Business Case For ERP Implementation In Select Harvest Company

Company Overview

Discuss about the Business Case for Select Harvest Company.

We are a group of people who have identified that Select Harvest Company is undergoing some issues related with the database management system. Considering this issue, we have identified a business case proposal for the company in respect of the ERP implementation, which will be a possible and effective solution for the company. This report is about a business case of ERP implementation system in Select Harvest Company. At present Select Harvest company is undergoing varied issues related with quality of work and customer satisfaction and all this is happening because of the manual process management and process handling by company people. For effective quality management of work and data management, company is in need of effective database management system, like ERP that can resolve the issues faced by company at present. The first step is the development of a case for business for analyzing the challenges to business for addressing the investment in new project. Aspects related with business environment which are driving the need for innovation implementation, have been discussed in detail in this case. With changes in market, every organization wishes to be competitive and for that they are required to have updated systems. Businesses are looking for opportunities for integrating technologies in the business and utilizing it for supporting business goals. In this project, business case for ERP implementation has been discussed (Sage, 2011).

Select harvest is an almond grower and processor company. Company is having business of almond which owns and manages the orchards and harvest crops. The Food business of company is involved with the processing and marketing of wide range of nuts and fruits based products. Company is existing since a long time and urgently company is facing some issues because of which their operational processing is hampering. The system of enquiry handling of company is so far running manually but now they are looking for alternatives for mitigating risks associated with quality of information. ERP database management system is being considered in this business case for company to have effective database (Select Harvest, 2016). 

According to us, company is currently processing all customer enquiries manually. There is requirement of innovative database system for assisting the staff members in their daily work and allowing them to efficiently and rapidly respond towards enquiries. The proposed business case will do this task. This business case is about implementation of ERP system in company to assist the staff members to make their work easy going and hassle free. Information technology offers a significant investment. For ensuring that scarce resources are optimized in possible manner and benefits are being realized, an approach of business case is essential for managing priorities of database system which we are planning to undertake in this business case.  Investments made in technology segment are very complex in nature. One of the big issues regarding justification of implementation of database system is that it is not considered as an effective database system by every department. In the first instance, system of database management is considered by researchers as silver bullet for the issues of company. Still it will not be wrong to note, that the opportunities offered by enterprise resource program system comes with high pricing in financial terms. Often the implementation of ERP fails, as many times company people run behind schedules and in fact, at times they lack budget. Irrespective of the results, implementation of ERP is a valuable lesson that could be learned for companies considering their own implementation. The ERP system will act as domain of information technically and will come across all departments of company. In simple terms, the new innovative database management system for company will hook up information with the stakeholders of company by logically combining data for developing new resources (EPA, 2012).

The Problem the Innovation Can Solve

This unique innovation has been thought to be implemented in company as currently company is facing varied issues like poor quality of data management, unsatisfied customer rate, increase in complaints, and lack of proper documentation, everything in manual terms. The new unique system will develop new database system and resource system that can be easily accessed and shared by stakeholders of company (Hooper, 2007). For creating a modernized database management system, company will need agreement and satisfaction of senior management people of company to go through all risky and transition process, which will hook up considerable amounts of information. It is considered that everyone will get convinced with the benefits of system but still, it is mainly about the anticipation of others for foreseeing the benefits that are hidden behind this new project (Ziff Davis Research, 2012). 

 Common issues that have forced company to consider innovation are:

• Desire for growing business
• Inefficient processes of business
• Need for reduction cost
• Obsolete systems 

The best and unique way of approaching the business case is to be assured that the people who would be using the system are aware of the critical things and advantages related with the usage of system. The integration of database system actually means that data from all resourceful departments of company will be amalgamated in tight and effective manner.

