Strategic Information Systems for Business and Enterprise
HI5019
Executive summary
The report aims to explore the importance of ERP for an enterprise. In this case, Austal Limited is an Australian shipbuilding firm listed on the Australian Stock Exchange. The report further elaborates on the drawbacks in the company’s management and makes appropriate suggestions for selecting a suitable ERP system. It also discusses why the chosen ERP system is best suited for the company and how the company is going to benefit from the installment of this system.
Introduction
The manufacturing company that has been chosen in the report is Austal limited. It is one of the global leaders in shipbuilding. The report primarily contains the suggestions provided by a consultant regarding the investments that the company wants to make in Enterprise resources planning (ERP), which will help in the firm’s future growth and development. The business activities, products, and primary clients of the company are mentioned in the report that provides integral support to the success of this world-class manufacturing unit. The business processes, risks, and the internal control of the company are also provided in the report that will give a detailed view of the proceedings of the company. A proper evaluation of the primary features of ERP and its role in controlling the business is described in this particular report. Investment in ERP is one of the most important initiatives for global businesses, and the implementation of the ERP can bring huge changes in the operations of the organization that will nurture future growth and development.
Background
Austal Limited is not only Australia’s but the world’s leading manufacturers of high-speed ferries. The company tries to focus on providing the customers with the perfect solution, designing, constructing, and delivering vessels to its clients. The company also manufactures a broader line of other vessels. The company is one of the global leaders in shipbuilding and is listed under the publicly listed ASX companies. The company provides various shipping solutions to defense as well as commercial establishments around the world and has a great reputation in world-class manufacturing ships and other vessels. The company has primarily been an exporter of luxury yachts and military patrol boats. The manufacturing unit has a major share of about 70 percent of revenue that comes from military sales. The company is considered a success story for Western Australia, whose shipbuilding tradition goes back a long way. The company is relatively new and has gained huge success and popularity within a span of 30 years. The company was founded in June 1987 by John Roth well which was a boat builder from Fremantle in Australia. The business began as a very small unit consisting of only 40 employees. However, it grew as the world’s leading manufacturers of ships.
Evaluation of key business processes
Austal shipping company primarily falls under the manufacturing and production sector, since they are associated with ships and other vessels’ self-manufacturing. The business process of Austal shipping is dependent on their greatest strength that is considered their workforce. In an enormous set up like shipbuilding manufacturing, the employees’ roles and responsibilities are of greatest significance. Their dedication and hard work have taken the company to an entirely new level. Product planning and designing, procurement, and production are the three basic processes in the manufacturing industry. Planning and designing involve creating a framework for the ships and vessels that are about to be manufactured. This is the first process of manufacturing. The second process is procurement that involves the supply chain of the raw material that is used for manufacturing purposes. The final stage is the production process that involves the manufacturing and distribution of the finished goods. The company has achieved significant business success by the implementation of a few variables in the last 30 years. The clients have benefitted from a number of policies that the company follows. They can be listed as:
- Management of in-house designs and offering customers personalization and flexibility.
- Production and manufacturing of world-class products with the highest technology and quality align with the current market standards.
- Maintaining the production processes that are quality assured and managing projects that are the best among the industry standards.
- Strong and unparallel focus on delivering customer needs and fulfilling the deliverables.
- Maintenance of a highly skilled and productive technical and management workforce.
- The organization is committed to on-time and on-budget delivery of products to the customers.
- The company’s financial and corporate management is very strong, which helps in achieving the key business perspectives.
- Competitive value for money pricing is followed in the company.
Risks associated with the business processes
As a leading manufacturer of ships and vessels, the Austal Company carries some risks associated with the business perspectives. There are many areas that the management needs to cover to safeguard the company from external threats. There are primarily three types of risks associated with the shipbuilding industry. They are technological risks, business interruption risks, and compliance risks. Although Austal is one of the largest manufacturers of ships and vessels in the world, they can also face some risks associated with the business’s external environment. They should prepare a constructive approach to mitigate and address the risks involved with the distribution of the business.
