Management Information System and System Implementation of Enterprise Resource Planning - Term Paper Example

Introduction There is a drastic change in the market situation for the industries with the advent of globalization. Industries are restructuring their business activities by entering into joint ventures with other organizations of their industry. Advanced technologies are helpful to the managers in encountering the major business challenges of the global economy. The task of managing the enterprise is better for the managers with the availability of information on sales, inventories and other data. An academic discipline that covers the application of information systems to solve the business problems is Management Information System or MIS. The information system is the collection of the activities of the people, application of technologies and procedures. Management information systems analyse the information systems applied to the other operational activities of the organization (O’Brien.J, 1999). Enterprise Resource Planning or ERP integrates all the data and the processes of an organization by using the multiple components of the computer software and hardware. The difference between ERP and MIS exists in that; the ERP incorporates the elements that may not necessarily focus on decision support. Oil fields Technical Services or OTC Company of the Government of Dubai provides onshore facilities and logistical support to oil field operators and power generation sector of United Arab Emirates, Middle East and Asia-pacific. For its international perspective, the company needs to restructure the business activities by developing larger human capital and acquire the latest technologies. The technologies like the automated operational systems and customer relationship management will support the entire operations of the company. The present study analyses the business challenges, the ERP project plan, methodology of the implementing the ERP for the global positioning of the company successfully. Overview of the company: Established in 1950’s by the Government of Dubai, the Oil fields Technical Services or OTC Company provides its services to the oil field operators and power generation sectors. The company started restructuring its business activities by forming joint ventures with the eminent organizations of the industry. To reposition itself in the international market, the company needs to adopt latest technologies and develop a large human capital. Business challenge statement Quality of the service and the satisfaction to the customer are the key points to maintain and achieve leadership in the market for a service industry like OTC that provides services to the oil field operators and power generation sectors. The desire of the company is improve the supply chain that focuses on decision-making and policy development, time compression, demand amplification, integration and design of the supply chain, and the management of the international supply chain. The multiple supply chain and transportation challenges include e-commerce, accelerating the deadlines to shipping, delivery in a cost effective way, optimizing ware house and distribution operations, manual and automated material handling, and sortation. The oil field industry is labor intensive and the profitability of the company depends on the technical expertise and the effieciency of operations. To assess the existing condition of the wells, to montior and control the flow of product from the wells that produce the product, and to monitor the drilling process, the companies exploit the computer technology and sophisticated sensors. In addition to enhancing the financial performance through improving the customer service, effieciency of operations, reliablility and productivity the company needs to address the regulatory compliance. Technology like the management information systems plays an important role for business strategies. The decision makers of the company need a meaningful and timely information. The integration of the information system is the requirement for the growth and positioning at a global level. The major challenge for the company is its struggle to achieve sustainable information management. The interconnection of the business continuity, net work, communication and bandwidth requirements in the dispersed physical locations is a challenge. Outsourcers of the oilfield service industry are responding to the developments in the digital oil field that helps to transform the industry. The important challenge for the company lies in applying the technologies of the management information systems. Through this applications there is a very good scope of achieving a greatest business value in the digital oil field enviroment. The successful application of the information systems provides packaged solutions, applications and business processes within the architechture of flexible nature. Literature review Paul Geerders(2004), in his article on ,Management information systems’discussed MIS as the consistent, modular and flexible tools for the systematic acquisition. Peter Weill et.al,(2004), in his article on ‘ Building the infrastructure for the strategic agility’ on how the executive make few moves more critical than their decisions about the technology infrastructures that promote the future strategic agility. Mark Jeffery and Ingmar Leliveld(2004), in his article ‘Best Practices in IT Portfolio Management’ discussed on need for the CIO’s to learn to communicate the visions and strategies and the advantages by following the specific steps