BISY2005 Enterprise System Its Significance And Principle Driver For Adopting ES Assessment 1 Answer

Answer :

Enterprise Systems

Introduction 

An Enterprise resource planning (ERP) or also known as enterprise system is the cross-functional system of information that offers company-wide integration and coordination of the critical business processes along with helping within planning resources of the corporate. It is the computer software utilized to meet the requirement of the corporate rather than an individual user. This essay will undertake a detailed demonstration of the enterprise system to ultimately discuss its significance and principle drivers for a business adopting ES. The diverse manner in which ERP or enterprise systems contribute towards better organizational performance and measurement of such contribution will also be undertaken. Later, the organizational change administration consideration critical for effective adaptation of the enterprise system will be discussed in brief.

1. Discuss the principal drivers behind businesses adopting Enterprise Systems 

The enterprise system has been the large scale software application packages that support the company in business processes, information flow, reporting, and data analytics. The system allows the company to effectively decrease its operational cost of information technology and minimize manual inputs of data. The ERP or enterprise system has the ability to replace several independent systems which are accountable for progressing data with the aim of supporting particular business function or processes.  

At present, the business enterprises have improved their reliance over the suppliers. Each and all aspects of the business need procurement. Additionally, every need of the corporate is linked to the suppliers that generate the requirement for administrating supplies relation, information, contract, and following several regulations. The business needs an effective supply chain administration system for the reason to implement a productive supply chain and operate with the idea to realize the profitable value for the amount invested through supplier evaluation of performance, cost, and risk.  

The four models of enterprise system establishment have been recognized from the analysis that includes third-party implementers vs vendor implementers, out-of-box vs heavy customization, best-of-breed vs traditional and upgrades, new or replace model (Gupta et al. 2018). All these models have been the significant drivers motivating ES adaptation. It is found that the consultant implementer or third-party found responsible for administrating the ES projects. The drivers of this trend have been vendors to be driven. Within the administrating establishment procedure, the vendors are adding extra revenue sources, particularly during licensing incomes are reducing. Gupta et al. (2018) argued that ES vendors at current emphasizing services to build an income, clients responding well due to overall costs might be decreased effectively. The second drivers of adopting ES are consistent increments within mid-marketplace ES. The enterprise system vendors are targeting corporate that are highly conservative, less experienced within administrating threats along with complexities of IS establishment projects. The future growth within third-party ES adaptation markets is generated through ES-hardware vendors partnering with the consulting organization to enhance their involvement.  

The increase in high complexity and cost of effective customization method driven by the concern of risk, expenditure business may afford, the adaptation of ES are driven. The out-of-box and heavy customization decision have been huge implication over the change administration tactics which accompanies the adaptation of ES (Alomar 2018). The alignment between business strategies and ERP, successful ERP project management, and business function modification has fostered by adaptation noted to allow elements of advantages of ERP. Alomar (2018) opined that benefits related to improved efficiency, customer service, and decreased expenditure only help an organization adopting ERP to become competitive within the sector. The enterprise system offering cost advantage as the main element for any business has triggered adaptation of it as heavy customization implementations methodologies and products. The third drivers of ES adaptation are technological environment consistently upgrading, replaced, add-ons, or becoming new. It has led the adaptation of advanced ES systems to replace the older version to improve business efficiency. Kiran and Reddy (2019) argued that upgraded ES adaptation are not regarded as trivial practice because of several times, the functionality is altered. The ES that is cheaper with easiness to maintain and configure is heavily adopted. The drivers of ERP adaptation has also been their capability to sustain the legacy application supporting the major segments of the business needs. 

The fourth drivers of ES adaptation are the best-of-breed vs traditional implementation model. The enterprise system adaptation at present is mainly derived in relation to the best-of-breed establishment in which the business is integrating ES for better CRM or customer relationship management, business intelligence, and data warehousing. Wang and Lien (2019) contradicted that the traditional ES systems are still largely adopted by small to medium-size enterprises that are helping businesses to fulfill potential needs. The evaluation of four adaptation models depicted various drivers of present establishment practices. Initially, the improving attractiveness of the vendor-implementer model has been driven by the client's demand and service offered by vendors. Secondly, the out-of-the-box establishment tactics are adopted by several organizations due to spending constraints. Conversely, for specialized companies, such strategies may not be best. Thirdly, the current adaptation of enterprises is still derived from a mix of upgrades, new, add-ons along with replacing of current implementations. With the majority of the latest ES adaptation is occurring within SMEs, the enterprise systems adaptation actions within big corporate are emphasized on add-ons and upgrades (Rodrigues et al. 2016). The traditional ES adaptation still noted to dominate the latest implementations with best-of-breed models are considered in several add-ons, replacements, and upgrades. Moreover, the best-of-breed model found broadly accepted for the latest adaptation within niche industries.  

