Challenges in ATFC
Discuss About The Business Reengineering Or Erp Implementation.
Air Travels Flight Centre (ATFC) Ltd operates local flights in Australia. Presently, the ATFC plans to streamline all their operations in the all their branches across the country. Passengers can book flights in any of the locations near to travel to different states in the country in person or through a phone call and then take the flight according to booking time. ATFC comprises of more than 500 employees. In order to improve operations within all the booking centres, ATFC requires to streamline their existing processes.
Currently, business processes at ATFC are not integrated. Each of the company’s flight centre perform their own operations. Sometimes, passengers want to transfer their booking information from one center to another which is complicated. Instead of transferring the information, customers may be forced to cancel their bookings and go book in the centre where they want to transfer their flight details. This makes ATFC processes complicated which lowers business efficiency. It also leads to a lot of time wasted both by passengers and workers. Passengers could end up going to another branch in order to complete a booking. Sometimes staff members at ATFC find themselves calling from on one center to another to confirm details. It is therefore important to study and upgrade the existing business processes for the flight centre.
A process refers to a succession of operations that performed in order to achieve a goal. Therefore, a business process is a task that is done to help the business achieve its goals (Bourgeois & Bourgeois, 2014). A process that helps a business accomplish its goal in a matchless way can set it apart (Brown, 2008). The more unique and better the business processes, the more operational and effective is the business. It is also important that business processes are set out to eliminates costs and allow the company to reduce the prices of its products and services and eventually increase revenue (Vincenzo, 2017). The following are the five core business processes that characterize organizations:
- Logistics, Procurement, and distribution- includes all the activities connected with obtaining inputs and storing and shipping products and services to customers.
- Operations– includes all the activities which enable the production and smooth functioning of products and services
- Product or services development– involve all the activities that improve or bring new, and redesigned products or services to customers including market research, analysis, design, and more
- Sales, Marketing and User accounts– represents all the processes that aim at notifying present or probable consumers of an organizations products and services including advertising, promotions, telemarketing and more.
- Customer engagement and aftersales services– encompass all the support services delivered to clients after they pay for goods or services including customer support, training, call-center services, help-desk services and guarantees.
Business process management (BPM) is a part of corporate operations management that utilizes several methodologies in order to model, discover, analyze, measure, optimize, automate and improve business processes (Jeston & Nelis, 2014). Establishments that want to improve their business operations often go for strategies that will help and create such processes (Dabaghkashani, et al., 2012). Business process management (BPM) can also be understood as al the efforts needed to plan, implement, document, and dispense business processes with help and support technological advances (Trkman & Klun, 2016). Business process management therefore contains all the concepts, methodologies and practices used to sustain the creation, running, alignment, presentation, and examination of business processes (Dabaghkashani, et al., 2012).
Figure 1: BPM Lifecycle Stages. Source (Dabaghkashani, et al., 2012)
As ATFC looks to streamline their business processes for a competitive advantage and it is important to appreciate the process of business process re-engineering. Business process re-engineering (BPR) is an operation approach in organizations that focuses on the design of how business operations flow within a business (IEEE, 2015) . BPR helps organizations to rethink and even re-arrange their work operations in order to improve products and services. As such, business efficiency increases, costs reduce, customer services become more efficient and the company gains competitive advantage (Roskill, 2014). For instance, because of the many innovations and developments in the modern world today, a business cannot be working with a process engineered 30 years ago. It is crucial for business to adopt to technology changes and change and re-engineer their business processes as well. When looking to install an ERP solution, one of the most important things to help the process become successful is to perform business process re-engineering. That said, both BPR and ERP are done together. For the ERP deployment to be successful for ATFC, it is good to go for BPR first. Performing the BPR will certify that business process are improved to a level where they will match and be compatible with the proposed ERP solution. This will reduce implementation costs and greatly reduce ERP complexities and customization difficulties.
Business Processes
For nay successful organization, human resource and business processes are the two keystones (Thilakasiri, 2010). Even if workers at ATFC are motivated to work hard and the processes in the business are old, non-essential and cumbersome, the organizational will not be able to achieve optimization and the results will be poor. There has to be a balance between the two; a great and motivated workforce and updated and great work processes (Nishadha, 2017). BPR is the strategic plan that will transform both the workforce and the processes at ATFC for more productivity and growth. As such, all the existing business processes need to study and improvements made. Only after that can the organization now be able to implement a working and effective ERP solution.
