Course Code- MIS100 Foundations of Information Systems
The concept of having a proper communication system or information transferring system within an organisation is age-old and without which there cannot be a smooth running a business operation. The research report will be considered in information related to the new format of information transfer within an organisation Breaking the general information silo of an organisation is critical and to understand the best possible way to minimise the problem will be another objective. The following work will be considering information dissemination to the Executive leadership team of Albany bakeries. The organisation has decided to change the information silo to a new format. The objective of this report will include information related to the ERP system of transferring information from one stage of management to another.
The following research will include information related to enterprise resource planning that forms an important aspect disseminating information from one management level to another management level. It was noticed that the information Silo utilised by the reflected organisation only constituted vertical Information sharing their work issues of horizontal and direct contact with top-level management. The work will include information and concepts of enterprise resource planning that will certainly help the selected organisation to reflect on the changes required for initialising the new Information sharing method. The concept of enterprise resource planning that includes the planning of material, customers and employees will be descriptively evaluated in the following report work. The report to be provided to the joint leadership of Albany Bakeries would suffice their query in understanding the way to bring new changes and the importance of ERP.
The following report would consider providing information related to the objective that enterprise resource planning systems have and that are similar to other functional areas of information systems. It will also include the benefits and limitations of its system and recommend the way or module that could be utilised for implementing. Different models available for implementing enterprise resource planning and identifying their benefits and drawbacks will be evaluated in the following research work. On changing the information transfer system from information silo to Enterprise resource planning there will be an impacted organisational department which will also be identified in the following report work.
Major objectives of an ERP system and how are they similar or different to a Functional Area Information System
ERP system is a single complete system of managing different business operations and processes through a single system. This means a complete amalgamation and integration of management for different operations conducted by the firm. Now the major objectives of ERP system is as follows:
- To incorporate better-controlling tools: Now ERP system is single system management that helps in inducing more control over the operational activities of the firm. In traditional management systems the management operations are divided hence the control is also divided. Through the help of using an ERP system, Albany Bakeries can increase the amount of control that the firm wants to exercise over the different operations of the firm.
- To manage cost: Cost is incurred in management activities is a cost that every company wants to decrease hence a major objective of implementing an ERP system is to cut down cost so that the firm incurs lower expenses and has a higher profit margin. Hence financial objectives are also there behind the implementation of the ERP system within the company (Nwankpa, 2015).
- To increase security: Now when there is a divided management system there are high risks within the security of the company's resources be it any type of resources. This is because there is a high chance of corruption and risks of data leakage associated with device management systems. Hence the objective of the ERP system is to make the management system more secure in nature by implying single system management.
- To enhance the decision-making process: Now in a divided management system or in the traditional management system decisions are made as per the information received by separate divisional managers. In such a way the information gathering process takes a lot of time. Now the objective of the ERP system is to decrease the time taken in gathering information so that the decision-making process is enhanced within the firm.
Looking at the description above it can be said that the ERP system and the functional area information system are two separate ways of managing a company's resources and operations. Functional area information is focused on divisional management whereas ERP systems are focused on single management systems. The information generated through the Functional area information system is provided to the middle-level manager for the purpose of planning and managing whereas in ERP system the following is provided to the upper level as well as the middle-level management in order to operate the Albany Bakeries business activities (Kilic, Zaim & Delen, 2015).
Benefits and limitations of ERP systems
There are both advantages and disadvantages of any system and so that the following is given for the ERP system. The advantages or benefits of an ERP system are given below:
- Optimization of business process: As stated above ERP system for management is a system which single-handedly helps the firm to conduct their business operations. In this way, the business process becomes more efficient and optimization of the business activities is done to make sure that the firm is efficiently operating in their business. Now, this is done by eliminating waste or unnecessary business operations. In this way, the firm is able to become more efficient within their operational activities.
- Accurate and timely access to information required: Now ERP system is a system which is known for being efficient while storing and rendering data and information needed by the management of the firm in order to conduct the business operations. Through the use of ERP systems, the management of Albany Bakeries can easily access data and information which is needed by them in order to collect data and information for the decision-making process or for planning and operating the business of the firm (Lin, Zhao & Wei, 2014).
- Reduction of time and cost: ERP system is a single system of management can be stated as an efficient system through which a company can decrease the time and cost incurred within the management activities of the firm. The operational cost and time incurred can be reduced by the management through the use of this system. This is the major advantage of using the ERP system within the company so that the operational office of the firm is increased.
- Better control and performance measurement system: ERP system can also be used in order to effectively control and measure the performance of the company's employees in order to derive better efficiency from the work operations of the firm. This is because in this method the collection and storage of data can be done easily using which the company can analyze the performance of the workforce and control the following in order to generate better performance.
Now there are also some limitations that are related to the ERP system and they are as follows;
- Costly system: The system may decrease cost after its implementation but the cost of implementation is very high. This is because the system is a modern one and requires a high cost of implementation that that of the traditional one. Thus this is a major disadvantage that is related to this system.
- Requires expertise: Now as the system is new every employee within the system is not able to effectively operate the system. Hence there is a requirement of professionals that are able to operate the system otherwise the system will not be able to deliver what it is expected to deliver and this is a major limitation that is related to the ERP system (Rajan & Baral, 2015).
- Resistance: Now employees may resist the change in the system because the system will be more stringent. Hence employee resistance is a common behaviour seen in the workforce through the implementation of this system within Albany Bakeries.
