Managing the Next Wave of Enterprise Systems - Assignment Example

THE SAB ENTERPRISE SYSTEMS Name Institution Tutor Date Question 1 1) The Main Differences between an “Enterprise-Wide” Enterprise Resource Planning (ERP) System and a “Best-Of-Breed” Software Application An enterprise-wide resource planning system encompasses a set of management tools that achieve a balance between the supply and demand of a corporation. It yields enhanced productivity, improved customer service and the reduction of inventories and costs. Similarly, the ‘best-of-breed’ software applications achieve similar results. However, different vendors develop the application as opposed to an enterprise-wide resource planning system whose product design process is a responsibility of a single provider. It is also evident that the ERP systems require high degrees of technical integration and large scale integration thus increasing the complexity of the implementation processes. Therefore, the decision of a firm to implement the enterprise-wide ERP software necessitates an intensive reengineering process to meet the needs of the business processes. Since the best of breed applications are less complex and integrated, they require minimal levels of integration (Light et al. 2000). The ‘best-of-breed’ software applications are more relevant in the establishment of competitive strategies that yield an innovative supply chain. Even though ERP systems yield mass customisation and the development of new industrial structures, the multiple-vendor best-of-breed applications yield the best results. The implementation complexity suffices to be the other difference between the two approaches to enterprise software applications. It is evident that the ERP systems offer multiple synergies since they are more complex as compared to their best-of-breed counterpart (Brown & Vessey 2003). On the other hand, the best of breed software systems exhibit reduced complexity thus making the implementation and utility processes easier on the part of the organisation. Furthermore, ERP systems use system upgrades to integrate the latest technological advancements in the market. On the other hand, the stand-alone applications found in the best of breed programmes guarantee the rapid functionality delivery of the best-of-breed enterprise systems. Leftwich Construction Engineers (LCE) chose paramics as the best of breed solution to simulate the downtown of Miami City. The application turned out to be the most useful tool in the analysis of the mammoth traffic witnessed in the city. The three primary attributes that guaranteed the selection of the programme include its scalability, perfect visualisation capabilities and ease of application. The Insurance Australia Group chose the Sparx Systems to develop a single view of its systems so as to identify, analyse and manage its complex infrastructure, interfaces and applications. The standard architecture visual capability and model proved to be the most appropriate for the organisation (Sparx Systems 2007). 2) Strategy and expected benefits of the Enterprise-wide’ Enterprise Resource Planning (ERP) system The implementation strategy of an enterprise-wide resource planning strategy consists of two primary phases. The first phase entails the initial design of the project. The second phase comprises of the utility and the possible changes of the system depending on the feedback. The cost-efficient scope governs the implementation strategy to guarantee the flexibility of the application. Moreover, expandability suffices to be the other aspect of the implementation strategy. According to Brown and Vessey (2003), the implementation of the project may either utilise incremental phases or the ‘Big-Bang’ approach. The two methods determine the complexity of the project and its duration. In the quest to reduce the complexity of the project, the phased approach is the most appropriate. It is effective in situations where there is insufficient knowledge about the technology used to develop the enterprise-wide system application. The method reduces the risks associated with the implementation of the project. However, the full roll-out approach is only applicable in situations where there is a high maturity of the knowledge related to the application. The enterprise-wide system application guarantees consistent and integrated processes in the entire value chain. It also provides a consistent model of data that suits the requirements of the organisation. The use of the primary relationships also enables the finance team to estimate the costs of the project. Concentrating on a single vendor reduces instances of ‘finger-pointing’ evidenced in the best of breed solutions. Moreover, the organisation uses the least time to implement the project. The costs incurred in training and implementation are also lower than in the best of breed alternative. The typical architecture also allows the organisation to benefit from low costs of maintenance (Wallace & Kremzar 2002). Finally, the system also offers all the data in one piece/system since there exists a single data entry point. 