Business Process Management - Coursework Example

Business Process Management Id: Word Count: Executive Summary Enterprise Resource Planning System is an advanced technology for integrating all the major operations of any organisation. The study is mainly focused on the discussion of the adoption of this system by the global organisations. It has elaborated different attributes of this system and their efficacy in the core business operations. In the report, two case studies of Cadbury Company and Hershey Company have been discussed to emphasise on the differences of procedures of ERP system implementation in business. The study of Cadbury Company has conveyed the success of the ERP software implementation procedure, while the details of Hershey Company have communicated the reason behind the failure of the ERP system. The discussion has further communicated the major problems faced by organisations during the application of the system. It has also suggested a number of solutions to avoid these discrepancies. The system is developing its services by collaborating with various updated technologies such as mobile applications and cloud computing. It has also been illustrated that organisations are using different tactics to reduce the expenses regarding malfunctioning of the ERP system. The final outcome of this discussion has suggested that the ERP system is gathering great acceptance from different organisations industry sectors. It has also suggested that the technology is developing rapidly to accrue a huge market share worldwide. Table of Contents Table of Contents 3 Introduction 4 Definitions of ERP System 4 Case studies 5 ERP system implementation success of Cadbury Company 5 ERP system implementation failure of Hershey Company 5 Problems and solutions 6 Future directions 6 Consumerization of ERP 6 Mobile ERP 6 Two-Tier ERP 6 Cloud ERP 7 Conclusion 7 Appendix 8 Reference List 9 Introduction The study is based on the discussion about various aspects of Enterprise Resource Planning (ERP) systems. This discussion will mainly focus on the importance of the usage of ERP system in different businesses. Two organisational case studies will be illustrated to analyse various implementation procedure of ERP system in business operations. The case study of Cadbury and Hershey’s company will demonstrate the success and failure of the ERP system implementation procedure in the organisational operations. A list of problems regarding the usage of the system in business process will be discussed. The study will also offer some solutions to the problem of ERP implementation. A number of recent technological developments of the ERP system will be illustrated in the report. These developments will enable business operations cope up with the ever changing market structure. Finally, recommendation will be made regarding the major vendors of ERP software and current level of usage of the system. Definitions of ERP System ERP or Enterprise Resource Planning system is considered as business process management software which generally allows organisations to utilize integrated application system to control the business operations. It also assists organisations to automate various back office operations related to human resources and technology (OLeary, 2000). This software integrates all aspects of organisational operations that include sales and marketing, manufacturing, supply chain management, financial management and customer relationship management. With the help of this integration company can control important data from all the stages of business operations (Arik Ragowsky, 2002). A proper ERP system mainly integrates the internal as well as external information flow which is further used by business as a single and comprehensive solution (Umble, Haft and Umble, 2003). Case studies ERP system implementation success of Cadbury Company Cadbury Company is the second largest players of British confectionary industry. It was established in the year of 1824 by John Cadbury (King, 2010). During 2007, the problematic implementation of SAP system had restricted the financial performance of the Cadbury Company. By the year 2011, Kraft Food Group had announced its hold over the major operations of Cadbury Company. During that phase, Kraft Food Group had also implemented a unique program development and system analysis software called SAP ERP 6.0 which was termed as the largest global ERP system application (King, 2010). In the recent years, Cadbury Company has experienced a huge production capacity of chocolate related products due to the implementation of SAP based ERP system. “Probe”, the new computer system of the UK, is aimed towards integrating supply chain, manufacturing, distribution, purchasing and sales and marketing operations of Cadbury into a single global SAP oriented ERP program (King, 2010). The organisation had experienced delays and problems in the initial phase of the implementation. Over the period of time, the successive implementation of the ERP system had assisted the organisation to reduce their operating cost (Kable, 2010). The systematic implementation of the ERP system has enhanced the