Core modules of ERP systems and explaining what would the extended modules and what would be recommended first for implementation
There are 8 core ERP module that is there within the ERP system and it is as follows;
- Sales and marketing module: This module of ERP helps the firm in managing sales and marketing activities that help in managing data of sales such as customer order, pending sales, invoices and quotations.
- CRM module: CRM module of ERP helps the firm in keeping a good customer relationship by storing information and data like customer feedback, queries, customer demographics and details to conduct better communication with the customers (Zach, Munkvold & Olsen, 2014).
- Finance module: Financial module of ERP helps firms in managing their financial resources in an evident manner by keeping records of the following that include cash inflow and outflow, Taxes, expenses, capitals and other financial data.
- Manufacturing module: Manufacturing module of ERP helps the firm to manage the manufacturing process by managing data for physical resources, raw materials, stock, finished goods and goods in progress.
- Human resource module: Human resource module of ERP helps the firm in managing human resource of the firm by managing data and information like salaries, payroll, number of employees, daily wages, leaves and working hours.
- Supply chain module: Supply chain module of ERP helps the firm in managing the supply chain of the firm by managing data and information like total supplier, supplier details, feedback and demographics.
- Purchasing module: Purchasing module of ERP helps the firm in managing the purchase of the firm by managing data and information like total purchase, orders details, creditors, demographics and details.
- Project management module: Project management module of ERP helps the firm in managing projects by managing data and information like project objective, detail, resources and others (Elkhani, Soltani & Ahmad, 2014).
Looking at the requirements of Albany Bakeries the firm needs to have an ERP module is Sales and marketing, financial management, Human resource and manufacturing.
Different available implementation models that the business can consider for their ERP implementation their benefits and drawbacks and recommending and which one would be recommended
Enterprise resource planning consists of five different modules of implementation which needs to be evaluated properly by the management of the organisation before implementing. The five models of enterprise resource planning are financial management, supply chain management, inventory management, CRM and human resource. Keeping in mind the general effect of Albany bakeries, there will be requirements for both supply chain management and financial management (Ali & Miller, 2017). The leadership Board of the bakeries includes mostly Managers from finance and accounting, information and marketing. Therefore, to ensure that the information transferred among them gets easily decimated to another management level there is an urgent requirement for Breaking the information silo, that is generally in use and to bring up enterprise resource planning.
Advantage of financial decision-making module under enterprise resource planning includes increased efficiency level of operation that helps in understanding the numbers of business value. It allows for the proper balance between profit maximization and risk minimization. Being a group of bakeries, it is important that a proper endorsement of decision making is followed up which can be supported through the financial planning under the enterprise resource planning system (Deshmukh & Kumar, 2016).
There will be limitations that include rigidity within the Enterprise. Rigidity within the enterprise would include the strict following of guidance provided under the financial management of enterprise resource planning. Providing a standard in accounting terms for a bakery would also bring challenges in terms of coping. The standards of financial planning could also lead to inappropriate bureaucracy and loss of revenue.
When identifying the advantages of supply chain management under enterprise resource planning for the organisation selected it can be seen that there will be better control of the operation which helps in increasing the satisfaction of the leader. Proper supply chain management implementation of enterprise resource planning the competitiveness of reaching New Market increases and a profitability ratio also gets boosted (Ranjan, Jha & Pal, 2016).
However, they are aspects that need to be kept in mind when implementing supply chain management for enterprise resource planning. Directorate of departmental was which may lead to inappropriate planning, manufacturing and information technology dissemination.
Keeping in mind the above pros and cons of different models of enterprise resource planning that can be selected for implementation it is obvious that none of the above-selected models can be left out because the group of bakeries needs a proper leadership as well as the profitability ratio to run in the distant future with successful growth.
Identifying the functional departments that are likely to be impacted in the business as they transition to a world where ERP supports cross-functional and cross-departmental processes
Implementation of new changes within an organisation is certainly going to impact the different department. However, as per the selected organisation which is a group of bakeries, there are certain changes that need to be kept in mind so that the transition to a new format of Information sharing through enterprise resource planning does not hamper the general operation.
Departments which are going to be directly impacted both positively and advert 3 are the departments of Finance and department of production. Department of Finance will be directly impacted as there will be the implementation of the financial management system under the model of enterprise resource planning (Simmonds, Tadesse & Murthy, 2018). Enterprise resource planning will be the centre of challenges to be evaluated by the management of the bakeries. Leadership quality that directly impacts the operation of an organisation also will get tested with the new implementation of Information sharing system. The leadership among the bakeries will get tested with the new implementation of financial management to manage resources as well as finance of the bakeries for future prospect. The transferring of information to judge the way how the bakeries will be dealing with economic challenges will also be impacted by the implementation of financial management under Enterprise resource planning. Other than the financial department Production department will usually get impacted due to the change in the supply chain management system under enterprise resource planning. Resources generally gathered for the bakeries are targeted for the minimising of risk and maximizing of the profit. It clearly gives a dilemma among the management to utilise the resources optimally (Holmberg & Johansson, 2017).
Concluding in the light of the above context it can be said that the use of ERP systems in Albany Bakeries is very important in order to make the management more efficient in nature. This will help the firm in effectively managing different aspects and operations of the business through a single system operation. The decision-making process will be benefited through the use of this system and the overall operational efficiency of the firm. It is to be mentioned that through effective use of this system the company will be able to cut down management cost and make the management operations of the firm cost-efficient in nature.
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