Discuss about the Integrated Information System Proposal of Auburn Wine Company.
Auburn Wine Company is a company that is situated in Clare which is operated by three brothers as partnership established in 1994. The company is a winery shop that is privately owned and has a Cellar Door. The Cellar Door is used to make most of all the sales of Auburn Wine Company. In the year 200, the wine selling company started its selling of wine directly to all the customers and the local outlets. Two new shops of wineries were built in Barossa Valley and the other in Barmera. The capacity of the Auburn Wine company was also expanded from 255,000 barrels that was sold in 2002 to an amount of 990,000 barrels in 2004 which was expanded to a great extend. The company added more additional capacities in next ten years. The current capacity of barrels that are sold by Auburn Wine Company is near about 2,486,000 barrels. The shop that was opened in Barossa Valley was established in 2004 was very successful. A plat of glass bottle in Port Adelaide was built by the company in 2006 and also and adjoining warehouse was also built. The future plan of AWC (Auburn Wine Company) for next five to six years is to increase the capacity of the additional purchases of wine and by adding some additional capacity to all the wineries that already exited in the company. By 2020, the company plans to double its revenue size if all the plan goes well.
The Auburn Wine Company is working for past twenty years and is the company is growing significantly. The initial setup for the Auburn Wine Company has already finished and the company is now focusing to streamline all the processes that are involved in company. It also enables a high rate growth of the company. As the services and branches of Auburn Wine Company were increasing tremendously, it was facing difficulties in managing the Information Technology (Powell 2013). So the company has identified the need of SAP as an Information Technology Tool that is very effective which serves the needs that are related to the processes and the systems.
The software that is necessary which integrates the system of financial accounting which manages the internal accounting is the Data Action Software in the Auburn Wine Company. This software is used to manage the internal accounting, invoicing and billing to customers who has different outfalls. The software is not integrated with any other departments in Auburn Wine Company which provides low integrity of information and also increases the changes of errors (Hsu, Yen and Chung 2015). The settlements and the tracking of all the payments receipts are done manually for the customers. This decreases the accuracy and also the settlements are delayed of the accounts against all the payments. There is no integrated tracking of payments and receipts to vendors and customers were available in the system that existed in the Auburn Wine Company. By using the SAP, the company will be able to enable all the payments and receipts that are automatically done by the tool of SAP.
The company does not have any international sales handling software which provides the company drawback in their expansion plan in future. The company is not able to keep a look on any of the international sales that were being expanded. But if the Auburn Wine Company uses the process of SAP, the company can keep an eye over all the activities that are done in the international sales and live tracking can be made by the marketing person and the sale force team of the company on their mobile phones or iPhones. This is done by Mobile SAP which enables to track the situation of the product and also control the inventory to give a tough competition in the market.
The company also lacks the availability of the dunning procedure which delays the receipts of all settlement amounts. The company sends manual reminders to all its customers for the payments that are to be done. This drawback of the company can also be removed by using SAP. Sap enables automatic reminders for the due payments which will be sent to all the customers via fax or emails.
The company has a procedure of net 30 terms of payment that are run by accounts of large customers or the resellers. A charge of about 5.5% interest is implemented to all the accounts of the customers or the resellers if there is a due amount which lasts for more than 21 days. The company also pays a discount of 2 percent if the payment is done within the seven days of the delivery. This procedure of the Auburn Wine Company performs all these calculations manually by a finance person who keeps all the track of the invoices that were created last month. After all the calculations are made, the discounts or interests that are implied on all the invoices are done through software of data action which is more time consuming and also requires more efforts by the finance person (Chang et al. 2015). When the company will implement SAP, all these works will be automatically done. An automatic report will be sent by system of SAP and will be delivered as fax or emails to the finance person that includes all invoices that were created last month. The software tracks automatically all the interests that are to be implemented if there is a due for more than 21 days and after calculating all the interest, the amount invoices are sent to the customers or the resellers. The calculation of all the discount rates that are given by the company also calculated automatically if the payment is done within seven days. All the manual efforts and the tracking can be done in a automatized way in implementing Sap which helps the company to save time and the efforts of its employees.
The inventory of raw materials which includes glass bottling plant is managed by the Pear tree software. This is separate software and does not integrate with other systems. To report any data related to bottle manufacturing are to be done manually which is extremely a difficult job to perform and requires skills to handle the Pear software. SAP can keep a track of such business processes that are held in the company related to all the raw materials. Using the SAP software does not need much skilled employee. Anyone can keep a track on the records using SAP software.
The methodology of SAP technology can be implemented through five phases. The five phases are as follows:
Phase 1: Phase 1 is the Project Preparation phase. The main purpose of this phase is to do the planning initially and also prepares the implementation of the project that is being prepared. High level meeting is performed in this phase with all the team members to decide the scope of project, project phases and procedures of the project, the team members that are to be selected as core, standards of the projects and finally sets up the environment that is required to built a project.
Phase 2: This involves the blueprint of the business. In this second phase of implementation, the project team comes to the company premises and understands the environment and the process of the business. The purpose of this phase is to achieve an understanding that is common for all the employees which informs the way about how to run the company business with SAP implementation. Detailed documentation of the preparation of all the results is gathered in the workshops. All the definition of the organization structure is also gathered in this phase. Definition of the organization change and the organization structure is performed in this phase of blueprint.
Phase 3: This is the realization phase. The process of business requirements that are based on Blueprint of the Business SAP system is the purpose of this phase. All the testing and configuration of the system is included in this phase. The user assistance training is provided in this realization phase which implements team to all the user of the Auburn Wine Company.
