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Executive Summary
The background and the scope of this project is to provide the client, Albany Bakeries with a well-researched and analysed report that contains important information regarding Enterprise Resource Planning-systems. The main objective is to provide Albany Bakeries executive officer with a solution to the issues they have been facing with the information silos.
By providing the client with this feasibility study, they will have the ability to improve the way that they are currently running their business. By transitioning to an improved ERP system, where all information silos can work together instead of being divided into different functional departments, Albany Bakeries will be able to increase growth and success.
This report will answer the following questions:
- What are the major objectives of an ERP system and how are they similar or different to a Functional Area Information System?
- What are the benefits and limitations of ERP systems?
- What are the core modules of ERP systems and what would the extended modules be? Which module would you recommend first for implementation and why?
- What are the different available implementation models that the business can consider for their ERP implementation and the benefits and drawbacks of these different implementation models? Which would you recommend?
- Which functional departments are likely to be impacted in the business as they transition to a world where ERP supports cross-functional and cross-departmental processes?
The conclusion of this report is that Albany Bakeries should adapt to the technique of agile in its system to increase productivity within the organisation. It is also recommended that Albany Bakeries use the implementation model of Software as a service, as this is the best choice for their business.
Table of Contents
1.0 Introduction………………………………………………………………………………..……….3
2.0 Body of the report……………………………………………………………………………….4
2.1What are the major objectives of an ERP system and how are they similar or different to a Functional Area Information System?…………………………………………………………………………….4
2.2 Benefits and limitations of ERP systems…………………………………………………………………..5
2.3 The core modules of an ERP system……………………………………………………………………….6
2.4 Available implementation models……………………………………………………………………………..7
Figure 1: On premise vs Software as a service implementation benefits and drawbacks..8
2.5 Functional departments to be impacted with transition to ERP…………………………………….8
3.0 Conclusion…………….………………………………………………….………………………10
4.0 References…………………………………………………………………….…………………11
5.0 Appendices…………………………………………………………………….…………………13
1.0 Introduction
The purpose of this solution plan report is to advise and help Albany Bakeries to increase growth and to change their current information silos to a better information system where all different functional platforms can work together (accounting, finance, human resources, production and marketing). My consulting team and I will undertake an agile project to help the Albany Bakeries to run their business in a new and easier way by removing the information silos.
The research will be from high-quality sources from the library, high-quality references from websites and all the research will be investigated and identified, to be able to address the key concepts for the case study with correct information.
The expectations from this report are to understand and learn about the Enterprise resource planning (ERP) system vs. the Functional Area Information System, the benefits and limitations of an ERP system, the different implementation models that a business can consider for their ERP implementation etc. and therefore end with a conclusion with summarizing the findings or recommendations for Albany Bakeries.
2.0 Body of the report
2.1 What are the major objectives of an ERP system and how are they similar or different to a Functional Area Information System?
Functional Area Information System (FAIS) “were developed independently of one another” (Rainer & Prince, 2019, p.293), which is now called information silos. The information silos did not communicate with one another, which led to lack of communication and therefore the integration made the organization less successful and efficient. A system called Enterprise resource planning (ERP) system is designed to correct the lack of communication and inefficiency. That is one of the major objectives for the ERP system and that the ERP system resolves the problems by integrating the functional area IS through a common database, that everyone can access, which will lead to that everyone will have the information provided and not any lack of communication. So, for instance, experts credit ERP systems will increase the productivity in the organization, the ERP systems will adapt to a business process of the organization’s overall to combine management, planning, and the use of all the organization’s resources that will have a common software platform and database. This is called removing the information silos and implementing ERP instead of FAIS (Rainer & Prince, 2019, p. 293).
The major objective of Functional Area information systems (FAIS) is typically focused on a particular functional area in an organization and has its own collection of application programs and are just focused on a special department which can be finance, accounting, HR etc. and the objective is to increase the efficiency and effectiveness (Rainer & Prince, 2019, p. 287).
The systems are not familiar, FAIS is focused on just one particular functional areas whether it is accounting, finance etc. This can lead to a lack of communication because they are just focused on one area and not the other areas. ERP system is focusing on connecting with all areas to a common software platform and database, the ERP share a common process a data modules that everyone can access (Gartner, 2020). The systems are different from one and another, one is more specific and the other one is more overall and general to the organization.
