The Sale of an Enterprise Resource Planning System - Report Example

Cover Letter: The report relates to the sale of an Enterprise Resource Planning (ERP) system to small and medium sized enterprises in developing countries. This report provides information on the following topics. Research and analysis of the market Reasons for Selection of such product Identification of clients’ segments Pricing strategy for the identified client segments Sales proposition listing Features and benefits of the product Conclusion and recommendations Research and Analysis of Potential Market Place Reasons for Selection of the Product Reasons for selection of an electronic intangible business solution rather than goods or other services are as follows. Security of investment: The first and foremost priority of every investor is to invest in an industry where his capital investment will never lose its worth with the passage of time and he will remain secure. The same reason I have considered before investing in this industry was this that the investment will never be diminished due to the non-perishable nature of the solution and ease in its updating for compatibility with time. Return on Investment: The second reason is the expectation that the little amount of investment will yield me high revenues through its sales over the time. Opportunity for Growth: With the passage of time and learning from the circumstances and incorporating new ideas and invention in the product can led towards future growth of the organization and the product as well. The incorporation of new changes are easy and cheaper than any other product is the other reason for selection of this product from the wide range of goods and services in the market. The selected product for sale should have some features that could benefit the prospective client by outweighing its cost from its future benefits. The product should have some beneficial features for the client. The features and the benefits that would be incorporated in the solution (i.e. the product) are considered after getting understanding of the small and medium sized enterprises. Selections of Market and Identification of Clients Segments in Such Markets Based on our study of small and medium sized organizations we have identified that small and medium sized organizations are our target as they are willing to move from manual system towards computerization, due to their wish for growth. After detailed study of their behavior in reacting to such solutions offered for sale we identified their grievances and their expectations from such systems after taking into account all these factors we have chosen “Small and Medium Sized Organizations of the Eastern Developing Countries” due to the reasons of lack of computerizations and their wish for quick and effective decision making process for their businesses. After studying the market we have identified the following three client segments in the selected market (i.e. small and medium sized entities of developing Asian countries). Small Industries: These industries are the small in size having potential and wish for growth comprising of 50-100 employees but due to lack of proper resources and a proper production and information system they were not able to achieve its wish of growth and enjoying economies of scale. We have customized our product as per their needs and their expectations at a lowest possible price they are able to pay. Medium Sized Entities: The second segment we have identified in our study of the market was the medium sized enterprises which were on the way towards growth from a longer period of time driving with 100-200 employees but due to lack of proper planned approach for such growth they remain where they were few years later, and were not able to cope with the fast changing pace of business world of today. Here the concerns was not the cost but was provision of an integrated and complete solution which will fulfill the entity’s long lasting wish of growth. We have devised a proper course of action for this kind of entities ensuring timely and effective implementation of an integrated modular system that will the entity to grow fast and keep abreast of the competition in the industry. Medium Sized Developed Business Entities: These entities has achieved its wish of growth over an unnecessary longer period of time due to lack of proper information system and organizational structure that allows persistent growth in future or even sustain its current position for future. After getting understanding of the market we come to a point that these entities needs permanence on its growth by enabling them to comply the customers’ orders in time ensuring quality of the goods sold. Understanding the needs we devised solutions for the needs in an effective manner. Sales Strategy for the Above Stated Market Segments We have adopted different strategies for different client’s segments on the basis of their needs and expectations of the system and their current system in operation, the problems encountered in this system and the expectation of the entity’s management for the better alternative. We performed better in terms of their expectation for new system and provided them support for changing from current to new system, by providing training to the concerned staff of the entity. The different approaches for different type of clients are described below for every type in brief. Small Industries Considering their ability for paying for our product and their needs for an integrated system, we provided a complete set of business solution to this client segment in the form of a one-time investment and customized it according to the business structure with an option