Enterprise Resource Planning System: A Case Study On Improving Processes And Performance Of Linfox

What is meant by an ERP system?

According to Glass (2020), Management Information System is a computer system which contains more than one software and hardware that provides the backbone of the operation of the organisation. MIS has the capability to collect information from various online platforms, analyses the information as well as reports the data for the decision making of the management (Glass 2020). Main motive of the Management Information System is to extract data from various types of data.

In this report, at first, definition of ERP system will be elaborated. After that, it will highlight regarding business value of ERP system of Linfox (Glass 2020). Then, this report will discuss regarding the working mechanism as well as cost of ERP system for Linfox. At the end, it will highlight regarding various challenges for the ERP systems of Linfox.

According to Aremu, Shahzad and Hassan (2020), Enterprise Resource Planning is a type of business process management software. It helps a company to use a software for integrated applications (Aremu, Shahzad and Hassan 2020). It helps to manage a business. It also automates many back office functionality related to the technology, services as well as human resources. This software is designed for using in large businesses. Sometimes it needs some groups to perform the customisation as well as analysis of data. ERP system also has the capability to perform the upgradation and deployment.

According to Chofreh et al. (2020), in contrast to that, small business ERP based applications are very lightweight as well as customized for specified business industry or vertical (Chofreh et al. 2020). Most of the organisations use the ERP software to replace the legacy system.

Enterprise Resource Planning has various advantages on context of business. These are as follows:

• According to Cowan and Eder (2020), Linfox Company can perform the simplification of the entire decision making of their business. It helps to save lots of time by applying all valuable information within a single system (Cowan and Eder 2020). It helps the Linfox Company to work within an automated framework which prevents the staffs of the company for performing the repetitive as well as mundane assignments.
• According to Essila (2020), Enterprise Resource Planning software helps the Linfox Company to grow because they eliminate some inefficiency in some business procedures. ERP software helps to increase the production to remove COGS (Essila 2020). It gives sufficient amount of time to the staffs of the Linfox to generate revenue for Linfox (getting a huge amount of sales, shipping out the orders in a faster rate and many others).
• According to He et al. (2020), Enterprise Resource Planning system helps to make a business more agile. In a continuous modification of business environment, respond to the change is very important. A good ERP system is very much flexible, scalable as well as modular to adopt the shifting market dynamics. It also provides the facility to adopt the modification of consumer needs to the Linfox Company. Initially, they have the ability to apply specific applications. It also helps to integrate the new features of the application when the business grows.
• According to Hignite, Margavio and Chin (2020), Enterprise Resource Planning system helps to enhance the security as well as accessibility while decreasing the risks as well as hardware costs by transforming the Enterprise Resource System to the cloud platform (Hignite, Margavio and Chin 2020). Transferring the ERP system to the cloud platform helps the Linfox Company tom perform scaling, upgrading as well as extending in a faster rate. It helps to enhance the visibility as well as accessibility of ERP system. It helps to take the entire advantage of the capabilities of ERP system.
• According to Hoxmeier and Lenk (2020), Enterprise Resource Planning helps to achieve a professional partner for the Linfox Company. When the company authority upgrades the Enterprise system, then the company gains the partnership of the ERP application provider (Hoxmeier and Lenk 2020). It also gets the entire support for becoming a community member.  
• According to Hung et al. (2020), Enterprise Resource Planning software generates effectiveness which helps the Linfox Company to make their business leaner as it grows. With the help of ERP system, Linfox Company has the capability to enhance their business without the presence of any Information Technology staffs or personnels (Hung et al. 2020). The expenditure of implementing the ERP based system is easily managed by the Return on Investment, which helps to make the business more flexible.
• When the Linfox Company upgrades themselves to an Enterprise Resource Planning system then the Linfox Company will get the help from the ERP vendors. According to Kashyap(2020), they may get all types of technical as well as training support from the service providers of Enterprise Resource Planning. They may offer community membership to the Linfox Company (Kashyap 2020). There are some Enterprise Resource Planning systems who have some dedicated group of users as well as communities that open up the whole networks of industry innovators as well as dynamic brands.
• According to Kulikovet al. (2020), an Enterprise Resource Planning System has the ability to reduce ineffectiveness, wasted resources and time. It also helps the Linfox Company to empower their business for making it flourish (Kulikov et al. 2020). If they are not ability to adjust the growing demand of the consumers because of their conventional Enterprise Resource Planning system then they can upgrade their ERP system to the latest one, so that they can realise their free growth of the potential.

