CHAPTER 1 Introduction

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1 CHAPTER 1 Introduction 1.1 Background In this globalization era, information system is undoubtedly becomes a fundamental need in every company. It is an important part that supports a company s business process. It is rather intriguing how the companies develop and causes a high level of competition among each other. Information system has helped company to perform its business process to be more effective and efficient. Besides, it allows company to integrate its internal functions that can improve performances. The size of the company determines the business processes performed and also the information needed. Hence, a big company needs a system that can provide hassle free system that integrates all functions in the company, the business process and also to be able to provide the real time information that should be crucial to a company. Enterprise resource planning (ERP) systems support solutions for standard business processes such as financial, sales, procurement and warehouse. In order to improve the understandability and efficiency of their implementation, ERP vendors have introduced reference models that describe the processes and underlying structure of an ERP system. To select and successfully implement an ERP system, the capabilities of that system have to be compared with a company s business needs. Based on a comparison, all of the fits and gaps must be identified and further analysed. This step usually forms part of ERP implementation methodologies and is called fit gap analysis. These days ERP systems need to offer a lot of functionality in order to cope with a large number of business requirements. This functionality needs to be aligned with the business in order to create value for the organisation, confronting the organisation with the options of either configuring the enterprise system, the organisation, or a combination of both (Pack & Kovacic, 2013, pp. 1-2) 1

2 2 ERP (Enterprise Resource Planning) is a system development methodology that can help company to make a system that integrates all functional areas, making it real time and transparent, and also increase the efficiency and effectiveness of the company s performance. PT. Sinarmas Land is the pioneer of lifestyle residential apartments, office and retail spaces. It is one of the leading company in property and development in Indonesia which were found in 1980 s. Le Grandeur Hotel is the subsidiary company of PT. Sinarmas Land, which is located in Jakarta and Balikpapan. Le Grandeur Hotel Jakarta is an award winning hotel that manages 350 guest rooms and suites, several services and facilities such as gift shop, wine shop, laundry, etc. Le Grandeur Hotel manages to use ERP system which is provided by SAP to enhance their business process quality in aspects such as finance, sales, and material management. This thesis mainly discuss about the evaluation and give recommendation of module Material Management of the ERP System run in Le Grandeur Hotel and analyze the performance of the module in the company, which has the functions to maintain the goods sold used in the hotel operation and integrates business function in the business process Scope The scope of this thesis will be limited to: 1. Analyze the business process in Le Grandeur Hotel supported by Material Management Modules, including the procurement cycle, goods movement management, physical inventory management, and consignment process. 2. Analyze SAP system of Material Management Modules with sub module which are the procurement cycle, goods movement management, physical inventory management, and consignment process. 3. Analyze Lotus Notes system of Material Management Module, including approval, cancellation, and the integration with SAP system. 4. Recommendation to optimize current system by upgrading the system or business process of Material Management Module.

3 3 1.3 Benefits and Objectives Objectives of this thesis are: 1. To analyze and make an assessment for the Material Management business process in Le Grandeur Hotel. 2. To analyze and make an evaluation for the functions of systems that are being used in Le Grandeur Hotel, which are SAP and Lotus Notes system. 3. To produce an evaluation consists of analysis and comparison of whether the system run in Le Grandeur Hotel has met the business process requirement. Benefits of this thesis are: 1. Understand the Material Management business process in Le Grandeur Hotel. 2. Understand the functions of the current system in Le Grandeur Hotel. 3. Produces recommendation as the result of the analysis that can be utilized to improve system performance, to support the business process in Le Grandeur Hotel. 1.4 Methodology Evaluation Methodology The methodologies used to evaluate MM modules at Le Grandeur Hotel are: 1. Requirement analysis for MM modules a. Gather the requirements to evaluate MM modules. b. Analyze the requirements to determine related data and information that will be collected. 2. Data and information collection for MM a. Direct interaction with MM system. b. Interview MM users. 3. Business process analysis a. Analyze the business process that is being used in MM module at Le Grandeur Hotel. 4. System analysis a. Analyze how the SAP and Lotus Notes systems work to support the business requirements in Le Grandeur Hotel.

4 4 5. Fit Gap Analysis a. Analyze the gap between the business process and the system function. 6. Evaluation alternative research a. Collect the result of the performance evaluation of MM modules. b. Develop recommendations for the company to enhance the Business Process and fulfill the requirements Research Methodology To do the research in this thesis, there are some methodologies that used to get data and information that are required, and these data will be analyzed in the analysis methodology. These are the research methodology that is used: 1. Data collection methodology These are some methodologies used in this thesis to get data that is required: a. Interview Getting data and information from interviewing users who use the SAP, and Lotus Notes system at Le Grandeur Hotel. b. Internship Getting data and information from the business process observation and analysis at Le Grandeur Hotel. c. Literature methodology Getting data and information by reviewing some journals, books from internet, and books that are related with ERP, and Lotus Notes system implementation. 2. Analysis methodology Data that already collected will be analyzed using these analysis methodologies. These are some analysis used in this thesis to find the requirements that are required to be evaluated: a. Business process analysis Analyzing the current business process used at Le Grandeur Hotel to get data and information that are going to be used in the thesis.

5 5 b. Current system analysis Analyzing the current system used at Le Grandeur Hotel to get some data and information that are going to be used in the thesis. 1.5 Writing Systematic This thesis writing systematic will be divided into five chapters. The five chapters are: CHAPTER 1 : INTRODUCTION This chapter explains about the background, scope and limitations, benefits and functions, research methodology and writing systematic that are used in this thesis. CHAPTER 2 : LITERATURE FRAMEWORK This chapter defines the theories that are related to ERP system evaluation that will be a fundamental of analysis and evaluation of Material Management modules. CHAPTER 3 : CURRENT BUSINESS PROCESS AND SYSTEM ANALYSIS This chapter focuses on the background of the company, organization structure, and current business process and system analysis at Le Grandeur Hotel. CHAPTER 4 : EVALUATION AND RECOMMENDATION This chapter explains about the result of the evaluation and the recommendation of Material Management modules at Le Grandeur Hotel. CHAPTER 5 : CONCLUSION AND SUGGESTION This chapter concludes discussion from chapter one to chapter four, including the suggestions to use for continuous improvement.

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