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Enterprise Resources Planning (ERP)

 

 

 

 

 

 

Enterprise Resources Planning (ERP)

Introduction

The entire assignment will be focusing on the management consultancy firm that provides a suggestion to a company for the enhancement of the business. In this assignment, the ERP system has been taken into consideration for the management of the firm. Therefore, the chosen client’s company for the assignment is Boral Limited, which is listed under the Australian Security Exchange (ASX) and is a manufacturing company located in Australia. The following assignment will be referring to the system of ERP (Enterprise resources Planning) and will intend to provide various suggestion to the client’s firm, which is Boral Limited. The assignment will be initiated with a brief description of the chosen manufacturing company and its business activities to acknowledge the overall condition of the business so that it is easy to recommend the suggestions for the company in the required area. Further, the assignment will be evaluating the major business process of the client. It will also be representing the history of ERP in the modern world of business. It will compare and contrast the characteristics and functions of three ERP software packages provided by ERP vendors. As a whole, it can be said that the assignment will make sure that the chosen company adopts ERP systems for the well-being of its business.

Description of the client and it’s business activities

The company that has been chosen for the assignment is Boral limited, which is a multinational business firm operating as the manufacturing and supplying building and construction materials. The organization has been established in Australia with a wider range of extensive operations in the US and Asia. The company has been operating well until date, analyzed with the revenue earned by the firm with the amount of A$5.86 BILLION (2019). The company operates with more than 17000 employees, more than 672 operating suites, and 150 distribution sites. The business activities of the Boral Limited are engrossed with the manufacturing of the constructional materials for constructing various buildings. The operational activities of Boral Limited are divided into several groups such as Boral Australia, Construction Materials, Cement & Building Products, etc. The organizational operations have been executing with adequate efficiency with which the company has been able to earn a positive balance of revenue in the business.

However, the company has been analyzed with various issues in the internal control of the company. The inadequate level of internal control in the company has led them to face several challenges. In particular, an implementation of the advanced technology in the firm has introduced trouble for the company. Therefore, in this context, it can be said that the company is in a high need of ERP system in the firm.  The implication of the ERP system would help the firm to enhance in terms of technology as it would assist them in the exact usage of the same.

Evaluation of the key business process for Boral Ltd

It is a fact that the internal control of Boral Ltd is not up to the mark, and hence the company has been facing various issues in the firm. The following business processes have been evaluated, which can be used by the business organization for the enhancement:

Planning and Budgeting: Planning is the core business process that every business organization should consider while executing the business. Similarly, budgeting also plays a significant role in the success of the business. For the organization of Boral Limited, the planning and budgeting process would be the core business process that would help them to process accurately as per the strategic plan. Therefore, the company must plan, budget, and make the use of technology for the manufacturing process.

Business Process Management: The management is the pillar of the business organization as it is accountable for the entire business, starting from the business operations to the profitability of the business. As pet the fact that the Boral Limited is the manufacturing business organization, the management should be strong and should make sure that the internal control of the firm is effective enough to lead the company to achieve its organizational goals and objectives. It would be beneficial firm the client to use the effective business process management in the firm in order to grow its business in the emerging market (Tran, Lu and Weber, 2018).

Approval: Approval is another important part of the business process to be implemented in the business organization. Therefore, in the case of Boral Limited, the firm should consider this factor as important as other factors of the business process. This way, the firm will be able to maintain a proper process management system, makes sure about the proper accountability throughout the entire process. The predefined management implemented in Boral Limited would serve as the driver behind the definition of workflow steps. Therefore, the approval process aims to vary across organizations and industries.

Reusability: It is considered one of the best processor methods for the enhancement of business processes. In particular, the manufacturing business organization in today’s world has engrossed into digital marketing, and hence, the objectives of the marketing gear towards personalizing and tailoring down the communication. However, the organization of Boral Limited should adopt the process of reusability because it is important as the company operates as the manufacturing firm and it is involved in the supply firm as well (munvo.com, 2020).

Measurement: The strategic framework of the business process in a company is based on the performance management methodologies to check on the competence and efficiency of marketing activities. Therefore, the effectiveness of the performance should be accurately tracked and measured to make sure that efficiency is maintained in the business. Therefore, the firm of Boral Limited should effectively consider the measurement of the performance to make sure that the operations are taking place as per the plan and objectives. It is also one of the effective initiatives to improve the internal control of the firm. It is important in the Boral Ltd as the improvement in the internal control is the essence of the firm.

 

Figure 1: Business Processes

(Source: Self-Created)

Features or Functionalities of ERP

The features or functionalities of ERP that the organization of Boral Limited should consider while supporting its business activities mentioned above are as follows:

Integration

The functions of the ERP are considered a major portion of what makes this solution varied from alternative kinds of software. The concept of ERP system offers integration in an entire basis and intuitive platform through which the majority tasks driven by data can be checked and supervised.

Automation

The concept of ERP encouraged and promoted the process of automation and enabled the most tedious task to be in the comfort zone for the performers. The concept makes the tasks in the business organizations to be done with ease as much as possible. Hence, Boral Limited should take the automating facility provided by the ERP systems into consideration, as it would be a great help to the company.

