Enterprise Resource Planning: A Guide To Implementation For Apple Inc.

Business Process of Apple Inc.

Discuss about the ERP Stands For Enterprise Resource Planning.

Enterprise resource planning refers to the software that helps business to gain efficiency in their business process. ERP stands for enterprise resource planning system that helps an organization to automate their system in such a way that they gain advantage in the competitive environment. In a competitive environment, it is difficult for an organization to sustain their activities by using an ordinary business process. So, this process will help the manufacturing company in initiating the activities successfully in the target market (Ahmad, and Cuenca 2013).

Further, the below mentioned report provides a brief  information about the business process of the company, requirements of the business to adopt the software along with the requirement of the system to make use of this software in the organization. Furthermore, it also explains the selection of vendor and software for the Apple Inc. and the ways that explains that the company has successfully implemented this system in their process to increase the overall efficiency of the organization. The latter part of the report explains the level of efficiency of technology implementation, potential risks connected with the activities of the manufacturing company using the software and the mitigations to resolve these risks. It should be noted that in the current era, it has become the needs of the companies to make use of the ERP/ AIS software in the business operations so as to maintain their competence in the target market. As this system will adequately help the company in collaborating activities and completing them properly. More details about the report are discussed below:

Business process of all organizations varies according to the industry and the motive of each organization to represent them in the target market. Apple Inc. is regarded as one of the most prominent company in the IT industry of Australia that manufactures consumer electronic goods worldwide. Most famous products of the company are iPhone, iPad, MacBook etc. It should be noted that the company has maintained a reputable position in the market that helps in initiating sales repeatedly. However, it should be noted that in order to manage a large scale organization, the company needs to have an efficient process in use, but the company earlier used an orthodox business process management to initiate their operations in the market (Alavi, and Yoo 2015). Further, the below mentioned is the physical business process of the manufacturing organization Apple.

• Initially order is received by the company on the manual basis for which entry is made in the physical books of accounts by the employees of the company.
• Afterwards, the details of the transaction are recorded (cash or credit). After acquiring knowledge about the transaction, the employees then focus on looking for the balance in inventory and the available stock present with the organization.

Requirements for ERP System Implementation

After then, all the materials are prepared, packed and shipped by the employees of the organization. The employees themselves record the transactions of purchase and sales of the organization (Ali, and Miller 2017).

Further, it should be noted that these activities initiated of the organization were good till the time the ERP/ AIS system were not introduced in the environment. Now, the physical business process creates errors and issues for the organization in the external environment.

Evaluation of the requirements of the business with respect to the need of the ERP system in the organization so as to make the employees perform functions in an effective manner, it should be noted that the company needs to adequately open up to the innovative technology in the environment. The process has been now being used by most of the manufacturing organization present in the environment as it deviate the problems and brigs success for the organizations Al-Mashari, and Al-Mosheleh 2015).

Further, it should be noted that from the above mentioned process flowchart it can be easily evaluated that the company has many drawbacks in its process. The employees of the company perform all the functions of the manufacturing and operations process manually. This has become a burden for the employees that results in decrease in the level of efficiency. Apart from that, the company has hired some of the employees for repeated work like recording of the inventory present at the warehouse, this aspect results in paying heavy costs to the organization. Also the above mentioned system flow chart does not provides or increases the efficiency level of the different activities of the organization. As the company is present in the Information Technology industry, thus it is important for Apple Inc. to maintain their image by initiating such activities and efficiently innovate the manufacturing activities as well (Jinno, Abe, and Iizuka 2017).

The major requirement of the business process of the company is to reduce its costs and increase the sales of the company. The traditional business process of the company cannot provide them greater level of satisfaction as there is presence of many errors in the system and the process is very complex as well. Thus, it is the business requirement to make use of ERP system to achieve success in the target market. As the organization is vast and diversified in nature, so it should be noted that the manufacturing functions of the company are spread in different parts of the world. Thus, in order to manage all these activities, operate effectively, plan, develop, the company require one database. Use of single database will effectively help the company in organizing activities and achieving success in the market (Kulkarni, et. al., 2015).

