important topics. There is, undoubtedly, a need to explore these concepts further so that a deep understanding of the issue can be attained. The main areas of discussion that have been touched in more or less all the lectures include the uniformity of the data entry and record for business which span over international markets. Since the markets are different, the procedures for data entry and the manner of record keeping also vary. As long as those data sets are used by the same department, there is no problem in the functioning of the business. The problem arises, however, when the data has to be shared across different processes and frameworks. For this reason, incorporation of IT solutions into the business would mean a uniform process of data entry, that is accessible globally and across multiple and different operating systems. It would also be updated in real time. The IT solutions that are used by the companies need to be modified according to the individual needs of the company, and the structure of the departments that the company comprises of. Also, they should be cheap, requiring no major framework shifts or infrastructure development, and should be quick to operate. However, these IT solutions require special training of the operators and the personnel of the company, as they involve complex tasking and multi-tenanted aspects. Consultants are required to select and install the programmes through complete steps, which have been discussed previously in the paper. Also, the initial costs of the integration is quite high, and the return might not be made for quite a few years. The constant monitoring and the modifications means a dedicated staff for the operation working constantly. This would put more financial strains on the company. However, the benefits in the long-run outweigh the initial challenges, and so ERP has proved to be a lucrative business for companies such as Accenture and SAP. One use of IT that needs to be explored further is its effect on the carbon footprint, especially the direct effects of integration of businesses and IT. As discussed in the paper, IT can reduce the carbon footprint of companies both by direct and indirect measures. The indirect measures have been discussed in detail in the paper, and the companies are well aware of the indirect use of IT to reduce pollution. However, it is the direct effects of IT that are intriguing and interesting, and need to be explored further. Virtualization is one of the biggest effects, reducing physical traveling and hence cutting down on the cost and CO2 emissions. Digitalizing records and files is another method, reducing physical waste, and the effects that are generated as a result of disposing off that waste. The need of the day is to deploy the Research and Development departments of the companies and organizations to come up with other ways in which IT can enhance the reduction in the carbon footprint through its direct use, and then implementing those measures so that the effects can be practical. Bibliography Baldwin, W. 2012. Value Added Consulting. [Online]. Business & Decision. [3 April 2012]. Bannister, C. 2010. Can IT contribute to the reduction of UK plc’s carbon footprint? [Online}. ca. [3 April 2012]. Chazal, M. D. n.d. IT & Business: 10 things I wish I had known 10 years ago. [Online]. [3 April 2012]. Hall-Roberts, V. 2012. Emerging Technologies and Their Use in the Enterprise Space. [Online]. Accenture. {3 April 2012]. Logan, A. 2007. Enterprise Resource Planning (ERP). What is it and why does it matter? [Online]. Accenture. [3 April 2012]. Read More