Design and Development of an Enterprise System - Coursework Example

Design and Development of an Enterprise System of Affiliation Design and Development of an Enterprise System Company Background Sunrise refers to a medium-sized manufacturer supplying varied car control panel models in along with frames. At present, the company focuses on a lean production in addition to the ability to deliver items within short lead times. In so doing, the enterprise will be better placed in terms of responding to changes in the demands of the car manufacturers. Sunrise produces varied categories of car control panels in addition to desperate models of frames. To this end, the business has been capable of serving up to global 5 car manufacturers with 2000 unique products. In particular, the company assembles the frames, inside components and the car control panels based on the requirements of the clients then ships the end assembly products to the respective customers. Rather than manufacturing the items that it issues to its clients, Sunrise has opted to obtaining the relevant parts from local and overseas suppliers. As a safety measure intended to protect its supply chain, the company often makes purchases from multiple suppliers. Current Business Process Sunrise gets orders from each client once a week via EDI then the received sales order are automatically channeled to a sales management system (SMS) supported by a database. As soon as the account manager confirms the sales order, Sunrise looks at its stocks. The order is directly produced in case there is sufficient stock remaining from prior purchase orders. In case of insufficiency in stock levels or an out-of-state for the item in question, the organization has to send a purchase order related to the needed component in order to complete the sales order process. Every component ordered from the suppliers reach the premises of the organization on a day-to-day basis. Upon the arrival of these components, the stock manager scans each of them into a stock management system then the stock record of the relevant record is updated accordingly. Issues Identified Time Wastage The company wastes a significant deal of time to process an order, schedule production, control stock and purchase items. Delayed information processing might bring about reduced responses to changes, increase in stock levels and a more elaborated order lead time. This indisputably happens at the disadvantage of customers thus putting their loyalty at stake. For instance, it is unreasonable commanding loyalty from a customer population that that is already feeling discontented out of factors like a sales order being processed a week after the intended time. Error Prone Operations The current business process is error prone because it exhibits a higher likelihood of making mistakes. The idea that the system is update a week after the other leaves a lot to be desired. Typically, such a manner of operation might end up disregarding a large portion of the urgent action points in addition to slowing organizational growth. Underproduction The company depends on the sales orders tracked via SMS in order to figure out the processing needs. So, an insufficiency or an out-of-stock state that befalls items requested by customers halts the sales order processing thus impairing the company’s productive capability. Objectives of the Proposed Solution To introduce an inventory tracking system that can synchronize the organization’s purchase needs with the customer demands. To improve customer experiences by reducing the time needed to process an order, schedule production, control stock and purchase items. To introduce an error-free method of running business operations to allow the organization witness multi-faced growth within the automobile industry. Review Literature The implementation of ERP systems within organizations is often costly and time consuming. In many cases, the implementation costs often range from thousands to millions. According to Ziemba & Oblak (2013), implementing an ERP calls for the employees of an organization and the external professionals involved to commit a significant deal of time and breeds changes in business processes in addition to development of new business procedures. In such situations, operational staff and managerial training becomes inevitable (Al-Fawaz, Eldabi & Naseer, 2010). In addition, setting ERP systems can command upgrade of the existing hardware facilities along with purchase of new I.T facilities. This indisputably leads to cost overheads, which can be a huge disadvantage to business entities with weak financial endowment. It is on this ground that companies generally perceive the switch from one set of business process to another as an expensive endeavor. Elsewhere, Zaglago et al. (2013) describes the design of ERP solutions as a concept that is often founded on the principle of best practices. This in simple terms means that ERP vendors are often are at the frontline in pursuit of the most appropriate business model associated with an arm of an organization then translate that model into an ERP solution that will be more relevant to the organization. Rather than manipulating the ERP system business specifications to suit organizational needs, business entities have adopted their routinely processes to fit an ERP system. While choosing on appropriate ERP solutions, business enterprises should select ERP packages that suit the organization in spheres such as the ability to support changes within the business environment, the ease with which the package can integrate with the current information system, ability to provide industry functionality, level of support after implementation alongside the availability of implementation helpers such as training materials and help texts. For a long time, scholars have expressed interest in figuring out how different factors can ultimately shape the success level of I.T projects. From the list of factors