Selection of Vendor and Software

It is not easy for the organization to implement the ERP system software in the business as it requires understanding, communication, efforts by all the employees of the organization. The system that is to be implemented in the organization requires many aspects from the organization as well. Thus, the system requirements from the company are discussed below:

Financial & Accounting: This aspect is one of the major requirements of the enterprise resource planning system as it is the only process that requires being used and implemented in the organization on a daily basis. Further, is there is presence in any error in the financial accounting of the company then it can directly affect to the image of the company in the external environment. With the help of this system, the organization can easily convert complex transactions into simpler ones. Also, the employees need not to record the repeated transactions on a daily basis as the system can easily add it on itself (Manthou, Stefanou, and Tigka 2015).

Material Management: With the help of the enterprise resource planning system, the organization can effectively manage the inventory in the organization. Inventory control and management is considered as one of the biggest task for the manufacturing unit as it requires the employees to calculate and record the stock. If any mistake occurs then the employees are liable to pay for it. Thus, in order to perform all the functions effectively without making any mistake, company should use this system. Further, it should be noted that it is the requirement of the system to gain access of all the materialistic data about the company and store it into the cloud (Silver 2017).

Production Management: While looking at the manufacturing aspect of the Apple Inc., it was noted that the company needs an adequate procedure with the help of which the management can function their activities in the external market according to the current demand. The ERP system of the company induces many steps that are important in the eyes of the organization as it helps them in fulfilling the organizational goals effectively. This aspect will help the company to manage the production and manufacturing activity by effectively collaborating all the functions and acquiring the inventory requirement as well. This process will adequately place the right amount of products in the market according to the demand and supply (Sudhaman, and Thangavel 2015).

Customer Service Management: This part of the process explains that the system used in the company requires managing the services that are directly related to the satisfaction level of the customers. The system should involve the post-sale services so as to increase the satisfaction level of the customers (Wease, et. al., 2018).

Successful Implementation of ERP System

Lastly, it should be noted that the system that is to be applied in the activities of Apple Inc. also requires various functions to be performed by the management of the company. The system requires the management to co-operate with new operations of the organization, the management should not resist to such changes present in the environment of the company instead they should welcome it with a positive approach in mind. Another requirement is that the management should start using thus process in their system once all the issues are solved because if the company introduces the process in the organization while there are issues in the system, then the ERP system would get close to fail (Sarno, Djeni, Mukhlash, And Sunaryono 2015).

Selection of software and vendor selection is very crucial aspect for the organization. The working of the organization is based on the process that they use in their business, so implementation of new ERP system will totally help them in turning the face of organization and inducing innovative activities in the business. It is the most important job for any organization to recognize the correct software and the right vendor for the organization. The right type of software will help the company to grow extensively in the market and selection of right type of vendor will help the company to attain proper after sale services as well. The selection of ERP software is a crucial decision as it requires huge investments and expensive automation decision for the company as well (Tarhini, Ammar, and Tarhini 2015). Thus, it should be noted that a wrong decision in this case can attract huge penalties for the organization. Further, in order to implement adequate software the company needs to initially analyze the internal capabilities and then look for the external features that can affect the installation of the ERP software in Apple Inc. (Tasevska, Damij, and Damij 2014).

In the process of selecting the adequate software and vendor, the company needs to look after the requirements of their business, the management needs to identify the flaws in the business that are currently hampering their growth in the external environment. Apple being present in IT industry needs to use software that represents their significant activities in the target market. Apart from that, the company also needs adequate software that implements the operational activities effectively. The selected software should collective organization all the manufacturing and operational activities in such a way that the activities of the business centralized and decentralized at the same time (Yeh, and Xu 2013). Also, when it comes to using the software many processes fails because they are not aligned to the interest of the organization, so the company should test all the options available on prior basis in order to implement the software in the business. The company should use the software that can easily optimized by the employees in the business process because if the management adopt a software that uses high technological application and the organization is unable to perform simple functions on time, then software is of no use for the organization (Laudon, and Laudon 2016).

