ERP Systems: Past and Present
Discuss About The Enterprise And Integrated Business Process.
a.) What had come before is used to refer to the systems, with less functionality and integration of modules that were in place before the introduction of the ERP systems in the 1990s Rashid et.al (2002). In the 1960s organizations implemented a centralized computer system called the inventory control package (ICP) whose major role was to management their inventories. In the 1970s Material Requirement Planning (MRP) systems were implemented to plan products and parts requirement. In the 1980s Manufacturing Resource Planning (MRP II) systems were implemented. The MRP II’s role was to manage; manufacturing processes, distribution, engineering, finance, human resource management and requirements specification Da Xu (2011).
Customer relationship management. This is where PWC as an organization manages the intimacy between the customers of PWC and PWC Kumar (2010). This is done through constantly checking how frequent customers use PWC when they need accounting or auditing services to be rendered to them. By doing so the organization can establish their most frequent customers and put up strategies of keeping them at PWC.
Accounting and Finance management. PWC majorly deals with auditing and managing money, therefore, accounting and finance activities rendered by Enterprise Resource Planning are very essential for this organization.
Human resource management. This activity deals with; recruiting of employees, training of employees, allocating and assigning of roles to employees, pay role, retirement and separation of a non-employee from PWC as an organization Briscoe et.al (2012).
Manufacturing management. PWC is not a manufacturing organization, it renders money related services like financing, auditing and accounting. Manufacturing management where manufacturing requirements are considered is therefore, not a suitable activity for PWC.
Work flow management. Work flow is already catered for in the Human Resource Management where the workload and work flow of all the employees and workers of PWC are managed. Human Resource integrates the work flow activity thus making it unresourceful incorporating the work flow again as an activity.
c.) Manufacturing of products is an activity or process that has to be managed on the premise and cannot be taken up to the clouds. This is because manufacturing requires planning and checking of product requirements and other manufacturing variables. The product requirements and these other variables need to be checked at different points in time. This feature of manufacturing where the product variables have to be checked at different manufacturing levels makes it difficult using cloud sourced software but very effective and efficient using the software on the premise.
Customer Relationship Management
Finance . With the increase of cyber crimes including cyber theft , managing finances using cloud sourced ERP becomes insecure as money may be lost by people, organizations and even governments. Due to this the finance activities are kept at premise level to avoid cyber theft which often goes undetected.
d.) The trend of the next ERP systems is the cloud based ERP systems offered by hosting companies such as Oracle. The reasons as to why organizations are migrating to cloud based ERP is because of security, the cost of developing premise based ERP systems and changing technology. Organizations that offer cloud based ERP ensure the security of the data and information and update the ERP regularly to accommodate new and trending technologies in the market. The cost of developing a premise based ERP is more expensive than acquiring a cloud based ERP system and may even consume a lot of time during development.
Analyzing the traditional competitors. Traditional competitors are the New Private Enterprise’s main competitor in the same industry with the same resources and space. Understanding how the traditional competitors devise strategies to remain relevant in the market will enable the New Private Enterprise to deal with such competition by devising new ways and counter strategies of dealing with competition.
Analyzing the new market entrants. The New Private Enterprise should analyze how the new market entrants are putting a strain on the existing Enterprises. They should know what equipment and manpower they use. After doing this a decision can then be made on whether to implement the use of the new equipment or more advanced equipment to counter competition from these new market entrant enterprises.
Existence of substitute services. The New Private Enterprise should find out whether there are any substitute services to what they are to offer their customers in Yangon. If the substitutes are established then the New Private Enterprise can decide on whether to incorporate the alternative substitutes in the services they render to their customers or find measures to counter the substitute services. This will enable them to control prices in the market.
Customers. Customer power in Yangon should be established. The customer power is directly proportional to the number of substitute services available to the ones New Private Enterprise is rendering to the customers. If the customer power is high they should mitigate strategies to lower it and if the customer power is low they should find ways to maintain it or even lower it.
