Unit 7 Enterprise Resource Planning Systems Assignment Sample

Task 1: Information Document for the Business Department Managers

Introduction to ERP Systems

ERP systems are computer-based applications that are used to control and coordinate the various activities in a company (Faccia and Petratos, 2021). They are essential in making the operations efficient, cost-effective and accurate in handling data hence play a major role in today’s competitive environment.

Purpose of Using ERP Systems

In a manufacturing and distribution type of business, ERP systems act as central organizers of different business activities (Syreyshchikova et al., 2020). The integration proves to be useful in performing or pulling off, managing stock, and other competent production plans. Thus, real-time data and analytics offered by ERP systems can help improve decision-making and increase business productivity. Moreover, they help in making the leads between one section of the organization and the other functions effectively, from the production line to selling, to finance, among others (Kapetanopoulou, Kouroutzi and Anastasiadou, 2021). The primary goal of an ERP system in such settings can therefore be squarely defined as the enhancement of efficiency, minimization of costs and timely and effective delivery of products.

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Principles of ERP Systems

Based on the analysis of characteristics of ERP systems, there are several principles on which they rely, and these principles include integration, automation and real-time data processing (Morawiec and Sołtysik-Piorunkiewicz, 2022). This concept is the linking of different organizational tasks to form a single comprehensive system that denies the creation of partitions It involves knitting different organizational activities. Automation in ERP systems limits the roles of people in organizations reducing on the chances of error (Morawiec and Sołtysik-Piorunkiewicz, 2022). Online operation enables the data to be as current as possible and retrievable in real time, allowing for precise decision-making. The above principles contribute to the improvement of the outcomes of organisational tasks and operations.

Elements of ERP

The main components of an ERP system involve the finance, human resources, inventory, supply chain management, and customer relationship management (CRM) components (Al-Qudah, 2020). Finance is another module that encompasses accounting, budgeting, and, financial reporting and offers a firm’s financial portrait. The human capital management module tends to employee data and paperwork, wages, and compensations overseeing the human resource functions. Inventory data control coordinates product stock, orders, and deliveries to improve the Supply Chain processes (Zhao and Tu, 2021). The supply chain management module coordinates the contractor’s supply line to the customers and the expenses required in the process. The CRM module is concerned with handling customer combustible, enhancing customer satisfaction and finally sales generation. These features are crucial in the running of business entities to achieve the intended organizational objectives.

ERP vs. Management Information System

ERP systems and Management Information Systems or MIS as they are commonly referred to both aid the decision-making process but in different ways and ranges (Ouiddad et al., 2020). Whereas MIS deals only with the flow and handling of information within certain functions, ERP systems link all the business processes organization-wide. MIS offers customized information and analysis for the department while ERP gives a broad view of the company’s functioning (Jo and Park, 2023). Another thing is that the implementation of advanced techniques such as automatic and real-time data processing, with which ERP systems are equipped, is usually absent in MIS. Hence, while business units require access to MIS, enterprises have ERP systems to integrate and enable the management of corporate performance.

Enterprise Resource Planning in Manufacturing

In manufacturing, the use of ERP systems provides a major boost to productivity and efficiency since it involves a reduction of time for doing core activities such as planning of production, and acquisition of raw materials among other activities (Chopra et al., 2022). Since ERP integrates every node of a manufacturing company in real time, firms are in a position to adapt efficiently to market changes hence cutting short lead times and thus eradicating bottlenecks.

In the same way, ERP systems provide efficient resource utilization where material and manpower are utilized and this cuts down the expenses and also improves quality. In conclusion, the elaboration of this paper gives priority to appreciating the importance of ERP systems towards improving the competitiveness of manufacturing operations.

Task 2: Recommendation Report to the Senior Management Team

Introduction to ERP Proposal

The rationale behind using a business proposal in this document is to show a detailed plan for the implementation of an ERP system in our organization (Chofreh et al., 2020). The following proposal will endeavour to identify the advantages, disadvantages, and importance of implementing ERP in the organization with the hope of convincing top management to approve its procurement.

Management Uses of ERP Systems

From the analysis of the literature, it becomes evident that ERP systems are efficient tools for senior management since they allow real-time access to vital business information that can be used in decision-making. In addition to the well-coordinated processes, implementation of the ERP systems includes wide reporting and analysing abilities to present different problems of the companies’ activity including financial, stock, and customer satisfaction.