Evaluation of Efficiency of the System Implementation

The process should eliminate the complexity of work for the employees and it should deliver its best use to the company so that organizational objective is easily achieved. Apart from the software, the vendor’s with which the company wants to buy the software also requires equal importance. The company not only buy the software with the vendor but they also undertake a contract with the vendor of software. As the organization would not use the software for just one time but they will use this process for a long term, also the cloud based software requires the assistance of vendor in the environment (Mittelstädt, Brauner, Blum, and Ziefle 2015). So, if the organization purchases software from the vendor that does not provide good after sale services, then even after attaining a good product the company would not be able to gain adequate satisfaction from the product. The vendor with which, the company Apple would form alliance should be a reliable organization that can adequately satisfy their requirements (Harmon 2014). Further, other aspects that the organization should consider while purchasing the software from the vendor are discussed below:

• After-sale services: The vendor with whom the company organizes the company should provide efficient after sale services to them. This will increase the satisfaction level of the organization and help them to effectively co-ordinate the software in the organization as well. Also, the contract should have flexible that can be easily complied by both the parties. The contract should also provide the terms of non-compliance of the cases.
• Certified company: The vendor with which the organization Apple should come into contract should be a verified vendor. The vendor should be reliable and should also provide expected services to the company in increase their satisfaction (Banerjee 2018).
• Fix then automate: Before selecting a vendor and software, the organization should initially fix the issues present in the system that many arise while using the software. While testing the software, the organization might various face various challenges, so the management should initially fix them and then use the software in the organization.

The company Apple uses SAP software to organize the activities in their business. This process effectively helps the organization in corporate accounting that decreases the stress of the employees in the organization. Further, it should be noted that there are various vendors present in the market but the company selected SAP organization to provide the software related services to the organization (Ake, et. al., 2016).

There are many ways with which the company used the software SAP to increase its profits in the market and gain appreciation as well. Further three of these ways are discussed below:

• Creating security for organization: This services software is used by organization to increase the security for the organization. The company started storing all the information in the cloud based software that decreased their threat of misplacing any price sensitive information. The process introduced various security tools that enhanced the business functions as well. The management used this software to store the information and actively record the transactions. With the help of this process, the management only displayed the personal and price sensitive information to the people who were authorized by the organization. The process the level of security in the organization. Leakage of one information can impact the image of the company in the external market, so the organization stores such information at places that can be accessed only few people (Dhar 2018). Also, it should be noted that the digitalization of this work reduced the number of people to whom the information is to be shared that increased the privacy for the company.

• Employee Productivity: It is one of the most crucial work for the business, the management of the organization needs to satisfy the employees so as to increase the efficiency of the organization in the external environment. Before introduction of SAP, the company used to induce the employees in regular periodical work, the employees used to manually record all the transactions in the books of accounts. But, this system eliminated the duplicacy of work and increased its accuracy as well. Thus, it should be noted that with the help of utilizing SAP, the employees reduced their workload with the help of this software (Kapp, Latham, and Ford-Latham 2016).
• Method of integration: The Company used the ERP software to integrate effective communication in the organization. The company increased informal communication by integrating various functions and centralizing various activities under one service system. With the help of this process, all the employees started using the software, now when all the employees worked on one software; it integrated various functions and eliminated the repetition of work as well. Also, the company effectively used the chain management program with the help of this process. The software connected a chai with the employees along with the suppliers that helped them in knowing various activities of these people (Marian 2017).

The level of efficiency achieved by the use of enterprise resource planning system in the organization can be determined by comparing the growth effectiveness and profitability of the organization with the past year data of the company. The level of effectiveness and efficiency in the organization rose with the use of ERP system in the organization by 25%. Before the implementation of this process, the employees were unable to achieve the expected margin of 25% of excellence in the company. But later with the introduction of this process, the company attained innovative measures to level up the effectiveness of the organization. Further, post implementation of this process, the strength of the organization doubled in the environment. With the introduction of enterprise resource planning, the company induced innovation in their internal process that helped them to use their resource and capabilities effectively. Resulting to which, the organization gained success in the target market. With the increasing level of satisfaction for the employees in the organization, the satisfaction of customers gradually increased that increased the market share of company in the external market (DeStefano, De Backer, and Moussiegt 2017).