Most popular example of Enterprise Resource Planning is the Oracle ERP Cloud.

According to Mahar et al. (2020), Oracle ERP Cloud helps to streamline the business operations as well as drives for automation for the manufacturing industry. With the help of streamlining procedure, all data is available at the central location of the software (Mahar et al. 2020). It has an entire visibility in all functionalities such as designing, development, procurement, production, inventory and many others. Any type of work force can perform the screening of the status in continuous manner. It is not at all dependent on any individual team. For example, planning group of the Linfox Company can screen the progress of production (Mahar et al. 2020). They inform the purchase and finance team regarding the importance of extra raw materials. It helps to provide the efficiency and improves the profit of the company. It also helps the Linfox Company to maintain the requirements of the consumer in an effective way. By using computerized procedures, the company additionally resolves the dependency on the manual procedures.

The Business Value of ERP System for Linfox.

According to Situmorang (2020), it helps to improve the development process and reduces the number of mistakes. It helps to enhance their production fundamentally.

According to Smith and Smith (2020), Oracle Cloud ERP is the best Enterprise Resource Planning System for the Linfox Company. It is a very efficient Enterprise Resource Planning system. It is developed to perform the streamline operation of enterprise business procedure of the Linfox Company. It is a robust platform which delivers the security, privacy, analytics and integration of the various tools (Smith and Smith 2020). It may help the Linfox Company to execute their business in a successful manner.

According to Wang et al. (2020), this software gives more than one ledgers, currencies, accounting standards as well as entities. These features help the Linfox Company to spread their business in the new markets. One of the most important software of Oracle ERP Cloud is Oracle Financial Cloud (Wang et al. 2020). It is an inclusive, integrated as well as scalable system offers a latest reporting solution. It is developed by using an analytical data model. It has the capability to generate accurate as well as consistent data for supporting the external report as well as the outside management.

According to Uddin et al. (2020), this software offers far reaching support for the global organisations within a large range of industries. Another module of this ERP software is the Oracle project financial management cloud. It is an enterprise based system for project based companies (Uddin et al. 2020). It will provide lots of information regarding the comprehensive management of finance of a project. It offers reliable project management software as well as the procedures that can be deployed in the ongoing ERP system or the Oracle Cloud Suite.

According to Situmorang (2020), Oracle ERP Cloud has a module named Procurement Cloud module. This module has a characteristics named self service portal. It will help the Linfox Company to provide flexible contract billing as well as supplier portal. It will help the Linfox Company to provide an easy integration with the suppliers. It will also help the company to implement different policies as well as management of supplier risk (Situmorang 2020). It will provide the facility of streamline operation for the source-to-pay procedure through social automation as well as collaboration while reducing the expenditures for achieving the higher margins.

According to Kulikov et al. (2020), in Oracle ERP Cloud, there is another module named Risk Management Cloud. It will help the Linfox Company to mange the financial compliance as well as perform the streamline operation (Kulikov et al. 2020). This module will provide the Linfox Company a secure as well as centralized risks control repository. Main target of this feature will to reduce the financial reporting risks.   

How does ERP system work for Linfox?

According to Kerr, Troth and Pickering (2020), ERP Tier I software are designed for providing the service of the Fortune thousand companies. Most of the portion of this software is complicated. These are designed to provide services to the large business organisations that have various departments (Kerr, Troth and Pickering 2020). For those companies, revenues are measured in terms of billions. It allows the consumers to work on a single function. This software has the capability to divide the assignment among more than one user. ERP Tier I solutions are very complicated among the tiers of ERP software vendors.