that makes IT an integral part. Glover Ferguson, Sanjay Mathur and Baiju Shah(2005), in the article ‘Evolving information to insight’ discussed on the how to use the information technology efficiently to manipulate the information that increases the ability of organization. Peter Weill and Sinan Aral(2006), in the article titled’generating premium returns on your IT investments’ discussed how benefits of establishing the best IT practices that add up to tangible IT savvy premium. Heather A. Smith(2004), in his article ‘Grid computing’ discussed on the research on grid computing and how it is advantageous to tap the potential of the idle computers in many firms because of inefficient network. Chris Sauer and Leslie P. Willcocks(2002), in their article on the ‘ evolution of the organizational architect’ discussed their survey reports of CIO’s of 97 companies. They found that CIO’s of the some successful companies are smart enough by developing mechanisms that forces the communication between the strategiests and technologists. Frederick et.al(2004), in his article on project management issues in implementing ERP discussed the key areas of ERP project management and explaining the ways that project managers has to pay the attention. Mohsen Ziaee(2006), in his article on ‘A modular approach to ERP system selection: A case study’discussed correct design of the ERP suitable for implementation. J.Micheal Tarn et.al(2002), in their article titled ‘ Exploring the rationales for ERP and SCM integration’discussed how ERP system improve the supply chain management. In her article Marie Elena Salazar, inventory and productivity consultant‘understanding the concepts of MRP/ERP, discussed the need for the companies to acquire the tools that assures the customer at the global level of quality goods and services. Ioannou.G, Papadoyiannis.C, (2004), in their article titled ‘Theory of constraints-based methodology for effective ERP implementations’ discussed on the reasons for the long time implementation of ERP and how this tantalises the industries. Gable.Guy..G.et.al,(1998), in their article cooperative ERP life cycle knowledge management described how the significant presence of SAP in the market offers a unique opportunity that encourages the tripartitie ERP knowledge frame work. ERP implementation methodology Every company follows a certain methodology of implementing the ERP software. In the modular implementation, One ERP module goes at a time. The implementation limits the scope to one department that is functional. The approach is suitable for some companies that do not share the common properties across the departments. Integration of the ERP modules follows the installation of the independent modules of the ERP system. Each business unit may be having its own databases and ERP system. Reducing the scope of implementation reduces the risk of installation, customization and operation of the ERP systems. One successful implementation of the module leads to the overall success of the ERP project. The modular implementation of the ERP system suits well for the international supply chain management of the company. The modular implementation consists of Project integration that includes development plan, execution, change control Project scope consists of inititation, verification, change control Project duration comprises activity control, development, schedule development and scheduled control. Project cost is resource planning, cost estimation and cost control. Project quality includes quality planning, and quality control. Human resource management containing organizational planning and team development Project communication consists of communication planning and information distribution Project risk is risk identification and control Project procurement management comprises procurement planning and project close out. ERP project plan The ERP project plan comprises the following steps Project management Initiating and planning a project for a specific period. Executing and controlling the project Executing the project plan Kick off the project Organising and conducting the external kick off meetings Allotting certain time for releasing work packages Assembling and assigning the work packages. Monitoring the project plan comprises the Ongoing weekly management activities Updating the work plan of the project and issues of database, Monitoring the production of deliverables, Conducting core team meetings and project team meetings. Assessing the project status Gathering data, assessing the performance, status, quality and risk, Performing ongoing quality assurance reviews Conducting client satisfaction discussions Managing the project calendar, human resources, and the client vendor relationships. Accepting the interim deliverables Reviewing the interim deliverables for completeness and quality Obtaining the acceptance of the interim deliverables Reporting the project status. Conducting the status meetings Preparing the issues and status reports Reporting the project performance measuring the project performance Managing the financials of the project and the work plan of the project. Issue of the performance reports Conducting the weekly project team meetings and the steering committee meetings. Control change Determining the need for a change Finding out the scope for a change Requesting for a change Assessing the risk Investigating and proposing a solution Developing a potential solution Obtaining the approval from the quality analyst and the leader of the project. Negotiating for the approval for a change Explaining the need for a