Question:
Discuss about the Business Characteristics and ERP Implementation.
A report based on the implementation of Enterprise resource planning in a manufacturing industry namely Amcor. It is being explained in this report the business processes and its requirements regarding the software which needs to be implemented. The ways which help in selection of vendors and software and how the systems requirements are matched with the software applications and functions. The level of efficiency is increased after adopting Enterprise resource planning as it lessened the time and costs incurred in it. Various potential threats and risks are associated with it and how Amcor have overcome with such risk and threats, provide mitigations to the same. Along with the report conclusion is provided to conclude all the facts and innovations done by Amcor after implementing Enterprise resource planning into their existing systems (Bradford, M., 2015).
An enterprise resource planning is a combined management system which covers various areas of an enterprise from Human Resources, Production department, Finance and Accounting department and Logistics. It brings the value to all the functional areas as mentioned above and organizes these operation processes, combined them in a way that the resources (material, workers, equipment, finances) are optimally utilized. It ensures smooth flow of information between processes through defined channels. Enterprise resource planning assures of one data base and one user interface handled by one application for all systems basically a multi-purpose application which provides multi-lingual facilities. Enterprise resource planning uses common data bases by systemized database management who covers all the functional areas and performs core activities which increases efficiency of the enterprise and improves quality of work. Enterprise resource planning can be customized according to the business process which fits in and help in making strategic decisions by managers to operate them in a profitable and efficient manner (Panayiotou, 2015).
A business process is a set of happenings linked with specific product or service which serves a particular goal. The task performed include the sequence of activities which convert input goods to the output goods for customers as specified. The factors involved in transforming input to one output adds value to the product. These factors are various processes present in a management namely operations, support and management. A certain objective consist of various activities required by the process and all these business processes work towards a common organization goal (Rajnoha., 2014)
In this digital economy, the need for manual work has lessened so far with the increase in productivity of an enterprise. After digitization the pressure of work has also increased to do more so the processes are optimized and designed in a way that it ensures smooth functioning and flow of information (Nour and Mouakket, 2013).
Amcor has outsourced software to speed up the IT development which allows business to make better and optimal decisions. Enterprise resource planning has helped Amcor implement the best of practices in various processes. Amcor follows one solution to harmonize the processes by adopting enterprise resource planning system. This system helps executive to estimate costs and the complex analytics to make a clear and accurate picture overall. It had shaped the way executive works with the IT systems. Digitization improves the efficiency of processes by saving much time and effort. Amcor has improved its cost efficiency in these recent years and worked smart for innovation which is must to compete in global market in technology terms. Enterprise resource planning helps Amcor to boost its growth even after facing challenges and the pressure of economy. Digitization helps speeding up the activities as compared to manual work done and results are more accurate. The issues regarding visibility and accuracy have been solved and enterprise resource planning has given quality assurance to manufacturing industry which is counted as an important aspect for industrial growth.
In the context of enterprise resource planning, there are requirements of business which needs to be fulfill in order to improve the efficiency of business as a whole. Business requirements gives an idea that a system works instead how it needs to be work, it describes the functions need to be followed and solutions to the issues arise in between. The requirements are to be defined as selection, implementation and optimization of the functions to manage the expectation that what exactly needs to be delivered and what not. It provides a framework to understand the aspects and make decisions for the betterment of the business to achieve the set goals. If ERP has been applied in past then it can be reviewed and renewed according to the need of the business, through the past experiences one can make sure it matches up the current requirements. The main purpose of the same is to make aware business of its goal to become a combined organization, where all the business processes work together for a common objective (Esteves, J.M., 2014).
The requirements will be gathered from the top level to the lower level rather than department wise which was an old technique of doing business. It does not consider the way where every department is working on the individual goals. Amcor business process’s requirements are an in-depth analysis of business models and strategic plans to propose the requirements and evaluate them in an efficient manner which proves to be beneficial in long term completion of company’s goals. Amcor works on a strategic objectives based on two priorities where primary goal is to satisfy customer and secondary be minimizing the costs. With minimizing costs, the savings can be utilized in other prospects to make quality at its best and that indirectly satisfy customers as today customer is all about quality of a product. Requirements are being evaluated on the basis of its post effects on all business processes and how it promotes the ultimate objective of a company to maintain the level of integration (Ram, Wu, and Tagg, 2014).