that have been mentioned in these studies, it is possible recognizing critical success factors that can lead to enterprise-wide success. In many cases, the research adventures treat the critical success factors differently depending on the anticipated research outcome. For instance, some studies have end-user satisfaction as a critical success factor whereas other studies have focused on other aspects such as return on investment. Regardless of the approach used to assess the success level, the studies insinuate a need for continued research in this subject matter. To this end, the findings from the previous studies broaden the already existing knowledge, provide a pathway to discovery of new success factors and transform the present knowledge on how the critical success factors associated with an I.T project influence the project’s implementation process. While analyzing publications focused on this subject matter, Somers and Nelson (2001) distinguished factors that are critical to the implementation of ERP systems. More specifically, they identified the factors as the support of the top management, the ability of a business entity to establish a longstanding relationship with the suppliers that support the company whilst it operates the ERP system as well as the ERP package selection. The main goal of this analysis was to verify the impact of the aforementioned factors on I.T project management and the broader organization. In general, the implementation processes for ERP systems are often actualized via strategic, big and sophisticated projects that entail a host of risks that are often depicted on the project cost, schedule and budget. For this reason, business entities need to set up conditions that permit implementation of the chosen solution within schedule, time and budget. Implicit in this is the point that the organization pursuing an ERP solution need to be cautious of the most crucial factor behind the success of an ERP project. One reason that has led to the failure of ERP systems to deliver business values is that most organizations exhibit structures and processes that are not in harmony with the type of information and business logics enforced by ERP systems. In essence, a reasonable portion of ERP solutions have failed to deliver the anticipated benefits for the reason that business entities keep disregarding the need for change management. Hence, it is imperative that a business enterprise passes through a well-planned transformation founded on sufficient strategy and precisely defined implementation methods. In so doing, organizations get to recognize that a change is not an instantaneous event whilst devoting efforts to transform the way employees behave and work. Some business entities might require longstanding plans beforehand to transform the organizational culture prior to the implementation of the ERP. Such activities seem useful at the initial phases of ERP projects then persist all through the adaptation plus acceptance phases. So, proper change management is the best tool to keep end-user resistance of ERP tools at bay. Communication is another tool that affects the success level of an ERP project all through the project phases. Basically, communication needs to encompass the tasks, objectives and scope of every ERP implementation project. The tool is useful both to the project and to the wider organization. To attain effective communication, a business pursuing an ERP project would need to resolve to measures such as making the project team to hold weekly meetings, posting progress reports on the company’s intranet and making the project team members to have face to face meetings. Some authors like Somers and Nelson (2004) used this need to suggest that organizations venturing into ERP projects need to formulate communication plans. According to Baxter (2010), issues to be captured in the communication plan should include in-depth information on how to manage changes in the business processes, briefings of strategies plus tactics for change management and the rationale behind the implementation of the ERP. To conclude, choice of ERP systems appropriate for organizational needs is a sophisticated decision which harbors substantial economic consequences hence the need for proper analysis. Analysis of Issues in the Case The extended amount of time that Sunrise spends in accomplishing routinely operations like sales processing and supply chain management raises a serious alarm in relation to the demands of the contemporary business world. Indeed, best-run business entities have already outlined sensitive perspectives of their business, allowing them to swiftly act with increased flexibility, insight and efficiency. This is specifically true if the business enterprises resort to ERP solutions. Poor inventory tracking that is in Sunrise sends the meaning that the company is still caught in the circle of running out of stocks or featuring insufficient stocks. In the same way, the company could find itself order to for items that it does not need. In either case, Sunrise will appear as a business entity that is incapacitated to remain responsive to the demands of its target clients. There is no doubt that this manner of production can in the long run lead to huge financial losses, reduced revenue stream and compromised customer loyalty if left unhandled. Moreover, competitor firms in the automobile industry are already leveraging the just-in-time approach to production (Stair & Reynolds, 2010). So, could this be a call on Sunrise to resort to an ERP solution to alleviate these challenges? Finally, mistakes that are tolerated for an elaborated amount of time often prove to be difficult to correct. At the worst, mistakes revolving around financial transactions obviously put an organization’s financial position. To keep such potential losses at bay, it makes sense for business enterprises resort to software systems that can help them accomplish the day-to-day