ES Software Selection Report

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Executive SummaryTOP Coffee’s seeks to improve its supply chain performance to improve the company’s profitability. The company also seeks to trim down labour requirements and transcription errors. The report recommends implementing ERP or SCM, both of which have the potential to attain the company’s objectives. The key questions considered in choosing between ERP and SCM is based on the benefits of each ES in reflection to the business needs, the cost of the software and the cost of implementation and ease of use. Compared to SCM, ERP is more complex, expensive and fraught with risks. Hence, due to the overall lack of knowledge and expertise on implementation of Enterprise Software (ES) and the company’s limited finances, it is recommended that SCM should be implemented as it is less complex and more basic, as well as flexible enough to address the company’s need.

Table of Contents

TOC o “1-3” h z u HYPERLINK l “_Toc391394962” ES Software Selection Report PAGEREF _Toc391394962 h 1

HYPERLINK l “_Toc391394963” Executive Summary PAGEREF _Toc391394963 h 2

HYPERLINK l “_Toc391394964” ES Software Selection Report PAGEREF _Toc391394964 h 4

HYPERLINK l “_Toc391394965” Introduction PAGEREF _Toc391394965 h 4

HYPERLINK l “_Toc391394966” Business and Technical Rationale for Adopting ES PAGEREF _Toc391394966 h 4

HYPERLINK l “_Toc391394967” Issues to Consider PAGEREF _Toc391394967 h 5

HYPERLINK l “_Toc391394968” Process for selection of ES Software PAGEREF _Toc391394968 h 5

HYPERLINK l “_Toc391394969” Comparison of ERP and SCM based on SWOT Analysis PAGEREF _Toc391394969 h 6

HYPERLINK l “_Toc391394970” Strength PAGEREF _Toc391394970 h 6

HYPERLINK l “_Toc391394971” Weakness PAGEREF _Toc391394971 h 7

HYPERLINK l “_Toc391394972” Opportunity PAGEREF _Toc391394972 h 7

HYPERLINK l “_Toc391394973” Threats PAGEREF _Toc391394973 h 7

HYPERLINK l “_Toc391394974” Analysis and justification of suitable ES package PAGEREF _Toc391394974 h 8

HYPERLINK l “_Toc391394975” Conclusion and Recommendations PAGEREF _Toc391394975 h 8

HYPERLINK l “_Toc391394976” Reference List PAGEREF _Toc391394976 h 9

ES Software Selection ReportIntroductionTOP Coffee is confronted with the challenge of expanding markets and the changing customer expectations. This report examines the company’s business and technical rationales for their need for Enterprise System (ES), issues to be considered before adopting ES, and the process for the selection of two most relevant ES packages. In this regards, ES software such as Enterprise Resource Planning (ERP) and Supply Chain Management software are analysed. SCM software is selected as it is more sustainable. It is expected to provide two key benefits: integrated enterprise view of the business that covers all departments and functions and secondly, an enterprise database for storage, monitoring and processing all business transactions.

Business and Technical Rationale for Adopting ESSeveral reasons justify grounds for adoption of ES software. Top Coffee seeks to expand its business into supplying and servicing coffee machines, coffee beans and accessories to the corporate market and restaurants nationally. It therefore needs ES software to achieve standardisation and to promote synergy across its product lines and national boundaries (Umble et al. 2003). The company also faces pressures to lower costs in its supply chain and to radically reduce throughput times and inventories. To remain competitive, TOP Coffee has to improve its business practices and procedures. Additionally, it has to share vital in-house information with the customers, suppliers and producers. The organisation’s functions must also improve its capacity to produce and communicate accurate and timely information. It therefore needs ES software to reduce production and distribution costs, promote information sharing, and broaden knowledge and skills base (Shang & Seddon 2002; Light & Papazafeiropoulou 2004).

Issues to ConsiderThe key questions TOP Coffee should consider in choosing between ERP and SCM should be based on whether the investment will pay off, in addition to whether the ES is capable of satisfying its key objectives and the business needs (Shang & Seddon 2002). The business benefits are multidimensional and vary from improving decision-making to improving operation, both of which will fulfil TOP Coffee’s business needs. Given the company’s aims and objectives, the other issues to consider include the cost of the software, cost of implementation and ease of use. For this reason, this report concentrates on the post-implementation benefits of the two types of ES.

Process for selection of ES SoftwareSelection of the SCM and ERP takes similar procedure. First, TOP Coffee has to create a vision, where it decides the corporate objectives and strategies. Next, the company must create a function list or list of current business processes that form criteria for selecting ERP or SCM. Next, the company has to create a list of likely software vendors. Afterwards, the company creates request for proposal (RFP), which outlines how the company requires each function and department to operate as well as the instructions to the software vendor (Umble 2003). Next, the software vendors or suppliers showcase their packages to the company. Here, Review is based on the corporate objectives and strategies. This is followed by selection of the most suitable ES software. Later, the company justifies the investment by comparing the software’s benefits and the costs. Subsequently, the company negotiates a contract and runs a pilot program before finally deciding whether to implement the software (Umble 2003).

Comparison of ERP and SCM based on SWOT Analysis

Enterprise Resource Planning (ERP) systems consist of software packages that allow businesses to unify their internal business processes, in addition to all information pertinent to operation of the business (Muscatello et al. 2003). The SCM integrates all major business processes across the entire supply chain, from the supplier to the end-consumer.