2.2 Benefits and limitations of ERP systems
The benefits of Enterprise resource planning (ERP) systems is that it is offering many benefits to an organization. It integrates with all common software and databases and all operations across the different departments in an organization (accounting, finance, marketing etc.). ERP systems are designed to multiple different modules to handle the organization’s processes. The popular applications are: accounting, finance – budgeting and forecasting, HR, Inventory management. With all of these applications, ERP can do processes across every department and share information to all departments when its needed, which leads to efficiency, effectiveness and good communication. For example: Human Resources can tell management of new employees, while the accountant can send reports (Wood, 2020). Therefore, an ERP system is a good system for small businesses like Albany Bakeries, that everyone can use the same system than using different ones, which can lead to confusion and lack of communication.
The limitations with the ERP systems is that they are really expensive to install and it takes time to get around it because the system can be difficult to understand and that usually costs the company money to have someone train staff about the system (solution dots, 2016). Another huge limitation factor is that the ERP system does not meet all of the reporting and analytical needs of the organization, which means that the system can be too general/overall and not so analytical. Which can decrease success with a general system such as ERP (Wood, 2020).
Overall, the ERP system is an integrated software that collects all data so everyone can use it and get all the information when it is needed, it is a suitable system for Albany Bakeries. The only factor they need to consider if it fits their budget. But this system will improve all lack of communication and confusion and result in a better way to run their business.
2.3 The core modules of an ERP system
The core modules of an ERP system include; human resources, manufacturing and production and accounting and financing (Rainer & Prince, 2019, p.295).
Within an ERP system, the various functional departments (FAIS) have been incorporated into one complete system that can process information and streamline the core internal business processes across the entire organisation (Oracle, 2020). The extended ERP modules are; business intelligence, e-business and customer relationship management (CRM) (Rainer & Prince, 2019, p.295). As stated by Donohoe (2019) the extended ERP modules “go beyond these basic business functions to include additional modules that support external operations”.
It is recommended that Albany Bakeries should start by implementing the module of CRM.
CRM allows an organisation CRM allows a business to have a customer-centric strategy rather than a product or finance centric strategy. By implementing this module, Albany Bakeries will be able to create a competitive advantage in the industry as they will gain a deeper understanding of their customers’ needs and wants and thereby be able to provide a superior customer service (Santos, 2019, p.184).
CRM is a highly important strategy, as it allows a business to build a relationship with its customers. When a business has a good relationship with its customers it increases customer retention as well as customer loyalty (Kulpa, 2017). One of Albany Bakeries’ main goals is to take their business to the next phase and increase growth. By implementing a CRM system, Albany Bakeries will have the ability to improve their relationship with their customers and thereby increase their revenue which will, in turn, increase profitability and further growth. Although, the drawbacks of this type of strategy is that the organisation’ must value its customers more than their profits and always put their customers first (Santos, 2019, p.184).
A CRM system enables Albany Bakeries with a place where they could store important information regarding their customers, such as, contact details, preferences, requests etc. Which will be very valuable as the organisation will be able to manage their relationships with the customers and thereby increase business growth as well as maintain a positive reputation with the customer at the core of the business (Salesforce, 2020).
2.4 Available implementation models
There are two different available implementation models that Albany Bakeries could consider for implementing their ERP system. These models are on-premise software implementation and software as a service (SaaS) (Rainer & Prince, 2019, p.297).
On-premise implementation refers to having a ERP software that runs in-house, in either one of the organisations’ locations. This type of system means that the organisation will have full control over its software, as they will not be relying on other vendors to be responsible that the system runs smoothly (Techopedia, 2020).
Software as a service (SaaS) refers to the implementation model where an organisation uses cloud-based software. This type of model requires a third-party vendor that will be responsible for creating and maintaining the system. By using this type of system, all information will be available over the internet where anyone could access the information from any location (Oracle, 2020).
As can be seen in Figure 1, these are the benefits and drawbacks of the different models.
Figure 1: On premise vs Software as a service implementation benefits and drawbacks
| On-premise software implementation | Software as a Service (SaaS) implementation |
| Benefits:
● Data control (more secure) (Toolbox, 2015). ● Not having to depend on vendors (Toolbox, 2015) ● Easier to customise the system to fulfil the organisations’ own needs (Toolbox, 2015).
|
Benefits
● Cost-effective (Short, 2020). ● Don’t require extensive hardware (Short, 2020). ● Predictable on-going costs (Oracle, 2020). ● The system can be used from any location (Oracle, 2020). |
| Drawbacks:
● Higher costs (Hughes, 2020) ● The organisation will be responsible for any issues with the system that might arise (Hughes, 2020). ● Setting up the system is a complex project (Beyond Software, 2018) ● Programming might limit the functionality of the service (Beyond Software, 2018). ● Difficult to log in through different locations (Beyond Software, 2018).
