ERP Recommendations for Emerson Produce - Assignment Example

A report on ERP recommendations for Emerson Produce Introduction Over the years, Emerson Produce has employed IT-based applications to manage its 25 self-service grocery stores. The company uses computer-based systems to track and process customer orders. In the near future, the company hopes to expand its business operations dramatically, as a result the existing computer-based systems may not be efficient enough to manage the company’s operation processes. In a bid to expand its business operations, increase efficiency and minimize on its operation costs, Emerson Produce seeks to adapt Enterprise Resource Planning systems. Enterprise Resource Planning (ERP) incorporates powerful systems with software packages that allow businesses to integrate different disparate functions. ERP systems provide the foundation for a wide range of e-commerce –based functions such as web-based ordering, inventory management, built-to-order goods and order tracing among many others (O’Leary, 2000). This report seeks to provide recommendations to the management team of the Emerson Produce with regards to how they can implement effective Enterprise Resource Planning (ERP) that will enable the company to increase its efficiency and minimize on its operation costs. Foremost, this report will examine the EPR needs of the company and subsequently provide recommendations on how the company can select a suitable ERP that will enhance its operations. Furthermore, this report will highlight the functions that the ERP will perform in order to meet the unique needs of the company. Moreover, this report will discuss the ways in which the management will ensure that the selected system can be updated with time. In addition, this report will provide an overview of the likely costs that the system will accrue. Selection and implementation of ERP system According to Leon (2007) business modeling or developing a business model is one of the first steps towards adapting ERP. ERP systems should mirror a company’s business processes and operations. A company’s business model is a representation of the business as one large model depicting the interdependencies and interconnections of the different business processes and sub-systems. A company’s business model comprising of its business processes is often developed based on the strategic plans, goals and objectives of the company. ERP systems are often developed based on the business models of a company (Leon, 2007). With reference to the sentiments of Leon (2007), one of the basic steps towards the selection of an ERP system revolves around the identification of the company’s strategic goals, objectives and business needs. Based on the business model of Emerson Produce, its strategic goals, objectives and its existing needs, the following are some of the ERP requirements for the Emerson Produce business model. Therefore the company should consider the outlined factors when selecting an ERP system. An ERP system that integrates the various operations of the company’s self-service grocery stores. A system that incorporates the relevant e-commerce –based functions to facilitate web-based ordering, inventory management, built-to-order goods, order tracing and online delivery among many other functions. A system that is flexible and can be updated over time. Selection methodology It is essential for the company to adapt a structured approach in the selection process when selecting a suitable ERP that is in line with its business model. Prior to the selection process, a set of practices should be presented to the relevant stakeholders and involved parties within the company. It is important for the involved parties to comprehend the process involved in the selection process such as requirements, tender invitation and the criteria and process of selecting vendors. This will ensure that the decisions reached will be made based on collective and objective basis, this will in turn lead to a high level of understanding and co-operation in the course of the selection process (Howlett, 2010). Burns (2011) observes that vendor selection is one of the crucial steps of selecting a suitable ERP system. He suggests that in order to obtain a list of potential vendors one should contact industry associations consultants or use internet searches. Following the selection of potential vendors, the management teams should ensure that the demonstrations given by the potential vendors are relevant to the strategic goals, objectives and business model of Emerson Produce. For instance, the vendor demonstration should be able to illustrate the ways in which their systems will integrate the different operations of the various self-service grocery stores. Their demonstrations should also depict the kind of e-commerce based functions that their system will incorporate so as to increase efficiency and minimize the company’s operation costs. In addition, in order for the demonstration of the potential vendors to be approved, they should demonstrate the way in which their system can be updated over time on low costs. These are the criteria that should be used in the process of vendor selection. Vendors should be treated equally and given equal opportunities to present their demonstrations (Burns, 2011). Given the fact that choosing a suitable ERP system is a complex process that may involve various economic implications, it is important that a multi-criterion approach should be employed. Prior to the presentation of the various potential systems, the management team should agree on the criteria and the scoring system that should be used. The selected criteria incorporate a wide-range of factors based on the internal and external factors that impact on the business. According to Alanbay (2005), some of the selection criteria should include; systems requirements, Back-up System, integration with other systems, user friendliness, flexibility and maintenance among many other factors (Alanbay, 2005). The full involvement of relevant personnel in the decision making process is also essential. The top management, leadership of various departments and representatives of uses should be involved in the decision making process (Wallace & Kremzar, 2001). Alternatively, the company can employ the traditional methodology when it comes to the selection and implementation of an ERP system. This methodology involves phases such as planning, education, configuration / design, Conference Room Pilot (CRP), Cutover Activities and live support. The planning phase involves the participation of project managers comprising of the management team and vendors who work together to develop and review a plan and