efficiency of different organisational operations and introduced effective warehouse management systems. It has provided all kind of learning scope to the employees which therefore resulted into efficient handling of the entire program (Kable, 2010). It has encouraged the company to restructure their branch offices. The best in class ERP vendors had designed the operations of the organisation and introduced vendor connection portal which further assisted the company to efficiently monitor their inventory movement (Kable, 2010). ERP system implementation failure of Hershey Company Hershey Company is the largest chocolate manufacturing organisation of North America. It was founded by Mr. Milton S. Hershey in the year of 1876 (James, 2014). During 1996, Hershey Company had announced the implementation of an ERP system called Enterprice21 which had integrated R/3 ERP software of SAP, IBM global service, Seibel’s CRM system and Manugistics SCM system. The total cost of the project was $10 million (James, 2014). The newly installed computer system of the company was not working as per the plan of the management. They were facing problems regarding order processing and shipping. The distributors of the organisation were failing to maintain their commitment to the retailers which was deeply affecting their relationship. By the end of 1999, their market price decreased drastically by 8%. This software failure had cost $150 million to the organisation (James, 2014). The major reason behind this failure was their over burdened ERP implementation schedule. Absence of systematically scheduled implementation had deeply affected the ERP program (UK Essays, 2015). The organisation had also sacrificed the proper system testing procedure to reduce the expenditure of the project. The testing phase can be considered as the safety net of this program and it should never be compromised (UK Essays, 2015). The rapid transition and overlapping of different phases of ERP system had provided less scope to the employees to learn the proper execution of the process. Therefore, the organisation experienced 19% decline in the overall profit ratio by 1999 (UK Essays, 2015). Problems and solutions Various problems in the ERP system implementation process can delay the overall business activities and incur additional cost (Bingi, Sharma and Godla, 1999). The major problems of ERP system execution and their solutions have been suggested below- Absence of proof planning is one of the major reasons behind the failure of ERP system. Prior planning and proper scheduling of every step of the implementation is essential to avoid the risk of delay and malfunctioning of the program (Bingi, Sharma and Godla, 1999). To avoid this misconduct, organisations must organise internal audit for all their processes and policies before choosing any ERP system. Organisations can consider hiring third party vendors to suggest them the accurate ERP systems as per their internal structure (Bingi, Sharma and Godla, 1999). Improper testing procedure or absence of testing procedure generally restricts organisations from understanding the actual results of the implementation. Organisations need to conduct testing before implementation of each step of the planning to assess the real world effect of these changes (Bingi, Sharma and Godla, 1999). Improper background check of the ERP vendors and unwillingness to hire third party ERP vendors can also cause long term problems for organisations. Few businesses have witnessed restrictions in system functionality and lack of capabilities after the installation of the expensive ERP system. The alteration of this process has forced the organisation to cross the limit of their budget (Bingi, Sharma and Godla, 1999). Management must conduct thorough background check of all the vendors before hiring them. They need to consider hiring third party vendors rather than premium vendors to reduce their overall cost of the ERP implementation (Bingi, Sharma and Godla, 1999). Future directions The recent developments of ERP system can be categorized as consumerization of ERP, two-tier ERP, mobile ERP and cloud ERP (Robb, 2014). Consumerization of ERP A number of leading organisations are replacing the traditional ERP system with consumerization of back office operations. This new technology will enhance the connections between the front office and back office operations which will further improve the close connection with consumers. The integration of multiple touch points of consumers will enable companies to achieve maximum customer satisfaction (Robb, 2014). Mobile ERP The latest innovation of mobile ERP enables the employees of all the branches to access the system from their mobile phones or tablets. This reduces the cost and hassle of accommodating computers for all the employees (Gelogo and Kim, 2014). Two-Tier ERP Utilization of two-tier ERP will reduce the chances of over expensive failure of single ERP system. The primary ERP system can be used for the traditional purposes of the organisation while the secondary ERP system will enable the management to experiment with all the recent developments of the ERP