Royal Chocolate, Enterprise Resource Planning System - Essay Example

ROYAL CHOCOLATES CASE Existing Scenario Current Users Royal Chocolates has 5 people in the office - the CEO, Marketing Director, Personnel/ HR/ Training Director, Bookkeeper, and Administrative Assistant. In addition, there are 5 person sales force team, and 5 vendors from whom raw material is usually procured. The plant consists of operations in three shifts with each shift consisting of 40 persons (assumption). Current IT Systems - Hardware and Software The company has one network printer, a group of old computers that are networked together, and uses Word 97 as the text editor. Recently 6 new servers, 10 desktops, 5 notebook computers, and 5 printers have been procured. Requirements The current requirements for the company include the following: There is a need to establish communication links both internally with the people in the office, with the sales force, and externally with the vendors. The company wants to increase the speed of communication with vendor so that vendors can provide the supplies quickly and timely. The billing system is required to be quick, accurate, timely, reliable and secure; and payments should be easy to track. The inventory management system is required to be automated to make it more efficient and effective, so that reordering can be done at lower levels, thus saving cost of ordering and the inventory carrying costs. The human resource management system is required to effectively manage all employee issues, and to maintain correct record of all employees. The company also requires a system to enhance their ability to take strategic decisions based on the performance of the company. Royal Chocolates needs a system to implement e-commerce initiative. Recommendations and Rationale After conducting careful analysis of the requirements, Royal Chocolates is recommended to implement the following systems and application to take care of their information systems needs: Latest Hardware and Office Automation Software To satisfy the requirements of quick and fast communication, the company needs to upgrade its obsolete machines. As the company has purchased 10 new desktops, 5 of these should be provided to the 5 people working in the office. These people do not require notebooks since they do not move along often. The remaining 5 desktops should be installed at the plant site, so that plant management and employees can have access to the company's network. In order to produce reliable and accurate office documents quickly and efficiently, and to extract the full potential of office automation software, the company should purchase enterprise wide licenses of the latest Microsoft Office 2007 suite; which contains MS Word for documents generation and reporting, MS Excel for financial spreadsheets and numerical analysis, MS Power Point for presentation development, and MS Outlook to support emails. Email Royal Chocolates has a high volume of inter-office correspondence (assumption). An intranet email facility can eliminate most paper based communication. The system will provide instantaneous delivery, significantly reducing the time and manual record keeping overhead costs. The company is recommended to implement Exchange Server 2003 for better management of email system. One of the newly acquired servers should be used as email server. Appropriate software should be installed that include not only the exchange server software, but also email clients like MS Outlook, antivirus software and others. Intranet and Extranet To provide the necessary infrastructure for internal office correspondence, and email facility, the company should implement an intranet for communication between people in the office, and between office and plant. In addition, extranet needs to be developed to communicate with vendors and suppliers. The development of intranets and extranets is a part of e-business which can be said to include e-service, the provision of services and tasks online (Nelson, 2001). The extranet will allow the company to establish a VPN (Virtual Private Network) with the vendors, who can then login to the company's network just as if they are logging in to the intranet. This will help in quick, fast and reliable communication between vendors and the Royal Chocolates. The sales force team should be provided the newly purchased notebook computers. They will also be provided access to company's network through VPN. This will allow the sales team to quickly interact with people in the office and the plant, to move around using their notebooks and still be connected to the company's system, and to place an order within minutes directly to the plant managers who can then schedule the production accordingly. One of the servers should be used to provide intranet facility, the other should be configured to handle extranet connections. Enterprise Resource Planning (ERP) System In order to establish a framework to store, track, document and account for all the activities that take place at offices, branches and are conducted by the sales force, it is recommended that Royal Chocolates should acquire and implement an ERP system. An ERP is a software system that attempts to integrate all departments and functions across a company on a single computer system that can serve all those departments' particular needs (Koch, 2006). An appropriate ERP for Royal Chocolates is Oracle Application Suite or SAP (the selection of one of the alternatives requires in-depth study of the organization's systems and processes), due to its comprehensiveness and ease of use, reliability and accuracy of recording transactions and generating result, effective security and internal controls, and worldwide acceptability and use by top companies. One of the servers should be used to install the ERP, while other should be used as the backup for primary server. So, in case the primary server fails, all the users' requests will be directed to the secondary (back up) server. The ERP system will assist the company to not only track and document all activities in the organization, but will also help the management in decision making, since all the relevant information is provided by the ERP system to make an informed strategic decision. Also, scheduling decisions for production can be made using the necessary information about the inventory, orders, and projected growth rate. Hence, ERP will help in short, medium and long term decision making. The ERP system also assists in managing human resource records. All information regarding employees, their dependents, their payroll, liabilities etc. can be recorded and tracked. ERP provides an effective mechanism to document and track billing and payment details, receivables and inventory management. Royal Chocolates can exploit the ERP system to its fullest potential by acquiring a complete all module ERP package. Website and E-Commerce Payment Gateway Successful e-business adoption is driven by a comprehensive corporate strategy that requires a vision and commitment from the top down (Comergent, 2006). To go online and market the products worldwide, the company requires a well developed and content rich website. The website will provide details about the company, its operations, and products. It should also have an online e-payment gateway like Verisign etc. to allow the company to sell online through credit cards. The security of online selling is a critical issue and the company should provide a secure, authentic and reliable site in order to attract the customers in making online purchases. One of the servers should be configured and installed to provide website and online selling (e-commerce) support. Just-In-Time Inventory Royal Chocolates can implement Just-In-Time (JIT) concept where the inventory is replenished just at the time it is required at the plant. The company can drastically reduce the reordering limits by implementing JIT system. Printers The five printers should be installed as follow: One printer should be provided to the CEO to allow him/her to generate strategy documents and reports One printer should be provided to Marketing Director so the (s)he can generate marketing trends and analysis reports. One printer should be installed at the plant site to generate costing, budgetary and production schedules. One of the printers should be provided to HR director for HR reports generation purpose. This printer will be shared by Administrative assistant as well. The last printer should be provided to the Bookkeeper so that (s)he can print confidential financial documents for top management. REFERENCES 1. "Executive Guide to Enterprise eBusiness Success." Comergent. 2006. 27 February 2007 . 2. Koch, C. "The ABCs of ERP: Getting Started With Enterprise Resource Planning." CIO.com. 10 January 2006. 27 February 2007 . 3. Nelson, D. T. "e-business". TechTarget: SearchCIO.com. 26 July 2001. 25 February 2007 . Read More