ERP Solutions for Automobile Industry
Content
McMann Cars – Information Technology Management Report
SUBMITTED BY FRANÇOIS-XAVIER SERIN (2836786) ANITA JOHNSON (2825034) QUENTIN LEGENDRE (2836520) ARVIND BAUDH (2831454) BANITA SHARMA (2838334) RAMYA NIKITA VANKAYALAPATI (2828474)
Information Technology Management
McMann Cars
TABLE OF CONTENTS
I. Part 1 – Study of Information Systems in McMann Cars 1. Introduction 2. MacMann Cars 3. Methodology for investigating the issues 4. Recommendations 2 2 4 5
II. Part 2 - Request for Proposal for Information Systems in McMann Cars 5. Common Survey 6. Operational Level System 7. Management & Strategic Level System III. Part 3 - Report for Information Systems in McMann Cars 8. Why Invest in ERP? 9. Which vendor to select? 10. Outsourcing or In-House? 11. What does the future hold for ERP? References Bibliography 11 13 14 15 16 17 8 9 10
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Part 1: Study of Information Systems in McMann Cars
1 Introduction Since the dawn of Information Technology it has always been like a new toy which the traditionally reputed organisations and companies held little respect for. They would eventually find it essential to make the shift in order to compete with the others who benefit from it. Change is inevitable and highly resisted by such companies especially the large multinational organisations because in their case change translates to huge investments. This section of the report details the current issues surrounding McMann Cars, the need to address them with a concurrent system and the alternatives that could be suggested to do so. 2 McMann Cars
McMann Cars have traditionally learned to adapt to the local environment and have built systems accordingly. While this strategy may have worked in the past, in this internet age McMann Cars realise the need for systems that allow better communication, control and centralisation of information. Following are the specific areas of concern arranged in the decreasing order of importance.
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2.1 Internal Communication Only with the rapid advancements in communication technology the idea of global companies truly took shape. It grew slowly from simple messages over a telegraph, to long conversations through a telephone to the here and now virtual meetings on handheld devices. This kind of mobile communication enables faster, better and reliable information exchanges that would help strengthen coordination, cooperation and harmony in the business operations of the organisation. Hence this is the priority at McMann Cars (MMC). 2.1.1 Broken communication channels across divisions It is vital for a harmony to exist between the various divisions of an organisation. Those divisions are connected to one another and hence need a certain amount of information exchange to happen in order for them to synchronise themselves accordingly. This is not helped in the case of MMC because of the geographical barriers between the individual divisions which combined with the incompatible systems at each of the site locations means that very little cross-divisional or cross-functional communication can happen without significant efforts. The incompatible electronic mail systems only makes things seem out of proportion in this regard. 2.1.2 Within an individual division It is noted that project managers are expected to make trips spanning the length of UK visiting divisional headquarters and departmental sites. If communication across divisions is important, communication within a single division or a project team is highly critical. In this day and age when virtual project teams and mobile internet are common place, scattered administration and management is not seen as a hindrance anymore. But because of the stop-gap nature of the systems that were developed to address this need, MMC is currently unable to upgrade itself to match the modern industry standards. 2.1.3 Distributed responsibility and control of operations Since the above mentioned communication systems are ineffectual, the knock-on effect is that the top management is hardly able to make a strategy that could count and be executed in the manner planned. This is because the strategic management is having limited communication with the individual divisions and very less control over the operations within each division and are thus unable to help the division’s senior management, monitor and streamline the execution of the operations. 2.2 Inadequate Supply Chain Management These days companies have made much less evolution in improving the effectiveness of communication between their facilities and those of their suppliers and customers. The automotive industry also faces this challenge on a bigger scale as it usually is on a global range that it gets its supply of parts and other resources. It is therefore difficult but necessary to convince a supply chain partner in a far away country to share and integrate their IT systems and file standards to the company. A lack of commonly accepted and implemented values for the layout and content of communication that flows between MMC and its supply chain partners is
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decreasing the potential for supply and cost savings, dissipating effort due to repetition, safeguarding against redundant systems and investment in non-ideal information process. 2.3 Redundant systems Because of the wide variety of proprietary applications, operating systems, databases and hardware that are being employed by MMC at different site locations, outdated and obsolete systems within each division are slowing down the information chain within the whole system. They add to the confusion and error in data that lead to misinterpretation and could potentially have larger impact when it happens on a larger scale. Resources that utilised for that process are better deployed for a system that supports the objectives of the organisational information system plan. 2.4 Data security Data critical for generating important information such as the time of delivery and warehouse stock count are at a risk of being lost, corrupted or misinterpreted due to the lack of clear communication and protocol standards at MMC. Most corporate businesses encrypt all private information to keep sensitive information out-of-the-way from interfering eyes and also have a measure to account for the loss of it. This ensures that there is right information available at the right time to the authorised personnel. MMC currently employs no such system on an organisational basis. 3 Methodology for Investigating the Issues
3.1 360 Degree Feedback Though the issues aforementioned are a fair assessment of the situation, an opinion of the people who are facing the issues would go a long way in gauging their validity and importance. It would also then be useful as a catalyst for change by keeping all the stakeholders informed of the need for change and in getting them ready for it when required. A feedback analysis from the suppliers, distributors, top management, senior management of each division, and the lower tiers of the organisation would give a complete picture of the opinion of each sector and their individual requirement. 3.2 Cost-Benefit Analysis After establishing the critical nature of the problems a comprehensive list of the strategic options available are to be arrived at. By then factoring the costs involved in the development and implementation of each of those options against the potential benefits that those solutions could provide, the feasibility of the alternatives could then be determined.