change Obtaining the acceptance from the client. Updating the project plan Modification of the project plan on assessed risks and feedback from the client. The release of the new work Assembling and assigning of the new work packages. Obtaining the acceptance of the projects Finalising the deliverables and gain acceptance. Complete transition of the project resources and the end of executing and controlling phase activities. Closing the project Gather the feedback satisfaction from the client. Close out the project with the client and the team. Finalization of the documentation, share knowledge Complete administration work and the end of closing phase activities. Client design by conducting the workshops. Processing of the sales orders Purchasing and inventory Warehouse and distribution. Manufacturing Finance Shared service current state analysis Review of the requirement matrix Address book Gap analysis and resolution Gap analysis with common design. Planning manufacturing accounting, Product costing Product data management, Forecasting Sales order management Advanced pricing. Warehouse management Purchasing, application design, high-level application requirements Sales order processing purchasing and inventory Warehouse and distribution Manufacturing and finance forming workshops Forming the global report Finalising the report and forming the matrix. Conducting the interface workshops, Documenting the interface specification Updating the detailed design documents Conducting the data conversion design workshops Reviewing the date conversion feasibility Reviewing the high-level data conversion. Functional team participation and support Address book Employees Customer master Vendor master Item master Item location quantity Item location Item cost. Item price, cross-reference of the item SO history, preference profile, SO header, and SO detail Bills of material Routings Open purchase orders, open work orders Technical design workshops Environment hardware, software Infrastructure and security steps Assessment of the training needs. Purchasing and inventory, warehouse and distribution, manufacturing, end user security and access workshop Defining of the access requirements by area. The configuration of the hard ware and software Developing prototype scripts, finance configuring and setting up the proto type environment the configuration of the overall module, planning, shop floor Manufacturing accounting, product costing, product data management, forecasting, sales order management, advanced pricing. Warehouse management, inventory management, purchasing, collecting and adding proto type data. Sales order processing, purchasing and inventory, warehouse and distribution Finances, conducting prototypes, sales order processing, purchase and inventory, warehouse and distribution, manufacturing, finance Tech support, wrap up of the prototype 1, and sales order processing. Purchasing and inventory, warehouse and distribution, manufacturing, finance, prototype cycle 2, developing prototype scripts, sales order processing, purchasing and inventory Ware house and distribution, manufacturing, finance, configure and setup Prototype environment, overall module configuration, planning and shop floor. Bills of material, routing, opening the purchase orders, opening the work orders, interfaces, labelling, EDI, global product database, user procedures, development of the user procedures Developing the inventory of user procedures. Technical configuration follows the steps of developing the user outlines for each process, reviewing the procedure, training, planning and preparation, training development, procedural approval for the functional areas, integrated test planning, and stress test planning. Developing classroom training schedule, executing training, postproduction support, quality assurance review, environment management, technical management Automation of the operations Human resource and payroll: The automation of the human resource enables the employees to perform better in customer care. It is important to understand the needs of the employees of the company and provide them service and support. There is a need to adopt the policies that lay emphasis on fair treatment. By providing the convenient location and hours, there is a chance of improving the efficiency of operations. The employee-focused technologies include HRIS, applications, Intranet, internet, tools and devices. Benefits by automating the HR administrative process include timesavings, compliance and error reduction, employee retention improvement. Finance: Installing software that effectively manages the complex application and valuation process, resulting in the time saving benefits with a greater control of the project. It is important and beneficial to install software the helps in subscription and usage billing processes with integrated contract management and revenue accounting capabilities. Engineering services: With better engineering services the overall positing of the company improves globally. Research and development in the engineering services constitutes a significant role in the automation process. Engineering services automation improves the product development disciplines. Logistics and distribution: Automation of the logistics can powerfully complement the facilities that a higher-level computer system provides. Logistics system has a variety of hardware and software components that include fixed machinery, mobile technology, integration software, operational control software, and the business control software. Work shops: Work shops give the