Technological and cybercrime is one of the major external risks associated with the product planning and designing aspect. The company may face leakage of ideas and designs developed by the organization’s core team. Applications and software have become more integrated, and the number of endpoints, the more the organization may face a greater risk for exploitation.
Business interruption is one risk that can be seen in this company. The lack of supply of raw materials or any kind of delay in the procurement process can result in an increase in business interruption risk. The client deadlines cannot be met, and there will be an increased risk of client distrust of the brand. This event may ultimately cause a decrease in the brand value of Austal Company.
Compliance risk is the third risk that can be associated with the shipbuilding industry. It can affect the production status and standards of the company. Compliance to meet environmental and other social standards are a challenge, and the company must make all efforts to maintain compliance norms within the organization. The shipbuilding industry requires adhering to the health and safety compliance standards as it involves a lot of risk with the employees in the organization.
Recommendations for mitigating the risks
The three types of risks that the Austal Company poses may affect the company’s overall business performance. The planning and production risk that is associated with technological advancements needs to be addressed by maintaining a strong software system that detects the leakage of data. The enterprise management (ERM) strategy effectively provides extra protection from risk to the shipbuilding company. The business interruption risk that is categorized under the procurement process risk can be mitigated by preparing a business continuity plan that cannot be affected by any untimely logistical issues of the supply chain. The compliance risk affects the production of the industry that can hamper overall sales and growth. A proper compliance statement regarding all the aspects of the legal implications of the ASX CGC will provide the mitigation of the risk. The company should follow. This action will help in creating policies that will safeguard the company from any sort of future legislation.
Features and functionalities of ERP that Austal should consider
The Austal Company is vast and extensive and includes many variations in the daily operational routine. An ERP with exceptional features and functionalities will help in the company’s smooth operational functioning in the future. An ERP system is a computer-based application that is used to manage external and internal resources of an organization that includes the financial resources, human resources, and tangible assets. There are primarily twelve core features of ERP that produce many benefits for the organizations. They can be classified as integration, automation, analysis of data, reporting, tracking, and visibility. The other core benefits include accounting, financial management, and customer relationship management. Human resources, supply chain, and manufacturing are the main areas that ERP can manage. In the case of Austal Limited, the supply chain, manufacturing, and customer relationship management are the three key areas that require specialized supervision.
Supply chain management
The shipbuilding industry’s supply chain management is managed by proper efficiency in the areas of tracking demand, inventory management, logistics, and proper distribution of the raw materials used for the manufacturing of ships and other vessels. A fully automated and integrated supply chain helps in the enhancement of the operations of Austral Company that helps in the enhancement of operations by the suggestion of purchase orders, work orders, and transfer orders across various locations. Inventory goals can also be set up by the ERP that helps in the simplification of the distribution process. The company areas of inefficiency can be identified by the proper use of real-time data provided by an integrated ERP.
Manufacturing management
The functioning of ERP started in the manufacturing sector. Assistance in the planning of products is one advantage that integrated, and sophisticated ERP provides. In the case of the shipbuilding industry, this can prove to be a significant move that can help in the proper planning and designing purposes of ship manufacturing. Sourcing of raw materials, monitoring production, and forecasting of business prospects are the added advantages of using an integrated ERP system that can boost the manufacture and production of Austal Company.
Customer relationship management
Customer relationship management is an important aspect of the company. As discussed above, the company excels in personalizing the products as per the needs of the customers. Customer relationship management becomes inevitably necessary. Integration of CRM into the ERP allows the company to manage and utilize the information of the customers, like their contacts, purchase history, orders, etc., at ease. This makes generating purchase orders, creating a customer account, or sending notifications to the customers easier in an automated process. Smooth processing and compliance of the customer’s demands strengthen the relationship of the company with its customers as the customer’s trust in the company increases.