Potential Risks and Mitigations for Apple Inc.

Further, it should be noted that the chances of errors for the organization also reduced. With the use of SAP enterprise resource planning system, the company increased the digital corporate accounting process. This process resulted in increased accuracy of the accounts of the company.

There are many risks that are connected with the process of use and adoption of ERP system in the organization. Further, these risks are discussed below:

• Selection of inadequate software: This is the biggest issue connected with the activities of the organization. As it is noted that the process of ERP system in the organization requires the company to change many aspect and openly welcome this process. So, in order to adequately install this process in the organization, the company needs to implement many changes an in case if the management mistakenly choose the wrong software for the business then it can hamper the growth of the company in the long term. As discussed above, it is very crucial decision for the organization to choose right type of software and vendor for the business. So, if Apple opts for software that does not match to their organization then it can negatively affect to the growth of the company (Porter, and Heppelmann 2014).
• Customization: The vendors give chance to the companies to customize the software according to their requirements of the business. All organization do get the perfect type of software that they actually want for their business resulting to which, they go for customization in the software packages provided by the vendors. The vendors do not hold accountability of the customized software it is not their formation but it is formed according to specific requirements of customers. So, in case if the software does not perform well then the company cannot turn back to the software vendor to rectify it. As the software was formed according to the requirements of company, thus the company cannot them hold liable for the cause.
• No clear vision: In the current environment, all organization uses the ERP software to grow efficiency of their business in the market. Most of the company uses this system because it is being used by all other organizations present in the environment, not because it is the need of their business. Thus, it should be noted that if the company do not have a definite motive implement this system then ERP would not its effectiveness.
• Exposure of sensitive data: The software uses various files of the organization to store them. Also, employees work on this software only, thus it should be noted that as all the data is stored on the software then data breach can aggressively hamper the growth of the company. Cyber threat increases for the organization as if this software is hacked then the hacker can easily gain information about all the past, present and future activities of the company (Ghosh, et. al., 2017).

Below-mentioned are the mitigations of the risks affected with the ERP system:

• The company should initiate the decision of purchasing software under the guidance of professional. They should take the risk of customizing the software only when they are totally sure about the outcomes of the process.
• The company should properly identify the needs and requirements of their business to apply the software in the organization. They should have a clear vision for the purpose of use of software before introducing it in the organization.
• The company should look for reliable and authentic vendor for their organization
• They should train the employees according to the new requirements of the software (Jinno, Abe, and Iizuka 2017).

Conclusion

Thus, in the limelight of above mentioned events, it should be noted that the enterprise resource planning software is very crucial asset for the organization. This process can act as an asset and it can affect the growth of the company as well. It is important for organizations to understand the requirements of their business and understand what kind of software they require for it. Further, the above mentioned analysis explained the ERP system of the company Apple. The report explains the advantages of the use of this process, risks related to it and the mitigations as well. Further, it should be noted that the ERP software enhances the internal performance of the organization that improves the external capabilities of the company automatically. With the help of the Sap ERP software, the company Apple adequately achieves success in the target market. Lastly, the company should use this software and innovate it according to the new requirements of organization in order to remain in competence.

References

Ahmad, M.M. and Cuenca, R.P., 2013. Critical success factors for ERP implementation in SMEs. Robotics and Computer-Integrated Manufacturing, 29(3), pp.104-111.

Ake, K., Clemons, J., Cubine, M. and Lilly, B., 2016. Information technology for manufacturing: reducing costs and expanding capabilities. CRC Press.

Alavi, M. and Yoo, Y., 2015. Use Information Technology for Organizational Change. Handbook of Principles of Organizational Behavior, pp.595-614.