According to Kashyap (2020), ERP Tier II software is less costly than the ERP Tier I software. This software are well suited for the medium sized companies. They may have single or more than one location. In general, the requirements are less complicated than the tier I companies. But the level of complexity is varied quite a bit within this group. Due to this reason, it is found that many vertical market players are existed within the tier two category.

According to Jarmoszko and Gendron (2020), if a company selects highly verticalized solutions then it may work very well the organisation because it is most perfect solution for the company. If the ERP system is more verticalized then the size of the market will be smaller than previous (Jarmoszko and Gendron 2020). It makes them financially insecure. But horizontal ERP tier II systems are financially secure. It may have some third party involvement which helps to make up the missing complexity out of the box. These are very popular among medium sized company. These systems can be installed as well as supported by the local companies by local partners.

According to Ibrahim, Ali and Besar (2020), ERP tier III software does not provide the functionality like tier I and II. Many people do not want to say these systems as the ERP system. Tier III solutions have the small business running vertical line of business application having weak accounting applications. They have lesser amount TCO. These systems can be implemented very easily.

Linfox Company should use the tier I Enterprise Resource Planning Systems (such as Oracle ERP Cloud, SAP as well as many more). According to Hoxmeier and Lenk (2020), they are largest business company in Asia and they have different departments in their business such as accounts, marketing, manufacturing, finance, sales and many others. With the help of these systems, the company authority can divide their tasks among more than one employee (Hoxmeier and Lenk 2020). As they are planning for a significant amount of investment, so that tier I ERP system can be a great option for Linfox Company.

Leading ERP software and the best ones that suit the company needs

There are various challenges regarding the application of Enterprise Resource Planning System. These are as follows:

• ERP vendors

According to Hung et al. (2020), in today’s competitive world, the choice of the exact product is very important to achieve the estimated productions. There are more than five hundred Enterprise Resource Planning systems available in the market (Hung et al. 2020). If the Linfox Company wants to choose a perfect ERP based applications for their business, then they should verify their past track records as well as projects, industry vertical and experiences.

• Commitment from the higher management

According to Cowan and Eder (2020), senior managers of the Linfox Company may play a vital contribution for  implementation of Enterprise Resource Planning. Involvement of the senior managers is very important for the success of the application of Enterprise Resource Planning.

• Adequate training

According to Aremu, Shahzad and Hassan (2020), after the implementation of the ERP system, bitterness of the staffs is quite common. This may heavily degrade the production of the company (Aremu, Shahzad and Hassan 2020). Special training and motivation are very useful regarding. This helps the team to get familiar with the software.  

• Inadequate flexibility

If the ERP system is not adequately flexible, then the Linfox Company may adapt its procedures to suit the ERP for its assignment. This is a backward procedure for the Linfox Company. It may take a huge amount of time and resources which may not be worth for the business of the company. However, if the company selects correct software for their specified requirements, the company needs to ensure the seamless integration. For that reason, it reduces flexibility of the company.

• Expenditure for maintenance

According to Chofreh et al. (2020), all Enterprise Resource Planning systems need continuous maintenance. It also related to the associated maintenance expenditure. At the beginning, ERP system may be a cheap product, but if the company do not add the maintenance cost at the beginning then the Linfox Company needs to pay a lump sum amount of money for the purpose of maintenance (Chofreh et al. 2020). This is a reason, for properly vetting a vendor before implementing the ERP software.

Conclusion 

Management Information System mainly focuses on management of the information systems for providing efficiency regarding the effectiveness of strategic decision making. It may include various types of terms such as transaction processing, decision support system, executive information system or expert systems. This terminology is referred as the academic study of business as well as it has connections with other areas of business such as information systems, e-commerce, computer science and many more. The term is used repeatedly in some of these domains. As an academic discipline, management information system studies regarding the people, organisation, technology as well as relation among them. It is entirely related to the course named “Management Information System” as course curriculum in the business schools. MIS professionals have a huge demand in the industry. They help the companies to enhance their businesses, personnel, gadgets as well as procedure of business.

Cost of the ERP system for a large company such as Linfox

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