Figure 1: A comprehensive framework of ERP Systems in different areas

(Source: Kitsantas, 2022)

The use of data drives the management to see some trends of future demands and then be in a position to plan the resources well (Kitsantas, 2022). Furthermore, effective ERP systems help in the enhancement of departmental cohesiveness so that all parts of the organization are on the same page. Efficiency in gaining data access and data analysis improves the general adaptability and proactivity of the management team; hence it greatly transcribes the business results.

Benefits to Organizations

The advantages of ERP implementation in organizations include; enhanced organizational performance, reduced cost and better control of data (Santoso et al., 2022). Through the handling of repetitive processes and linking of several business operations, the ERP systems minimize the use of a lot of manpower, thus increasing the overall speed of the system. The centrally located base of an ERP system guarantees that all departments obtain proper details so that there is no misinterpretation and maximum accuracy in their decision-making (Santoso et al., 2022). Furthermore, ERP systems promote the issue of scalability to mean that organizations can expand and advance by meeting the changing market needs seamlessly. ERPs also enhance interaction and collaboration which can be translated to better customer service hence enhancing the level of customer satisfaction.

A variety of ERP Software

Figure 2: Different Components of ERP systems

(Source: Dechow and Mouritsen, 2005)

There is more than one ERP software out there and they all have particular characteristics to meet certain business requirements (Dechow and Mouritsen, 2005). For instance, SAP ERP is considered to be very sound in functionality and its capacity to grow with the enterprise. The value of Oracle ERP Cloud: flexibility and data analysis, which makes it suitable for organizations that use cloud services. Microsoft Dynamics 365 has a good GUI, and it is compatible with other Microsoft products (Ahmadi, 2023). Also, it is salient to mention that Infor ERP and NetSuite have specialized options for particular industries like manufacturing and retail. The decision concerning the choice of ERP software depends on the size of the organizational structure, the type of industry it is in, and the needs of the business.

Expenditure Related to ERP Systems

Various costs incurred in the implementation of ERP are direct costs which include the costs of the software, hardware as well as implementation companies and other costs like training as well as maintenance. Thus, the costs of such investments can be rather high in the beginning, but the further effects concerning the making of work more efficient and effective from the aspect of costs outweigh these costs (Berk and van Binsbergen, 2021). Adopting the best strategy, therefore requires a cost/benefit analysis to deduce the feasibility of the ERP implementation.

Task 3: Project planning documentation

Introduction to Project Planning

The purpose of project planning documentation is to offer a systematized framework for ERP system implementation. This defines what needs to be done in the project, the kind of goals and targets that should be met the time frame within which the project has to be implemented and the resources that need to be applied in the implementation process to help in improving organizational efficiency.

System Design and Requirement Definition

The design of the system and the definition of the scope of requirements are some of the fundamental stages of ERP implementation (Alaskari, Pinedo-Cuenca and Ahmad, 2021). Entities like flowcharts, data modelling, and requirement matrices are the standard ways to describe and define the characteristics of the system and the requirements of the organization. Such tools are useful in making sure that the system that is being implemented is an ERP system that fits the particular needs and needs analysis of the business concern thus avoiding cases of misfit and enhancing the functionality (Alaskari, Pinedo-Cuenca and Ahmad, 2021). Due to scoping, the likelihood of exposing some difficulties and the realistic expectation of the project result is possible.

Quality Assurance Techniques

Quality assurance control is necessary for reviewing the functionality and compliance of the real ERP system with the anticipated standards (Jaskó et al., 2020). There are levels of testing for the application that is developed such as unit testing or integration testing as well as user acceptance testing. While unit testing is performed on individual units, integration testing checks how individual modules are integrated. UAT on the other hand entails people part with the organization testing the system to ensure that it fits their requirements (Jaskó et al., 2020). This way, the potential problems in the QA process are easily detected when they occur and can hence be fixed before they lead to costly errors and prolongation of the project.

Challenges Faced in ERP Systems Implementation

When implementing ERP, several risks are experienced, these risks are financial, operational and reputational. The primary financial risks are related to capital intensity in software, systems, and services that are involved in implementation (Chen, kumara and Sivakumar, 2021). However, where the project fails or is protracted, such costs can shoot through the roof and consequently affect an organization’s financial structure. Implementational operational risks have to do with the disruptions of business processes amidst the implementation process and this is detrimental to the productivity and unsatisfactory to the clients (AL-Saadi, Cherepovitsyn and Semenova, 2022). There are reputational risks any time that the ERP system is not able to deliver the promised returns implying that the organization is losing its credibility and trust in front of the stakeholders. Any organization must assess these risks adequately, with the view of managing them properly.

