Enterprise Resource Planning Systems Role in Improving the Quality and Growth of Business Enterprises - Case Study Example

Name : Tutor : Title : Institution : @2015 (Sumner, 2005) Defines Enterprise Resource Planning (ERP) as a software used for business process management. It allows the correct use of an integrated system in an organization that can be used to collect, store, manage and interpret data. In most cases, data on critical business activities like product planning, cost, marketing and sales, manufacturing or service delivery, shipping and payment and inventory management are best managed using systems. It helps the company to automate its various back office functions that relate to services, technology, and human resources. The ERP provides a view that has integrated all the core business processes that are commonly real-time, by use of conventional databases that are operated by various database management system. The ERP system helps to crucial business resources such as raw materials, cash, and production capacity and also monitors the status of business commitments such as purchase orders, orders, and payroll. The applications that compose the system can share data across the various departments of a firm such as accounting, manufacturing, sales, purchasing among others that provide the data. (Röthlin, 2010). The ERP helps to facilitate the flow of information between all the business functions and also controls connections to the stakeholders outside the company. Information technology investments have recently become the biggest category of capital expenditure in most parts of the world like the Unites States and United Arab Emirates over the last decade. Smaller enterprises are also adopting the ERP systems that were initially used by large firms. One of the companies that have significantly used the ERP system in the United Arab Emirates is the Royal Group. The group launched its operations in late 1990’s. It consists of 60 large and middle size companies that exist in the United Arab Emirates. The Group has been doing well in its diversification plans and has various business activities in all the major sectors including finance, hospitality, real estate, manufacturing, technology, and media. Royal group currently has its head office in Abu Dhabi, the capital of United Arabs Emirates, and all the operations of the organization get coordinated from there. (Davidson, 2011). The chairman of the Group currently is His Highness Sheikh Tahnoon bin Zayed Al Nahyan. Royal Group has grown at a tremendous rate and today, and it is one of the greatest business and investment holding houses in the United Arab Emirates. Before the ERP system, the Royal Group Used traditional systems that were different. The ERP model is different from the initial systems development because it can run on different network configurations and computer hardware by the use of database as the information repository. The Royal Group started in late 1990s and since then it has employed more than four thousand people from different countries and cultures. Initially, it was a major challenge to manage the records of all the employees using the traditional systems. Recently, after adopting the ERP system, Royal Group is among the greatest business and investment in the Gulf region. It has a significant and growing presence both internally and internationally, and it has a broad spectrum of partners and investments in Asia, Middle East, South America and the United States. After the Royal Group had applied Oracle E-business Suite Release 12 in its forty-eight companies, for two years to facilitate their system administration and maintenance, the company’s productivity increased from 30% to 50 %.( Oracle, 2012). Before adopting the ERP, the organization spent enormous costs and efforts to maintain the dozens of companies under it. The organization has deployed a comprehensive platform across its companies. To get a system that was able to serve the diverse lines of businesses, that the group possesses the media groups, construction activities, and oil companies was an important challenge. The ERP system has made it easy to manage all the diverse activities of the organization. Royal group had the problem of establishing full control over its purchases, budget, financial situation and inventory. However, with the introduction of the ERP system, all these operations have been made easy for the organization. Duplicate data in different companies was a major challenge for the Royal Group of enterprises. However, with the introduction of ERP system, the organization was able to eliminate the repeating details since it established one data source for the group that was visible to all companies in the group. Initially, it was difficult for the organization to maintain correct financial and operational data. With the introduction of the ERP system, the Royal Group has been able to obtain accurate fiscal and operational data that has helped the organization to make informed and agile decisions. The Royal Group adopted Oracle E-Business Suite as its ERP platform. It has helped in making centralized implementation, and it has put in place robust backup systems that contribute to ensuring there is a reliable availability, and this provides to lay an excellent foundation for real productivity gains. It has established total control over the organization’s purchases, budgets, financial situation and inventory. (Davidson, 2011). To boost the productivity of the organization, Royal Group has put in place Oracle Database in the form of two none real Applications. The applications included Clusters on a SPARC Enterprise M5000 server and the other on Oracle Solaris 10 and Oracle EBS, based on SPARC Enterprise M4000 servers on Oracle Solaris 10. These have been used without virtualization so as to realize the set goal of 70% productivity. (Oracle, 2012). The Royal Group has also initiated a single data source using Oracle Database, Enterprise Edition 11g in all the companies that are under the Royal Group. It has greatly helped in eliminating duplicate suppliers, items and customers. It has also minimized the time required to determine the company’s financial status and to ensure the group’s developers make business intelligence dashboards that are vital in management reporting without much efforts and errors. (Oracle, 2012). The use of ERP has enabled the organization to minimize the time required for creating management reports by 50%, production of accurate financial statements at the group levels, company, and subsidiary. It enables managers to make decisions accurately in the short period. It minimizes the time needed for creating the month-end closing reports from two to three months to less than one month that is more than 50% decrease. The ERP system has played a vital role in streamlining the generation of payrolls for more than four thousand employees. It has also helped to unify the recruitment processes in all companies, secure transfer of workers by centralizing policies and the management of the enterprise at the group level. In conclusion, the ERP system has played a great role in improving the quality and growth of business enterprises in all parts of the world. The ERP system has been significantly used in the Royal group as a vital organizational tool since it integrates different regulatory systems and ensures error-free transactions and production. For any group to prosper in business in the current trends, they must employ the Enterprise Resource Planning system so as to integrate applications effectively. The forms commonly used in the company in collecting, managing, storing and interpreting data from critical business activities like product planning, cost, marketing and sales, manufacturing or service delivery, shipping and payment and inventory management. Diagrammatic representation of the relationship between ERP system and other business modules. References. Group Website: http://www.royalgroupuae.com Read More