The Most Appropriate Information Systems Meeting the Business Requirements of EquipHire - Case Study Example

? EquipHire Table of Contents Introduction 3 of the business 4 Key information required for the business 5 BIS Requirements 5 Recommendedinformation systems 9 Reference 11 Introduction The world of the 21st century is moving at a fast pace. The fast pace of advancement of the modern day world is happening more on the lines of rapid change and tremendous development. It is of high importance to mention that the evolution of the telecommunication technology along with the process of emergence of high speed internet and various kinds of technology enabled gadgets has resulted in the process of playing a tremendous amount of influence in the lives of the masses around the world. It needs to be mentioned that because of the lines of emergence of high speed internet connectivity, the network of communication channels has improved in a drastic manner all over the world. The internet has played a major role in the process of creating the channels of communication in the various regions of the developed as well as the developing economies. It can be rightly said that it is of considerable importance to highlight that this technology powered development has resulted in the process of transformation of the globe, where the entire world can be represented and increasingly seen as a single and well connected global entity. Because of this technology powered transformation of the world around us, there has always been a steady evolution of various kinds of trends associated with the factor of globalization. The trends of globalization, that are emerging from all corners of the world are increasingly getting diffused at a very rapid pace and it is happening irrespective of the fact of whether the regions are located in the developed or developing economies. The rapid diffusion of the trends of globalization is resulting in the process of evolution of various kinds of new types of consumer demands. These new consumer demands are increasingly paving the way for a significant amount of business opportunity. Many firms located in different global markets are increasingly looking forward to the prospect of entering new markets, since it will help to capitalize on the growth prospects that are emerging because of the new kinds of consumer demands. It has to be stated that the entry of new firms in a specific market plays a very important role in increasing the level of competition and thereby leads to the process of increasing the consumer’s power. In this case, the focus is on a commercial and domestic equipment hire company named EquipHire. The company’s management has identified the fact that the existing information system is nearing the last stage of its product life cycle. As a result, the top management is looking for a fresh assessment of the business information requirements of the company along with recommendation for new information systems which will be successful in meeting the current business based requirements of the company. Description of the business While discussing about the business, it needs to be stated that the company EquipHire is in the business of providing commercial and domestic equipments for hire. The company has eleven branches which are spread in various regions ranging from metropolitan Sydney, Wollongong as well as New Castle. The manpower of the company is a combination of both full time and part time employees. The product portfolio of the company is highly diverse in nature and comprises of building and engineering tools, equipments for industrial plants as well as domestic categories. Around 70% of the company’s sales are from the commercial sector like construction, engineering as well as architecture. Also, the sales from the domestic sector are growing at a steady rate and are starting to contribute in an active manner. Key information required for the business It needs to be considered that the information technology is a highly evolving field. With the passage of time, the development of new kinds of software often leads to the emergence of new information formats. The new formats of information will automatically transform the pre-existing information systems of an organization as obsolete as well as incompatible in nature. Thus, to keep up with the evolution of technology, as well as to enhance the competitive angle for an organization, it is very important to undertake a periodic analysis of the capabilities of the organizational business information systems and make necessary upgradation of the business information systems. In this case, the key information requirements for the business comprises of sales data, invoice, costing information for both long and short term hires. The information for equipment utilization rate is needed by the company as it will help in boosting up the product usage efficiency. The company also needs information in regards to demand forecasting as its will help in better estimating the seasonal and construction influenced fluctuating demands. The data related to accounts, equipment maintenance as well as equipment transportations is also critical to the company. BIS Requirements Every business, big or small, must maintain proper records of their daily transactions. Keeping record of every transaction is very important to businesses because the business runs on the capital of the owners’ and all other entities are accountable to their stakeholders. From the information given in the case study, EquipHire has about 11 branches across metropolitan cities in Sydney. All the meaningful transactions related to business were used to be recorded and maintained manually or in hand written registers or ledger books by 78 staffs. It is also given that the company uses basic Microsoft XP and MS Office 2007 for general purposes and uses excel spreadsheets for accounting and costing requirements. But with the concept of globalization, the entire landscape of the accounting system in business changed. But with every organization computerising their business information system that reduces the work time considerably, it is essential for EquipHire to also chart out Business Information System requirements so as to remain competitive in the market. Transaction Processing System The primary purpose of any business is to identify goods and services that have significant demand in the market and then produce such goods most efficiently using economic method and then sell the goods in the market keeping significant profit margin. All these activities require certain amount of transaction of inputs, processed goods and outputs and it is very important for businesses to keep record of such transactions so as to derive the true profitability from business. For a company like EquipHire whose business may be considered as medium scale by judging the volume of business and the number of branches through which it operates, it is very important to automate their transactions so that the records reflects correct updates for every single transaction (Rahmatian, 2003, pp.479-484). Sales and Customer Relationship Management From the information given in the case study it can be said that the demand for plant and equipment hire is seasonal and also affected by fluctuating construction activity. The company has recognised that the quality of equipment checking and maintenance is not consistent enough to ensure good levels of ongoing repeat customer business. The