software. This procedure will assist the organisation to properly manage their overall system during the failure of any of the primary or secondary ERP software (Robb, 2014). Cloud ERP The innovation of cloud ERP system has enabled multinational organisations to easily and efficiently integrate all the functions and operations of their global branch offices. This technology has reduced the cost incurred by organisations to implement ERP system in every business units (Robb, 2014). Conclusion Installing a properly working ERP system across different business divisions is no longer a luxury for organisations. It has become a necessity for businesses to cope up with the increased demand and competition of the market. ERP system is an essential tool for the multinational companies to integrate the functions of different overseas branches. The major vendors of the ERP system are continuously working on introducing different new and improved version of ERP software. This system is gradually integrating with various other advanced technologies such as smartphone applications and cloud computing to provide better services to the consumers. They are also providing solutions to manage the temporary malfunctioning of the traditional ERP systems. The leading vendors of ERP systems, such as Oracle, SAP, Infor, Microsoft and Sage, have distributed their services across all the major countries in the world. Most of the ERP solutions of these vendors are helping businesses to integrate their major operations such as purchasing, inventory, manufacturing, sales and marketing, accounting and asset management. These vendors are providing different software solutions as per the core requirements of the industries. Organisations of almost all the major sectors, such as manufacturing, retail, service, transport, energy and communication, are upgrading their business operations with advanced ERP systems. Adopting and properly scheduling ERP software is providing a huge competitive advantage to organisations. It assists organisations to increase their service delivery speed and quality. It also enables organisations to reduce their production and operational cost. Appendix Vendors Products Operated countries Operated industry sectors Market share SAP SAP R/3 NetWeaver Business ByDesign Business One mySAP The organisation is operating in 130 countries across the world. Manufacturing, distribution, energy, retail, service, transport and communication. 25% Oracle JD Edwards EnterpriseOne JD Edwards World Oracle e-Business Suite PeopleSoft Oracle is operating in 145 countries across the globe. Manufacturing, distribution, energy, retail, service, transport and communication. 13% Microsoft Dynamics NAV Dynamics AX Dynamics GP Dynamics SL Microsoft is providing their services to the organisations in over 150 major countries. Manufacturing, distribution, energy, retail, service, transport and communication. 5% Infor ERP Adage ERP LN ERP LX ERP SL ERP Swan ERP SX.Enterprise ERP VE ERP XA Infor ERP is operating in 194 countries across the globe. Manufacturing, distribution, energy, retail, service, transport and communication. 6% Consona Corporation Intuitive Made2manage AXIS Cimnet Encompix DTR The ERP system of the organisation is operating in almost 100 countries. Manufacturing, distribution, retail. 2% Sage MAS 90 MAS 200 MAS 500 ACCPPAC Pro ERP ERP X3 They are operating in 24 countries such as Australia, Belgium, Austria, Kenya, Ireland, Germany, India, Canada, France etc. Energy, retail, service, transport and communication. 6% (Source: Compare Business Products, 2014) Reference List Arik Ragowsky, T. M. S., 2002. Enterprise resource planning. Journal of Management Information Systems, 19(1), pp. 11-15. Bingi, P., Sharma, M. K. and Godla, J. K., 1999. Critical issues affecting an ERP implementation. IS Management, 16(3), pp. 7-14. Compare Business Products, 2014. Top 10 enterprise resource planning (erp) vendors. [pdf] Compare Business Products. Available at [Accessed 26 February 2015]. Gelogo, Y. E. and Kim, H. K., 2014. Mobile integrated enterprise resource planning system architecture. International Journal of Control and Automation, 7(3), pp. 379- 388. James, M., 2014. A recipe for disaster: learning from failed food and beverage ERP implementation. [online] Available at [Accessed 26 February 2015]. Kable, 2010. Kraft and Cadbury: Managing SAP through a takeover. [online] Available at [Accessed 26 February 2015]. King, L., 2010. Kraft facing mammoth SAP integration as it buys Cadbury for £12bn. [online] Available at [Accessed 26 February 2015]. OLeary, D. E., 2000. Enterprise Resource Planning Systems: Systems, Life Cycle, Electronic Commerce, and Risk. United kingdom: Cambridge University Press. Robb, D., 2014. Top 8 ERP trends for 2014. [online] Available at [Accessed 26 February 2015]. UK Essays, 2015. Enterprise resource planning at hershey foods corporation. [online] Available at [Accessed 26 February 2015]. Umble, E. J., Haft, R. R. and Umble, M. M., 2003. Enterprise resource planning: Implementation procedures and critical success factors. European journal of operational research, 146(2), pp. 241-257. Read More