Benefits of ERP System

Enterprise Resource Planning (ERP) can be described as a software based business process management and this allows a typical organization to performs the various back office functions that are related to human resources, services and technology. The ERP system is a software that integrates various operation related to marketing, sales, manufacturing, development and product planning though a single user interface, application and single database (Tian and Xu 2015). ERP is considered to be an enterprise application that is used by both the large and small business entities. The ERP systems integrates and includes the multiple modules that are based different technical capabilities of the software. The combination of the tasks that can be performed through an ERP system are, manage payroll and human resources, reduce the purchase costs, financial and accounting applications, assess the needs of the business, reduction of the redundant tasks, standardization of the critical business procedures, automate the life cycle of the employees, facilitation of better project planning, improving the accuracy of the financial data, configure prices, service knowledge base, supply chain management, distribution process management (Tasevska, Damij and Damij 2014).

The case study here focusses on Richard who is the owner of Richard Antiques Imports and it is his family business for over a period of 25 years. His business has grown to large extent and presently the employees and Richard himself is unable to manage large amount of data because all the data customer related data, sales related, purchase related and expense related data are managed manually. This study is based on the usage of a ERP and the implementation of the ERP into the Richard’s business so that reports can be generated on total revenue generated, payments outstanding and generated, peak times, and location related data. The aim of the study is to improve the quality and technology, business and functional aspects. The scope of the study highlights the ERP system used in the study and the software used is a SAGE Evolution software which will be used as record keeping software. It is taken as an assumption that the SAGE software will be user friendly for the employees that will be using it. While one major constraint is the procedure of implementation of the ERP into the whole business process.

There are several approaches that organizations can take in order to implement the Enterprise Resource Planning (ERP) and thus it is always necessary to implement the correct strategy which will be applicable for a specific type of business. The four major type of the ERP implementation methodologies are as follows:

• Big Bang rollout- the implementation takes place at one go and all the users of the gradually move to the new adopted system on a given date (Katerattanakul, Lee and Hong 2014).
• Phased rollout- the implementation occurs in several phases for an extended period of time. The users of the system move into the new system through a series of steps (Khaparde, Somani and Malde 2015).
• Parallel adoption- in this strategy, both the ERPs system and the legacy run parallel and the users of this system works with the new system while also working with the old system (Ilin, Iveti? and Simi? 2017).
• Pilot- this strategy relates to the implementation of the new ERP system within the organization and it is trialled over a period of time (Seethamraju 2015).

The big bang rollout implementation relates to the need of maintaining and revising a legacy software, since very little resource and time is required. Whereas, there is a high risk for the failure. It is important to highlight that malfunction is a single module can an entire failure of the system. The implementation time required is very short in comparison to the other implementation strategies. While one the disadvantage of the Big bang implementation strategy is that the project manager is unable to show how the system works until the whole system is installed properly (Vaidyanathan and Fox 2017).

Case Study on Richard Antiques Imports

The phased strategy is comparatively exhibits lower risks in comparison to the big bang strategy. Whereas the risk is involved in the process of losing the management before the strategy implementation is properly accomplished. The project manager can showcase the working of the system before achieves the complete status. One of the major drawback is that the implementation is very expensive in order to accomplish the entire system (Ahmad, Ibrahim and Garba  2015).

The Parallel implementation strategy provides the basis of the comparison where the old system is compared with the new system. This strategy requires double the number of the human resources and the double the number of the computing. Thus, in short the method is a time consuming process. One of the advantage is that if the new system fails, the implementation does not fail entirely. While, running two systems at the same time takes a lot of resources and it is expensive (Lyytinen and Newman 2015).

In the Pilot implementation strategy, the project manager has the provision of showcasing the working system and this is accomplished in a particular department. To accomplish the implementation of this strategy, it takes a lot of resources and is expensive. The duration of the implementation strategy is less compared to the other strategies. While the need to revise and maintain the legacy system is still high (Ptak and Schragenheim 2016).

Among the four strategies, the phased implementation strategy is the best strategy considering the less amount of risk associated with it. The modules are implemented at a time and the modules are also implemented in groups and also is often implemented at a single location. This approach requires a maintenance and attention which is given to the legacy system (Nagpal, Khatri and Kumar 2015). The various advantages and the disadvantages of the phased implementation strategy are provided below:

Points of contact (Bradds et al. 2017)

The implementation plan consists of subsections that include the project planning, scoping and analysis, design and build, final preparation. The project planning starts from the 25^th August and the entire duration of the project is 12hrs with an overall budget of $2310. Scoping and analysis starts from 28^th August and the entire duration of the project is 13hrs with an overall budget of $510. The design and build part initiates from the 2^nd September and the entire duration of the project is 14hrs with an overall budget of $1800. The final preparation starts from 7^th September and the entire duration of the project takes 18hrs with an overall budget of $1600.

Security and privacy requirements: Security and privacy issues- there are two issues that has been noticed in the FTP site as well as the ERP software. the FTP site is considered to be a site for sharing the pubic file share site and is also used for the distributing the patches to the customers. Thus, if the users share their private data then it can cause privacy issues. Due to this the site was shut down and the version of the software is updated through the HTTP for the Updates. The data is managed by a pervasive database that is present within the SAGE evolution. It has been found to be unsecured and this means anybody can copy the files that underlies the data. Thus, it is important to mention that the ERP SAGE evolution software requires firewall software, antivirus software and internet security suits to protect and secure the localized stored in the computer and prevent any kind of data theft. The system will also require an authentication system for the employee that will access the software (Tullett 2018).