3) Strategy and expected benefits of the ‘best-of-breed’ software application The strategy of the best of breed approach integrates the standard software developed by different industry vendors. Therefore, the organisation that uses the most efficient software in the market reaps the benefits associated with the utility of the best of class software. The approach either involves the implementation of a new system or the upgrade of an existing system with the ‘best in the market' software updates. System upgrades are most appropriate in the case of mergers and acquisitions following the need of the purchasing company to improve the system of the purchased firm to industry standards. The middleware suffices to be the key enabler of the approach. It eliminated the need for developing low-level APIs as a prerequisite for the transportation of data to the receiving application. Furthermore, direct data-sharing using the messaging technique is also evident in the integration of the different applications. The central integration engine is also utilised in the integration of the different applications to produce the best application in the market (Light 2000). The expected benefits of a firm that implements the best of breed system application include the ability to select the products that have the most and best functions and features. Secondly, each department in the organisation benefits from the best system application in the market. The approach also enhances the flexibility of the system regarding its individual elements and substitution. Moreover, the organisation enjoys the service of specialised vendors. The methodology also enables the firm to decrease the risks in a system by replacing a defective software component in the system. Furthermore, the company can perform independent module maintenance procedures without interfering with the other modules. The company also enjoys the latest technology in the market. Consequently, the approach enhances the overall performance of the business processes (MacKinnon et al. 2008). Question 2 The Essential Elements of Each of the Main Steps of an ERP Implementation Strategy The implementation of an enterprise resource planning system starts with the selection of the actual ERP software. The selection process involves identifying the vision of the organisation. Input from the executives and the cross-functional teams is pertinent to the identification, examination and rethinking of the prevailing business processes. The step identifies the significance of the implementation process to the organisation. In the event that the implementation process involves several departments of the corporations, all the stakeholders ought to take a centre stage in the creation of the vision. The step also entails communicating the vision to the firm. Secondly, creating a list of functions is essential prior to the implementation of the ERP software. The individuals that have an in-depth understanding of the software application, the business processes and the industry should handle the identification of the functions and features of the software (Umble et al. 2003). The step also involves documentation of the business processes by the unit managers. Creating the appropriate candidate list for the software suffices to be the next step in the scoping process. The industry and size of the company determine the magnitude of the candidate list. Therefore, it is appropriate for the change stakeholders to select the vendors of the software applications that will meet the needs of the organisation. Following the selection of the potential candidates, it is appropriate to narrow the list to approximately six vendors. The ‘goodness of fit’ of the required software solutions should define the selection process. In the succeeding step, the organisation should create a proposal request bearing the functions and features of the company’s departments. The proposal also specifies the terms and conditions, the instructions to the vendor and the vendor’s response. Conducting a review of the strengths and weaknesses of the proposals is also appropriate. The assessment also consists of unclear areas that require clarification. The chart below represents the pre-implementation steps of the project. Figure 1: The pre-implementation steps of the programme In the seventh step, the project committee settles on about three finalists. The three finalists should demonstrate their packages to the project committee. The demonstration of the packages of the vendors provides an allowance of an intense critique of the merits and drawbacks weaknesses and strengths of the software application. To enhance the understanding of the aspects of the package, it is imperative for all the stakeholders to attend the demonstration meetings (Umble et al. 2003). Apparently, the next step involves selecting the winner from the potential candidates. Price is one of the factors that influence the choice of the winner. The other significant factors that affect the selection of the winner include the technological risk, the value of the application to the business and the flexibility of the software. Moreover, the selection panel should consider the support of the suppliers, the closeness of fit and the ease of implementation. It is also imperative to provide a justification for the investment in the software. Conducting a cost-benefit analysis of the intangible and tangible benefits associated with the utility of the software versus the implementation and running costs is necessary. The intangible benefits include increased motivation, reduced confusion and chaos and improved communications. Reduction of costs and improved productivity are the major advantages of the software. At the end of the step, the project committee should issue a ‘go ahead’ or cancel the project. Contract negotiation suffices to be the next step. The critical aspects associated with the justification of the contract influence the negotiation process. Before the actual implementation of the application, it is proper to run a pilot programme in selected units of the organisation. The pilot test of the project enables the identification of the unknown hidden drawbacks and benefits of the software application. In the last step, the implementation panel