|
Drawbacks:
● Lack of control over IT resources (Rainer & Prince, 2019, p.298). ● Slow systems can create problems for the organisation (Rainer & Prince, 2019, p.298). ● Not secure enough (Rainer & Prince, 2019, p.298).
|
When considering the benefits and the drawbacks of both of these models it is recommended that Albany Bakeries should implement the model of Saas. Because it is more cost-effective as well as it does not require the organisation to set up their own software which means that Albany Bakeries do not have to spend time on creating their own system as well as maintaining it. This system will also be able to be used from different locations which can be very beneficial for Albany Bakeries as they will be able to access the system from any location.
2.5 Functional departments to be impacted with transition to ERP
As Albany company undergoes transition in ERP, the Human Resource, Finance, Production, ICT, and Customer service departments will be impacted drastically. Regarding the Production department, the system will provide effective tools to allow quick planning, execution, and tracking the company’s resources (Aremu et al., 2018). Albany will be able to focus on the quality of goods and services to customers. The production department should monitor closely the quality and quantity of the confectionary they produce.
Secondly, the change will significantly improve the ICT department. Usually the ERP enables integration of the entire company’s departments and processes. The process will also ensure safe handling and dissemination of the company’s data (Fernandez et al., 2018). As a result, the company will ensure that all processes are tracked and monitored to ensure safety production of goods and services.
Moreover, the transition will have an impact in the Finance department. The company will enhance profit tracking through checks and balances. Likewise, the system will enhance the ledger and accounts managements. Khaleel and Alkhaldi (2017) found that ERP consist of tools for financial and cost accounting, sales and distribution that contribute to company’s overall performance,” (p.41). The systems allow the financial officers to make easy analysis and reporting of financial information. Lastly, the automation of data will reduce errors that would otherwise lead to losses.
The customer service department will also experience a shift in orders and delivery of good and services. ERP software allow automation of flexible prices that have a competitive advantage, and thus increasing customer satisfaction (Scurtu & Lupu, 2016). Further, there will be convenient processing of sales and avoid duplicate purchases. With many clients in Albany the system will come in handy to manage credit limits for the customers.
Conclusion
In the contemporary world business organisations’ are in a trend to adapt to the new technological ideas about business. One of the key tools that is widely adopted is enterprise resource planning. ERP is a process used by companies to manage and integrate the vital components of their businesses. In most cases agile technique is applied to address complex organisational needs by incorporating varied informational technologies.
In our study we were assigned a task by the chief executive officer of Albany bakeries to address information issues. The objective of this feasibility study is to provide the executive office of Albany bakeries with a brief solution to the problem of information silos.
Additionally, with the presence of the information silos that exist in Albany, the quality of the customer service was not to the standards. The mode of answering the enquiry of the customers is poor. Customers’ concerns and complaints should be thoroughly addressed. The poor-quality customer service was as a result of poor training and sensitisation of customer service representatives. With the adoption of agile technique, the quality of the customer service would improve.
For any business to succeed, it must focus on increasing production processes and effective management of resources. ERP system is essential meant to ensure cost-effective utilization of company resources. The system ensures unification of IT and other processes to increase efficiency. However, on limitation of ERP is that it requires high initial investment capital. Secondly it demands experienced workforce especially in technology. Nevertheless, the system has previously proved efficient in supporting cross functional and cross departmental processes. Having several models of ERP, companies should focus on human resource module, finance and production. The implementation of this approach will help Albany to address the most complex organizational and consumer needs.
References
Aremu, A. Y., Shahzad, A., & Hassan, S. (2018). Factors affecting enterprise resource planning adoption on firms’ performance among medium-sized enterprises. Int. J Sup. Chain. Mgt Vol, 7(6), 308.
Beyond Software. (2018). Saas vs On-premise. Retrieved from
https://www.beyondsoftware.com/comparing-saas-vs-on-premise-software
Donohoe, A. (2019). What is extended ERP? Retrieved from
https://bizfluent.com/facts-6982283-extended-erp-.html
Fernandez, D., Zaino, Z., & Ahmad, H. (2018). An investigation of challenges in Enterprise Resource Planning (ERP) implementation: The case of public sector in Malaysia. International Journal of Supply Chain Management, 7(3), 113-117.
Gartner, G. (2020). Enterprise Resource Planning (ERP).