operations in an error free manner. It is noteworthy that the initial cost for acquiring the needed software utilities and solutions might often be scary. Nonetheless, a single move to get use software utilities like ERPs to eliminate mistakes can save an organization from potential financial woes whilst building its reputation. In sum, streamlined and accurate inventory management is critical to Sunrise’ ability to deliver within pre-agreed schedules at the same time maintaining inventory cost controls and customer satisfaction. To actualize these needs, business entities have the option to choose on ERP solutions like SAP, Oracle and Netsuite have capabilities that can allow operations like management of in-depth warehouse data and tracking and recording of stocks. Through integration of a single item price or price list, a business entity opens its way to updating inventory valuation simultaneously. Suitability of SAP as the Suitable ERP for the Given Case The main of pursuing an ERP solution is to offer a business entity with an individual product capable of providing a software utility to aid in the execution of core business operations. Main products like Oracle and SAP claim to be featuring the best approaches to allow business entities to run their routinely processes. Nonetheless, given that these systems cater for large and complex business entities, they have often remained sophisticated in the face of small business enterprises that rarely exhibit similar requirements in the context of the sophistication and scale of the day-to-day operations. Often times, business entities that resort to mid-market ERP feature limited IT resources, though they often need flexible software products. Numerous sources point to the idea that there is no cloud-oriented alternative to Oracle and SAP, more so in more elaborate organizational contexts. Even though Netsuite is a suitable ERP on demand with regards to small and medium size business enterprises (SMEs), its functionality and capability falls below the offerings of Oracle and SAP. Moreover, SAP offers demand-based ERP solutions too. According to Akhatar (2013), SAP scales best for larger business enterprises and Oracle has to this end proved to be the greatest competitor in this arena. For instance, SAP CRM is broad-scoped in addition to being significantly configurable to suit the clients’ business processes. However, a simplified and narrow-scoped solution could gain fame within the lower niche of the market (typically SMEs) mainly because of a surprisingly reduced go-live time, reduced initial cost alongside a narrow, though focused scope. Core SAP ERP modules were set up from scratch with the intention of attaining a fully integrated system (Akhtar, 2013). For this reason, a change in a section like finance will be reflected in purchases, sales and inventory modules if it bears any association with these sections. This type of integration is native to the SAP system. Now if this capability is extended with the SCM or CRM functionality, a business entity becomes better positioned to extend its ERP solution to other systems with little hassle. This degree of integration is hard to actualize and is rare in other alternative ERP solutions. For instance, compared to SAP, Oracle’s provision is just but a set of varied products that must be cobbled together prior to implementation. In essence, it is this level of integration that Sunrise requires in order to improve its routinely operations. Corporate viability is another reason why SAP is a better alternative for the needs at Sunrise. With more than 232,000 customers, 65,000 employees and a revenue level that tunes to €16. 22 billion coupled with a 4-decade history, SAP reveals no hint of quitting the ERP market (Akhtar, 2013). This gives the meaning that if Sunrise Automobiles settles for SAP, it will be investing in a software utility whose manufacturer is set to stay in the market to see it (Sunrise) actualize its intentions to attain lead production alongside the reduction of the lead times required to deliver products. Finally, the nearly four decade experience that SAP has in the business world has seen the company transform their ERP solution into something more business and industry specific. The application scope of SAP ERP, more so if associated with the SAP business suite, also offers an enterprise-wide and a centrally located system even for the biggest business enterprises at the same time delivering steady benefits like smooth-running business processes, easily accessible information along with minimized interfaces among varied applications. Besides, Sunrise will have the option to procure the SAP business applications based on modules to suit specific organizational operations like CRM or to procure SAP business suite in order to integrate virtually all its routinely business processes. Further, SAP presents an option to operate the financial module as a standalone or a portion of the wider suite. These capabilities all hint that Sunrise will have a heightened level of flexibility when it comes to the deployment of the SAP solution. Finally, the acquisition of Sybase in 2010 made SAP as a company to shift its vision in favor of technological adventurers and commitment towards enterprise mobility. This resolution encouraged the SAPHIRE NOW 2010 slogan about “on premise, on demand and on device” (Akhtar, 2013). Further, the company bears the belief of the mobile devices growingly turning into new desktops. Many are the affirmations from SAP that their enterprise solution is set to becoming a top-edge software utility with regards to enterprise mobility. In fact, the business enterprise is already on its pathway to realizing this objective. This gives the meaning that Sunrise will still be legible to reaping the benefits of SAP ERP even if it decides to purchase mobile devices for execution of business transactions or engage employees located in geographically desperate