1 Company ERP system analysis assignment Student name: Student ID: Module name: Module code: Module tutor: Due date:
2 Introduction Data and information management in an organisation is very important. This is because the results are used to help the managing team undertake several measures in the organisation. Several inventory management systems have been implemented by various companies and businesses in order to ensure that there is smooth functioning of the organisation. Enterprise resource planning (ERP) is one of the systems that has been used by companies. This is a report prepared on analysis of a certain ERP system concerning customer order management(o'brien, 2004). However, before the implementation of any inventory management system it is very important to consider the financial requirements, system requirements and the productivity of the system. This report will specifically analyse the requirements of the ERP system in this company, its importance and the financial need of the system. Financial analysis The company decision on the new ERP model is that it will be a commercial systems. Various factors have been put together about the materials that will be required to ensure its successful implementation. However, the new ERP system is not to be implemented on the old or same hardware that the organisation is using rather than on a new hardware(delone & McLean, 2003). The system aims to cater for a population of 500 people. As a project manager it is important to evaluate the financial benefits of the systems and what the business will gain from the system implementation. In this case, there is the need of calculating the project CAPEX and OPEX.
3 Project CAPEX Capital expenditure Amount Total amount 4 CPU 5000 each 20,000 Product components A1 110*500 A2 140*500 A3 400*500 A4 15000*4 A5 11000*4 55,000 70,000 200,000 60,000 44,000 Disaster recovery price 30% of 46650 13995 Total project CAPEX 462995 Production site cost: total cost of component A without user + no of CPU ( 110+140+400+15000+11000) + (4*5000) = 46650 Project OPEX Capital expenditure Amount Total amount Maintenance 15/100 of 5000*4 3000 Vendor annual fee 20/100 of 462995 92599 Total project OPEX 95599 ERP project CAPEX (investment) 462995 ERP annual solution OPEX 95599
4 The above are the costs to that are to be incurred on implementation and the maintenance of the system. However, it is also important to note that there some other costs that have not been highlighted, this costs are crucial since they give the actual estimate of what the system will cost. Some of the costs that have been ignored are training costs and data transfer and maintenance cost. Training cost ERP systems users; which are both the staff members and the customers need to have enough knowledge on the systems and also have sufficient skills on how to use the system. The management team has failed to consider the fact that some workshop and conferences are required to help the users have some experience on the systems. This programs will require some finances in order to be successful(davenport, 2000). Data transfer and maintenance cost Considering that the system will be built on new products that is new CPU and hardware; it means that there will be need for the company to transfer their previous data from their old systems to the new ones. This will need professionals to transfer the data and this services will be at a fees(davenport, 2000). The system benefits are to be analyzed after a period of 5 years this will be determined through the total cost of CAPEX and OPEX cost. Total cost of ownership Capex cost = 462995 OPEX cost = 92599*5 = 462995
5 = 3000*4 = 12000 Total cost = 462995+ 462995+ 12000 936990 System requirement Having identified the cost of that will be required on the system, it is important to analyse the context diagram and identify some of the ERP requirements that are necessary in order to ensure that it meets the organisation business process. The diagram below represent the ERP system that will be implemented by the organisation(delone & McLean, 2003).
6 This diagram shows a simple customer order management system. However, to have a better understanding of the system it is important to understand the signs and shapes used on the diagram. This symbols help one to understand the relationship between the activities. (Baguley, 2009) This diagrams shows the relationship that is in between the COM activities, from the simple context that has been given above it is clear that there are various activities that can be done simultaneously and there those that would take place after the completion of another activity.. Assuming that an order receipt has been confirmed then the next step is to check the condition of the order, this means that one cannot confirm an order before the procedure has occurred. Using project management skills it is important to identify that the activity are forward pass activities where by the initial state is for the customer to send an order(choudhury, 2004). However, from the diagram it can also be identified that after confirmation of the order there are two approaches that can be undertaken by the system that is to terminate the order or to deliver the order. It is also important to estimate the time frame between activities in order to save cost and time. ERP system The major role of an ERP system is efficiency, cost and time. This means that a company that is aiming at maximizing efficiency reducing cost and time ERP is one of the system that is implement. Having understood that the following are the business function of ERP systems.
