Question:
Discuss about the Professional Research and Communication for Enterprise Resource Planning System.
Research Topic
The aim of this research is to determine how organisation can create business value through the implementation and use of enterprises resources planning system. The ERP implementation project is of strategic importance considering the economic costs and benefits. The research shall also help in identifying the critical success factors in ERP system implementation (Bernroider, Wong, & Lai, 2014).
Research Aims and Objectives
The main research aims of this project are:
Research
The research questions that would be dealt in this paper are:
Background of the Research
According to the previous research and studies, companies implement enterprise resource planning (ERP) systems for managing internal and external business resources. ERP integrates various business functions and makes processes faster and efficient (Shaul & Tauber, 2013).
Significance of the Research
ERP or Enterprise Resource Planning is business process management software allowing an organization to collect, store and manage business activities such as purchase, services, delivery or human resources (Shen, Chen, & Wang, 2016). ERP makes Information Technology useful as it helps in addressing fluctuating demands. ERP makes it possible to use open database connectivity or client server technology (Bradford, Earp, & Grabski, 2014).
This research paper shall prove beneficial for the employees and organization to understand a better picture. The research shall help in improving business performance and progress. The paper can be used by universities and organizations as it puts together the value, benefits and risks involved with ERP implementation.
Literature Review
The organizations gain competitive advantage as the businesses are striving to gain competitive advantage. The organizations require better strategy technology planning and incorporation of IT system to manage functions and processes efficiently (Chang et al., 2015). ERP systems are sued for handling the different types of organizational activities through a single system. IT is basically a computer software system with different types of operational strategy (Kanellou & Spathis, 2013). The ERP system has the power of handling the financial information of a business organization as well as the information regarding the human resource management, market forecasting and other important business operations.
According to Schniederjans & Yadav (2013), most of the business organizations are using the ERP system for handling the business operations efficiently through a single unit of software. The system is consisting of a secure data base at the back end. The front end of the software is graphic user interface system, through which the users will be able to insert, delete, manipulate and analyze the important data from the back end database of the company. The ERP system are also used for the job scheduling and roster maintenance works.
Generally the development of the ERP systems is done by the IT experts of the software vendor company. The business organizations give their requirements regarding their requirements of the business operations. The IT experts design the system for full filling the requirements of the client business organizations. The users of the system are unknown about the internal structure if the ERP systems (Zeng & Skibniewski, 2013). They just know the way of using the system and the utility of the system in their organizational activities.
Enterprise Resource Planning (ERP) Systems
ERP system is business software that includes solutions for core processes such as production, accounting, planning and control, human resource management, delivery and various other processes (Sumner, 2011). The software package helps in integrating complete range of functions and business processes from a single information and IT architecture. ERP systems help in supporting the inventory, material resource planning and integrates data with sales, finance and human resources (Hoch & Dulebohn, 2013).
ERP Systems Functionality
ERP can be categorized into different categories and consists of analytical tools that can serve different purpose. Firstly, EPR ensures financial compliance and predicts business performance. The software automates financial supply chain management and accounting by depending insight and tightening control of finances (Tsai et al., 2012). Secondly, ERP optimizes human resource processes with a human capital management and integrated solution. The software auto manages talent, deploys workforce and HR processes. Thirdly, ERP manages end-to-end operations and business cycles including order management, material requirement, forecasting, master production scheduling, shop floor control and various others (Zeng & Skibniewski, 2013). Fourthly, ERP helps the organizations in managing corporate services such as safety compliance, health and environment protection, quality management and other administrative processes (Hassabelnaby, Hwang, & Vonderembse, 2012).
ERP Advantages and Disadvantages
It is argued that one of the biggest advantages of ERP is enhancement in communication with customers and suppliers. There are various tangible and intangible benefits due to ERP implementation in an organization. A few tangible benefits include increased productivity, reduction of personnel, reduction in IT, increase in revenue and better cash flow management. The benefits also involve reduction in logistics and transportation, better delivery times and reduction in IT costs. A few intangible benefits include improved business processes, increased flexibility, better visibility, unanticipated reduction in cost, standardization of systems, increased visibility of corporate data and supply chain management processes (Galy & Sauceda, 2014).
On the other hand, there are risks and disadvantages involved of an ERP system. An organization needs to take care of certain issues while implementing ERP. The organizational resistance may be high and they would not be willing for accepting change. The changeover may take adequate time and may lead to cost overruns. The maintenance of the IT system can be time-consuming and costly. The data errors would result in incorrect data and would be carried throughout the system (Ha & Ahn, 2013).
