Executive Summary
Organisations having much information to analyse as the basis of making decisions often employ large numbers of employees in case they do not deploy management information system (MIS) to ease the analysis process.
However, from the perspective of the US medi-corp, which is a hypothetical company, such an approach introduces ineffectiveness and inefficiencies in decision making especially where decisions from different departments are to be fed into a central platform to arrive at an overall decision to execute a given task.
The current paper introduces ERP (Enterprise Resource Planning) as an MIS strategy for handling customer relationship challenges, supply chain management, and manufacturing function challenges of the US medi-corp.
Background
When an organisation grows in terms of its size and production capacity, its customer and supply chain problems and complaints become difficult and time consuming to solve. This case is evident in the US medi-corp (a hypothetical company).
The US medi-corp manufactures medical equipment, which it sales within the US after sourcing manufacturing materials from a myriad of suppliers located across the US. Apart from sales of products, the company also gets revenue from customer support services such as maintenance of the medical equipment.
The company has a hierarchical management structure so that command flows from the top to bottom. Making the organisational decisions is informed by the information flowing from customers, suppliers, and other organisational stakeholders to and from the organisation.
The strategic plan of the company is to exploit the global market. To achieve this goal, the US medi-corp values employees as the most important asset available to realise its strategic plans.
Operating in such a business environment, the company has been constantly looking for solutions to facilitate both urgent and quick decision-making processes especially in its effort to engage in the global trade.
Setting the Stage
The operation of the company has faced a number of problems in the continued effort of the US medi-corp to resolve supply chain and customer problems and complaints with urgency.
Indeed, this major problem may hinder the success efforts of the company since, “in a fiercely competitive environment, business strategy not only determines success, but also governs business survival” (Fui-Hoon & Lee-Shang 2001, p.285).
Hence, it is important for the US medi-corp to anticipate putting in place mechanisms of response besides ensuring an ardent reaction to market place demands.
Due to the increasing number of the customers that the US medi-corp has to attend, problems such as quick location of the customer and determination of frequency of purchases for each customer have been encountered in the recent past.
Consequently, making decisions on market targeting has proved problematic thus making the company suffer from being unable to precisely forecast its production.
The above problem is even more significant by noting that making target marketing decision in good time results in challenges for “helping to determine, which of the business practices could be altered to increase customer numbers” (Grant, Hall, Wailes, & Wright 2006, p.7).
Using the current information management systems, which are highly dependent on interaction of human decision makers (department heads and general managers) with segregated information systems running on different computers, location of past records involving customer communication is hard to access thus resulting to slowed resolution of customer disputes.
In effecting the transactions between suppliers and organisation, the fact that information is held on different computers makes it difficult to urgently prepare all documents relating to a specific transaction (Kraemmerand 2003, p.229).
This challenge forms a major hindrance to the attainment of the strategic plan of the company since “every minute that staff members spend on editing or otherwise generating paper work is an extra minute they are being less productive” (Head 2005, p.65).
Therefore, a solution is necessary to enhance speedy preparing of documents ranging from invoices, shipping labels, purchase orders, receipts, and customer communication to preparation of manufacturing plans based on customers’ demands.
Case Description
People Perspective
The challenges discussed above among others have attracted various concerns from organisational stakeholders. The people of the US medi-corp are organisational stakeholders who are affected by the current state of information management systems.
There is a challenge of efficient and effective management of the immense customer information base. Therefore, it has come to the attention of the US medi-corp that customers are conceiving the company as overlooking their orders.
Consequently, the US medi-corp is concerned that it may lose dissatisfied customers to its competitors in the industry.
In the attempt to build goods customer relations to retain them amid the looming challenges at least in the short-run before a solution is sought, the customer communication department sends individualised massages to explain the circumstances for order delivery delays coupled with other issues related with customer service.
However, in this process, due to the large number of customer base, messages are sometimes sent to unintended customers.
In some situations, messages are sent to the right customers though with the wrong preferred option. In the case of suppliers, staff members are incapable to make purchases of raw materials from the most outstanding suppliers.
Organisational Perspective
It is concerning the organisation that customer complaints and challenges in keeping track of the best suppliers will impair the success of the US medi-corp.
With the increasing of customer base, the capacity of employees to handle the entire customer base both effectively and effectively with the current state of information management system is a major problem.
In the realisation of this problem, the boards of directors coupled with the respective line managers meet to discuss the way forward. It was held that an intervention was necessary in the effort to ensure that the company will be able to handle even more quality and time cautious customers across the globe.
In the organisation perspective, the most preferred strategy is the one that would result to low costs in the long run but ensure that customers are well satisfied with both by the products and services offered by the US medi-corp.