locations. Design Figure 1 design for SAP modules with integrated approach Description of the Modules Web Platform The web platform will be used by the customers, sales associates, suppliers and the organization’s research unit. The customers will use the web platform to get real time results of the stock that is available then place sales orders. The sales associates will use the web platform to analyze the demands of customers then optimize the supply needs of the company in order to avoid the idea of items getting out of stock. Suppliers will use the web platform of the supply needs defined by the sales associates then make arrangements to avail the respective items requested for to Sunrise’ warehouse. Finally, the research unit will use the web platform to perform minor surveys of the experiences of suppliers, customers and the sales associates. Considering that the SAP system will be a new adventure, Sunrise needs to establish a unit that will proactively figure out any issues that will prevent the SAP system from delivering business values hence the need for the research unit. The CRM System The CRM system will allow Sunrise to manage relationship with all parties that are critical to successful operation. Further, the system will manage every information and data associated with these parties. Using this system, the company can store accounts, contact information and sales opportunities associated with customers plus prospects in a common repository. Integration for SAP ERP and SAP CRM Within the competitive market, efficient movement of goods within the supply chain becomes critical. To do so, Sunrise will want to activate a business function that integrates its SAP ERP with the CRM unit. Presence of this platform will allow Sunrise to minimize the integration cost while reducing the communication between the company and its respective partners. Further, the integration is intended to help the sales crew to quickly fetch customers’ concerns from the sales management repository and supply responses in a well-timed fashion. The Controlling Module This module will help Sunrise to plan, report and monitor the operations within the organization. It entails methods of viewing and organizing costs that are needed to generate financial reports. More specifically, the module allows for planning and tracking of reports regarding costs. Control operations revolve around management and configuration of the master data which encompasses cost centers, cost elements, profit centers, functional areas as well as internal orders. The Sales and Distribution Module This module will be charged with the duty to manage every transaction ranging from proposals to enquiries to pricing and quotations among others. Presence of this module will help Sunrise to attain a superb level of inventory control and management. The module will constitute sub-components like credit management, billing and sales information system among others to aid in its primary function. Human Capital Management This module will enhance the work process plus data management within the organization’s human resource department. The module’s capability will come in handy right from the recruitment process then performance evaluation along with the management of promotions, handling of payroll issues and compensations during the use of the SAP utility. In the end, Sunrise will realize how this module can help it to restructure its human capital in a way that draws the organization closer to the overall strategic goals. Production Planning This module will constitute software utilities intended to assist in production planning plus management. The module will cover master data, transactions as well as system configuration details as a way to attain the plan procedure associated with a production process. It is noteworthy that effective functioning of this module will command collaboration with the distribution resource plan, sales and operation plan, material requirements plan as well as product cost plan. In this way, Sunrise will be assured of drawing nearer to a superb production management. Financial Accounting (FI) This module will help Sunrise to manage every financial transaction inside the enterprise. The module will help employees in the management of data related to every business and financial transaction. An even more striking aspect of this module is that it is flexible to the size of a business context. Implicit in this is the point that future expansion of the organization will not in any way put the capabilities of this module at stake. Through this module, Sunrise will be in state to obtain real time information regarding its financial position within the automobile market then set strategic goals accordingly to attain a competitive ability. Materials Management This module will manage the needed, processed or produced materials within the enterprise. Varied categories of procurement requests will be managed under this module. Typical components associated with this module include consumption-based planning, vendor master data, invoice verification and inventory management among others. SAP Integration Server This module will act as the central constituent of the SAP Exchange Infrastructure. Its major function will be provision of a framework that will help in exchanging information among varied organizational and third party entities. Further, the server regulates incoming and outgoing communications that are channeled via web applications like fundamental controls whilst doing system configuration. Relational Database Management System (RDBMS) This table constitutes several tables designed to store information. Often times, these tables are related to one another via established relationships. One obvious benefit of using this approach to store data is reduction of redundancy hence saving the storage space that Sunrise will require. Another benefit of this method of data storage is that SAP will never permit input values