opportunity for a highly interactive and collaberative settings that combines people to exchange ideas, plans and eloberate emerging ideas, high quality research, cutting edge and other practices. The current processes in each functional area are mapped out visually, participants of the work shop will evaluate these visual for refining the processes. Quality management system: Automation with software that provides the real time analysis of the business performance, allowing the access to timely and accurate data about the service orders, and mobile capabilities that allows the field forces participate in the corporate goals like revenue optimization and the retention of the customers. B2B and B2C: B2B allows businesses to directly deal with the suppliers and dealers online. This allows the electronic transfer of orders, invoicing and even payments. The intermediary portals that connect suppliers to customers are B2C. These sites pass goods to the consumer. The automation of the B2B and B2C by installing software that works for highly responsive customer service. Summary and conclusions With revolutionary changes in communications and technology, it is essential for the companies to respond to the needs of the global consumers. For their global perspective, it is important to meet the multiple challenges of supply chain management, and transportation. The task of managing an enterprise is relatively easy as the managers are getting better information on sales, inventory and other data with advances in technology. For an enterprise particularly an oil field industry will be successful only when it gets the actionable information. The intelligence lies in using the precious resource the human resource. Data collection and proper method to manipulate the data are important for an enterprise. Utilising the management information systems in a wise way and the suitable ERP implementation methodology will fulfill the goals. To fulfil the desire of Oil fields Technical Services or OTC for a global perspective and to restructure its business activities for better performance and customer satisfaction, it is necessary to work for modular implementation of the ERP system. A perfect ERP project plan will greatly improve the quality, efficiency and customer satisfaction at the global consumers. Selecting the correct software for the automation of the processes like HR and payroll, finance, quality management, engineering services, workshops, logistics and distribution and B2B and B2C for implementation will help to achieve the goal.. References O’Brien, J (1999). Management Information Systems – Managing Information Technology in the Internetworked Enterprise (in English). Boston: Irwin McGraw-Hill. ISBN 0071123733. From the Journals: Chris Sauer and Leslie P. Willcocks,(2002), The Evolution of the Organizational Architect Topic: Management of Information Systems Reprint 4334; Spring 2002,MIT sloan management review, Vol. 43, No. 3, pp. 41–49 Frederic Adam, et.al(2003),Project management issues in implementing ERP, towards approach more suited to ERP projects, Electronic Journal of Information Systems Evaluation, 2003 Glover Ferguson, Sanjay Mathur and Baiju Shah(2005), Evolving From Information to InsightTopic: Management of Information Systems Reprint 46211;Sloan Management Review, Vol. 46, No. 2, pp. 51–58 Gable, Guy G. and Scott, Judy E. and Davenport, Tom D. (1998) Cooperative ERP Life-cycle Knowledge Management. In Edmundson, Bob and Wilson, David, Eds. Proceedings 9th Australasian Conference on Information Systems, pages pp. 227-240, Sydney. Heather A. Smith and Benn Konsynski (2004), Grid Computing, Topic: Management of Information Systems Reprint 46114; Fall 2004, MIT sloan management review, Vol. 46, No. 1, pp. 7–9 Ioannou.G, Papadoyiannis.C, (2004), Theory of constraints-based methodology for effective ERP implementations International Journal of Production Research, vol.42(23), Dec,2004, pp.4927-4954, Marie Elena Salazar, inventory and productivity consultant,(2005), Understanding the concepts of MRPII/ERP, Available on http://www.plant-maintenance.com/articles/ERP_concepts.shtml Mark Jeffery and Ingmar Leliveld(2004)Best Practices in IT Portfolio Management Management of Information Systems Reprint 45309; Spring 2004, MIT sloan management review, Vol. 45, No. 3, pp. 41–49 Mohsen Ziaee, Mohammad Fathian, S.J. Sadjadi A modular approach to ERP system selection: A case study, information management and computer security, vol.14(5), pp.485-495. Peter Weill, Mani Subramani and Marianne Broadbent(2004), Building IT Infrastructure for Strategic Agility, Management of Information Systems Reprint 4416; Fall 2002,MIT sloan management review, Vol. 44, No. 1, pp. 57–65 Peter Weill and Sinan Aral(2006), Generating Premium Returns on Your IT Investments Topic: Management of Information SystemsReprint 47211; Winter 2006,Sloan Management Review Vol. 47, No. 2, pp. 39-48 Paul Geerders(2004), Management Information SystemsRelevance to Agricultural and Rural Development Available on http://knowledge.cta.int/en/content/view/full/1001 Available on http://www.aim2004.int-evry.fr/pdf/Aim04_Adam_Sammon_Carton.pdf From the Internet: Angela Andal-Ancion, Phillip A. Cartwright and George S. Yip(2003), The digital transformation of traditional business. Sloan Management Review, summer 2003 Available on http://sloanreview.mit.edu/smr/issue/2003/summer/9/ Brooks Automation Logistics Management & Distribution Report,  July, 2001   http://findarticles.com/p/articles/mi_hb4866 ERP implemetation methodologies Available on http://www.sysoptima.com/ Read More