Data Analysis

Data Analysis is the major functionality of the ERP system that should be considered by Boral Limited. It is because the ERP system would help the company to analyze the data in a proper manner, as it helps the firm to collect accurate and exact data in eth firm. It analyzes the data relevant to the business operations and can show up to the management whenever required.

Reporting

The ERP system is one of the most suitable and relevant tools in terms of reporting. Every business organization can rely upon the functions of ERP when it comes to the process of reporting. Similarly, the organization of Boral Limited can also consider this important feature of the ERP concept in order to improve its business organization.

Customer Relationship Management

Customer Relationship Management is the most common and beneficial feature of ERP for every business organization. Therefore, Boral Limited must consider the system of ERP for the management of the consumer system. It is because this concept will help the firm to enhance the services provided to its consumer, and consequently, it will improve the business activities (ERP Features List, 2020).

History of ERP

The Enterprise Resources Planning (EPR) is the type of software that the business firms utilize to manage their day-to-day operations in the business such as accounting, procurements, project management, risk management and compliance, and supply chain activities. The system of EPR combines various business process and leads the flow of data among the combined business process. With the help of the ERP system, the risk of data duplication and provide data integrity with a single source of truth. It is because the concept of EPR collects the shared data transaction of the organization from multiple sources (Langenwalter, 2020).

The initial forerunner to ERP software can be outlined back to the 1960s when it was used as an effective device to administer the inventory and quality control in large manufacturing organizations. Gartner coined the establishment of the concept of EPR in 1990, but the root dated to the 1960s. At an earlier period, the concept of EPR implemented to the management and control of inventory in the manufacturing business organization. In the concept of EPR system, the software engineers generated programs to supervise inventory, settle equilibriums, ad report on status. Therefore, the system of ERP was engrossed with the Material Requirements Planning (MRP) systems for scheduling production process. The ERP system grew to cover more manufacturing process from year 1980s. Therefore, with the implementation of the ERP system in most of the manufacturing business, the companies began to enhance to a certain level, and the progress of the manufacturing industry was on the ongoing business (Alomari et al., 2019).

The concept of ERP also makes sure that these data fields and attributes roll up to the correct account in the company’s general ledger with the motive to track and represent the entire costs in an appropriate manner. In particular, the modern worlds of business are highly engrossed with the technical world. Hence, most of the manufacturing business uses technological factors in the production process. Therefore, the ERP system plays a significant role in the growth and success of such manufacturing business. In the manufacturing business, the use of ERP has been a necessary factor since its establishment as it helps the firm to maintain honestly and accuracy in the business. As the ‘e’ denotes enterprise regardless of the firm’s size, the ERP is used in the companies with high-growth, medium-size or small size of the business. The concept makes the firm easier to run its business in a profitable way.

As a result, business firms of every size and a broad range of industries are transitioning to cloud ERP systems. It is the fact that there has been a prediction by Forrester that SaaS-based ERP adoption will increase 21% annually through 2015. Moreover, it is identified that the entire business firm who are engaged with the use of technologies should adopt the concept of ERP for the immense growth and success of the business. The companies should consider the organizational goals of the business while adopting the ERP system to make sure that the company gets every benefit from the system (Langenwalter, 2020).

 

Figure 2: Enterprise Resources Planning

(Source: Abdelmoniem, 2016)

Compare and Contrast of Three ERP Software Packages

The three ERP software packages that have been offered by the ERP vendors for the Boral Limited are Accounting, Order Processing and Supply Chain Management. All the three ERP software that has been offered by the vendors will function differently; this will help the company to build strong internal management in order to grow their business in forthcoming days. The functionalities or the features of the three ERP software packages have been compared and contrast below accordingly:

 

Figure 1- Offered ERP Software by Vendors

Sources- (Self-Created)

Accounting– In ERP systems, accounting or finance modules aggregate the financial information from across all the linke4d modules that provides the firm with a total figure of their spend and revenue. Theses software will help the firm to roll up the reports of profit and loss from financial statements and put together the estimation that takes into the information from the whole business (Kiran and Reddy, 2019). In comparison, the other two software of ERP, which is under the package that has been offered by the vendors is different from that of the accounting software. Though all the three software will help the internal control management to be advanced, they function differently for the same cause. If accounting software focuses on the financial information than the order processing will focus on flows of sales order information through the system whereas supply chain management will generally focus on managing the relationship within the suppliers, their transactions and, maintaining the processes of connected business.

Order Processing– This software will help the company to enhance the customer service by allowing fast, effective, accurate and timely fulfilment of the order. As like the accounting software that deals with the financial report and supply chain management software that manages the relationship within the suppliers, the order processing software alone brings stability to the services and sales of the company (Fernandez, Zaino and Ahmad,2018). Hence, integrating the order processing software directly with an ERP provides the business analysts with an overview of improvements and inefficiencies across the cycle of sales. Generally, this software also builds a powerful and accurate process of sales order to improve internal management but differently.