Phase 4: This is the final preparation phase. All the final preparation that includes testing, system management, activities of customer and end user training is done in final preparation phase (Chou et al. 2014). The open issues that are critical are served in this phase. A strategy plan is prepared in this phase which gives an idea about when to cut the legacy of the system and switches to SAP technology. All the details of when to take the inventory, invoicing and open deliveries are to be done. The shifting of master information from a legacy system to a SAP system is looked after in this system. If this phase is completed successfully, the company is ready to run the SAP technology in its business.
Phase 5: This is the last phase of implementing SAP. All the phases mentioned above are the offline phase (Ram, Corkindale and Wu 2013). All the works that are project oriented and environment of pre production is taken to live in this go love and support phase. When this phase is completed, all the processes are ready to work that are decided in the scope of the project. Until the system of Sap does not gets stable, the legacy system must be kept running by the company because if some failure occurs, then the company will have to face a high risk. After the project is published live, a support team is provided by the project team to support all the users to be given by the company. The support team helps to resolve the issues that are related to Information Technology which works on SAP.
The business suite of SAP is imposed of many applications of business software which allows the companies to execute and plan all the processes when they are saving the cost of operating on all the processes and also provides opportunities for the company to move to new businesses (Bernroider, Wong and Lai 2014). The Business Suite application of SAP is based on the platform of NetWeaver and also gives a support to the methods that are considered as best methods in all the processes of the business. The business suite also provides the business application that are integrated and all the functions from finance, assets management, product development, purchasing, marketing, production controlling and human resources. The integrated of applications that are consisted in the SAP Business Suite are as follows:
The Business Process Reengineering is a practice that enables to rethink and redesign the process of work that is to be done to support the mission of the company and also reduce the cost of the company (Sun, Ni and Lam 2015). The reengineering begins with high level assessment that deals with the mission of organization, customer needs and the strategic goals. By implementing the SAP in the company is to follow concept of all the reengineering process of business in the second phase. This helps the company to fit the gap of the process analysis and also improves and automates the processes in different departments to maximize the utilization of processes and resources. All the areas are covered that are not currently taken care of that includes the international sales which is ignored because there is a lack of enablement of the resources that are available in Information Technology area is very important in the expansion plan of the Auburn Wine Company.
The change of the company can be managed by the change management strategy that ensures a transition that is smooth that runs in the organization. The management of change works on people relationships, processes and also system relationships (Ravasan and Mansouri 2014). The change management helps to ensure the change of business processes and also accepts using of new systems. There are three steps for an effective change management.
The competitive advantages that are provided by the SAP are as follows:
Efficiency: The SAP ERP system discards all the processes that are repetitive and also reduces the need of entering information manually (Ahmad and Cuenca 2013). So it makes the company to streamline its process which helps as an advantage in the Competitive market.
Forecasting: The forecasts tools that are needed to create the forecast is given by the SAP enterprise resource planning. The information that is provided by the SAP system is very accurate and makes the business to create realistic estimate.
Collaboration: Collaboration in between the all the department of the company is very important to establish a market competition (Nour and Mouakket 2013). There should be collaboration in all the departments so that the data that is entered in the ERP system in a centralized way is consistent.
References
Nour, M.A. and Mouakket, S., 2013. A classification framework of critical success factors for ERP systems implementation: A multi-stakeholder perspective. In Competition, Strategy, and Modern Enterprise Information Systems (pp. 98-113). IGI Global.
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.
Ram, J., Wu, M.L. and Tagg, R., 2014. Competitive advantage from ERP projects: Examining the role of key implementation drivers. International Journal of Project Management, 32(4), pp.663-675.
Ravasan, A.Z. and Mansouri, T., 2014. A FCM-based dynamic modeling of ERP implementation critical failure factors. International Journal of Enterprise Information Systems (IJEIS), 10(1), pp.32-52.
Sun, H., Ni, W. and Lam, R., 2015. A step-by-step performance assessment and improvement method for ERP implementation: Action case studies in Chinese companies. Computers in Industry, 68, pp.40-52.
Galy, E. and Sauceda, M.J., 2014. Post-implementation practices of ERP systems and their relationship to financial performance. Information & Management, 51(3), pp.310-319.
Bernroider, E.W., Wong, C.W. and Lai, K.H., 2014. From dynamic capabilities to ERP enabled business improvements: The mediating effect of the implementation project. International Journal of Project Management, 32(2), pp.350-362.
Ram, J., Corkindale, D. and Wu, M.L., 2013. Implementation critical success factors (CSFs) for ERP: Do they contribute to implementation success and post-implementation performance?. International Journal of Production Economics, 144(1), pp.157-174.
Chou, H.W., Chang, H.H., Lin, Y.H. and Chou, S.B., 2014. Drivers and effects of post-implementation learning on ERP usage. Computers in Human Behavior, 35, pp.267-277.
Powell, D., Alfnes, E., Strandhagen, J.O. and Dreyer, H., 2013. The concurrent application of lean production and ERP: Towards an ERP-based lean implementation process. Computers in Industry, 64(3), pp.324-335.
Hsu, P.F., Yen, H.R. and Chung, J.C., 2015. Assessing ERP post-implementation success at the individual level: Revisiting the role of service quality. Information & Management, 52(8), pp.925-942.
Chang, B., Kuo, C., Wu, C.H. and Tzeng, G.H., 2015. Using Fuzzy Analytic Network Process to assess the risks in enterprise resource planning system implementation. Applied Soft Computing, 28, pp.196-207.
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