Operations and Information Systems: Heelz - Assignment Example

ASSIGNMENT Operations and Information Systems: Final Assessment Introduction Heelz is a boutique shoe retailer based in the UK, and owned by Sally. Initially, there was only one store which has been further developed into a chain of stores. Sally has opened the four Heelz stores and also has acquired “Zanatos’ a group of four outlets in July 2012. Two of the four acquired Zanatos outlets are located in Spain, which means that now Sally has to manage international business. This acquisition is viewed as a strategic decision made by Sally as she is planning to expand into the European market. As the Heelz and Zanatos have different IT systems, it is necessary to integrate these systems into one system. Alos it has been identified in the case study, that it is necessary to develop e-commerce platform for B2C segment. The system should be fully integrated enabling customers to collect and return stock via the stores, and via the courier. The aim of this report is to address all of the above mentioned issues and to provide advice on how to address the technology needs of the Heelz growth. The focus will be made on the integration of e-commerce in Heels business. The remainder of the report is structured in the following way: Section 1 provides a brief overview of the overall process of the OIM; Section 2 of the e-commerce and its integrations into the business; Section 3 explains how the SSIP process should be utilized in order to ensure successful project implementation; Section 4 is a concluding part of the report. Section 1: general overview of the overall process of the OIM Operations management deals with operational activity of the business. This is an activity of managing resources for achieving strategic goals of the companies. Normally, operations management involves delivery of goods and services and sale of these goods to customers (in case of commercial organization) (Slack, Johnston and Stuart, 2010). In order to deliver goods or services, managers have to coordinate many internal processes and manage internal customers and suppliers (Slack, Johnston and Stuart, 2010). In order to manage internal processes more effectively, businesses have integrated computer-based technologies in operation management processes. Information technology represents a single type of technology, which includes any device, enabling to collect, store, manipulate and/or distribute data or information (Slack and Chambers, 2007). Increasing number of companies implement various IT strategies and utilize computer-based systems in order to improve their operations. One of such technologies is ERP system, which is also appropriate for Heelz Company. Section 2: Implementation of ERP systems E-commerce With the development of Internet-based technology, increasing number of consumers prefer to do shopping online. Heelz, being a company operating in two European markets should definitely launch e-commerce activity for its business operations. By developing online platform for its business operations, the company will gain greater opportunities to reach potential customers despite their geographical location and time zone and also to reduce overhead, rent and other costs associated with maintenance of a high-street store (Slack and Chambers, 2007). Moreover, online store will enable the company to better communicate with its target audience and to offer best deals to potential/existing clients (Slack and Chambers, 2007). ERP systems Initially, Heelz had one store and there was no necessity to develop integrated approaches and utilize sophisticated information technologies in order to run the business. However, with the expansion of business and integration of two different business models, Heelz faced with a necessity to manage and integrate vast amounts of information (Slack, Johnston and Stuart, 2010). In order to address this challenge it is necessary to implement ERP system to Heelz business. Below is provided a brief overview of the ERP system, its benefits, and key aspects for implementation. Brief overview of the ERP system In simple words, ERP (Enterprise-Resource Planning) software is a system, which helps organizations to plan and manage effectively its resources. More scientific definition of the ERP is as follows: “The system which attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different departments’ particular needs” (Slack, Johnston and Stuart, 2010:409). ERP system integrates information from all parts of the organization, including: strategic reporting applications, sales and marketing applications, delivery and logistics applications, service applications, human resource management applications, purchasing and supply applications, operations applications, and financial applications (Slack, Johnston and Stuart, 2010:410). The ERP systems have been widely integrated in various industries and in different countries. Retail industry is not an exception. Many retailers have already utilized ERP system in order to develop more efficient approach of communicating with its target audience and integrating its business operations (Zhu et al., 2010). The benefits of implementing ERP system The benefits of implementing ERP system are summarized below: Provides absolute visibility of what is happening on all parts of the business; Enables making all parts of the business and operations more efficient; Provides better “sense of control” of operations and sets the background for continuous improvement of operations; Helps to integrate supply chains of customers and suppliers; Enables to communicate with business stakeholders (customers, partners, suppliers) in more efficient and productive manner (Slack, Johnston and Stuart, 2010:411). By implementing RP system, Heelz Company will be able not only to address all current issues and gain above mentioned opportunities, but also will be able to make its operations much more efficient and coordinated. ERP system will help Sally to integrate two different databases of Heelz and Zanatos, and thus, to smooth it’s all business processes. Taking into consideration the fact that there is a goal to launch e-commerce platform for B2C business activities, implementation of ERP will be especially helpful. Implementation of ERP system ERP system is designed in order