Retrieved from https://www.gartner.com/en/information-
technology/glossary/enterprise-resource-planning-erp#:~:text=Enterprise%20resource%20planning%20(ERP)%20is,service%20and%20the%20supply%20chain.
Hughes, A. (2020). On Premise vs. Cloud: Key Differences, Benefits and Risks. Retrieved
from https://www.cleo.com/blog/knowledge-base-on-premise-vs-cloud
Kulpa, J. (2017). Why Is Customer Relationship Management So Important? Retrieved from
Khaleel, Y. K., & Alkhaldi, A. N. (2017). Enterprise Resource Planning (Erp) Model for Small and Medium Sized Manufacturing Firms Based On UML. International Journal of Information, Business and Management, 9(3), 41.
Oracle. (2020). Enterprise Resource Planning Systems Transform, Integrate and Scale
Businesses. Retrieved from
https://www.netsuite.com.au/portal/au/resource/articles/erp/what-is-erp.shtml
Oracle. (2020). What is Saas? Retrieved from
https://www.oracle.com/au/applications/what-is-saas/#link5
Rainer, K. R., & Prince, B. (2019). Introduction to Information Systems (7th ed.). USA:
John Wiley & Sons.
Santos, J. (2019). Customer Relationship Management : Strategic Approaches in Digital
Era. USA, Ashland: Society Publishing.
Salesforce. (2020). A Beginner’s Guide to CRM Systems. Retrieved from
https://www.salesforce.com/eu/learning-centre/crm/crm-systems/
Solution dots. (2016). What are the advantages and disadvantages of ERP system.
Retrieved from
https://solutiondots.com/blog/advantages-and-disadvantages-of-erp-
system/
Short, T. (2020). What is SaaS? 10 FAQs About Software as a Service. Retrieved from
https://www.softwareadvice.com/resources/saas-10-faqs-software-service/
Scurtu, L. E., & Lupu, V. (2016). Enterprise Resource Planning-ERP for business and knowledge management. The USV Annals of Economics and Public Administration, 16(1 (23)), 145-153. doi: 10.1016/j.protcy.2013.12.184
Toolbox. (2015). 5 Benefits an On-Premise ERP Gives Your Mid-Sized Business. Retrieved
from https://www.toolbox.com/tech/erp/blogs/5-benefits-an-on-premise-erp-gives-your-mid-sized-business-083115/
Techopedia. (2020). On-Premise Enterprise Resource Planning (On-Premise ERP).
Retrieved from https://www.techopedia.com/definition/29370/on-premise-enterprise-resource-planning-on-premise-erp
Wood, L. (2020). ERP: Benefits: Advantages and Disadvantages.
Retrieved form https://softwareconnect.com/erp/benefits/
Appendices
Scrum board 1
| Owner | Backlog | In progress | Done |
| Elin Bolmér | – Discuss and divide the tasks for the project
– Research different systems – FAIS & ERP – Do a first draft |
– Research the different systems
– Do a first draft – Communicating with my group |
– Discuss and divide the tasks for the project |
| Sheena | – Discuss the different tasks with all group members and divide the tasks equally.
-Research ERP systems |
-Working on finalising the first draft of the report.
-Making sure that everything will be done within the timeframe -Communicating effectively with the group members |
– Divide tasks between group members
– Layout/design of the report |
| Anderson | -Identify modes of communication in the industry.
– Research of ERP -Discuss with the group what every single member will be responsible for. |
-Task allocation
-Planning meetings -Identifying the degree of application of agile methodology |
-Policy setting
-modes of communication set -Tasks divide fair and equally with the others members |
Scrum board 2
| Owner | Backlog | In progress | Done |
| Elin Bolmér | – Research the different systems
– Create powerpoint slides – Be done with first draft – Write presentation script |
– Powerpoint slides | – Research different systems
– Done with first draft – Written a presentation script |
| Sheena | -Create power point slides for the presentation
-Finalise the report |
-Powerpoint slides
-Writing the script for the presentation |
-Completed first draft of the report
-Research for the report |
| Anderson | -Create power point
-Finalise the final version of the report which will be submitted |
-Finalizing the final version of the report
-Writing the script for presentation -Adding content to slides -Fixing layout of the report |
-Completed the first and second draft of the report
-Reach for the questions |
Presentation Script
First slide: Solution Plan title – welcome to our solution plan presentation for Albany Bakeries, this presentation will be presented by me Elin Bolmér, Sheena Muisyo and Anderson Colombo.