Technology Perspective
Current information management technology deployed at the company is customised for each department. For example, the manufacturing department makes decisions based on inventory levels of raw material, material in the process, and the finished products.
Since the US medi-corp does not intend to hold large numbers of finished products, information from the sales department is essential in determining manufacturing decisions.
Unfortunately, since the information technology systems are customised as per the department, the manufacturing department depends on the analysed customer information from the sales department before consulting with the procurement so that raw materials can be sourced.
This decision-making process takes time thus resulting to delayed order executions. In the effort to raise sale levels of the US medi-corp, the company has developed a web based sales strategy.
However, this strategy faces a challenge since “web customers cannot choose a product related to the one they are looking for if they do not know that it exists” (Vilpola, 2008, p.63). From the technological perspective, a MIS technology that would integrate all the functions of the US medi-corp departments is required.
Solution Design Options
To help in the resolution of the problems faced by the US medi-corp, integration of the information management systems is required to enhance rapid decision-making.
Indeed, rapid decision-making is required for an organisation having large numbers of stakeholders whose contribution in the organisation affects the activities of the whole organisation (Dehning & Stratopoulos 2003, p.211). For the case of the US medi-corp, this outcome could be attained in three main ways.
The first option is to design a decision support system. The second option is to design and implement a transaction processing system.
Finally, the third option is designing and implementation of a MIS that integrates these two systems. The choice of either system is based on SWOT analysis of each of the MIS systems.
The decision support system has the strength of helping to make various decisions based on the analysis of data and statistical projections. Transaction processing system has the strength of “providing away of collecting processes, store, display, modify, or cancel transaction” (Mureell 2001, p.9).
The decision support systems create an opportunity for improvement of the quality of the decisions made by organisation managers as opposed to replacement of the managers.
Through a transaction processing system, an organisation gains an opportunity to permit multiple transactions to occur simultaneously (Davenport 2003, p. 128).
In addition, through the transaction processing system, data collected by the system can be “stored in databases, which can then be used to produce reports such as billing, wages, inventory, summaries, manufacturing schedules, or check registers” (Fryling 2010, p.327).
The two systems share common threats in that security of the systems is a big issue. A major weakness of the transaction processing system is that the appropriateness of the transactions is overly dependent on the accurateness of the information maintained in the databases.
On the other hand, the decision support system is slower in helping to arrive at a decision because it interacts with human decision makers. Upon consideration of the systems’ strengths and opportunities, the US medi-corp needs to take advantage of the strengths and opportunities of both designs.
Hence, an integrated information system is selected for design and implementation. This system is the ERP (Enterprise Resource Planning).
Solution and Implementation
The selected solution is implemented so that the US medi-corp is able to integrate all its production and management function in a manner that decisions are quick to make and respond to all the US medi-corp stakeholders’ concerns in real time.
Figure 1 below shows a schematic diagram of the modelling the ERP version to be used at the US medi-corp.
Fig 1: Source (Turban et al. 2008, p.300)
Implementation Methodology
The implementation of the solution entangles the construction of the ERP system and introducing it in the US medi-corp. This step encompasses the construction of both software and hardware.
Alternatively, the hardware and the software can be sourced from manufactures who can customise it to suit the requirements of the US medi-corp. This option is preferred to save time that is required for the new MIS to be fully operational in the organisation.
In the process of sourcing the software, bidding is the first step. The selected bidder will be based on the ‘low-price-bidder’ basis. However, the ERP software supplied must be able to support integration of external and internal management information throughout the US medi-corp.
It should have modules for management of manufacturing functions, service and sales, modules for management of customer relationships, inventory control, production planning and forecasting, and procurement among other modules that would “facilitate the flow of information between all business functions inside the boundaries of the organisation to manage the connections to outside stakeholders” (Yusuf, Gunasekaran & Abthorpe 2004).
ERP is an expensive MIS in the short-run. Hence, the US medi-corp needs to cut the costs of hardware meaning that the ERP supplied needs to be compatible with the current US medi-corp’s hardware, which supports Windows NT, UNIX, and mainframe.
Implementation of the ERP at the US medi-corp will require change management, which entails alteration of the processes that employees utilise to conduct the business of the organisation.
Many operations that were executed by employees manually or with interventions of computers will now be integrated and automated throughout in the organisation’s processes.
Therefore, employees will be retrained on how to use the new system to help them “share common data and practices across the entire enterprise to produce and access information in a real-time environment” (Fui-Hoon & Lee-Shang 2001, p.285).
Since the company does not have a technical team to facilitate the implementation of the MIS, a third vendor will be hired to evaluate the customisation needs of the organisation to suit its needs. Figure 2 below shows these customisation requirements.
