How Can a Global System Enhance the Value of a Firm?

A global system can enhance the value of a firm in many ways. For example, a global system allows firms to further standardize and optimize business processes with globally adopted practices (Richards, 2013). It also gives firms a single system to use, helping break down cultural and geographical barriers (Richards, 2013). A global system also makes it easier for a business streamline processes and follow various “global and local compliance requirements and customer mandates” (Richards, 2013). Those with a global system see reduced operating costs, from IT to infrastructure (Richards, 2013). A global system creates greater visibility in financial reporting, for example a firm may be dealing with multiple currencies (Richards, 2013). A global system gives a firm greater flexibility to respond to different geographical markets and competitors. This is beneficial because customer needs will vary with location. Target Canada could have benefited by incorporating a global system. For example, Target was not able to streamline their stores, they were found to be inferior to their American stores. Target also didn’t have a system in place that helped them adapt to the Canadian market. For example, some key differences include currency and Canada’s metric system, this is a problem IT would have run into, and one a global system could have dealt with. Target decided to go with a new system when they came to Canada, they used SAP. SAP is known to be difficult to implement and maintain (TGO Consulting, 2016). Target should have made sure that the ERP system they implemented moved them towards their objectives, with the right time and resources (TGO Consulting, 2016).

References

Richards, J. (2013, July 2). Top 5 Benefits of Global ERP Systems and Processes. Retrieved from Merit Solutions: https://www.meritsolutions.com/business-insights/top-5-benefits-of-global-erp-systems-and-processes/

TGO Consulting. (2016, March 31). What Can Target Canada’s ERP Failure Teach Us? Retrieved from TGO Consulting: http://www.tgo.ca/what-can-target-canadas-sap-failure-teach-us/