Business requirements refer to features that products and services in business should so that they can be beneficial to stakeholders (Robertson & Robertson, 2006). For ATFC, business requirements are imperative as they will enable better quality outcomes from business processes. This is because if they are well implemented, they will help ATFC lessen daily operational costs. Business requirements development for ATFC will also provide operations flexibility and greatly decrease risks (Stroud, 2017). The following are business requirements for ATFC:
- To grow customer orders by at least ten percent within five months after the ERP system installation
- To decrease customer complaints by fifty percent after a successful ERP implementation
- To enhance all the business processes for improved productivity
An enterprise resource planning (ERP) system is a software solution that provides a centralized database to run all the operations of a company (Bourgeois & Bourgeois, 2014). With a central database, all the data and information for the organization is stored a single location which helps integrate business functions. Therefore, data captured in one branch of a company becomes available to any other department or branch in an organization. (Bourgeois & Bourgeois, 2014). As such, an ERP application can be used to run and manage an entire enterprise operations (Addo-Tenkorang & Helo, 2011). An ERP centralizes an organization’s information as well as integrate processes and procedures that an organization adopts. ERP systems helps thus combines a business’s data and information into one access point by merging business processed and techniques with information technology and provides data and information clarity (Jirava & Toseafa, 2017). Depending on their processed and operations, companies can have related modules in the ERP that characterize several functions in the organization including finance, services, sales, planning etc.
Figure 2: ERP Systems Architecture
SAP ERP is enterprise resource planning tool that is designed and developed by SAP. It unites all the major business procedures of an organization (SAP, 2017). SAP ERP entails of several modules such as, finance, accounting, planning, control, asset accounting, product planning sales and marketing, HR, project management, quality management and more. By executing SAP ERP, ATFC will therefore be able to incorporate all its processes in several sections across all their branches from the main office to other branches. The SAP ERP will enable the gathering and amalgamation of information from all units in ATFC comprising services, HR, customer management, sales and marketing, financial planning.
Enterprise resource planning systems (ERPS) are critical for organizational success as they assist with proper control and management of relationships and resources (Nicolaou, 2008). When an organization deploys an EROP system, it is important that they know that is not the end. They should invest in user training at several levels. Only then can the system be efficient for the company. The first thing to do is to perform pre-requisite training (Kumar, 2016). Here the workforce is educated on the benefits of ERP system both for their work and for the benefit of the entire organization. ATFC should train all their staff members on the reason why it is important to introduce and implement an ERP system. Afterwards, they should train them how to work with modules within the ERP system by explaining how business processes flow and employee job roles to make them work successfully. In this training level, the company should also provide an overview of the ERP software triangulation with business processes. As a result, users in this case, the company employees become comfortable and familiar with ERP system and use it for the success of the business. Training staff members on how to use the ERP system maximally therefore will help improve overall organization efficiency.
Business Process Management
Today’s modern market is increasingly become tough with competition. The result of tougher competition is that organizations are more and more utilizing technology to beat their competitors. There are now tools and applications to improve business operations for a competitive advantage and to enhance customer experiences. One such solution is an ERP application. Companies are hence progressively employing Enterprise Resource Planning (ERP) solutions to advance operations and deliver products and services quicker (O’Donnel, 2018). However, the answer doesn’t lie in just deploying an ERP solution. It is crucial to plan for a solution that matches particular business requirements in order to have a smooth and successful ERP implementation. Effective ERP planning help ensure a simple ERP customization process for any industry as well as reduces any extra costs. Additionally, it reduces ERP implementations failure. It is important for ATFC to do proper ERP planning before the implementation if the ERP is to succeed and work for the company.
The fundamental objective of utilizing an ERP system is to offer a central database for all data and information that is shared within an organization to enhance data flow (Beal 2007). Effectively executed SAP ERP systems can provide numerous benefit for ATFC:
- Provide updated information access through a common single database and error reduction in real time for both employees and customers
- Improved planning and control of flight schedules in all the branches
- Connecting ATFC staff across all branches
- Increase sales revenue due to better managed customer services
- Reduce managerial costs.
- Reduce supervisory and monitoring expenses
- Efficient and smooth work environment for company workers
- Customizable user account interfaces for modules access
- Increase data and information accuracy.
- Generate electronic accounts of distributed manual paperwork.
- ERP system integration will enable easy data sharing and migration across branches
- The ERP system will enable scalability which will make the business achieve sustainability
This part discusses, functional, non-functional, user requirements for the proposed ERP system
- Users will be required to access the ERP using a computing device enabled with Internet connection
- Users can then login into the ERP system using username and password.