7 Factors to be satisfied by ERP system requirements (O'Brien, 2004) With such functions, ERP systems should satisfy various requirements of the system. Functional requirement 1. The system requires hardware platform for its support 2. Internet access for connectivity and communication between the user 3. A firewall for security reasons that will help to protect personal data 4. The system interface should be friendly for easy accessibility and usage 5. The system should be able to control inventory in that case alerting the company what the customers need 6. Each staff member using the system shall be uniquely identified by his or her 8-digit employee number.
8 7. Every customer will require to register through the use of a username and password in order to access the services 8. The system should be able to serve 500 users of the company since as stated the users are 500 Non-functional requirement 1. The first requirement is the financial requirement 2. Ethical practices of the system to the society and the users 3. The system should provide different kind of languages in order to give different users options 4. The main focus of the organisation is to improve and increase efficiency, so the system should be able to offer performance efficiency. 5. The system should be fits according to the laws and regulations of the company. 6. The system services should be available to all users Global requirements 1. The system must satisfy ISO/IEC 20000; this is a standard certification of a IT systems to ensure that they of the right standards to be used by the customers and staff members The satisfaction of the above measures is very important since with such factors the organisation will be able to meet its objectives, mission, visions, and goals(barker & Frolick, 2003). Conclusion Organisation performance can be improved by various factors, ERP systems is one of the measures that improve organisation performance. The major function of this systems is to improve the organisation efficiency, lower cost and also minimize the time that is used to work
9 on one activity. In this case it also important to analyse various requirement of the system before its actual implementation. Some of those factors are the financial requirements, the system requirements and also the benefits that will be enjoyed from the use of the system. Slide one: Introduction Project presentation What is the report about A belief definition of the ERP systems Need of ERP system How to create and implement ERP system Slide two: Requirement analysis of ERP systems System analysis What is required to implement an ERP system Identify whether the product is new or an upgrade Slide three: User requirements Analysis the functionality of the system Analysing the flexibility of the system Analysing the benefits of the system Analyse the system accessibility to the user Slide four: System requirement Analysis the software to be used Financial analysis Analyse the system design and architect
10 Analyse the engineers that will be working on the project Slide five: System implementation After identifying the requirements the next step is creation and implementation of the system. Ensure the system can service the number of users in the company Ensure that all the legal procedures are well followed. Ensure that the system can offer the privacy that is required to the users.
11 Works Cited Akkermans, H. & Helden, K. V., 2002. Vicious and Virtuous Cycles in ERP Implementation: A Case Study of Interrelations between Critical Success Factors. European Journal of Information Systems, Operational Research Society Ltd., Volume 11, pp. 35-46. Baguley, P., 2009. Project Management. North Shore: Hodder & Stoughton. Barker, T. & Frolick, M. N., 2003. ERP Implementation Failure: A Case Study. Information Systems Management, Auerbach, 20(4), pp. 43-49. Choudhury, S., 2004. Project Management,. New york: Tata Mcraw Hill. Davenport, T. H., 2000. Mission Critical : Realizing the Promise of Enterprise Systems. Boston: Harvard Business School Press. DeLone, W. H. & McLean, E. R., 2003. The DeLone and McLean Model of Information Systems Success. A Ten-Year Update." Journal of Management Information Systems, M.E. Sharpe, Inc, 19(4), pp. 9-30. Gargeya, V. B. & Brady, C., 2005. Success and Failure Factors of Adopting SAP in ERP System Implementation. Business Process Management Journal, Emerald, 11(5), pp. 501-516. O'Brien, J. A., 2004. Management Information Systems: Managing Information Technology in the Business Enterprise. Boston: McGraw-Hill/Irwin.