that fail to comply with the business rules that guard the operation of Sunrise automobiles. Web Server This is a module whose definition is crucial to allowing the workflow receive XML-oriented messages like an XML response document. Discussion and Conclusion Implementation Issues The initial step even before venturing into integration design is that Sunrise will need to comprehend the SAP-based process both in a functional and a technical perspective. In essence, it is fundamental understanding what it really means two have information transferred between two systems (Khosrow-Pour, 2006). With regards to this, Sunrise will need to answer questions like: will the effective use of SAP call for replacement of our current I.T infrastructure and is the organization set to incur the underlying cost? Another implementation issue will be the definition of the appropriate security policies. This stems from the point that SAP will be introducing a new set of I.T facilities whose protection needs are likely to fall outside the current security policies. As Sankar & Rau (2006) put it, the information system policy issue needs to be handled prior to deployment in order to evade potential financial losses that are known of incidences of security breaches. Incidences of end-user resistance are also likely to arise at the utility’s implementation phase (Khosrow-Pour, 2006). The effect of this factor can be felt even the more if the management does not engage or elicit the opinion of the low-level users regarding the procurement of the SAP ERP solution. One simple way to alleviate this would be to establish a strong cross-organizational collaboration amidst all arms of the enterprise during the implementation of the SAP ERP solution. Finally, presence of well-defined destination and goals is crucial to the efficiency with which the SAP ERP can deliver the organization’s business values (Sankar & Rau, 2006). In particular, Sunrise will need to precisely define the factors or parameters that it will need to use to measure success as far as the implementation of SAP ERP is concerned. This needs to include the definition of the deadline upfront, financial benefits and the critical business processes along with the intended efforts to make stakeholders address them. Benefits and Drawbacks The benefits of the SAP integration solution include the following. First, the solution will allow the integration of SAP and the associated modules in a real time fashion without compromising the system security. Secondly, this integration solution features minimal friction considering that it permits the integration of back and front office systems into the developer utilities that the end-users at Sunrise are already familiar with. Finally, adventuring into the SAP integration solution paves way for a brighter future. Using this solution, the company can set up a reliable and highly scalable infrastructure that can facilitate the integration of SAP. Though SAP promises a host of benefits, there are some limitations that could crop up during its use. To begin with, successful implementation of this ERP utility could lead to heightened expenditures that Sunrise might not be prepared to incur. The increased implementation cost is likely to emanate from avenues such as upgrade of the supporting hardware facilities and training of the involved employees prior to deployment of the SAP ERP. Another limitation is that the vendor package could sharply contrast the company’s current business model. Finally, implementation of SAP could make Sunrise data to be a point of interest of web attackers, whose actions could cause more financial losses to the business enterprises (Brady, Monk & Wagner, 2011). Conclusion In conclusion, SAP ERP is the best way to allow Sunrise to realize it aspiration of reducing stock level, feature efficient production and to effectively coordinate the planning endeavors for the components supplied and assemblies. The modules of the SAP integration services discussed in this paper already reveal how adoption of the SAP utility would help Sunrise to improve its business operations including the experiences of its clients. Thus, the paper points to the idea that investment in SAP ERP is really worthwhile if attainment of the overall organizational goal is anything to go by. Bibliography Akhtar, J. 2013. Production planning and control with SAP ERP. Al-Fawaz, K., Eldabi, T., & Naseer, A. 2010. Challenges and influential factors in ERP adoption and implementation. Brady, J. A., Monk, E. F., & Wagner, B. J. 2011. Concepts in enterprise resource planning. Boston: Course Technology. Baxter, G. 2010. White paper: Key issues in ERP system implementation. Large Scale Complex IT Systems, 3-9. Khosrow-Pour, M. 2006. Cases on information technology and business process reengineering. Norwood Mass Sankar, C. S., & Rau, K.-H. 2006. Implementation strategies for SAP R/3 in a multinational organization: Lessons from a real-world case study. Norwood Mass Somers T.M., Nelson K. 2001, The impact of critical success factors across the stages of enterprise resource planning implementations. Proc. of the 34th Hawaii International Conference on System Sciences, Hawaii. Somers T. M. and Nelson K. G. 2004. A taxonomy of players and activities across the ERP project life cycle. Information & Management, 41, 3, 257-278. Retrieved February 27, 2004, from ScienceDirect database. Stair, R. M., & Reynolds, G. W. 2010. Principles of information systems. Boston, Mass: Course Technology, Cengage Learning. Zaglago, L., Apulu, I., Chapman, C., & Shah, H. 2013. The Impact of Culture in Enterprise Resource Planning System Implementation. In Proceedings of the World Congress on Engineering (Vol. 1). Ziemba, E., & Oblak, I. 2013, July. Critical success factors for ERP systems implementation in public administration. In Proceedings of the Informing Science and Information Technology Education Conference (Vol. 2013, No. 1, pp. 1-19). Read More