Business Proposal for the Implementation of Erp

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EPPA 4716 : INTEGRATED CASE STUDY

CASE ANALYSIS REPORT
CASE 5 : INTERNATIONAL DIVIDER WALLS

“BUSINESS PROPOSAL FOR THE IMPLEMENTATION OF ERP”

Prepared by :

(SET 5 - GROUP 2)

NURSAFFALIEANTI BINTI OTHMAN                                 A139665

NURSHAHIRAH BINTI ABD MAJID                                 A139950

NOR LIYANA BINTI HUSAIN                                         A140076

NURUL FARAHANIM BINTI SALIM                                 A139889

DOREINA GEOFFREY                                                 A139365

NUR ATHIRAH BINTI ABDUL HAMID                                A140086

Prepared for :

DR. KHAIRUL AZMAN AZIZ

1. PROJECT DESCRIPTION

In ID Walls, we developed a strategic plan to implement a global ERP system. Implementation in the Americas division had been completed successfully. To take the next step in the ERP roll out, we had to decide about the roll out of an ERP system for the three divisions. In order to fully implement the ERP system, we can choose from two alternatives available: a one-instance option (centralized approach in which all divisions use the same ERP, which will be hosted and managed centrally) and a multiple-instance option (decentralized approach which will get each division its own ERP project).

With a one-instance option, a centralized global project would be set up for the full implementation in all division. The project would include a standardization of customer, vendor, and product and finance naming conventions and processes. After the implementation, the ERP infrastructure would be hosted and managed centrally.

With a multiple-instance option, each division would set up its own project. Moreover, to allow easy and fast financial consolidation, a global project would be set up for standardization of financial naming conventions. The multiple –instance option required each division to set up its own project and manage its own ERP infrastructure.

1. EXECUTIVE SUMMARY

The implementation in one of the divisions (Divider Walls America) of our company had been successful. Now, we need to take the next step in the worldwide roll out of the ERP system.

Enterprise resource planning (ERP) is business process management software that allows an organization to use a system of integrated applications to manage the business and automate many back office functions related to technology, services and human resources.

In order to encounter current financial and IT crisis, an implementation of the global ERP need to be done as soon as possible. With all the explanation and analysis of the whole company as well as by each divisions that will be discuss in the next page, we proposed for the multi-instance option which this option can be easily implement and adapt to the current situation of International Divider Walls.

1. INTERNATIONAL DIVIDER WALLS - AT A GLANCE

ID Walls was worldwide leader in design, production, and sales of divider walls. Our company also had a strong presence in the indoor sun screen market. Due to economic downturn business had been going down. ID Walls had taken several initiatives to improve its cash position and reduce costs, but free cash flow was limited due to significant indebtness. The cash position was being monitored by the banks, and Sarbanes Oxley corporate governance legislation (SOX) put pressure on the CEO and CFO regarding the financial statements.

1. Company Strategy

The strategy of ID Walls was to expand the market for divider walls across industry segments (e.g. government, education), and return to its historic profit level for the indoor sun screens.

1. Organizational Structure

ID Walls had a head office and three division. The division were evaluated by corporate on profit and loss objectives.

1. Culture of The Company

Our corporate CEO, fostered the entrepreneurial spirit of the company and stimulated its international expansion. He had designed the organization in such way that it reflected the autonomy of the various divisions that could operate freely as long as we achieved agreed upon financial objectives.

The entrepreneurial spirit of the company and its drive towards expansion had not always been successful from a financial point of view. Our corporate CFO, Larissa Jones, knew that tight control of the company’s financial was vital for its continuity. She required better IT support for high-quality consolidated financial statements.

1. IMPLICATIONS FOR ERP IMPLEMENTATION

From a theoretical standpoint, the implementation of ERP systems may affect the firm business strategy by offering new opportunities for the firm that did not enjoy previously.ERP implementation is the firm’s ability to adapt, configure, and integrate information flows and business processes. Even though a firm may implement ERP, it needs to adapt, reconfigure, and integrate its information flow and business processes on a continuing basis because markets change and new technology are created. Successful ERP implementation involves redesigning business processes from an inflexible, mass-transaction orientation to an agile, lean, and knowledge-based process. During business process transformation efforts, firms must incorporate corresponding training programs, operating procedures, and information technologies to support the emerging infrastructure. The result of appropriately implementing ERP is to improve firm performance primarily caused by redesigned business processes, integrated managerial functions, accelerated reporting cycles, and expanded information capabilities.

Impact of ERP Implementation on Business Strategy, management information systems such as ERP affect business strategy. Business strategy involves long term planning that may include mergers and acquisitions, market segmentation, capital formation, products sourcing, supplier and customer relationship management, and product. A firm’s ability to have information readily available helps them achieve competitive advantage and strategic initiatives. The concept of receiving timely feedback, analyzing deviations from expectations and taking necessary decisions to correct deviations is rooted in cybernetic control theory. While the adoption of ERP systems offer the means by which firms can survive and adapt, managers need to implement processes, procedures, systems, and metrics that will facilitate their business strategy. Because ERP systems can rapidly deliver a comprehensive set of interrelated data and information to decision makers, firms can achieve competitive advantage and strategic initiatives such as cost leadership and market differentiation. These are characteristics of a firm that would be defined as a prospector. An ERP system allows a firm to pursue strategic options such as mergers and alliances, product innovation, cost leadership, and market differentiation. Implementing an ERP system has a positive impact on the adoption of prospector-type business strategy because it effectively facilitates this approach. Therefore, the following hypothesis is proposed.