Accounting and Finance Management
Development of supplier intimacy. The New Private Enterprise should devise ways to develop and improve intimacy between the enterprise and the suppliers like; gas stations who supply fuel to their vehicles, engineering organizations who do repair of their vehicles and supply spare parts and the drivers who render driving services to the New Private Enterprise.
c.) Service differentiation strategy. The New Private Enterprise should use an information system to know the customer needs in the taxi services sector. After knowing the customer needs the New Private Enterprise should implement them for their services. This will raise the customer satisfaction quotient and thus attract more and more customer’s day in day out.
Advantages of this strategy are more customers for the New Private Enterprise and thus more profit for the enterprise. When customers get comfortable with the services rendered by New Private Enterprise they tend to come back for the good services rendered.
The disadvantage is high cost of expenditure needed for raising the customer satisfaction quotient. This is because rising of customer satisfaction quotient may require decorations in the taxi, giving water to customers, putting in place comfortable and relaxing seats and audio system. All these require money.
Improved customer relationship management. SAP solutions through SAP-HANNA have founded a basis for NTUC FairPrice to manage customer intimacy in real time. This means that the system can manage customer intimacy while the customers shop their groceries; this boosts customer intimacy and thus an attraction for more customers for FairPrice. This was not the case with Oracle. Oracle did not offer real time customer relationship management.
Real time finance processes which ensure concurrence of processes and activities that are happening simultaneously. This means that finance updates can be made while other processes and activities continue executing. Therefore, boosting the processing time in the finance sector.
Improved sales process. Upon implementing SAP over Oracle the runtime for sales process reports reduced from thirty minutes (30) to ten (10) seconds. This optimization enhances the speed of the system and thus facilitating more success.
Enhanced storage process. The amount of time required to successfully store and retrieve data and information in the system’s database was reduced upon migration. This enhanced the selling and buying of the grocery goods thus improving on the sales process too. The lower the storage time the higher the number of sales made on daily basis.
Customer relationship management which deals with the monitorization of customer intimacy with the organization. It manages the frequency of the customer’s usage of the organization’s services.
Human Resource Management
Finance process which deals with payment of salaries to employees, allocation of funds to projects and auditing of funds. All the activities that either decrease or increase the monetary value in the organization’s account.
Sales process which deals with keeping track of the sales made in a given time frame or length of time. Sales process manages the changing sales activities and statistics.
Storage process which deals with the storage and retrieval of data and information from the NTUC FairPrice’s database.
These existing business processes could not address the issues because they did not integrate upgraded business intelligence which supports real time querying, analysis and feedback. The customer relationship management business process could not offer real time analysis of customer intimacy. The integration of finance business process was not able to support real time updates of financial data and information. Sales business process did not accommodate the feature of real time sales management where reports are to be generated after a given period of time.
The existing Enterprise Resource Planning system, through the storage business process did not support the robust infrastructure needed to implement a data centered environment for the IT infrastructure. This together with a down grade business intelligence made storage and retrieval of data and information from the database slower thus hindering the performance of the Enterprise Resource Planning system.
Customer relationship business process. Customer intimacy changes from time to time which makes the business process dynamic. With SAP Enterprise Resource Planning system, the management of customer relationship to NTUC FairPrice is real time, it’s updated every second and minute the system is in operation.
Sales business process is dynamic. The sales made by NTUC FairPrice keeps on changing on an hourly and daily basis thus needs real time management which is made possible by the upgraded business intelligence module incorporated by SAP ERP system. With the new SAP ERP system sales reports are generated in 10 seconds.
Real time financial business process. NTUC Fair Price’s business majorly deals with selling and buying of groceries which involves exchange of monetary value. When buying groceries from farmers the money in their account is expected to reduce real time. When selling the groceries to the customers the money in their account should increase real time. The process of selling and buying with the changing of the monetary value makes the financial business process dynamic.