Implementation Approach

In order to implement the ERP system into the Richard Antiques Imports, certain hardware requirements need to be fulfilled to streamline the implementation of the ERP systems. The Hardware and the materials requirements are the recommended hardware peripherals which will be necessary for the implementation of ERP system.

Staffing requirements- The SAGE evolution can be operated by a maximum of 10 users. Thus, a maximum of 10 employees can be employed that will work on the looking after the accounting and tracking the various records.

Delivery plan- The training materials are provided in the in the scoping and analysis section and also in the design and build section. Thus, it is important to highlight that the management presentation will be will be provided at the final section to that final finished product can be showcased along with its progress. Publications of the final data will be emphasized in the start production section that will highlight the publication of the finished work.

Change is a very common term which is runs through all types of the businesses irrespective of their age, industry and size. In order to bring changes into the existing system, it is necessary for an organization to undergo change and this change is undertaken in accordance to known procedures of change model. In the year 1940, Kurt Lewin put forward model called the Lewin change model and this model consisted of the three basic stages which are known as the unfreeze, change and refreeze. The Lewin change model incorporates the procedures of how to conduct the change in the functioning and operation of an organization (Hussain et al. 2016).

Unfreeze is the first stage and in this stage an organization is preparing to accept the various changes that are necessary. This stage also involves the breaking down of the present situation and formulating new ways of operation. This stage highlights the various reasons for why the existing ways cannot continue. This becomes easy to frame for an organization that is experiencing declining customer satisfaction, poor financial results, sales figures. This point towards the fact that change needs to be brought into the organization to improve the present scenario (Cameron and Green 2015). This is similar to what Richard’s company was Richard Antiques Imports was experiencing. Previously, the company used to manually perform all the task of customer dealing, product purchase, and product shipping and product sale. The manual procedure taken up by Richard Antiques Imports was fine 25 years ago, however as the branches started to grow it began to face the issues in maintaining manual records of client, customer, sales and products.

Change is the next stage which occurs due to the uncertainties created by the unfreeze stage. This is the stage where the management of a company or an organization tries to solve the various issues that the company was facing. People at this stage starts to believe and act in a way to promote the change. The change from the unfreeze to change does not occur in a short period and thus the people that are working in an organization must embrace and accept the changes proactively. Thus, people first need to believe how the change will benefit the organization and the employee that are working in it (Wojciechowski et al. 2016). Like the same way Richard felt the need to change the manual system of accounting, record keeping into something digital that will reduce the work pressure and the complexity of dealing with manual entering of large amounts of data. It has been seen that the staffs at the RAI stores are unable to manage the same level of service and the customer data. along with it, Richard was also unable to keep a track of the delivery dates, shipping company details and his visits. Along with this there were other issues that was hampering the functioning of Richard’s company. Thus, Richard wanted to bring the changes as he wanted to keep a track of the suppliers, the items that are purchased, record of shipments, sales and customers. Richard wanted to bring changes by automating the work that was previously manually done. Richard wanted to generate reports on the total number of the customers at each of the locations, revenue generated, payment outstanding and received, peak times. Richard believed that an ERP system can solve the problem of inconsistencies related to the management of data and the management of cash flow.

Roles of the Project Team

  Refreeze is the final stage of the change management. This is the stage where the employees of the company, the management is has embraced the decision and is now performing properly after considering the necessary changes. It has benefitted the normal functioning of the company and has enhanced it performances. This change has invoked a new way of working, and the employees feel comfortable, confident are sensing stability (Cummings, Bridgman and Brown 2016). This stage can be related to the ERP implementation plan. The implementation plan provides the exact start and the end days along with the duration and budget. The implementation plan has the 4 major dimensions namely project planning, scoping and analysis, design and build, and final preparation. The four major dimension is again sub-divided into major sections. The design and build section has the provision for the organizational change management. This will directly impact the implementation of the ERP into organizational change management. The implementation plan has the set of the standards, installation of the hardware, training of the employees, training of the end users and the administrators. The goals of the implementation plan are to bring changes in the manual system and make it easy to manage the large amount of data generated due to the function and the operation of the company.

Conclusion

From the above discussion it can be concluded that Enterprise Resource Planning is a software based business process management and this allows a typical organization to performs the various back office functions that are related to human resources, services and technology. ERP is considered to be an enterprise application that is used by both the large and small business entities. The ERP systems integrates and includes the multiple modules that are based different technical capabilities of the software. There are several approaches that organizations can take in order to implement the Enterprise Resource Planning. The four major type of the ERP implementation methodologies are Big Bang rollout- the implementation takes place at one go and all the users of the gradually move to the new adopted system on a given date; Phased rollout: the implementation occurs in several phases for an extended period of time. The users of the system move into the new system through a series of steps; Parallel adoption: in this strategy, both the ERPs system and the legacy run parallel and the users of this system works with the new system while also working with the old system; Pilot: this strategy relates to the implementation of the new ERP system within the organization and it is trialled over a period of time.

Reference

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