Gathering systems requirement for enterprise resource planning can be a complex task because of its intimidating nature. As invalid requirements can result in failures of enterprise resource planning implementation regarding costs and time involved. It is important to understand the needs of an organization system’s requirements and evaluate software accordingly. ERP software selection requires some understanding which ensures the alignment of product costs and business processes with the estimation of time. To gather the system requirements one can organize workshop guides which results in productive meetings where the expectations and questions are being asked and delivered that helps in anticipating the requirements lead to positive outcomes. After these workshops, allow an adequate time to think and collaborate the ideas about proper requirements and make decisions for a follow up. For these decisions there is a need for skilled and expertise personnel. As experts can make such critical decisions and involving right people for functional areas gives better evaluation results (Shukla, 2016). While designing ERP software, consultant should put forward all the possibilities and inefficiencies attached to it and considering all such possibilities a software can be designed for the sole purpose of meeting organizational objectives.
Amcor has developed various strategy to gather up the enterprise resource planning system requirements. The strategy named as requirement driven, solution driven and configuration driven strategies. Each of the strategy has its own strengths and weaknesses depending upon the process requirement where adequate time and costs standards are set. The strategy which match the requirements of that particular systems would be adopted. Amcor believes in gathering and developing requirements from different perspectives so that it covers all the areas well enough. This aspect of covering every area will help resolve conflicts if there any and ultimately lead to smooth functioning of system and timely delivery of products. And finally the result driven strategy helps recollecting the business results as desired (Fischer., 2017).
The selection of software and vendor is an important task for a company. The approach for selection must be clear with an open mind that it contributes to the organizational goals and compare the advantages that every software vendor comes with. The company needs a software from a renowned vendor who ensures of better quality which lead to proper utilization of resources and keeping in mind the time as well as costs involved. There are a few strategies which can be adopted in order to select software vendor. First there will be a list of vendors made according to the requirements of business. Then evaluation of software will be done but it requires thorough research, an in-depth analysis by questioning from vendor to make sure it supports the requirements of particular business. A vendor must show his concern regarding the requirements of a business process and take time to acknowledge the aspects, need of the business model. The add-ons and other functionalities are not as important as the core software is, so company should focus mainly on the basic software requirements of models and ignore there additional functionalities it brings as if it does not go with the company model the software is of no use there will be wastage of time and money (Niazi et al., 2016).
Amcor is been following a roadmap of evaluating vendor at the first place that whether the vendor is promised to be genuine and assured quality at a reasonable price. They focus more on the requisites rather than extra functionalities, the main aim of the software selected is to fulfill the requirements as per the business process and meet the organizational objectives. Amcor focuses on each department’s requirement for example technology department. IT department needs are up to date systems and integrated databases which support the existing systems and prove to be beneficial in terms of technology, time saving, lessen costs. At this stage where company is selecting software and genuine vendor the price thing should not matter much than the quality and right vendor (Khan and Azeem, 2014).
Amcor has taken stand in up keeping the innovative packaging solutions. After adopting digitization in their processes they have pounded on various ways to improve overall efficiency of their business.
It has provided flexible packaging for each and every product category, machines and equipment are implemented and software has been installed to lessen the workload on workers. When manual work is being decreased, the accuracy of results is increased with the increment of productivity. Enterprise resource planning provides visibility in the processes which helps in detecting errors if there any and resolved hand to hand. It reduces the time taken to resolve the issue on a later stage. Amcor struggles to continue with the innovative packaging and mark their success in technology driven market. Growth can be seen as it covers the bigger share in market (Schniederjans and Yadav, 2013).
IT has increased the competences and lead to improve quality and effectiveness of a product. Technology allows the fast processing of workflow in the organization. Automation basically decrease or replace the manual work which ultimately makes the business more efficient. Technology makes the process quicker than ever by reducing manual work also when technology has been added to all business processes it becomes a repetitive thing so there are less chances of errors that can occur while implementing technology to the models. The procedure to be followed in a process whether it’s an operation process or management process, repetitions of these procedures make work easier as there is no need to make changes every time when the whole process is being carried on. The main advantage it comes with is that time can be saved by doing the same tasks and reduce the chances of mistakes (Katerattanakul, Lee and Hong, 2014).
By implementing technology, production takes place in a short span of time as compare to work done manually. In the meantime production can be increased matching up to the demand and make possible for the workers to service or deliver their customers on time. All these activities ensures increase in efficiency and productivity of the business (Bradford, 2015).