Risk Management Techniques

Measures of risk management strategies are vital to counterbalance the possible risks that accompany the ERP plan (Masso et al., 2022). These are risk analysis, risk evaluation and the establishment of contingencies. Risk assessment is a process of identifying certain risks and the likelihood of occurrence and the consequences of the risks in a project. Summatively, after establishing different risks, a company evaluates them depending on the probability of occurrence and the implications. Next, contingency plans are created for the main risks to guarantee that the project will not be significantly affected by certain aspects in case of arising of these threats contingency plans are created for the main risks to guarantee that the project will not be significant. Other elements also relate to the ongoing identification and reporting on risks to stakeholders to control such risks throughout the project.

Testing ERP Functionality

Evaluating the live capability of ERP is an important process to see that it has complied with the organizational needs and business expectations. The testing process includes unit testing, integration testing, system testing and acceptance from the client commonly referred to as user acceptance testing (UAT). While the unit test is performed at the component level, integration testing checks the interfaces of the modules. System testing provides information on the system’s capability to accommodate and process the requirements of the business and causes such as data correctness and system reliability. The next step in CMC is UAT where the end-users use the system in a real-life situation to confirm if it meets the needs of the users (ALTAN, 2021). These procedures facilitate the detection of problems that may affect a system and the implementation of the necessary solutions before the system’s operations are accessible to the public.

Training and Support Requirements

Effective use of the ERP system implies that there should be adequate training for the end-users of the system as well as adequate support for the same (Jo and Park, 2023). To get positive results, training activities should focus on the needs of each category of users to make them feel relaxed using the system and master the areas of strength of the system. Another factor is also the merchandising of ongoing support through helpdesk and system upgrades once the system has been implemented to solve any problems that are likely to occur.

Test Plan

A test plan defines the tests that are to be performed during the ERP system implementation as well as its goals, areas of coverage, test cases, and positive results (Brunetto et al., 2021). The test plan is a very important document that maps the testing process as a whole and details all the various spheres that will or should be tested.

Strategic Planning

An overview of the systematic planning of ERP systems proves to be relevant to the implementation process. It entails the process of integrating the ERP project with the company’s strategic direction to complement organisational growth and Industry evolutions. Strategic planning involves defining goals, milestones and targets and ways on how strategies will be implemented as well as involving major stakeholders in the contraction of strategies.

Task 4: Report on Ethics and Codes of Conduct in Computing Systems

Ethics and Codes of Conduct Report

The goal of this report is to discuss the four principles of ethical computing as well as the main codes of practice concerning the use of computing systems in organizations (Ibáñez and Olmeda, 2021). It is crucial to comprehend these principles to avoid improper and unethical actions in a dynamically developing area of ICT.

Difference Between Ethics, Ethical Behavior, and Ethical Decision Making

Ethics relates to the standards of moral right and wrong and ethical practices on the other hand are the practical doing of right or wrong (DeTienne et al., 2019). Ethical decision-making relates to the process of arriving at decisions whereby the identified choices are mutually acceptable by various stakeholders and legal on account of the resulting impact on society. In ICT these concepts are important in as much as they help to check on full adoption of all the technologies in violation of the people’s rights and privacy.

Considerations with Third-Party Providers

The third-party vendors hired by an organization should observe the same legal requirements and ethical standards of the organization especially when dealing with sensitive information (Parella, 2021). An objective of third-party risk management is to reduce risks by conducting proper screening and monitoring including periodic assessments on potential third-party providers.

Function and Duties of IT Specialist

One can therefore conclude that IT professionals have a significant role in guaranteeing the ethical use of computing systems in an organization (Mökander et al., 2021). Some of the roles of compliance officers are data protection, protection of the system and legal and regulatory compliance. Lack of integrity must not be tolerated: IT professionals need to make decisions in IT practices for the benefit of the organizations and their shareholders.

Legislative and Regulatory Obligations

Organisations have legal responsibilities in respect of computing systems that have to be met including the GDPR and Computer Misuse Act. These laws are meant to promote data protection, privacy and cybersecurity relating to the management of data that organizations and people deal with. Compliance with these duties is necessary to avert legal consequences, and preserve consumers’ confidence and the reputation of the firm.

References

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• Al-Qudah, H.S.S. (2020). Impact of ERP System Usage on Supply Chain Integration: A Structural Equation Modeling, Jordanian Pharmaceutical Manufacturing Case Study. [online] papers.ssrn.com. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3603321 [Accessed 28 Dec. 2022].
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