Second slide: Intro (list what we are going to cover)– the purpose of this presentation is to give advice, help and provide solutions for Albany Bakeries to increase growth and change their current information silos to a better information system such as enterprise resource planning (ERP) system. So me and my consulting team will undertake an agile project to help Albany Bakeries to run their business in a new and easier way by removing the information silos, to a better system.
(Tell the audience what we are going to cover – make a list)
Third slide: Body of the presentation
Question 1: Enterprise resource planning (ERP) system vs. the Functional Area Information System.
What are the major objectives of an ERP system and how are they similar or different to a Functional Area Information System (FAIS)?
ERP system is a general system that integrates with all different platforms such as accounting, finance, marketing, management etc. Which means all departments share the same database and software and can access any information when needed, therefore, all departments get the same information and it will not lead to lack of communication and confusion. This system increases productivity, efficiency and good communication.
ERP system is very general and is connected with all areas which would be a good recommendation for Albany Bakeries.. Meanwhile Functional Area Information systems are more analytical and focused on one area.
Functional Area information systems (FAIS), is focusing on a particular area which is called silos, it could be just focusing and be specialised in accounting, finance, marketing etc. But the negative side effect is that everyone is just focusing on one area and not the other areas and that can lead to lack of communication.
Question 2: What are the benefits and limitations of ERP systems?
The benefits of ERP systems
- is that it integrates with all common software and databases and all departments can access the information
- Efficiency, effectiveness and good communication
The limitations of a ERP systems
- Really expensive to install and takes time to get around it
- Can be a too general system that is not that analytical and specific
Question 3: What are the core modules of ERP systems and what would the extended modules be? Which module would you recommend first for implementation and why?
The core modules of an ERP system are: human resources, manufacturing and production and accounting and financing. The extended modules are: business intelligence, e-business and customer relationship management. It is recommended that the first module for implementation is CRM. As this will improve the relationship that Albany Bakeries have with their customers. By using a ‘customer centric’ strategy (CRM), Albany Bakeries will be able to drive sales and increase customer retention.
Fourth slide: Body of presentation
Question 4: What are the different available implementation models that the business can consider for their ERP implementation and the benefits and drawbacks of these different implementation models? Which would you recommend?
There are two different available implementation systems, on-premise or software as a service (SaaS).
On-premise software implementation
Benefits:
- data control
- not having to depend on vendors
- easier to customise the system to fulfil the organisations’ own needs.
Drawbacks:
- Higher costs (Hughes, 2020)
- The organisation will be responsible for any issues with the
- system that might arise
- Setting up the system is a complex project
- Programming might limit the functionality of the service
- Difficult to log in through different locations
SaaS software implementation
Benefits:
- Cost-effective (Short, 2020).
- Don’t require extensive hardware (Short, 2020).
- Predictable on-going costs (Oracle, 2020).
- The system can be used from any location (Oracle, 2020).
Drawbacks:
- Lack of control over IT resources
- Slow systems can create problems for the organisations
- Not secure enough
It is recommended that Albany Bakeries chooses to implement the SaaS software as this system is more cost-effective as well as it will allow information to be accessed from any location which will be highly beneficial for Albany Bakeries. By using this system, Albany Bakeries will also be able to oversee their costs as their use of the system SaaS will show predictable on-going costs.
Question 5: Which functional departments are likely to be impacted in the business as they transition to a world where ERP supports cross-functional and cross-departmental processes?
As Albany company undergoes transition in ERP, the Human Resource, Finance, Production, ICT, and Customer service departments will be impacted drastically. Regarding the Production department, the system will provide effective tools to allow quick planning, execution, and tracking the company’s resources (Aremu et al., 2018). Albany will be able to focus on the quality of goods and services to customers. The production department should monitor closely the quality and quantity of the confectionary they produce. Moreover, the transition will have an impact in the Finance department. The company will enhance profit tracking through checks and balances. Likewise, the system will enhance the ledger and accounts managements. Khaleel and Alkhaldi (2017) found that ERP consist of tools for financial and cost accounting, sales and distribution that contribute to company’s overall performance,” (p.41). The systems allow the financial officers to make easy analysis and reporting of financial information. Lastly, the automation of data will reduce errors that would otherwise lead to losses.
Fifth slide: Conclusion
For any business to succeed, it must focus on increasing production processes and effective management of resources. ERP system is essential meant to ensure cost-effective utilization of company resources. The system ensures unification of IT and other processes to increase efficiency. However, on limitation of ERP is that it requires high initial investment capital. Secondly it demands experienced workforce especially in technology. Nevertheless, the system has previously proved efficient in supporting cross functional and cross departmental processes.