StrengthBoth the ERP and the SCM software can set up facilities and networks that enable TOP Coffee to transform raw materials into finished goods for delivery to customers. SCM will give the company advantage over its competitors by enabling them to make effective use of information along the supply chain, resulting in substantial cost reduction. On the other hand, ERP will enable effective use of information across the company’s entire value chain (Misra & Singh 2010).

Compared to the ERP, the SCM can help in regulation of the movement of inventory in and out of the organisation, resulting to faster processing of orders and timely deliveries. Both SCM and ERP will enable TOP Coffee to be more efficient and effective (Buxmann et al. 2004).

Both SCM and ERP are also cost-saving, since they can enable TOP Coffee to minimise cases of lost sales by determining sufficient stock that meets the demand. When it comes to providing data security, ERP and SCM can allow the employees sufficient information access to transfer, receive and make orders without compromising the firm’s security (Buxmann et al. 2004).

However, ERP has a broader application and can integrate inventory, sales, order, customer service and manufacturing. Additionally, it facilitates sharing of production plans along the supply chain to happen, as a result establishing a collaborative team within the company. It is also capable of managing all business resources including production, human resources and business finances effectively (Umble et al. 2003).

WeaknessImplementing the SCM and ERP can be a challenge since they both require substantial customisation to make them compatible with TOP Coffee’s management systems. In particular, implementation of the ERP can be greatly complex as creating a planning system that sufficiently integrates information technology and the human resource is a challenge and requires extensive risk management (Nah & Delgado 2006). ERP is far more complex to implement since integrating people, software, hardware and data in the managerial, operational and strategic level is impractical (Umble et al. 2003).

OpportunityBoth SCM and ERP have the capacity to increase efficiency by allowing for automation of TOP Coffee’s inventory-related tasks. For instance, like the SCM, the ERP can collect data and create records, which save time and increases business efficiency. However, unlike the ERP the SCM can help in warehouse organisation by enabling TOP Coffee to make effective use of its warehouse. For instance, products that have higher demand or are sold together can be placed near the delivery section to save time (Misra & Singh 2010).

ThreatsUnlike in using the SCM, data accuracy is critical in using ERP, if it has to function effectively. Due to its integrated nature, entering the wrong data may have negative overall effect on the entire organisation. Additionally, in using the ERP, it is imperative that every member of the organisation has to work within the system rather than around it (Umble et al. 2003).

Analysis and justification of suitable ES packageFrom the SWOT analysis, it is inferred that ERP system implementation is vast with risks. As result, it has the potential to hurt the business. Hence, it is hoped that the company may face a greater degree of failure in implementation of ERP than SCM. Additionally, ERP’s complex nature may trigger opposition due to the company’s overall lack of knowledge and expertise on implementation of Enterprise Software (ES) as well as the limited finances.

Additionally, SCM is selected since TOP Coffee requires an ES that addresses both internal and external organisational operations, thus making SCM to be the more suitable option. While the ERP offers inbound-oriented functions, the SCM has both inter-organisational and intra-organisation perspective. Since the company is more concerned about managing changes in its supply chain, the SCM can serve as much as ERP is expected to perform. The SCM can integrate the entire planning functions across the company’s supply chain. At the same time, it extends beyond traditional planning solutions by taking into account the capacity, demand and material constraints.

Conclusion and RecommendationsTOP Coffee aims to improve its supply chain performance to improve the company’s profitability and to trim down labour requirements and transcription errors. The company is faced with the option of implementing ERP or SCM, both of which have the potential to attain the company’s objectives. However, due to the overall lack of knowledge and expertise on implementation of Enterprise Software (ES) and the company’s limited finances, it is recommended that SCM should be implemented as it is less complex and more basic, as well as flexible enough to address the company’s need.

Reference ListBuxmann, P., Ahsen, A., Diaz, L. & Wolf, K. 2004, “Usage and evaluation of Supply Chain Management Software – results of an empirical study in the European automotive industry,” Info Systems J vol. 14, pp.295–309

Light, B. & Papazafeiropoulou, A 2004, Reasons Behind ERP Package Adoption: A Diffusion Of Innovations Perspective, viewed 24 June 2014, <http://is2.lse.ac.uk/asp/aspecis/20040095.pdf>

Misra, V. & Singh, U. 2010, “Supply Chain Management Systems: Architecture, Design and Vision,” Journal of Strategic Innovation and Sustainability vol. 6 no. 4, pp.102-108

Muscatello, J., Small, M. & Chen, I. 2003, “Implementing enterprise resource planning (ERP) systems in small and midsize manufacturing firms,” International Journal of Operations & Production Management vol 23 no. 8, pp.850-871

Nah, F. & Delgado, S. 2006, “Critical Success Factors For Enterprise Resource Planning Implementation and Upgrade,” Journal of Computer Information Systems pp.99-113

Umble, E., Haft, R. & Umble, M. 2003, “Enterprise resource planning: Implementation procedures and critical success factors,” European Journal of Operational Research vol. 146, pp. 241–257

Shang, S. & Seddon, P. 2002, “Assessing and managing the benefits of enterprise systems: the business manager’s perspective,” Info Systems J vol. 12, pp. 71–299