Amcor has been following few strategies to improve its level of efficiency. It follows the web based management of projects which avoid managing paper based projects. This step would help in keeping the track and accessing the projects through computers and laptops or any device which is easier than accessing paper based document files. Amcor has automated the tasks to save time and money as there are many tasks that are performed repeatedly and automation helps completing those tasks in a lesser time. This organization has set their software that manages multiple users and assignment at a time and reduces the complexities arise in such situations where as if such situation arise in a manual operation process it will lead to failure of such projects. The implementation of technology helps in increasing the efficiency of the company by reducing costs and saving time (Leu and Lee, 2017).
The potential risks and data breaches involve in technology driven processes could be many. In the past years where information technology has taken a toll in the industry but challenged by various threats and risks. By implementing enterprise resource planning industries are facing risks comes with it. In Amcor there are a few risks namely, Data management risks where risks are associated with the conversion of data. To manage such conversion of data in processes, companies should test from time to time the programs. Another risk would be the technical risk while implementing Enterprise resource planning system into the process. The risks are associated where there is customization as the customization should be aligned with the existing system cycle in the business process. The most seen risk in companies are Security risk, the security user access should be effectively designed that no outside user is allowed to seek in (Risk, 2017).
These potential risks can be lessened if they are known ahead of the time. Engineers can address these risks way before implementing and keeping in mind these threats measures can be taken to resolve all the issues and risks. . There are predators and cyber criminals who would take advantage and work out for their own profit by stealing confidential information which is not supposed to be seen by any unauthorized person. It is hard to stay competitive as sometimes there is no clear vision as why enterprise resource planning is being enabled in the business there are no measurable goals which can lead to failure of the process management. Sometimes implementation of enterprise resource planning may not work out as user data interface is not friendly with the processes present in the management and it can be risky for a business. Evaluation is must before buying a software and match the requirements of the business model where it is implemented. It is necessary to involve users while choosing software and get their feedback on the same. There are risks involve while selecting the software, no every ERP software is a proven solution for a business. The application if not tested carefully may not function properly with the requirements of the business process and won’t be able to scale up the expectations for the growth of business. To make sure about the applications of a software, stakeholders should verify with the aspects that they are looking for and can escape from choosing the wrong software. When a software is being purchased it is tested by its specifications which is additional to the functionalities of the software and how vulnerable it is in security terms. Sometimes few of the applications won’t work with the existing system software and it can create risk while implementing those applications. By involving right personnel while selecting the software would reduce the risks (Verner et al., 2014)
Amcor focuses on the purpose that its Enterprise resource planning works on the huge collection of data and differentiate that data into categories. The categories are of two one which is for public and other is confidential to the authorized persons only it cannot be exposed to any other casual person. It plans appropriately in context to the resources required on a particular project. The resources are to be allocated based on the need of the process. The success of implementation of a software depends on the resources allocated and brings the best outcome of a project.
Conclusion
To conclude all the concepts and understanding about Enterprise resource planning implementation in manufacturing industry. A proper research is required in order to implement ERP in management system. There is a need for skilled and expertise personnel to apply the tactics and knowledge to get the aspects of the software. The requirements of the industry process are to be measured for systematic implementation of the software. The risks and threats involved in selecting the vendors and software are mentioned and proper care, attention, expertise should be applied while selecting software which meet the requirements of the business. Any software selected for the particular department or process should be aligned with the organizational objectives with the increase in level of efficiency. A system must ensure the time management and save costs as required. It should reveal effective strategy to reduce time, costs and manual work lead to increased productivity which would be beneficial for satisfying customers by delivering products on time. Technology advancements are countless in terms of business operations by making them effective and ahead of a time in the market where competition is at its peak. The updated software helps industries to grow more and acquire bigger shares in the market by achieving their goals. As the case study based on the renowned manufacturing industry Amcor has been taken that how it has adopted digitization to improve their packaging techniques and quality (Amcor.com, 2017).
They have applied enterprise resource planning into their existing systems matching to their requirements and followed the whole procedure to avoid any risk or threats involved in software. By adopting technology in their manufacturing operation they have innovated various products which are light in weight and panel less containers which require less material. This step has enabled them to use the resources optimally and assured quality products (Risk, E. 2017).
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