Supply Chain Management– The issues of the supply chain can back on the overall revenue stream of a firm. Therefore, the modules of the supply chain within the ERP software will provide assurance that other teams have an overview of the supply chain and can respond promptly as per the emergency of the situation. Hence, among other sever improvements of infrastructure, an EPR with the software of supply chain can considerably minimize the responding times for the firm that needs to boost production at other plants to avoid the issues of the supply chain (Umar et al., 2016).

However, as per the above discussion of offered features of ERP software by the vendors, it can be said that all the three software functions differently for the same cause that is to maintain and build strong internal control management in order to grow the business of the firm but they work in a different manner. Thus, the three software will be helpful for Boral Limited as this software will bring accuracy, effectiveness and timely services for the customer as well as the employees of the company.

Identification of the Most Suitable Vendor and ERP Software Package

The most suitable ERP vendor that has been identified as a consultant is SAP, which stands for System Application and Products in data analysis as well as ERP software package for the client are accounting, order processing and supply chain management software. The chosen ERP vendor will offer comprehensive standard features, accessible optional modules in order to increase the functionality along with a number of integrations and other alternate options. The SAP software of ERP platforms will find out many strategic and operational requirements for the business owners of Boral Limited. It commonly includes technology solutions, business applications, database, cloud applications, analytic solutions and mobile applications that enable operators to take their work within them while travelling or any wherever they go (Chaveesuk and Hongsuwan, 2017). This vendor will allow clients to scrutinize security, manage inventory, place supply orders, manage to warehouse, place supply orders and much more. Generally, it will merge data, rationalize the process of operation and most often make any business more effective. As per the entire research, it has been found that the SAP ERP software has helped the manufacturing and may more companies to indicate the average increase in efficiency of the companies after its implementation and the time of average waiting for the effects to occur (Technologyadvice.com, 2020). However, as per the APICS (American Production and Inventory Control Society reports the following effects of implementing a system of ERP II:

However, the SAP ERP system will benefit the company in much internal management system, and some of the benefits of SAP implementation has been discussed in the following grounds;

Conclusion

The overall assignment provides a better understanding of the ERP system that can be used in the business organization in order to improve its overall business activities. The chosen organization in the firm in which the suggestion of various steps to improve its business activities is required is Boral Limited. Therefore, the report has analyzed that the organization of Boral Limited hold a weak internal control because of which it has been facing various issues regarding technological use in the business. It has been very important for the company to improve its business activities and internal control. In this context, the assignment has referred to the ERP system to be implemented in the business organization. Hence, the report has provided with various core business processes that should be implemented by Boral Ltd for the growth of the business. Further, the report has mentioned the features of the software, which should be considered by the client’s firm.

References

Abdelmoniem, E.M., 2016. The critical success factors and the effect of ERP system implementation on business performance (Case study in Egyptian environment). International Journal of Computer Science and Information Security, 14.

Alomari, I.A., Amir, A.M., Aziz, K.A. and Auzair, S.M., 2019. Enterprise resource planning system business process attributes: A research note. IJAR, 5(3), pp.111-115.

Chaveesuk, S. and Hongsuwan, S., 2017. A structural equation model of ERP implementation success in Thailand. Review of Integrative Business and Economics Research, 6(3), p.194.

ERP Features List, 2020. ERP Features List | Review Of Key ERP Capabilities. [online] Selecthub.com. Available at: <https://www.selecthub.com/enterprise-resource-planning/erp-capabilities-list/> [Accessed 26 September 2020].

ERP, S. (2020). SAP ERP Reviews | TechnologyAdvice. Retrieved 26 September 2020, from https://technologyadvice.com/products/sap-erp-reviews/

Fernandez, D., Zaino, Z. and Ahmad, H., 2018. An investigation of challenges in Enterprise Resource Planning (ERP) implementation: The case of public sector in Malaysia. International Journal of Supply Chain Management, 7(3), pp.113-117.

Kiran, T. and Reddy, A., 2019. Critical success factors of ERP implementation in SMEs. Journal of Project Management, 4(4), pp.267-280.

Langenwalter, G.A., 2020. Enterprise resources planning and beyond: integrating your entire organization (Vol. 12). CRC Press.

Langenwalter, G.A., 2020. Enterprise resources planning and beyond: integrating your entire organization (Vol. 12). CRC Press.

munvo.com, 2020. The 5 Business Processes Of Marketing Resource Management (MRM) – Munvo. [online] Munvo. Available at: <https://munvo.com/2016/11/23/5-business-processes-marketing-resource-management-mrm/> [Accessed 26 September 2020].

Technologyadvice.com. (2020). Retrieved 26 September 2020, from https://technologyadvice.com/erp/

Tran, A.B., Lu, Q. and Weber, I., 2018. Lorikeet: A Model-Driven Engineering Tool for Blockchain-Based Business Process Execution and Asset Management. In BPM (Dissertation/Demos/Industry) (pp. 56-60).

Umar, M., Khan, N., Agha, M.H. and Abbas, M., 2016. SAP-ERP implementation: Change management model using qualitative approach. International Journal of Computer Science and Network Security (IJCSNS), 16(6), pp.9-13.

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