most suitable solution to this problem is management of sales by creating bond with existing and potential customers which could be obtained by implementing Customer Relationship Management. CRM strategies focus on enhancing enterprise’s awareness about customer choices and preferences through improved customer interaction. It is often considered as one of the strongest and efficient approach for developing and maintaining customer relations. Bonding with customers is a strategy that drives the business towards success by maintaining customer loyalty. The actual need of the customer is better understood by creating a bond which in turn helps the organisation to serve customers in better way. The CRM strategy analyses the historical data about all acquired and potential customers regarding their likes or dislikes, search patterns, correlations, etc. in order to foresee future customer needs (Sugandhi, 2003, p.9). The CRM system of EquipHire can be grouped according to type of service, location, customer demography, and so on. It will help EquipHire to focus on every market segment and manage customer needs accordingly. Inventory Management System From the information given in the case study it is apparent that managing the company’s inventory of plant for hire is a particular challenge. The company finances most of its large plant with third parties, thus it needs to ensure high equipment utilisation or sales rates in order to service this financing. The company is struggling to make good decisions around how much plant they should hold as an aggregate and also by location to meet the demand for hire. Planning and Scheduling of inventory is very important so that goods do not lie idle in company’s go downs. The importance of efficient inventory tracking system lies in the fact that idle inventory block cash if not sold and also inventory maintenance requires carrying cost which rises proportionately with the rise of inventory. Thus, EquipHire needs to operate efficiently and keep track of inventory movements. With the aid of inventory management system, the entire process will be automated that will also reduce cost of manpower (Albert, No date, pp.1-3). Accounting Information System (AIS) Keeping proper accounting information is one of the most important requirements for any business and EquipHire may use AIS to automate and manage their accounting details and other financial statements. Implementation of AIS will reduce the overall manpower requirement of the organization and increasing efficiency and accuracy of current system (Xu, 2003, p.45). It is given in the case that the company uses QuickBooks to run accounts and maintain equipments using Access database which is then transferred into HireIT. However, given the information that the HireIT system is getting end to its useful life a new AIS could be a suitable substitute if appropriately integrated with business. Decision Support System The DSS has the capability to support the entire business’ decision making activities starting from placing new purchase order to decide on which geographic region the company should penetrate and diversify business. The requirements for efficient DSS are that it should be well structured in the sense of capturing the specific requirements of problem and provide appropriate solution to upper level managers of the firm. Hence, a properly designed DSS with user friendly interface will intend to help the decision makers of EquipHire by combining raw data documents, business models, and data analytics (Druzdzel and Flynn, 2013, p.3). Management Information System A good MIS is a compulsory requirement for efficient management of any business that operates on large scale and deals with voluminous data. For every department there should be an inter-related system that monitors the activities of that department. For instance, the purchase department keeps track of purchase of inputs that needs to be processed in order to produce the output. By using MIS, the company will be able to maintain these records in computerised system that will automatically track and update current and future requirements (Adekeye, 1997, pp.318-326). Recommended information systems After studying the given case study and determining the BIS requirements of EquipHire it may be concluded that the most appropriate information systems that will meet business requirements of the company is either Microsoft Dynamics ERP or SAP ERP. Microsoft Dynamics The main reason for recommending Microsoft Dynamics ERP is that it is a complete one step solution that will provide supply chain management, procurement or inventory management, CRM, HR, Accounting and financial solution. It can also be successfully integrated with EquipHire business irrespective of its size. The biggest advantage that the company will get from integrating MS-Dynamics ERP is that when the company expands, the system will automatically adjust to new business requirements (Microsoft, 2013). SAP ERP In discussing about SAP Enterprise Resource Planning software, it needs to be highlighted that it is a very sophisticated tool which helps in a great way to boost the organizational capabilities in regards to taking better and more efficient decisions. The SAP ERP comprises of solutions which help to a great extent in laying a strong foundation for an organization’s business strategy. The SAP ERP comprises of multiple integrated solutions which can help to a great extent in improving the cash flow of the organization, streamlining the various business processes as well as optimizing other corporate services (SAP -1, n.d.). The SAP ERP is a giant software which comprises of multiple segment specific packages like finance, accounting, marketing, human capital management, operations etc. The biggest advantage of using the segment specific packages of SAP ERP is that they are highly compatible with each other and are technologically advanced to a great extent (SAP -2, n.d.). Reference SAP -1, n.d. Enterprise Resource Planning Software. [Online] Available at: http://www.sap.com/india/solutions/business-process/enterprise-resource-planning.epx [23 Sept 2013] SAP -2, n.d. Better execute your business strategies – with our enterprise resource planning (ERP) solution. [Online] Available at: https://www54.sap.com/pc/bp/erp/software/overview.html [23 Sept 2013] Microsoft, 2013. Microsoft Dynamics. [Online]. Available at: http://www.microsoft.com/en-in/dynamics/erp.aspx. [Accessed on September 23, 2013]. Adekeye, W B., 1997. The Importance of Management Information System. [Pdf]. Available at: https://bearspace.baylor.edu/Hope_Koch/Teaching/Leadership/MIS%20Sharepoint/2009-2010/Recruiting%20Materials/Positive%20Benefits%20of%20MIS%20Presentation/Articles/The%20Importance%20of%20MIS.pdf. [Accessed on September 23, 2013]. Sugandhi, R. K., 2003. Customer Relationship Management. New Delhi: New Age International. Xu, H., 2003. Critical Success Factors for Accounting Information Systems Data Quality. [Pdf]. Available at: http://dataquality.computing.dcu.ie/thesis/HJ%20Xu.disseratation.pdf. [Accessed on September 23, 2013]. Albert, S., No Date. PDA Driven Warehouse Inventory Management System. [Pdf]. Available at: https://technology.asu.edu/files/documents/tradeshow/May04/SebastianAlbert.pdf. [Accessed on September 23, 2013] Druzdzel, M. J. and Flynn, R. R., 2013. Decision Support Systems. [Pdf]. Available at: http://www.pitt.edu/~druzdzel/psfiles/dss.pdf. [Accessed on September 23, 2013] Read More