REFLECTION PAPER Business Process Integration and Enterprise Resource Planning Systems VINEETH LAL MANILAL7750110 Marlon D Nangle 1). Do you believe that an ERP System is needed for every business? Justify your answer For a typical business process in a manufacturing company ERP system is used to communicate and exchange data within the different departments in the business unit for the successful operation of an organization. This helps effective coordination, data exchange and communication within departments, also have a better communication between suppliers, customer and related people.
Implementing centralized system in a company helps different departments have access to data of many other department. The main advantages of ERP in an organization is that the sales team will have a real-time inventory information access to the product inventory. Through this time can be saved, revenue and customer satisfaction can be increased.
Thus, company can maintain the reputation. In ERP system, all departments update a central information system. It helps to reduce duplication and redundancy of data. Updates information of departments in real-time and also give control over different business procedures.ERP system is necessary because1). To integrate financial information: – it helps the top most officials like CEO and board of directors to understand current overall performance of the organization.
Through ERP system finance department, sales department and all other department have to show their own level of contribution to the total revenue. Through ERP it represents a single version of figure that cannot be questioned or duplicated. Since all the departments are using single database2). To integrate customer order: – through this system we have all information of customer order in one system other than spread out on different departments that cannot be accessed easily. By this organization can make a track on different orders and helps to coordinate and communicate about production, inventory and logistics in different location at the same time.3). To standardize and speed up business process: – for a manufacturing facility which is running more than one business unit. In which the company use the same widget for different methods.
By implementing ERP system, it helps to make a standard method like single integrated computer system. This will reflect on less time, more productivity and reduced labor cost.4). Reduce inventory: – ERP shows a clear picture of process flow and order fulfillment process with in the company, thus stock in hand can be reduced (WIP inventory) and the system also helps to reduce finished goods inventory in the warehouse. 5). Standardize HR information: – Implementing ERP system in an organization has multiple business units, it helps the HR to track employee time, coordinate employees benefits and services.
2). How is an ERP System related to a company’s Business Process? Business process is a collection of activities that takes one input and gives output, which add value to the customer. Customers can be either internal or external. Optimizing a business process is just generally for whole organization.
For instance, we can consider an automobile manufacturing plant. In a manufacturing facility, we need parts and labor. Here manufacturing the automobile part is the process. To get a product completed we need to purchase spare parts. So, purchasing of parts is procurement process. Procurement process is very important, since we need to have sufficient parts and raw materials for the continuous production. If the components are not available or short the production can’t be met. This may result to losing the customer and may leave a negative impression in the customer.
Thus, we are running out of stock it is known as stock out. To avoid such kind of situations we can maintain a safety stock, in other hand record keeping is an important thing to be considered. In a production facility, its needed to keep record of all customers and suppliers. Through the ERP system the purchasing department can observe the stock in hand and if needed they can order materials directly looking from the centralized system to avoid a situation like stock out.
The transactional details are recorded like how much quantity is produced, stock in hand, how much materials are purchased. This helps accounting department to calculate the profit and loss. ERP in the business process needed input from every department. Sometimes output from the one department is the input for next department to start their own work. Thus, ERP is needed in the organization to get all the information from one functional department is available for all the other department without having them to ask for it. This increases productivity, efficacy and make process very velar to everyone in the organization. When enquiries about a product to sales team to buy a product on urgent basis, the sales team has real time information access to the products in inventory. Which is updated by the inventory department.
In the centralized system, the sales team responds on time which result in increased revenue and customer satisfaction. In case purchase is required the sales team updates the centralized database. Planning department is auto updated by this process. The planning team checks the availability of parts required which is updated by inventory department. Thus, data duplication is eliminated and accurate data is made available. The service or floor team updates the manpower in the central database, which can be accessed by the HR department. Vendors can directly update their invoices to the centralized system which inform finance department about the payments.
Thus, the payments are made on time and helps to avoid legal actions. These is how ERP system is related to a company’s business process. 3). Provide 3 factors to address that you believe necessary for a successful ERP Implementation Team work and composition Cooperation and structure have been considered as one of the indispensable elements which were talked about by numerous researchers. ERP project group should comprise of good colleagues and the task supervisor who are with good knowledge, attitudes, capacities, and experiences.
The team should understand of both technologically competent and organizations business requirements. Training and Education for the workersEvery employee should get a training and have a good understanding about the enterprise resource planning and how it is going to impact on the company’s business process for the successful implementation of ERP system. Training and education given for the employees and executives to let them know what are the logic and idea of the enterprise resource planning system. Training all the members in the company to develop their skills and enhance knowledge, there by they can improve a better understanding of what they are preforming at the work and related functional areas in the organization. Companies are recommended to train every worker to make understand about how their work to certain areas in the business process and how one’s work is going to reflect in the new system.
Top management supportOne of the most important factor for the successful implementation of ERP is the support of top management. The top management should take a step forward for the fruitful implementation of ERP. The mission of the management should be in a way that it to make a domain for the execution of ERP and get desired outcomes.
Top level administrations are not only observed but also members. So, they play a role in the successful implementation of ERP system. Reference1) Ray hu – Critical success factors for ERP Implementation- September 5, 2016https://www.
linkedin.com/pulse/critical-success-factors-erp-implementation-ray-hu/ 2). INSIGHT PAPER • 6.2.2014https://www.trexin.com/key-success-factors-for-an-erp-implementation/ 3).
Thomas wailgum – what is ERP-july 27 2017https://www.cio.com/article/2439502/enterprise-resource-planning/enterprise-resource-planning-erp-definition-and-solutions.html