• Improvements in Connectivity: After the implementation of database management system, information will be exposed to outside world. With the exposure, data transportation will be enhanced and will be capable of investing the trading relationships (Dieringer, 2004)
• Effective functionality: With the integration of data and portability of information, employees of company will be to make effective reports for senior management. Through these reports, management will be able to receive proper data. Employees of the company will be able gain to access to large database at one place only. Consequently, the accuracy of availing right information will also enhance(Nafeeseh & Al-Mudimigh, 2011).
• Growing business: Moving towards comprehensiveness, integrated ERP system will give business, the functionality they are looking for managing information and operations. The right and effective system will enable company to enhance the usage of system, as their needs will evolve by deploying all the parts of functions of ERP system. With the solution of ERP implementation, company will be able to manage growth and minimizing additional costing (County, 2010). 
• Business Intelligence: An ERP system includes business intelligence that will make reporting capabilities better and effective data driven decisions.
• Effective facility: The database management system will enhance user interface that will help company in gaining better approach line. Enhancement in the user interface will help in developing streamline inputs and effective outputs.
• Harmony: After implementation of the new database system, employees in the company will become better and effective one, as they will be more informed about the things happening in company as compared to previous time(ISACA, 2012)
• Integration: Integration process will help company in building coherent business information. The database management system will help in integration of all management processes into one single system, which will help in distribution of information in real time manner at all levels of company(AL-TWAIRESH, S, & AL-MUDIMIGH, 2011).
• Automation: Automation process helps in elimination of manual processing. ERP solution can help in automating the processes of business and that will help company people to avoid unusual events.
• Enhanced and Improved decision-making: The new system of database management system will be having business intelligence system and function of integration of information which will help company in eliminating the manual process. Company will be able to draft new reports with the help of database management system and that will enhance faster decisions.
• Better, efficient and effective collaboration: The ability of integrating with the stakeholders of company makes the company manage its end-to-end processes with the stakeholders in very effective and efficient manner. With the usage of electronic database system, Select Harvest Company will be able to connect itself with the stakeholders of company in no time (STA, 2008). 

It is proposed that a database management system be utilized by company for addressing the inefficiencies that have been outlined before. It is envisaged that after implementation of the unique system, whenever any enquiry will be received by company, details of the enquiry will be recorded in the system. Employees will then be able to search the database for by entering one or two criteria’s for seeing the required information they are looking for. If required, this process can be supplemented with hard copy print out in case anyone needs that. In case the system does not find information pertaining to particular query, only then the employees will utilize other sources of information. With the new database system, company’s people will be able to hold data in electronic form which will help them in performing statistical analysis of queries received using large range of data without any need of manual collections. Sales department, finance department, purchasing department, service department or any other as per their need can use this information.  The main goal of implementing this plan will be (Al-Aboud, 2011)

• Increasing number of resolution enquiries that are pending
• Decreasing waiting time
• Increasing customer satisfaction
• Decreasing time taken for statically analysis 

The next step is about analyzing and determining the cost of having an ERP system for database management, being implemented in company. Some of the costs that are associated with the system are (Epicor, 2012): 

• Acquisition: The most important costing and the essential one are related with the acquisition of product. Many organizations are looking for database management systems but unfortunately, because of acquisition cost, they turn down the idea.
• Cost of Expanding the Solutions: Over here it is to be noted that whether the solution is comprehensive in nature or not, or does it need any third party to upgrade the solution which includes best of features and complete ranges of modules which can be utilized by company in any department (Davenport, 2000)
• Training: Intuitive navigation will help in reducing the costs associated with the training system and getting the users more easy with the usage if system. Company requires to adopt graphical processing for user interface for streamlining the work process
• Implementation: Implementation of this innovation is notorious for high cost. For minimizing costing of implementation and delivering higher returns company needs to adapt to such system that does not need customized development(Bradley, 2013).
• Customization: The system needs to be customized in effective manner to address unique business needs an organization should possess.
• Administration: For reducing administration costing, the system will require simple administration flow for making it easy in implementation and updating in coming time without much effort of technology inputs(Fui-Hoon, Nah, & Lau, 2001).
• Future Needs: The new system is required to enhance and support the new technologies for allowing it to get modified in easy manner. This is because in coming time, both hardware and software require changes. These technology’s needs:
• Service oriented architecture
• Web oriented architecture
• Varied operating system like windows, Linux and AIX
• Multiple database like SQL, Oracle
• 4GL Integrated development environment

Benefits that are Expected from ERP Database System

The options of business case are:

• Manual database management
• Automated database management

Below are the options of automated database management system:

Name of vendor	Discussion	Cost
SAP	ü  German company with affiliates around the world ü  Completely comprehensive and is totally package inclusive application	Totally license basis
Microsoft Dynamics	Everything is covered except for point of sale	License cost : 7000000 Dollars
DEACOM ERP	Except service management everything is covered	Totally license based

We examined many other options but decided to complete estimates for only two options, automated and manual system. All estimates were pessimistic for manual system handling and optimistic for automated ERP system, for ensuring conservative comparisons for final automated decision.