to help organizations to solve problems related to fragmentation of information. The same problem has been detected in the case of Heelz Company. Implementation of the ERP system is quite a complex process as it involves integration of internal processes of the company which cover almost all operations and functions of business (Slack, Johnston and Stuart, 2010). Therefore, integration of all these processes and departments requires involvement of all departments, varying from operations managers, to finance and marketing managers. Implementation of ERP system is an element of change, and therefore, it might be managed accordingly. In order to ensure successful implementation of ERP system it is important to understand and manage critical success factors (CSFs). Some of the key strategic and tactical CSF’s include the following: Selection of appropriate ERP package, which will match the Heelz’s business processes; Commitment of top management and strong leadership; Necessity to assess the current IT system and infrastructure for readiness; Communication of vision and planning with the whole organization; development of integrated communication among different functions and departments; Adoption of time-frame approach for implementing CSF; Effective project management team; Buy-in from all functional units Enterprise-wide change management; Authority and status of IT leader Training as an essential element of ERP implementation; Team comprised of IT and business expertise; Effective project management team (Slack, Johnston and Stuart, 2010; Law and Ngai, 2007; Garg and Garg, 2014). Many companies fail to integrate successfully ERP systems, and thus incur significant costs and loses. There were also fixed many failures in retailing industry as well (Kranz, 2000).Thus, in order to ensure effective implementation of the ERP system, the management of the company is highly recommended to take into consideration all of the above listed CSFs. In addition to these factors, Heelz’s management has to realize that ERP system will require significant financial, human and time resources at the first stages of system implementation (Kranz, 2000). Section 3: Strategic Systems Integration Planning (SSIP) When an organization is planning to undertake some strategic initiatives in relation to information systems, simple mechanization of the processes in not appropriate approach. In order to ensure successful integration of IT technology into business operations it is important to ensure that the company has necessary skills, leaders, capabilities and engagement of both business and IT managers (Business Technology Consulting Group, 2011). The company needs to fit its business needs with a cohesive information systems capability (Business Technology Consulting Group, 2011). It is critical to have a clear understanding of the systems that are integrated into business, their functions and limitations/constraints (Summers, 2012). For these purposes organizations adopt Strategic Integration Planning (SSIP) – a process, which helps to balance between business needs and IT aspects. Thus, it is critical to pursue the initial business plans of the company and view technology as an instrument enabling/facilitating achievement of the corporate business plans (Business Technology Consulting Group, 2011). As there is not unified or single “pre-boxed” solution for all organizations, it is necessary to expect that the SSIP process may vary and depend on many internal and external factors (Business Technology Consulting Group, 2011:3). However, despite possible variations to SSIP process, there is a number of actions which should be implemented in order to ensure continuous alignment of IT strategy with the company’s business needs. These actions include the following: Managing the SSIP Project and Organizational Change It is important to establish scope, timescales, working plans, monitoring and measuring of the program (Business Technology Consulting Group, 2011). Assessing the current IT and business environments; Heelz Company even though is relatively small business operates in complex business environment at both domestic and international markets. Before introducing any technology it is highly recommended to analyze current business environment and to consider all the costs and benefits of each decision (Summers, 2012). IT environment also needs to be analysed and assessed (data centers, physical systems infrastructure and architecture, application interfaces, access security, etc.) (Business Technology Consulting Group, 2011). Identifying threats and opportunities The next stage implies assessment and development of process models. This practice will enable to identify the key functional areas and process of the company, as well as relevant inter-process relationships (Business Technology Consulting Group, 2011). Development of IT strategic and tactical plan (Business Technology Consulting Group, 2011). The company needs to have a well-developed IT strategic plan, with a specification of tactics of implementation. References: Business Technology Consulting Group, (2011). Strategic Systems Integration Planning. Retrieved from http://btcgllc.com/uploads%5CStrategic_Systems_Integration_Planning.pdf Garg, P. and Garg, A. (2014). Factors influencing ERP implementation in retail sector: an empirical study from India. Journal of Enterprise Information Management, 27(4), pp.424-448. Kranz, R.S. (2000), "Is true retail ERP available?", DSN Retailing Today, vol. 39, no. 12, pp. 13. Law, C. and Ngai, E. (2007). ERP systems adoption: An exploratory study of the organizational factors and impacts of ERP success. Information & Management, 44(4), pp.418-432. Slack, N. and Chambers, S. (2007). Operations management. Harlow, England: Prentice Hall/Financial Times. Slack, N., Johnston, R. and Stuart, C. (2010). Operations management. Harlow, England: Pearson Education. Slack, N. and Chambers, S. (2007). Operations management. Harlow, England: Prentice Hall/Financial Times. Summers, B. (2012). Effective methods for software and systems integration. Boca Raton, FL: CRC Press. Zhu, Y., Li, Y., Wang, W. and Chen, J. (2010). What leads to post-implementation success of ERP? An empirical study of the Chinese retail industry. International Journal of Information Management, 30(3), pp.265-276. Read More