Establishing the customer power. During the first quarter of the ERPsim distribution game, the goal is to maintain the limited stocks of products available so that they cannot replenish. The customer power is directly proportional to the available alternative products that the customers can use. If the customer power is established then the team can now set the product prices relatively high in a way that they cannot be bought and deplete the stock.
Manufacturing Management
Establishing supplier intimacy. In the second quarter of the ERPsim distribution game, the products can now be replenished and new ones purchased. Establishing supplier intimacy will enable suppliers to have stock reports. This will be a convenience to the team as the suppliers will automatically know when the products have run out of stock and thus promote ease of ordering the products, payment and delivery. With supplier intimacy products will always be available for purchasers.
The challenge faced is the ability of the team to communicate and the ability to utilize the information available to our advantage. Sometimes typing and retyping is slow therefore, the delivery of information might be untimely meaning the information becomes useless because it is untimely. The available information might also be interpreted differently by different team members.
Social media platforms through chat groups, we are able to communicate effectively and efficiently. This enables information delivery to be on timely basis. Through these chat groups in social media platforms, we are able to analyze data and information and come up with a common interpretation of the data and information in question. This promotes accuracy of the data and information available to the team. Social media platforms solve both the issue of untimely information delivery and inaccuracy of data and information available. Collaborative information systems also enable effective and efficient communication. Reports generated, data and information is view by everyone with the access privilege to the information system which enhances accuracy and timely delivery of data and information to all the members of the team. Analysis is also done comprehensively by all the members of the team therefore preventing misinterpretation of data and information used by the team.
Payment of purchases made. In the second quarter of the ERPsim Distribution game, when payment of the purchases for goods ordered from the suppliers is done there is changing in the monetary values present in the business financial account. The changing of the monetary value of the business financial account makes this business process dynamic.
Receiving of payment for products. In the second quarter, when the products are availed to the customers and they start buying, they make payment for the products they have bought. The payments they make increase the monetary value of the business financial account. The increase in the monetary value of the business financial account makes receiving of payment for products by customers, a dynamic business process.
Workflow Management
Stock – management process. The system should be able to generate real time reports on the status of the stock. This will enable suppliers to be in the loop and provide suppliers when they run out of stock. Real time updating of the stock status after the products have been delivered to the business and after the products have been sold to the customers. This comes in handy in the second quarter of the ERPsim Distribution game.
Supplier-relationship management process. This is where there is real time analysis and management of the suppliers to ensure that the business keeps or maintains their good suppliers. This is done in quarter 2 and 3 of the ERPsim distribution game where the business keeps the suppliers in the loop by providing them with stock reports and orders in real time. The real time aspect avoids complains from the suppliers about the inaccurate orders and the untimely delivery of information to them.
In the above BPMN for procure to pay process, the business logs into the system and orders for certain products they have run out of stock. The supplier administration checks whether the ordered products are available and notifies the business whether they are available or not. If they are available the business pays for the ordered products and the suppliers see to it that the products have been delivered on time. If the products are not available, the system notifies the business and then the system comes to a halt.
Improper communication between the supplier and the business will lead to a scenario like the one above where the business orders for products that have run out of stock and the administration from the supplier side notifies the business that the products are not available. If there would have been proper communication between the supplier and the business then the suppliers would have known that a certain product is running out of stock and need replacement. The business and the suppliers should be in constant communication with the business generating and sending the stock reports to the supplier. This in some way also strengthens the supplier intimacy.
This is the use of a common information system by the business and the suppliers. The use of a collaborative information system will promote communication between the business and the suppliers. The suppliers will be able to view the stock status of the business in real time. This will enable the suppliers to be on the loop on whatever happens with the stock of the on hourly and daily basis thereby enabling them to prepare and manage the orders of the business accurately and on a timely basis.
The collaborative information system is one of the ways of enhancing supplier relationship. The accurate and timely ordering of products by the business versus the accurate and timely delivery of the products ordered by the supplier is what builds the business-supplier intimacy over time. Because of the collaborative information systems the business and the suppliers can take care of their roles without any obstacle or interfering with each other’s role and responsibilities.
References
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