Ali, M. and Miller, L., 2017. ERP system implementation in large enterprises–a systematic literature review. Journal of Enterprise Information Management, 30(4), pp.666-692.

Al-Mashari, M. and Al-Mosheleh, H., 2015, April. Enterprise Resource Planning of Business Process Systems. UK Academy for Information Systems (p. 2).

Banerjee, A., 2018. Blockchain Technology: Supply Chain Insights from ERP. Advances in Computers.

DeStefano, T., De Backer, K. and Moussiegt, L., 2017. Determinants of digital technology use by companies.

Dhar, S., 2018. Operational Route Accounting ERP Software Service: Benefits and Obstacles.

Ghosh, D., Mathew, A.J., Narayanan, R.B. and Ramarathinam, P., Microsoft Technology Licensing LLC, 2017. Web-based visual representation of a structured data solution. U.S. Patent 9,852,384.

Harmon, P., 2014. Business process change. Morgan Kaufmann.

Jinno, H., Abe, H. and Iizuka, K., 2017. Consideration of ERP Effectiveness: From the Perspective of ERP Implementation Policy and Operational Effectiveness. Information, 8(1), pp.14.

Kapp, K.M., Latham, W.F. and Ford-Latham, H., 2016. Integrated learning for ERP success: A learning requirements planning approach. CRC press.

Kim, J.D. and Jeong, H.E., 2017. Dynamics of Governance in IS Outsourced ERP Implementation: Case-Based Exploratory Study.

Kulkarni, A., Hegde, N., Sharma, M., Kulkarni, A.A., Hegde, N. and Sharma, M., 2015. Educational ERP systems in the market–a comparative study. International Journal of Innovative Research Science in Technology, 1.

Laudon, K.C. and Laudon, J.P., 2016. Management information system. Pearson Education India.

Manthou, V., Stefanou, C.J. and Tigka, K., 2015. The Evaluation of Business Performance in ERP Environments. Automated Enterprise Systems for Maximizing Business Performance, 88.

Marian, A.I., 2017. Some aspects of Supply Chain Risk Management Global Risks Map and Apple’s Approach to Risk Management. Quality-Access to Success, 18(160).

Mittelstädt, V., Brauner, P., Blum, M. and Ziefle, M., 2015. On the visual design of erp systems the–role of information complexity, presentation and human factors. Procedia Manufacturing, 3, pp.448-455.

Porter, M.E. and Heppelmann, J.E., 2014. How smart, connected products are transforming competition. Harvard Business Review, 92(11), pp.64-88.

Sarno, R., Djeni, C.A., Mukhlash, I. And Sunaryono, D., 2015. Developing A Workflow Management System For Enterprise Resource Planning. Journal Of Theoretical & Applied Information Technology, 72(3).

Silver, M.S., 2017. How You Store Information Affects How You Can Retrieve It: A Fundamental Principle for Business Students Studying Information Systems and Technology. American Journal of Business Education, 10(4), pp.127-142.

Sudhaman, P. and Thangavel, C., 2015. Efficiency analysis of ERP projects—software quality perspective. International Journal of Project Management, 33(4), pp.961-970.

Tarhini, A., Ammar, H. and Tarhini, T., 2015. Analysis of the critical success factors for enterprise resource planning implementation from stakeholders’ perspective: A systematic review. International Business Research, 8(4), p.25.

Tasevska, F., Damij, T. and Damij, N., 2014. Project planning practices based on enterprise resource planning systems in small and medium enterprises—A case study from the Republic of Macedonia. International journal of project management, 32(3), pp.529-539.

Wease, G., Boateng, K., Yu, C.J., Chan, L. and Barham, H., 2018. Technology Assessment: Cloud Service Adoption Decision. In Infrastructure and Technology Management (pp. 447-471). Springer, Cham.

Yeh, C.H. and Xu, Y., 2013. Managing critical success strategies for an enterprise resource planning project. European Journal of Operational Research, 230(3), pp.604-614