Option1: ERP system for automated database management

Option2: Manual database management: Current management system of company

Alternative	Benefit	Disadvantage	Impact on Stakeholders
Option 1: ERP	Higher strategic alignment Data quality management Medium project risk Accessible information system	High Costing in initial time	Improved business process Increased data quality Enhanced customer satisfaction
Option2: Manual database system	Less effort Best NPV Less project risk Less cost involved	High data management cost Customized checklist have limited sharing No incremental benefits in coming years	Stakeholders that expect change will likely be disappointed Stakeholders will not get required information on time

Option 2: Potential benefit analysis

• Reduces paper handling
• Less paper work
• reduces re typing in forms
• Reduces delays in report while waiting for someone to update
• No errors in entry
• Easy access
• Simplified entries
• Speedy information access

Quantitative cost benefits analysis of options

Quantitative Cost analysis
Quantitative Analysis of Option 1	Year 1	Year2	Year3	Year4	Year5	Year6	TOTAL
EARNINGS:
Saving in terms of earnings	–	–	–	–	–	–	–
Cost avoidance	–	–	–	–	–	–	–
Revenue from investment	–	–	–	–	–	–	–
MISc.	–	–	–	–	–	–	–
TOTAL BENEFITS	–	–	–	–	–	–	–
Costs:
Non-recurring
Recurring	$119	$130	$127	$137	$148	$151	$813
TOTAL COST	$119	$130	$127	$137	$148	$151	$813
Benefits or cost of Alternative 1	-119	-130	-127	-137	-148	-151	-813
Present value of benefits	0
Present value of cost	-707
NPV	-707
Rate of Discount	4%
Quantitative analysis of Option 2	Year1	Year 2	Year 3	Year4	Year5	Year6	Total
Earning:
Saving in terms of earnings	–	–	–	–	–	–	–
Cost avoidance	–	–	–	13	13.2	13.6	25.96
Revenue from investment	–	–	–	–	–	–	–
Misc.	–	–	–	–	–	–	–
TOTAL EARNINGS	–	–	–	13	13.2	13.6	39.52
Costs:
Non-recurring	311.8	27	27.75	281.6	28.3	86.4	$763
Recurring	92	92.67	95.42	98.25	101	$583.69
TOTAL COST	403.8	119.67	123.1	379.8	129.4	190.6	1346
NET benefit	-92	-92.6	-95.4	-85.4	-88	-90.6	-544
Present value of benefits	32.4
Present value of cost	1190.2
NPV	-1158
Rate of discount	4%

Option 1
Qualitative summary	Illustration	Impact on stakeholder	Ranking
Benefit
Enhanced Morale	Improved morale of employees	All	Low
Cost
Transition	Transition management	All	Low

Option 2
Qualitative summary	Illustration	Impact on stakeholder	Ranking
Benefit:
Low change	Cost avoidance	All staff	Low
Costs:
Transition	Transition management	All staff	Low

Project Risk Assessment	Option 1	Option2
	Probability	Impact	Factor	Probability	Impact	Factor
Operational risk	1	4	5	5	4	20
IT risk	4	4	16	3	4	12
Financial risk	4	4	16	3	4	12
Summary			37			44

The main point lies here, which describes how our system will be better than other company’s system. Below is a checklist that defines which ERP system is beneficial for the company

• Price
• Modules
• Management System 

Companies like Metcash and Nestle are also using ERP kind of database management system, but still, we can assure that ours is better than them. For instance, the database management system of this company is based on the modular deployment model. Single ERP solution ensures the companies that processes of business are tightly integrated and that the data exists only in one place to be used for transaction, execution and analysis. Whereas we people will be offering best of breed solution that will be splitting processes in between the software modules and multiple database will be developed by this software, which will maintain the fragmented database. There are many vendors in the market like us and the companies that look for ERP solutions often turns to niche vendors who offers solutions for specific industry. While as far as we can see Select Harvest company may not want to implement a full ERP system, they need to consider the long-term possibilities of growth and inevitable needs for integration. Best of breed deployment model of ERP will encompass variety of specialized functions (Broward, 2010)