- Logging out of the ERP system
Functional requirements include all the services the ERP system is expected to deliver to all its users, as well as how it should respond to data inputs and the responses in specific conditions. Functional requirements will include the following:
- The system will be implemented using a central common database
- The ERP system will be designed to encompass modules including services, accounting, human resource, finance etc.
- The ERP system will be able to save all the transactions accomplished on it by all the users
- The system will have the capability to describe, store, modify, update, and retrieve selected information upon request
Non-functional requirements specifications for the system include all the restrictions on system functions such as time limitations, installation constraints and standards. Non-functional requirements for the proposed ERP system for ATFC will include:
- System capability to provide fast responses to all its users
- Allow multiple users access to data and information
- Provision of security procedures by the systems such as user identification and authentication
- Provide user feedback
Recommended ERP application for ATFC IS SAP ERP. SAP ERP is an application developed by SAP Company and helps incorporate all key business functions together. The recent edition of SAP ERP is the enhancement package which was launched in 2016. SAP is a global ERP solutions providers and many organizations are using their ERP products. They pride themselves in helping companies run their operations faster and smoothly for over 46 years (SAP, 2018). They also provide user support services to all their customers to ensure that customers are running their business well. They facilitate and fuel innovative ERP solutions and foster equality across the globe. SAP ERP is deployed on-site and is available for all industries. It comes in more than 35 languages .currently it is in use by virtually 50,000 customers. It provides core business process automation and integration (SAP, 2018). It therefore enables real data and information access. It can easily be converted to SAP HANA. Apart from integrating business functions, it enables companies to make faster decisions and gain a competitive advantage over other businesses.
Although implementing an ERP is very beneficial for organizations, it can be faced by some challenges. Challenges that can come as a result of ERP deployment for ATFC can include the following according to (Elmonem, et al., 2016).
- Data insecurity: There can be the issue of data and information access insecurity either from the inside or outside ATFC
- ERP Subscription charges: ATFC will be required to pay monthly subscription costs in order to continue using ERP system services.
- Reduced Performance : If the company network fails, it becomes impossible for users to access the ERP system as it can only be accessed through a network
- Difficulty in ERP Customization: TheERP system will need to be customized in order to match business processes at ATFC. Sometimes the process of customization is difficult and complicated
- Hidden costs: ERP systems operations may be accompanied by additional costs for, transition, maintenance and monitoring
- Skills reduction: IT employees at ATFC can fail to keep up with the technical know-due to the dependence on the ERP system
- Administrative challenges: ERP systems installations can interrupt all the operations in a business resulting to poor communication and functioning
There are many risks involved in ERP implementation. Some can include:
- Failure of the entire ERP implementation
- The return on Investment for ERP systems may take long
- Sometimes customers may suffer vendor lock in where their ERP services are only tied to one ERP provider because of high switching costs
- Lack of ERP modules inflexibility and compatibility issues with some business processes
Business Process Re-engineering
ERP system upon successful deployment usually become the lifeblood of any business. If they fail therefore, critical business operations can be affected (Harbaugh, 2018). It is therefore important to reduce challenges and risks that can come as a result of ERP failure (Grabski, et al., 2010). Here are several procedures that ATFC can follow to reduce ERP risks and challenges.
- Right vendor selection
- Budget determination
- Select ERP option whether on cloud or on-premise
- Understanding how ERP systems work
- Follow the right implementation procedures
- Train users
- Backup and recovery procedures
Conclusion
In the recent decade, the world has witnessed the effects that emerging and disruptive technologies have brought to organizations. Many have revolutionized business operations for the better and in the process have helped business increase productivity and ultimately profits. All businesses either large or small who have successfully deployed ERP systems to manage and control operations are increasingly reporting improved and smooth operations, cost reduction, enhanced customer experiences and increased revenue generation.
For ATFC to be able to achieve its strategic goals, the researcher recommends that they do the following
- Plan for a successful implementation of ERP software in order to streamline data and information across all their centres
- Obtain the right hardware and software requirements that are associated with ERP installation to facilitate an efficient ERP infrastructure
- ATFC workforce should be trained on how to efficiently use the ERP system so that they can be effective on the job roles
- Enforce policies and procedures on how to access and use ERP applications
- Train staff on the importance of security for ERP against hackers and other intruders
- Perform contingency planning, back-up and recovery procedures
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