2. How do Enterprise Systems contribute to organizational performance and how do we measure such contributions? 

In large companies previously, a varying information system was utilized for different purposes of business function including marketing, production, sales, finance, or others. The business procedure within every corporate function was disparate and fails the ability to share information across diversified corporate members. It was hard for the executives or managers to gather the information or data fragmented in a different system to depict a complete scenario of corporate operation and take business-wide decisions. Mangin et al. (2015, October) explained the ERP or Enterprise system as the cross-functional data system offering corporate-wide integration and coordination. It contributes towards organizational performance in terms of increasing the seamless flow of information across the company. Additionally, the diverse business procedures from production, logistics, sales, human resources, and manufacturing have collaborated into the company-wide business operation.  

The enterprise system is mainly driven by an ERP software suit a group of a collaborative software module and a general centralized database. It is noted that the software module helps in increasing organizational performance by supporting basic business processes under various functional areas. In the process, the database stores information from and provides the data to several applications for supporting the interior business activities. The various business activities that are supported by ERP software involve cash management, general payable, ledger,  predicting personal management, time administration, payroll, billing, product pricing, and others. Kiarie and Wanyama (2017) added that the ERP software helps in increasing corporate performance with completely automatic business internal back-office practices including communication with consumers, other business partners, and suppliers. For the establishment of the enterprise system, the company requires recognizing business processes for becoming automated and later map those procedures towards the processes offered by the ERP system. The process requires a lot of efforts, however, the corporate might find the system not supporting the way that company's business activities work.  For this purpose, the customization of the software becomes critical to fulfilling the needs of the company (Kiarie and Wanyama 2017). In order to acquire maximum advantage from enterprise system software, the company must modify its manner of working in accordance with the business process of software irrespective of customizing it. In the market, there are several ERP software facilitated by various software vendors that offer distinctive benefits towards increasing organizational performance. The SAP, Oracle manufacturing, PeopleSoft, Triton, MFG/Pro, or others are some examples of ERP software. The several ways in which the enterprise system helps in improving organizational performance includes decreasing cost related to transaction processing, software, hardware along with IT support employees within a profitable manner. The system helps in communicating the important firm-wide data on the organizational performance to the managers across the company rapidly to ultimately allow them to make better decisions as well as at the correct time (Bai et al. 20118). ERP software implementation helps in creating a largely uniform corporate culture with each individual utilizing a common kind of information and processes to progress. The organizational performance improves in terms of efficiency and quality of consumer services, distribution, and production by incorporating the organization’s interior business processes within finance, sales, custom logistics, or others. Moreover, the enterprise system allows information visibility and transparency in the organization that in return provides several operations delivered by various departments thereby contributing positively towards the corporate performance.

The contribution offered by the enterprise system is often difficult to measure because of its complex nature. There are several measurements model which might be utilized for measuring the contribution. The priori model utilizes five different dimensions of organizational success including system quality, information quality, individual influence, satisfaction level, and organizational influence (Mukti and Rawani 2016). The results within priori probability are mainly not impacted by the prior results. One of the limitations of the respective model is that it is applied to the group of events as many real-world events are likely to be subjected to conditional probability to a certain degree. The priori probability is defined as the classical probability. The other model is known as the revised model having four quadrants namely system quality, organizational impact, information quality, and individual impact. The measurement of each of these dimensions offers an overview of corporate experience of adaptation of enterprise systems (Mukti and Rawani 2016). Additionally, the contribution of the enterprise system towards organizational performance might be measured within repeated and highest sales, consumer retention rate, and improved public image along with sales conversation standards. The organization’s position in comparison to its rivals, efficiency, and flexibility towards responding to changing conditions are also certain measurement criteria to understand the contribution of the ES to the corporate performance. 