should validate the justification to provide a go-ahead or cancellation of the programme. The second phase concerns the actual implementation process. There are eleven steps in the software implementation process. At the start of the implementation process, it is imperative that the team should conduct an up-to-date review of the pre-implementation process. Determining the availability of the hardware required for the proper functioning of the software is pertinent. The hardware evaluation exercises ensure that the organisation installs the necessary hardware for the ERP application (Umble et al. 2003). The next step entails installing the software and conducting a pilot test to ascertain that the software performs as expected. The vendor should provide the technical support person to carry out the activities of the step. Following the installation of the ERP software, system training suffices to be the next procedure. It enables the users of the programme to understand the transactions and keystrokes associated with the application. The fifth step entails training the users on the pilot programme in the conference room. The training tests whether the users have understood the software application or not. It simulates the business processes from the beginning to the end. In the next step, the support personnel sets the permissions and security to ascertain that all the users of the application have the required level of access to the software. Moreover, the implementation team should ensure the existence of a robust data bridges and accurate data. Therefore, it is mandatory to input correct data from the old system into the new system to develop the trust of the system on the part of its users. It is important to document the procedures and policies in the next step with the use of a policy statement. After developing the policy statement, it is appropriate to transform the whole organisation to the new system utilising either the phased approach or a system roll-out. A celebration of the project accomplishments is also significant. Finally, the implementation team should also form an oversight committee that will monitor and assess the application on a continuous basis (Umble et al. 2003). The chart below represents the implementation steps of the ERP software. Figure 2: The implementation steps of the ERP software Question 3 A Reflecting on ‘Innovations in Enterprise Systems’ The emergence of cloud computing has resulted in the development of cloud enterprise systems. Following the emergence of cloud computing, businesses have had the opportunity to increase their productivity since cloud-based systems are cost-effective and enhance the innovativeness of an enterprise. To benefit from the cloud-based services, firms ought to adopt the ‘cloud-first' approach. The advocates of the cloud-first approach believe that the adoption of cloud-based enterprise systems will be a fundamental necessity for all firms in the future. It is evident that the implementation of the cloud-based enterprise system requires a reorientation programme on the part of the entire organisation. The focus, architecture and skills of the business and its personnel ought to change in regard to the delivery of its IT services. The development and implementation of the system blueprint suffices to be the initial step in the establishment of a cloud-based enterprise system (CGI 2013). The development and Implementation of the cloud-based enterprise system The transformation of the business system of an organisation from the traditional system of the cloud-based system is a procedure that involves four main steps. The first step entails the assessment and planning of the transformation. The step requires the change team to create an inventory of the system components. Creating the list necessitates a discovery exercise to determine all the essential elements of the cloud ecosystem. The phase also requires the change team to develop a blueprint of the cloud-based system to gain an in-depth understanding of its requirements. The service consumers of the enterprise-wide system are one of the significant components of the cloud ecosystem. They include the personnel of the business unit, mobile workers, remote workers and business partners. The governance of the enterprise cloud ecosystem is the other component of the migration to the cloud service. It encompasses several frameworks associated with CSP accreditation, cloud decisions, data classification and cloud store taxonomy. The brokerage platform for the enterprise cloud is the other component of the system. It entails the identity management, PaaS/SaaS store, the cloud management of Iaas and the Bus Process Engine. Moreover, the brokerage platform includes the cloud data/app integration platform. The change management team should also take note of both the internal and external brokers in the blueprint. The last element of the cloud ecosystem design is the enlisted and accredited CSPs. They include Pay-as-You-Go, multi-Supplier, evergreen and Best-of-Breed (CGI 2014). The change team should also analyse the suitability of the cloud to verify whether it is appropriate to proceed with the implementation plan or not. Just like any transformation endeavour in an organisation, the development of the migration plan is mandatory. The plan should include the migration strategy for the optimal cloud. The team should also determine the migration strategy for all the applications. Establishment of ‘move groups' takes place at this stage. The groups categorise apps that migrate together in their respective groups. To establish a sequence of the migration, it is appropriate to encompass ‘migration waves'. The chart below