Model	Drivers	Comparative Evaluation
ERP deployment model of???	Investment return Implementation cost Adoption Time frame for results	2nd Best ROI Most Costly Medium to fast Pace 24 months
ERP deployment model of our company	Investment return Implementation cost Adoption Time frame for results	Best ROI Low Cost Medium pace 12 months

Advantages of Our System over other Companies

• Low cost system
• More opportunities for differentiation
• Strong in depth functionality in every module

The deployment model of our product has been designed keeping in my mind the needs of Select harvest Company. The phases will allow implementation at pace that is manageable for Select Harvest Company by using the Best of Breed model for implementation.

The 5-year cost of ownership model has been specified below. No general rule of thumb was used for estimation. However, the estimated cost did not include the full range of functional requirements and management change, training cost. The cost elements that have been taken under consideration are: license cost hardware cost and software cost.

Major Components	Year 1	Year 2	Year 3	Year 4	Year 5	Total
Software Cost	2.9 Dollar	.5 Dollar	.5 Dollar	.5 Dollar	.5 Dollar	4.9 Dollar
Hardware Cost	15 Dollar	16 Dollar	8 Dollar	2 Dollar		41 Dollar
Expenses	1 Dollar	1. 5 Dollar	.5 Dollar			3 Dollars
Total Costing	18.9 Dollars	18 Dollars	9 Dollars	2.5 Dollars	.5 Dollars

Cause and benefit analysis for return analysis

Conclusion and Recommendation

This particular business case clearly shows that option 1 is better than option 2. The net present value of alternative one is effective than that of alternative 2 and even the risk factors associated with option 1 are less impactful. The following steps taken above precisely measures the investment in innovation for effectiveness of the company and, the ROI and NOV clearly shows that it is a recommended investment for the company. Even the cost and benefit analysis, plus the deployment model also throw light on the same fact. 

References

Al-Aboud, F. N. (2011). A Model Approach for the Analysis of Dominant Factors in ERP Software Implementation. International Journal of Computer Science and Network Security.

Al-Twairesh, N., S, A., & Al-Mudimigh. (2011). Business Cases For Erp Implementations . Journal of Theoritical and Applied Information Technology.

Bradley, J. (2013). Management Theory Based Critical Success Factors in Enterprise Resource Planning Systems Implementation. Idea Group Publishing.

Broward. (2010). Business Case for ERP. broward.

County, B. (2010). Business Case for ERP. Broward County.

Davenport, T. H. (2000). Mission Critical: Realizing the Promise of Enterprise Systems. Harvard Business Press.

Dieringer, D. S. (2004). ERP Implementation at Nestle. Retrieved from uwosh: https://www.uwosh.edu/faculty_staff/wresch/ERPNestle.htm

EPA. (2012). Business Case Examples. EPA.

Epicor. (2012). Best Practices for ERP Implementation . Panorama Consulting Solutions.

Fui-Hoon, F., Nah, & Lau, L. S. (2001). Critical factors forsuccessful implmentation of entreprise systems. Busniess porcess journal.

Hooper, P. K. (2007). FREP Handheld Business Case . CGI.

ISACA. (2012). Creating the Business Case for ERP System Acquisitions Using GEIT. ISACA .

Nafeeseh, R. A., & Al-Mudimigh, A. S. (2011). Justifying ERP Investment: The Role and Impacts of BusinessCase A Literature Survey. International Journal of Computer Science and Network Security.

Sage. (2011). 7 Steps to Building a Business Case for ERP. Sage.

Select Harvest. (2016). Select Harvest. Retrieved from Select Harvest: https://www.selectharvests.com.au/

STA. (2008). Report on Business Case Analysis for Statewide ERP Planning. STA.

Ziff Davis Research. (2012). Making the Business Case for Enterprise Resource Planning (ERP). ZIFF.