Critical Success Factors
Certain factors lead to successful ERP implementation and would ensure success in the organization. The clear understanding of strategic goals and commitment from top management would help in ensuring success. The hardware requirements must be assessed. ERP implementation takes time so the organization managers and employees must be patient. The senior executives must be very involved with the project from the start to the completion. The key technology issues must be addressed (Chauhan, Dwivedi, & Sherry, 2012).
Introduction
This section deals with the methods or procedures that the researcher shall undertake for deriving adequate information. Appropriate research methodology and data collection processes are elaborated in this section.
Research Proposition
The research paper follows explanatory research design for defining key variables and relationships. The collection and analysis of primary and secondary data would enable an increase in knowledge. The research also involves and connects ideas for better understanding of cause and effect relationship (Flick, 2015). The causal research is a conclusive research in which the relationship between employee productivity and organizational effectiveness is determined with the implementation of ERP systems. The research design involves the possible factors that would affect the IT systems in an organization.
Data Sources and Collection Techniques
Data for conducting this research is collected from primary and secondary sources. The primary source of data is collected through interviews. 10 respondents are chosen for the interview and they shall be given a duration of 10 minutes each. Secondary data is collected through published journals, books and articles for comparing data and discussion with other organizations (Blumberg, Cooper & Schindler, 2014). The researcher shall explore the organizations that have implemented ERP systems and have successful processes.
Research Method
The research method can be two types depending on the type of data used in the research study. They are quantitative research method and qualitative research method. Qualitative method is chosen for conducting this research as only the qualitative data will be sued for the completion of the research study. The qualitative data will be collected from both the primary and secondary data sources available in the area of the research topic. The topic is to find the ways in which ERP implementation can add value to the organization. The aims of this paper require gaining understanding of motivation, reasons and underlying opinions. The qualitative method would help in developing ideas and solving problems (Panneerselvam, 2014). The results of this research are descriptive rather than predictive.
Research Approach
There are two types of research approaches that can be used in the academic research works. They are deductive and inductive approach. Inductive approach is used for developing new theories or models regarding the research topic. On the other hand, the deductive method is used for the analysis of the existing theories and models by comparing with the present data. Deductive approach of research is followed in this research paper as it is aimed at testing theoretical studies. This will be the best option for the research work as there is no requirement of developing new theories. The researcher shall also choose out of the philosophy of Realism and Interpretivism (Neuman & Robson, 2012). It is not possible for the researcher to collect all live records from the business organizations. The positivism philosophical theory shall help in interpreting results through logic and reasoning.
Sampling is the process of selecting a set of population from the total population available in the target population of the research study. There are two types of sampling techniques available in the area of the academic research work. They are probability sampling technique and non probability sampling technique. In this case, the probability sampling technique will be used for selecting the sample population of the research work. The findings are obtained from the 10 respondents as general analysis and discussion (Anfara & Mertz, 2014). The selection of respondents is random and every participant has an equal chance of getting selected. The simple random process of the probability sampling technique will be used for completing the research work.
The research was conducted by asking a few questions to the participants. A copy of questionnaire is attached in the Appendix.
For the first question, the respondents answered that the goals and objectives of ERP implementation is to simplify business processes. The respondents say that it helps them in knowing real time information about business strategies. The system is found very efficient in controlling and managing organizations. ERP enhances operational processes and maximizes return on the investment.
For listing the critical success factors for ERP, the critical success factors were states as top management support, proper planning, appropriate risk management, project management, changing culture acceptance, clarity of goals and objectives, effective communication, project team competence and good leadership.
The participants gave a positive response when they were asked about the positive effects of ERP implementation. The respondents gave a positive response and stated that ERP shall bring positive changes in the organization. The business processes shall improve with the ERP implementation.
The top management commitment is necessary for the success of ERP as they support necessary human resources. The respondents further stated that the senior management understand the role and necessary requirements for driving a project. They also motivate the employees to accept change in the organization.
The respondents stated that resistance to change is one of the significant factors to ERP implementation. The first challenge with implementing ERP software is to know what processes or systems should be integrated, and which ones shouldn’t. It is difficult to know where integrating systems in an organization can gain a competitive advantage and where it will hinder the organization’s workflow. Another challenge of the ERP introduction is the management of the employees. The older employees of the business organizations may face some problems regarding the operations of the IT tools of the ERP system.
The respondents stated that ERP provides a fully integrated platform that helps in analyzing, monitoring and conducting data-driven tasks. The detailed reports provide easy access to vital business data for tracking organizational productivity. The ERP system will be able to handle all the organizational operations through a single system. This will be helpful for the employee management or job scheduling. All the important data will be saved in the data base of the system. This will help the decision makers of the company to take the superior decisions by considering all the important factors and information.