represents the steps involved in the implementation of the cloud-based enterprise system in an organisation. Figure 3: The implementation of the Cloud-based enterprise system Setting up a compliant and secure cloud environment suffices to be the second step in the implementation process. The workload requirements should determine the cloud environment created by the implementation team. After the creation of the cloud environment, migration of the enterprise system is the next step. It entails the migration execution process and the validation testing after the migration. The management of the migration is the last step. The management team of the cloud-based enterprise system should ensure the continuous management of the cloud-based environment. Some of the management activities encompass monitoring the performance of the new system, determining the degree of utility of the adopted system and the availing of the infrastructure required to run the new system. To optimise the system to achieve maximum functionality, it is appropriate to analyse its performance on a continuous basis (Cognizant 2014). Ascertaining the proper coordination of the cloud-based enterprise system is pertinent to the success of the migration. The failure of the company to ensure the efficient management of the transformation exercise will subject the organisation to the risks of an ad-hoc and uncoordinated change exercise. Case Study Analysis A leader in the news market migrated from the traditional in-house ERP system to the cloud-based system. The global company operates in Africa, India, the UK, the USA, and the Middle East. The company had in excess of 70 applications that utilised technologies such as .NET, MySQL, Oracle, Perl and J2EE. Moreover, the firm’s data centre’s exceeded 400. They spanned Windows, Solaris and Linux. Decommissioning of the data centres and the eventual migration of the centres to a third party host was the objective of the company before the migration. The movement exercise was successful. The company was able to install all its applications in the environment of the hosting provider. The stakeholders of the change process conducted application testing at all levels of the migration. The tests intended to ascertain the perfect working condition of the installed applications. At the end of the transformation exercise, the news firm enjoyed several benefits from the adoption of the cloud-based enterprise system. For instance, the migration reduced the maintenance costs and capital expenditure incurred by the company under the old enterprise system. The disaster recovery architecture impacted positively on the company’s resilience to its business. The migration also resulted in highly flexible and scalable enterprise infrastructure that improved the agility of the firm. The other benefits of the transformation encompassed enhanced firm stability and reliability of its services, reduced duration for the customers and the organisation to access the market and improved agility of the business. The cost savings realised by the company emanated from the decreased footprints of the server (Cognizant 2014). Benefits of the Cloud-based approach As mentioned before, the proper and coordinated implementation of the cloud-based enterprise system yields tremendous benefits to the company. The benefits of the cloud ERP in large organisations include the creation of more robust ERP applications that contain more features than the traditional system. The fact that the institutions use trusted and experienced vendors of the enterprise software applications guarantees the efficiency of the software. Secondly, it is easy to deploy cloud-based business systems. The new system also allows the organisations to pay for what it has used as opposed to the traditional system. It is also evident that the new systems improve the alignment of the organisation's returns to its cash flow. The merit emanates from the shift of the organisation's investment from the capital budget to operating budget. The maintenance of the infrastructure and legacy software also guarantee the free access and utility of some valuable resources (Fauscette 2013). The free resources enable the firm to concentrate on innovative activities. Reduced deployment time also yields other benefits to the company. For instance, it frees up resources and reduces the time to value thus enabling the organisation to realise its strategic objectives within a short timeframe. The cloud-based system also avails more scalable and flexible solutions to the company thereby guaranteeing long term support for the expansion of the enterprise. Migrating the residence of enterprise systems from the organisation premises to the cloud eliminates the need for data silos. Moreover, the firm also benefits from a more integrated ERP system. The benefits of the new system to small and mid-size companies include the ease and speed of the implementation exercise. Moreover, the firm does not incur expenses associated with the purchase of expensive software and hardware used to store and run the enterprise systems. Provided that the company infrastructure is up and running, the organisation does not incur the additional costs of hiring personnel to maintain its system resources. The responsibility shifts to the hosting provider. Furthermore, the cost-related barriers to the adoption of the new technology are low thus allowing mid-size firms to use the service. The lower costs emanate from the reduced implementation and deployment costs. Moreover, the pay-as-you-go subscription model frees the scarce capital resource of the firm thus enabling it to devote it to other critical investments. The cloud ERP is