3. What are the organizational change management considerations necessary for successful adoption of an Enterprise System? 

As the business-owner one may know that integrating the ERP Software solution would be a positive approach for the company. Chatzoglou et al. (2016) argued that organization is less informed than enterprise system implementation is not a simple transition and there lies the issue of inevitable resistance towards change by certain stakeholders within the organization. The people working in the organization might be hesitant towards embracing the newest approach of doing things. In order to address such issues, the adaptation of strategic organizational change management becomes critical that helps to improve the odds of success related to an enterprise system implementation project. The organizational change management or OCM offers the structure by which the corporate administers changes within processes, culture, or framework of the organization supporting employees to shift from the current practice of doing things to the new ones. Mondo and Musungwini (2019) discussed that OCM mitigates the individual engaged within the change that is taking place and how they would fit within the changes structure to confirm the successful establishment of ERP software. The several strategies that would help to ensure a smooth transition within an organization leading change is- 

 Planning: The written plan needs to be documented by the ES vendors and interior project team to outline every stage of implementation process including responsibilities, roles, communication plan, timelines, support strategies, and training schedules. The practice of highlighting procedures within the place and promoting best practices to deal with unexpected problems would ensure that the process steps ahead irrespective of difficulties that occur along the way. The project planning techniques or tools when effectively executed would serve as the roadmap for establishing an enterprise system and offers quicker routes to the ROI of the organization. 

Support and training: The support and ongoing training are critical for every user to obtain a technical knowledge of the latest software along with the need for investing efforts as well as adequate time. Mondo and Musungwini (2019) opined that supporting several training techniques is likely to confirm that every end-users are capable to acquire skills or learn by effectively using tactics that best fit for the employees learning style. The process of customizing training for every stage would help employees or users to acknowledge the way ES is related to their respective job roles or productivity. It would be critical to focus that support and training are ongoing process throughout the implementation as well as a continuous learning experience. 

Communication: The progressive, consistent, and frequent communication is significant to occur with the potential stakeholders of the organization through the establishment procedure. Ali and Miller (2017) discussed that the staff must be informed related to the reason for the organization adopting the ERP software system, explaining the ways it would particularly change their work projects and benefits the latest system would offer. With constantly updating information across the implementation stage, the staffs are encouraged to look for support and ask questions during, before, or after the procedure confirms active engagement.  All these communication tactics help in contributing to staff buy-in that is critical towards the success of the ES implementation project. 

Align leaders, mobilize and articulate the situation for change: It is important to clearly articulate the change in the environment across the organization. Ali and Miller (2017) contradicted that the leaders require motivating teams to interact project scope, implementation schedules and rollout strategies as the enterprise resource planning project is underway. The key aspects of the respective strategies include leadership acknowledges implementation tactics with clearly defined leadership actions to support the modification. The implementation teams are encouraged and staff for wider based activities by offering them with an authority to take decisions.  

Manage people, recognize risk and opportunity: It is important for the enterprise resource planning project teams to identify the risk and opportunity of the project. In here, the change management strategies and teams are placed to address any cultural modification the implementation is more likely to create (Kaaria and Njuguna 2019). The key aspects to address such issues are conducting people and organization readiness assessment to recognize the opportunity in the earliest stage with defining activities to realize those opportunities as well as mitigate risks. The ‘people’ threat mitigation progress would be monitored by undertaking post-implementation and mid-course checks. Moreover, the key stakeholders are recognized across the enterprise and business as well as implementing best practices for the adaptation.

Creating the future organization: The designing and developing the desired future business enterprise has also been important towards change management and enterprise resource planning. Kaaria and Njuguna (2019) determined the productive future organization stage involves evaluating job competency needs and redesigns for the latest environment. In this strategy, the current situation of the organization, departments, locations are analyzed in terms of business, people system, and processes. The development of transformation plans becomes critical to define responsibilities, timeframes, and actions to achieve the targeted environment. 

Conclusion 

The successful organizational change at the time of implementing an ERP system has been an outcome of various strategies. The technology implementation plan in collaboration with process implementation service teams has a guiding principle towards the successful implementation of the project. The enterprise system has been recognized as a wider scale application software that supports the company in business processes, information flow, reporting, and data analytics. The enterprise system effectively contributes for increasing organizational performance in terms of quality production, business efficiency, and decreased cost.