of up-gradation on lower cost in future. Considering these needs we also provided this system in offline mode providing local database for collections of data and an option of extending the same in case of future growth. An option of extending the business to other areas of the country we also provided an option in the system to collect data from such remote sites and submission of data from such sites on regular assigned basis. The system was provided with the following built in modules. Administration, Financials, Business partners, budgeting and Forecasting, Production, Inventory , Sales, Purchases, Payroll, Banking, CRM, Reports. Medium Sized Entities After understanding the core needs of this type of entities we planned to offer a complete online solution which will not only enable the entity to grow consistently but will also provide it a planned platform for such growth. The solution offered also provides online access to remote branches of the branches to submit their data on regular basis. All other modules are the same as were in the solution for small entities with an addition in the budget and forecasting module for this type of entities providing it with a planned approach for growth over a specified period of time. Medium Sized Developed Business Entities Understanding its current business process and future prospects for growth thereby identifying weaknesses in this system we have devised a new system incorporating the business needs of the entities and making it in a user friendly interface we developed a complete solution online database and integrated modular system for this kind of entities. All modules that were there in the system for a small enterprise are also here with an increase in their domain in terms of more documents and options for feeding data into the system. The reports in this systems were increased in number and quality according to the size and needs of the entity. Unsolicited Sales Proposition Table of Contents Introduction and Scope of proposition. Challenges Faced by small and medium sized entities………………….. Page 5 Information gap, Process gap, Decision Making, Page 5 Data capturing methodologies, Page 5 Controls inside small and medium sized entities, Page 5 Lack of proper authorization and other operating procedures, Page 6 Credibility of reports and other business data, Data relating to current Page 6 And prospective customers, Page 6 Selection of best alternative when purchasing, Budgeting and forecasting, Page 6 Information relating to payments and receipts. Page 6 Solution Offered for Meeting with these Challenges or Proposition itself page 7 Features of our Product Page 7 Unique approach, An integrated solution, stream lined business process, Page 7 Instant access to information to authorized persons, Page 7 Real time capture of data, Page 7 Customizable and adoptable Page 7 Designed for small and medium sized entities, Page 8 Customer and potential customer’s data, Supplier’s data, Page 8 Presentation of reports, list of modules Page 8 Facilities required Page 9 Financial costs and deadlines Page 10 Points of parity and Points of differences Page 11 Final conclusion Page 12 Some fruitful Recommendations Page 13 Introduction and scope of the proposition The proposal relates to offering a complete business solution to small industries after taking a detailed understanding of the industry identifying its needs and devising solution, this proposal contain challenges faced by small entities and solution offered for these challenges. Challenges of small sized industry Profitability is the core objective of every business organization, irrespective of its size, but as the small and mid-size industries are on the way towards the growth with having scarce resources in hand needs a great tact and planned approach towards this achievement. The scarce resources in hand should be utilized in a way to increase sales while maintaining the quality, to improve its payroll system in order to fully utilized its human resource, and use the materials in the production in such a way that neither stock outs nor stock happens, to fulfill with the regulations of the territory in order to avoid litigation, and to provide the management with fruitful information for making in-time, informed and wise decisions from such information. Information Gap in Small sized industries: The information gap relates to the non-availability or delayed information provision for running the entity’s routine transaction or business. That is a sale order is furnished by a prospective customer and due to lack of updated information of the stock in hand cannot be processed. This kind of information gap can push the organization towards its winding up as result of losing clients. Process Gap or Delayed processes in Small Sized Entities: The process gap relates to late execution of required processes due to non-availability of automated processes or delay in such processes due to any fault in it. The gap in the process may also occur due to availability of a mixed manual and automated system. This is also considered as fatal for the organizations. Decision Making: Decision making is a key process on which the growth every business depends, needs authentic, easy to understand information from inside and outside the entity. Inside the entity information relates to current status of the company’s stocks, assets, capital and borrowings, while information outside the entity encircles the information relating to the competitors’ rates, gross profit ratio in the industry, availability of credits in the market etc. If this information is provided in time quick and beneficial can be made by the management which benefits the organization