a fully integrated and complete system that enhances the performance of the business processes. The firms also benefit from better management and control since it eliminates data silos. Moreover, the analytic and reporting tools of the new system are also more efficient (Fauscette, 2013). The Limitations and Risks of the Cloud-based Enterprise System Loss of governance of the enterprise system is one of the risks that face the adoption of the cloud-based enterprise system. The migration of the organisation's information systems to the hosting provider subjects the corporation to several risks associated with the loss of governance of its system resources. As a result, the security threat of the firm’s resources is imminent under the cloud-based approach. The service level agreement may not protect the organisation from the security threat facing its information resources in the event of the adoption of the cloud-based approach. The lock-in limitation of the cloud-based data tools and applications also impedes the unanimous preference of the new system to the traditional one. The current standard data tools, procedures, tools and service interfaces adopted by the providers of cloud services do not guarantee the portability of the application, service and data (ENISA 2009). Subsequently, the client organisation may find it difficult to migrate from one provider of cloud services to another. Furthermore, in the event that the customer firm intends to relocate its information resources back to an in-house environment, the cloud-based system does not guarantee the flexibility of the reverse migration. Isolation failure is the other risk associated with the adoption of cloud-based enterprise systems. It is evident that shared information resources and multi-tenancy are the defining attributes of the new system. However, in the event of the failure of the mechanisms that separate the routing, storage, memory and the inter-tenant reputation, the isolation failure risk occurs. It is worth noting that the mechanisms that isolate the cloud-based enterprise resources are few and difficult to put in practice (ENISA 2009). Cloud computing also yields compliance risks. The risks occur when the provider of the cloud services fails to comply with the industry requirements. Compliance risks also occur when the service provider fails to permit the client to conduct an audit of the compliance of its services with the required standards. Migrating to the cloud-based enterprise system also subjects both the service provider and the client organisation to the data protection risk. Even though the customer is the legal owner of the data stored in the cloud environment, the firm does not have control over the utility of its data in the cloud system. Moreover, the client cannot conduct an audit assessment to establish whether the provider handles the data in a lawful manner or not. However, the risk does not apply to data providers that provide information on their data-handling practices. Insecure and incomplete deletion of data suffices to be the other risk that companies face following their decision to adopt the cloud-based approach. Whenever a customer places a data deletion request, the provider may delay executing the command resulting in the availability of unwanted information on the client’s website. The incomplete wiping of data may emanate from the existence of multiple customers who utilise the same storage device thus making it difficult for the provider to execute a full data wiping exercise. The malicious insider also poses a significant threat to the company. Certain roles are susceptible to attacks from malicious insiders. Such functions include the providers of the security service and the system administrators. Finally, the company also faces the risk of losing its IT professionals following its decision to adopt the cloud-based ERP systems. Resistance from the IT department may also prevent the company from outsourcing the greatest part of its IT services. The limitations of the cloud-based ERP system are more profound in large organisations as compared to small businesses. Reference List Brown, C V & Vessey, I 2003, ‘Managing the next wave of enterprise systems: Leveraging lessons from ERP’, MIS Quarterly Executive, vol. 2, no. 1, pp. 65-77. CGI 2013, ‘The Cloud-Enabled Enterprise: Developing a Blueprint and Addressing Key Challenges’, The White Paper. CGI 2014, ‘The Cloud-Enabled Enterprise: A Set of Transformation Strategies’, The White Paper. Cognizant 2014, ‘Cloud-Enabled Enterprise Transformation: Driving Agility, Innovation and Growth’, Keep Challenging. European Network and Information Security Agency (ENISA) 2009, ‘Cloud computing: benefits, risks and recommendations for information security’. Fauscette, M 2013, ‘ERP in the Cloud and the Modern Business’, IDC. Light, B, Holland, C P, Kelly, S & Willis, K 2000, ‘Best of breed IT strategy: an alternative to enterprise resource planning systems’, ECIS 2000 Proceedings, pp. 180. MacKinnon, W, Grant, G & Cray, D 2008, ‘Enterprise information systems and strategic flexibility’, In Hawaii International Conference on System Sciences, Proceedings of the 41st Annual (pp. 402-402), IEEE. Sparx Systems Enterprise Architect 2007, ‘Case Study: Developing an Enterprise-wide Architecture within Insurance Australia Group’. Umble, E J, Haft, R R & Umble, M M 2003, ‘Enterprise resource planning: Implementation procedures and critical success factors’, European journal of operational research, vol. 146, no. 2, pp. 241-257. Wallace, T F & Kremzar, M H 2002, ‘ERP: making it happen: the implementers' guide to success with enterprise resource planning’, Vol. 14, John Wiley & Sons. Read More