thereafter communicate the objectives of the company for the system (Carr, 2009). The education phase entails the vendor consultants educating the management team on the functionality of the system. In the design and configuration phase the consultant vendors help the company’s management team to configure and set up the new system based on the company’s business process. The conference room pilot phase involves the testing of the system whereas the live support phase is the last phase of the selection and implementation process which involves the implementation team training and assisting the end-user with real time support on how they can use the system (Carr, 2009). Functions of the ERP system Based on the business model, strategic goals and objectives of Emerson Produce, the proposed ERP system should be able to perform the following functions; Streamlining and integrating operations and processes of various branches of Emerson Produce. Synergize the resources of the company such as databases, inventories and software applications and enable the use of these resources simultaneously in the various branches. Incorporate a unified database that enables the storage of information for the different system modules. Facilitate information flows in the various branches of the enterprise. Incorporate software solutions that process and manage the company’s operations such as supply chains, manufacturing processes, financials, marketing, Human Resources, Decision Support System and Customer Relationship Management. Offer software solutions that enable; web-based ordering, inventory management, built-to-order goods, order tracing and online delivery among many other functions. Provide real-time support to end-users. An ERP system that performs the functions outlined above will meet the unique needs of the company, since it will enable the company to expand as much as it can since it offers web-based functions that can be utilized simultaneously in different branches and reach a wider base of end-users. Moreover, this ERP system will help Emerson Produce to minimize its operation cost since it will enable the integration and sharing of information and resources simultaneously in the different branches across Sidney, New South Wales, New Castle, Melbourne and Brisbane among many other areas. Additionally, the system will enable the company to enhance efficiency since it offers software solutions that streamline and integrate the company’s operations and processes. Costs According to Hamillton (2003), the costs of implementing an ERP system can be one-time costs or ongoing annual costs. These costs can be further divided into software, hardware, internal personnel and external assistance costs. The costs of ERP hardware and software packages widely vary, nevertheless the average costs ranges from 30 thousands for micro-based packages to several million dollars for packages that are main frame. The costs of these softwares and hard wares are generally determined by the number of concurrent users, the costs of smaller systems costs less. External and Internal assistance comprise of the training and consulting costs of implementing the ERP system. Groups that provide external and internal assistance include; independent consulting groups, software resellers and vendors. The amount or level external and internal assistance is dependent on factors such as the complexity of the ERP system, the knowledge and experiencing of the internal and external assistance. Given the fact that the duration period for fully implementing ERP applications range between four to six months, it is estimated that the average costs of external and internal assistance may range between 300 thousands for one time costs and 60 thousands for annual costs (Hamillton, 2003). Recommendations Develop a business model based on the strategic plans, goals and objectives of the company. Adapt a structured approach in the ERP selection process. Prior to the selection process, a set of practices should be presented to the relevant stakeholders and involved parties within the company. Ensure that the demonstrations given by the potential vendors are relevant to the strategic goals, objectives and business model of Emerson Produce. Prior to the presentation of the various potential systems, the management team should agree on the criteria and the scoring system that should be used. A multi-criterion approach should be employed, it should incorporate a wide-range of factors based on the internal and external factors that impact on the business. The full involvement of relevant personnel in the decision making process is essential. Conclusion In a bid to expand its business operations, increase efficiency and minimize on its operation costs, Emerson Produce seeks to adapt Enterprise Resource Planning systems. This report has provided recommendations to the management team of the Emerson Produce with regards to how they can implement effective Enterprise Resource Planning (ERP) that will enable the company to expand, increase its efficiency and minimize on its operation costs. Foremost, this report recommends that the management should develop a business model based on the strategic plans, goals and objectives of the company. Subsequently, the management team should agree on the criteria and the scoring system that should be used in the selection of vendor and an ERP system. A multi-criterion approach should be used, it should incorporate a wide-range of factors based on the internal and external factors that impact on the business. The full involvement of relevant personnel in the decision making process is also important in the selection process. Selection and implementation of ERP system- 800wrds Tailoring the system to meet the unique needs of the company- 250wrds Updating the system-200 Costs-150wrds Recommendations-150wrds Conclusion-200wrds References Alanbay, O.(2005). ERP selection using expert choice software. ISAHP 2005, Honolulu: Hawaii. Burns, M. (2011). How to select and implement an ERP system. Retrieved on June 11, 2011 Carr, J. (2009).Business process improvement. Retrieved on June 11, 2011 Hamillton, S. (2003). Maximizing your ERP system: a practical guide for managers. New York: McGraw-Hill Professional. Howlett, R. (2010). Innovation through knowledge transfer. New York: Springer. Leon, A. (2007).Enterprise Resource Planning. New Delhi: Tata McGraw-Hill Education. O’Leary, D. (2000). Enterprise resource planning: systems, life cycle, electronic commerce and risk. Cambridge: Cambridge University Press. Wallace, T. & Kremzar, M. (2001). ERP: making it happen: the implementer’s guide to success with enterprise resource planning. New York: John Wiley and Sons. Read More