The respondents stated that the supply chain management significantly improves with ERP implementation. Therefore, with timely acknowledgement and delivery, customer loyalty and retention increases. The ERP system will help the managers of the business organizations to manage the employees and different types of business organizations in less time.
The results and findings based on the questionnaire were conducted for which all the respondents answered in favour of implementing ERP to increase value at the organization. The ability of the ERP system is to provide accurate information across different business functions. For instance, before ERP implementation, a customer had to follow a paper trail across various departments once the customer placed order (Kanellou & Spathis, 2013). The process lead to delays and errors and the goods could not be shipped. However, after the implementation of ERP, the processes would be simplified as the application would check inventory, places order and issues invoice with the finance team. The demand and supply can be understood in a better manner as the application helps in anticipating requirements at all levels. The lead time, overall satisfaction and cost can be controlled (Hwang, Yang, & Hong, 2015).
The advantage of ERP is that the people in different departments can see same and updated relevant information. Due to centralized nature, the organizations can track inventory levels (Madapusi & D’Souza, 2012). The organizations can control their working capital requirements. As implementation of ERP changes the way people work, top management has to be proactive in explaining the reasons for, and how the organization as a whole will benefit from the implementation. A proper change management initiative can lower the potential risk of an ERP implementation, through a comprehensive communication and training process (Méxas et al., 2013).
Human resource management of the business organizations is a challenging job to the HR managers. Especially the job scheduling and roster marinating in the large business organization is very difficult to the managers of the organizations. In this context, the system will help to assigning job to the employees in a systematic way. The managers will be able to maintain the schedule regarding the job assigning and roster managing very easily by the use of the ERP system (Hwang, Yang & Hong, 2015). In this way, the business organization will be able to ensure that the employees will be handled efficiently and the attrition rate will be minimized by the use of the new ERP system.
The ERP system will also be able to handle the information regarding the previous sales and profit level of the business organizations. These data will be efficiently handled by the use of the ERP system. The analysis of the data will help the business organizations to analyze the present status of the business operations and sells of the business organizations. The decisions regarding the future business operations and choice of the product lines will be easier by the analysis of the data through the use of the new ERP system (Madapusi & D’Souza, 2012). This will ensure greater profit of the business organizations in future.
As per the data gathered in the data collection of the research study, it has been found that the older employees of the business organization may face some problem regarding the operations of the system as the new ERP system will consist of advance tool of the information technology. In this context, the employees should be properly trained about the use of the system. If any misunderstanding remains in the understanding of the system operations, then the employees may create huge problems in the operations of the business organizations (Rahnavard & Bozorgkhou, 2014). The problem can be solved by introducing an IT team for train the employees of the organization about the new ERP system of the company.
Three common approaches are discovered to implement a new ERP system. Firstly, it can be implemented by enabling it in the full enterprise. It is difficult for an organization to accept changes by accepting new software system. There is a need to provide training to the employees. Secondly, the organization can also implement ERP unit by unit. One a unit accepts the ERP implementation, the other departments or units shall accept the system. Lastly, the organization can start implementing different modules for manufacturing, finance, delivery or various others. Sufficient time must be devoted for training the employees and let them get comfortable with the ERP implementation (Hwang, Yang, & Hong, 2015).
The respondents of the research study have replied that the new ERP system will help the managers or the decision makers of the company. The system will have a secure data base, in which all the important data of the company will be stored. The ERP system will be able to analyze all the required information by fetching the data from the data base of the system. Therefore, whenever any new decision has to be taken, the system will analyze all the required information (Sumner, 2011). This will ensure the high level of success by taking the most superior decisions regarding the business operations of the company.
Conclusion
Summary
The above research report identifies how organisation can create business value through the implementation and use of enterprises system. This paper contributes to a better understanding of competitive advantage as it covers the value and benefits it can add to an organization. ERP integrates various business functions and makes processes faster and efficient. ERP makes Information Technology useful as it helps in addressing fluctuating demands. The paper can be used by universities and organizations as it puts together the value, benefits and risks involved with ERP implementation. The software package helps in integrating complete range of functions and business processes from a single information and IT architecture. The software automates financial supply chain management and accounting by depending insight and tightening control of finances. 10 respondents are chosen for the interview and they shall be given a duration of 10 minutes each.
Limitations
The research had certain limitations as there is no way to analyze the truthfulness of the respondents. The question may be differently interpreted by every respondent. Only 10 respondents could be covered due to time-constraints. No elaborate research could be undertaken by descriptive interviews. The explanations or reasons of responses could not be interviewed due to limited time.
Directions for Future Research
Organizations must be implemented with ERP systems and a longitudinal study may be conducted in organization after a gap of one year. The differences and value added in the business processes shall be evaluated.
References
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