Two general groups of ERP applications
Monolithic: This type of application was the starting point of ERP systems. As the name suggests, it is only one system that is expected to carry out all the applications of a company. It fails to customize itself to the changing business and lacks the ability to encapsulate and satisfy the growing business’s increasing demands.
Postmodern: The inability of the monolithic application of ERP led to the development of a more feasible solution that focused on several programs instead of one large program dealing with the respective field of management was developed. This collectiveness of the system allows the individual program to be changed and improved as per the need in a more cost-efficient manner. This makes customization of the system according to the need much easier, making the system more user-friendly and popular. Most of the ERP systems used today belong to this type.
Comparison of three ERP software
IFS Applications: IFS is an international developer of enterprise applications. The IFS Applications are a step further in securing and sharing information in the manufacturing business. The information that is stored in a variety of systems previously can be integrated into one with the help of this software. It makes communication easier for the company, along with increased visibility of the raw materials’ business procedure and procurement. This also cuts down on the project cost with more efficient working conditions. This will, in turn, improve the productivity of the labor and the company as a whole. This application cuts down on the project cost and reduces system administration cost and increased flexibility with easy up-gradation.
Info CloudSuite Industrial: This software has an all-around approach for the improvement and expansion of the manufacturing industry. The system focuses on improving operations, supply chain, and customer relationships. It provides automation of complex tasks and better business intelligence. It further shows flexibility for the incorporation of special business demands. The system claims reliable supply chain transparency and visibility of the global supplier. This system is capable of proper warehouse stock management and efficient in preventing stock-outs and delays. It also shows innovative customer engagement with the introduction of 2D and 3D images and responsible management of the products and services.
Microsoft Dynamics 365: This is actually a group of six different software. It includes Microsoft Dynamic AX, GP, NAV, and SL, Microsoft Dynamic CRM, and Microsoft Dynamic RMS. AX, GP, NAV, and SL belong to enterprise resource planning solutions, while CRM and RMS belong to customer relationship management and retail business software, respectively. GP, SL, and NAV are generally best suited for small to medium-sized businesses, while AX is more appropriate for large businesses. AX is useful in cases of companies that are multinational in nature and have multi-site operations. It provides functional operations in manufacturing and distributing. Dynamic GP, on the other hand, is more suitable in dealing with the financial management and human resource management of the company. Dynamic SL can be utilized efficiently in project-wise operations.
The most suitable vendor and ERP package for Austal Limited
By comparing and contrasting the above mentioned three ERP software by different companies, the one most suitable for Austal is Info CloudSuite. The reason for this choice is that the product is most appropriate for dealing with the above-mentioned problems that the company is facing or might face in the coming days as it looks to expand its business. As Austal is basically a manufacturing company, when it looks for the expansion of its business and its management, it will face problems in its manufacturing unit, supply chain management, etc. The software is capable of providing the company with real-time data that makes production planning and budget management much easier and cost-efficient. It is also seen to be efficient in resource management and customer relationship management. The package also claims efficient warehouse management, which is extremely important for this industry. As the company is a multinational, logistics is a difficult aspect to deal with, and capable supply chain management greatly helps to deal with it. Therefore, in the overall view of the report, Info CloudSuite is an optimum choice for the company.
Conclusion
Austal being a large multinational enterprise, is sure to have many difficulties in its different lines of operations. Selecting and investing in a well suited ERP is an important criterion for any business, and it is especially essential for large-scale businesses like Austal. Enterprise Resources Planning is expensive to procure and maintain, and therefore, it is crucial to select the appropriate system. A good ERP system will make the company’s management much easier and the business smoother as it provides greater transparency and insights into the company’s business operations. Employment of ERP makes management of database easier, which is large in cases of multinationals like Austal. The processes become automated, which reduces the manual workload. As Austal is a manufacturing industry, its needs and demands are unique to the industry. The chosen software to deal with the deficit of the company’s present working condition is appropriate.