in the short as well as long term. Data Capturing methodologies: The data related to daily business transactions of the entity if not captured timely and correctly it will not only result in the misuse of the company’s image but will also result in creating bad impressions on the currents as well as prospective clients base of the entity. The small and mid-sized industries are facing this problem severely and instead of growth with the passage of time they are facing de-growth in their sales and other activities. Controls inside Small sized Enterprise: Due to its small structure and high cost of effective controls the small and mid-sized enterprises are often deprived from proper controls in their organizational structure, causing the entity sometime to pay for goods or services not actually received or stealing of assets of the company. Lack of Proper Authorizations and Operating Procedures: Due to lack of proper hierarchy and other management issue it becomes difficult to assign authority to certain employees. Due to availability of scarce resources it becomes difficult to define standard operating procedures for the organizational activities. Credibility of the Reports and other Business Data: Due to availability of scarce resources these organizations cannot hire the skills of a high professional person. And that is why the data collected and the reports made from such data remain non-credible. Information Relating to Current and Prospective Customers/Clients: Every business runs due to its sales activities to its customers. Organizations with a quest for growth does not stops with its currents customer/clients, they are always in the process of expanding their customer base through different marketing campaigns and other activities such as acquisition of potential customers’ list and cold calling them and introducing to them their products or services. Therefore every business entity needs information in the form of reports to retain its current customers as well as increase its customer base. Selection of Best Alternative When Making Purchases: The organizations’ needs to purchase the requires goods or services at the lowest possible price from a supplier and this is possible if the entity has choice of alternatives that is information related to suppliers of the required goods or services. Thus every entity shall have a wide suppliers’ base in such a form, from which best alternative can be chosen quickly and effectively. Information of Payments and Receipts: In the business the most worthwhile thing which is intangible but benefits the organization more than its other tangibles, and that is “Trust” if the supplier has trust in your organization for in-time payments of liabilities your organization can do business on the wealth of others (i.e. suppliers). No organization can flourish in today’s business world if it is not selling its products on credit. Thus to go with the business world and keep the trust of the supplier by paying him in-time an organization should have a system which will alert the concerned persons and pay the company’s amounts in-time. Budgeting and Forecasting: To keep abreast with the competitors and remain ahead of them in the market every organization should have a system of budgeting and forecasting its revenues and costs of manufacturing/purchasing goods for the upcoming time and be ready to take necessary decisions in-time according to the changes in prices or costs of materials or goods. Every organization should have a properly maintained records of current as well as previous periods’ records of costs and revenues in easily retrievable so that future educated forecast could be drawn from that. In short every organization should have a properly maintained system of its all business activities that captures relevant business data in an easily retrievable way on daily basis and provides easy to read reports from such data on regular basis to decisions makers of the entity. Solution Offered for these Problems The Features of Our Product The solution we are going to launch is the answer to the problems faced by the small and mid-sized entities around the globe. We are going to offer a complete business solution with an option of “customization” in order to make compatible with the specific customer’s needs, and with another option of configuration which enables it to cope with the current business world’s pace. Following are the built in features and benefits that would be derived from its use. Unique Approach: We have decided to use a unique approach for our product after taking into consideration the market competition and customer’s needs and demands. Currently in the market there are plenty of software vendors (Oracle, Microsoft, SAP, SAGE, SYMBOL etc.) who provide business solutions but issue with these solutions is this that they are either providing solutions on few aspects of the entity or if few of them provides full pledge solution the cost of its implementation touches the sky which is bearable for the targeted industries. We will provide a complete business solution at very nominal rates from the other vendors ensuring quality. A Unity Agent in the Organization: The data can be entered in the system entered in the system from any department of the organization concurrently. That is the system will integrate the departments and one information entered in the will generate all the related entries in the system automatically, for example a sale transaction entered in the system will directly book sales, will debit customer’s account and at the same time will reduce inventory from the store’s account. Stream Lined Business Process: The wide range of our offerings aid our customers