Fig 2: Customisation requirements
The above areas of customisation evidences that ERP scope entangles significant alterations of staff work practices and working process (Monk & Wagner 2009, p.56).
Consequently, incomplete understanding of various processes before the implementation is initiated may lead to failure of the project (Somers et al. 2000, p.1001).
The implementation methodology is based on the Markus and Tanis (2000) ERP life cycle. The phases are “chartering, project, and Shakedown” (Markus and Tanis 2000, p.173). The chartering phase comprises the evaluation of various decisions that lead to the funding of the ERP project.
The main players in this phase are vendors, executives of the organisations, consultants, and the IT specialists of the company.
The main activities encompass initiation of the ideas, making decisions to proceed with the project, and scheduling and planning of the project after selection of the ERP as the main software solution that will be implemented. In the project phase, rollout and system configuration is done.
The main key players are the team members of the project, internal information technology specialists, vendors, and managers from the functional areas and business units to be integrated under ERP. The activities of the phases are software configuration, testing, integration, training, rollout, and conversion of processes.
In the shakedown phase, bugs are fixed coupled with systems rework, retraining, tuning of the system performance, ands ensuring adequate staffing to ensure that temporary inefficiencies are mitigated. Monitoring of the ERP system is also conducted in this phase to ensure that no bug remains.
References
Davenport, T 2003, ‘Putting the enterprise into the enterprise system’, Harvard Business Review, vo.5 no.2, pp. 121-131.
Dehning, B & Stratopoulos, T 2003, ‘Determinants of a Sustainable Competitive Advantage Due to an IT-enabled Strategy’, Journal of Strategic Information Systems, vol. 12 no.3, pp. 202-241.
Fryling, M 2010, ‘Estimating the impact of enterprise resource planning project management decisions on post-implementation maintenance costs: a case study using simulation modelling’, Enterprise Information Systems, vol. 4 no. 4, pp. 391–421.
Fui-Hoon, F & Lee-Shang, J 2001, ‘Critical factors for successful implementation of enterprise systems’, Business Process Management Journal, vol. 7 no. 3, pp. 285-296.
Grant, D, Hall, R, Wailes, N, & Wright, C 2006, ‘The false promise of technological determinism: the case of enterprise resource planning systems,’ New Technology, Work & Employment, vol. 21 no. 1, pp. 2–15.
Head, S 2005, The New Ruthless Economy: Work and Power in the Digital Age, Oxford UP, Oxford.
Kraemmerand, P et al. 2003, ‘ERP implementation: an integrated process of radical change and continuous learning’, Production Planning & Control, vol. 14 no.4, pp. 228–248.
Markus, L & Tanis, C 2000, The enterprise system experience from adoption to success: Framing the Domains of IT Management: Projecting the Future Through the Past, Pinnaflex Educational Resources, Inc., Cincinnatti, OH.
Monk, E & Wagner, B 2009, Concepts in Enterprise Resource Planning, Course Technology Cengage Learning, Massachusett, Boston.
Mureell, S 2001, E–Business and ERP: Rapid Implementation and Project Planning, John Wiley and Sons, Inc, New York, NY.
Somers, M, Nelson, K, & Ragowsky, A 2000, ‘Enterprise resource planning (ERP) for the next millennium: development of an integrative framework and implications for research’, Proceedings of the Americas Conference on Information Systems (AMCIS), vol. 1 no. 1, pp. 998-1004.
Turban, J et al. 2008, Information Technology for Management, Transforming Organisations in the Digital Economy, John Wiley & Sons, Inc, Massachusetts.
Vilpola, I 2008, ‘A method for improving ERP implementation success by the principles and process of user-centred design’, Enterprise Information Systems, vol. 2 no.1, pp. 47–76.
Yusuf, A, Gunasekaran, Y, & Abthorpe, M 2004, ‘Enterprise Information Systems Project Implementation: A Case Study of ERP in Rolls-Royce’, International Journal of Production Economics, vol. 87 no. 3, pp. 75-81.
Definition of Terms
Shakedown: Removal of bugs in systems under implementation
Project phase: a phase in the implementations of MIS that entails running of a system under implementation by the end users to determine its efficiently and effectiveness
Chartering: A decision that entails the definition of business problems and constraints of the possible solutions.
ERP: A software application, which enables an organisation to manage effective and also efficient utilisation of resources including human resource, financial resources, and material resources among others
Customisation: Configuration of MIS systems to meet the clients’ business needs
Bugs: Errors that influence the functionality of a software application
Change management: A group of techniques that are deployed by managers to effect changes in a firm
Decision support systems: A type of MIS, which makes it possible for managers to make decisions based on statistical projections and data analysis.