to restructure and mechanize whole business processes one after the other, including CRM, Accounting, Warehouse management and Production. In addition, a the need arises as a result of some event or information, automated messages, emails and responses can be scheduled and sent to various stakeholders without any haste and hassle. This management by exception model enhances efficiency by reducing unnecessary and excessive information and inappropriate actions, allowing our client to proactively response to the occurring circumstances. Quick access to Data: The data in the data base can be accessed quickly by the persons who are being authorized by the system administrator for this purposes. The other attracting feature of our solution is this that the user can only view the data and cannot make any changes in the stored data. All the organizational stored data remains from the user just a click away by using the shortcuts offered by our system. Real Time Capture of Business Data: Our product will process and store all relevant business data in real time keeping no place for any error which would have caused due to delay in recording. This feature of our product enables an entity to record all its transactions and events efficiently and effectively. Customizable and Adoptable: This software is customizable for the clients’ need and includes a room for future development as well through configuration. Designed Exclusively for Small and Mind-sized Businesses: We develop this system keeping in mind the challenges that are faced by the small and mid-sized entities and their needs for best processes flow in these organization. Not only this tact is used in development but it is also used in pricing of the product. Customers and Potential customers Data: Our product will enable the entity to enter one time master data in the system and then generate sales orders, Goods dispatch notes, and sales invoices to existing customers and make a planned course of actions for advertisement to the potential customers. The entity can also select customers’ lists and design it according to any basis. Supplier’s Data: A separate module is being designed for suppliers’ data as well in which the entity can feed all the data related to its supplier with having an option of viewing it in the desired view of the mangers of the entity in order to enable them for quick and effective decisions. Presentation of Reports: The reports or the output of this whole system are reports derived from the feed data over the time. Our product presents the information in reports in the users’ friendly interface. Modules List The list of the features and its benefits are very long but to understand the product one can easily understand it from looking at its comprised modules which are listed below. Administration: Includes definition of authorities and responsibilities to concerned individuals. Data entry limits for the data coders. Also includes company’s related data and other master data relating to company’s structure and other information. Financials: Includes chart of accounts, and all other accounting data that is accounts and ledgers etc. Business partners: Includes Master data and transactional data relating to current customers and master data of leads (prospective customers). Budgeting and Forecasting: Includes budgets and forecasting on the basis of current and previous data in the system enabling growth in easy manner. Production: Includes all the data relating to production of goods and their costing, in case of trading companies this module includes costing methods and cost contents of the items purchased for sales. Inventory: This module includes all data, documents and reports relating to inventories its valuation methods and currents status including information for stock minimum and maximum limits. Sales: This module includes data relating to sales of the entity item wise and customer wise. It also includes data relating to goods received and receipts against such goods and outstanding balance if any. Purchases: This module consists of purchase orders, goods received and payments for such goods made and outstanding. Payroll: This module consists of employees’ records master data, their salaries and other benefits and the way they are accounted for in the costing process. Banking: This includes all data relating to cash and bank. Total company’s balance in bank and cash in hand, categorizing them against received from the core business activities and other business activities. CRM: CRM or Customer relationship management module include leads information and any meetings that would be arranged with the customers. This module also provides programs for current customers’ relationship status and efforts to be made for strengthening such relations. Reports: The output of the whole system are the reports that would be provided to management for making decision for future and current status of the company. The above mentioned modules are incorporated in our product and are further subdivided in to drop menus and documents, which will fulfill the needs of these entities and will enable the stream lined flow of processes and information through this system. Facilities required for the implementation of System The facilities required from your organization is just the cooperation of your staff and power back up for consistent flow of information. Special cooperation would be required from the management side for devising of standard operating procedures. Assigning access to certain personnel of your organization that is end users and defining system administrator. Financial Costs of the Project and Deadlines Cost contents Time required (days) Costs in $ Implementation of the system 60 days 5000 Data Migration 30 days 3000 Training of the entity’s staff 15 days 700 Support for the system when required will be decided later Total Cost $ 8700 The Points of Parity and Points of Differences from Other Vendors Points of Parity: our organization like other vendors also provides a complete business solution for your company. The reasons why you should grant us the project are provided in the points of differences in this section. Points of Differences: The points of difference that you can enjoy with us and cannot with other vendors of the same solution are The cost, reasonable support services, the extendible number of user access, user friendly Interface of our software, no license cost for your organization, number and content of reports that our product provides, remote access of data, data security and recovery offers, the liberty of the administrator cannot be compromised by other users. Most interesting thing in our product is that we have developed it in house and we know it every segment and that is why there is no cost of licensing you have to incur for using the product rather it is a one-time investment that will benefit your organization till its life. We provide new add-ons for our product periodically at very nominal charges through you can very easily keep yourself abreast of current changes in the business world. Frankly speaking the solution we are offering is the perfect match for your organization and will help you in fulfilling your organizational goals effectively. Final Conclusion of the Report Every organization have some resources in hand through which they earns revenues. These resources are always scarce in case of small and medium sized organizations, which if not used in a properly planned manner will cause the organization to close its operations and will wind. Therefore every small and medium sized organization needs and enterprise resource planning system to plan and perform effectively. Taking into considerations this business needs of small and medium sized organization it become necessary for an organization to make quicker and effective decisions in order to keep its share in the market and to compete with its competitors both as to quality and as to cost. These quicker and effective decision are only possible when there is an information system in place which encounters entity’s every transaction and event in real time to avoid any fault in such recording process, and present such data in a form that is user friendly to the management for decision making. This system shall also provide trail of every transaction and event, the document it is using and the results of such transaction in relevant heads of account. The system to be effective shall not only provide information related to company’s customer but shall also provide a schedule of meeting or other ways to be used for maintaining relations with these customers. This will enable the entity to stay in its current state. But as every organization needs to grow over time increasing thereby revenues from sales to its customers, thus to grow with the passage of time the entity’s information shall also keep record of prospective customers. And through its CRM system maintain a relation with them for future sales or say growth of the company. To achieve the goals of growth and other organizational objectives an organization should have proper controls over the usage of company’s scarce resources. There should also be a standard operating procedures defined by management for carrying on the entity’s operation in effective manner. There should be a formal way of how things are could be purchased and there shall be prescribed documents to be issued at each stage of the process. The same procedures shall be followed for receipt of goods as well. In short there shall be an effective system in place which will not only stream line the business processes but will also stream line the information flow inside the entity. The after results of implementing such an integrated system will lead the entity towards growth and will enable the perform high in terms of quality in its operations. Some Fruitful Recommendations After taking into consideration the current processes of small and medium sized entities and the flaws that were encountered and that hindered such organizations from growth in these systems it has strongly felt that for an organization to be successful it should have an integrated information system in place. After the research of the market and comparing of results of the organization that have an information system in place with those who were not having such system it was prominent that organizations having an integrated systems were leaders in the market in terms of market share they holds and their contribution in the competition inside the market. Here it is strongly recommended (especially for small organizations as they have scarce resources to manage business with) that organization should have an integrated solution for running its business operations. For instance a typical system shall include these modules (Administration, Financials, Business partners, budgeting and Forecasting, Production, Inventory, Sales, Purchases, Payroll, Banking, CRM, Reports) at a minimum and shall have a built in option for incorporation of running changes with time that is it should be customizable and adoptable to the environmental changes that occurs with the passage of time. The database selected for storage of data shall a disaster recovery that is backups and other disaster recovery measures shall be in place to ensure stream line business process and information flow in the organization. Read More