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4 Recommendations Several solutions exist in the current IT market that could effectively address the above mentioned issues but as with any other aspect in a business organisation there is no one-stop solution. A detailed explanation and analysis should entail the investigation of all the problems and a comprehensive global IT consolidation strategy needs to be developed and implemented. That being said, a few suggestions seem to be apparent after the initial identification of the issues which are explained below. 4.1 Standardisation of common IT practices While the IT landscape across countries varied hugely in the yesteryears, the global IT standards are now validating and establishing themselves in an assured fashion. Incompatible email format systems, hugely varying governmental and legal requirements and differing security policies across the width of the organisation are things of the past and MMC also need to change their age-old practices in these regards along with the industry. Thus, the first and foremost directive in the new strategic information system plan should be about implementing organisational IT standards and best practices that would allow smooth informational flow. Among those standards would be the adaptation of a common crossplatform email client like Microsoft Outlook, AOL Mail, Lotus Notes or Thunderbird which is essential for official communication, the identification and phasing out of redundant systems and replacing them with simplified procedures that are in line with the rest of the organisation. 4.2 Project Management Software A client–server or web-based type of project management application which could link up to the organisation’s database would be able to provide the project managers, team leaders and top management the kind of real time information which could be key to synchronisation and harmony within the teams and divisions. It would also ensure that the resources are not wasted in the project due to the geographical or communication barriers. Either a customised version through an ERP solution provider or standard software like Microsoft Project Server or Basecamp could serve the purpose. 4.3 Intranet Portal To better increase the communication across the organisation an organisational intranet and Virtual Private Network (VPN) access could be the preferred solutions for MMC. The advantages in intranet is that it could then provide the facilities of access to the company’s database, a platform for the project management software and serve as a forum for the entire organisation’s base with increased mobility than what a LAN or WAN could achieve. It would be the knowledge bank that collects and preserves useful pieces of information such as a calendar of events, bulletin boards or documents which would be accessible to all the employees on a controlled private access basis. It could serve as a virtual office which could be personalised and which reminds each employee of the list of tasks and when they are due to be completed.
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4.4 Centralised Database Standardised single-instance data access and Enterprise Resource Planning (ERP) solutions could be utilised to build those common processes that could provide access to reliable information to the top management and each division so that they could then use this data to drive their systems and generate an accurate real-time picture of the information available to be used. This uniform system also ensures that it is easy to manage and modify the data at any of the company’s various locations making it highly adaptable to accommodate new technology that allows secured login access on the go. 4.5 Supply Chain Performance Monitoring Portal MMC’s global supply chain means that its suppliers are increasingly valued for their coordination with the production units. This can be synchronised by convincing them to share, integrate and collaborate with MMC on a web-based supply chain portal that allows for exchange of information and files on common standards. It also increases the security and visibility for both the partners. It would have the ability to track a shipment or delivery thus reducing wastage of resources and eliminating confusing and redundant systems.
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Part 2: Request for Proposal for Information Systems in McMann Cars
To fit with the employee’s needs for ERP, we have to create and send a questionnaire to all groups of employees. This survey will deal with general apprehension and with the current and future ERP of Mc Mann cars. All employees of the MC Mann cars, for each division, have to answer to the questionnaire. This survey is subdivided into two parts, one part is for everyone and another part is according to their level of hierarchy in organisation (i.e., Operational level, Management level and Strategic level). There are some shortcomings, what we have faced: Not every Operational level worker use ERP, so if they have problem we cannot find with questionnaire. Mentality: The interviewers may be of little or no interest at the time of filling questionnaire. There are some hidden question & answer, which is known by some specific personal only. It’s very lengthy process to distribute & collect “Page Questionnaire”. We think to overcome these shortcoming we should follow some other types of survey method also i.e., Managers may conduct individual interviews with each employee, group interviews with groups of employee who the same job, and supervisor interviews with one or more supervisors who know the job. We should also use group interviews when a large number of employees are performing same work. We can do telephone survey, which can be a useful alternative to the personal interview because it is quicker and less expensive to conduct than are personal interviews. We should do everything on ERP questionnaire online, so in this way we can save so much time. We think these can be quick way to gather information. The Surveys are listed below according to the level of hierarchy in organisation 5 Common Survey 6 Operational Level System 7 Management & Strategic Level System
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Name: Common survey (circle the answer) Your work experience in McMann Cars Which one is your department?
Employee No. :
Designation :
<1year Plant Disagree Disagree NO Not at all
1-3 years R&D Neutral Neutral
3-5 years Sales Agree Agree Sometimes
>5 years After-Sales Totally agree Totally agree YES Very good Very easy YES
I feel I can voice my opinion without fear I am proud to work for our company Do you use the ERP ? Is IS (Information System) is user friendly? Complexity of IS? Do you encounter any problem with ERP If yes, the problems are of degree Do you have some crash system? The specifications of computer are up to standard? Help from IT services? Speed of IS? Do you want the same password on all your application in the ERP? Do you need a smartphone access? Do you need a wireless access? Is every data cover in IS? Do you upload information in the ERP? Do you find everything in your research in the ERP? Do you need an external access of ERP? How many methods in ERP you have to Communicate? Is every data sharing done in ERP? Do you need more than one per day data refresh?
It could be better
Good Easy to use
Very complex Not really complex NO Moderate Never Not at all Never Very slow NO NO NO NO NO NO Home 1 NO NO
Please go to the next last page
Important Sometimes It could be better Sometimes Slow
Very imp. Often Good Often Fast
Huge importance Very often Very good Very often Very Fast YES YES YES YES YES YES
Hotel 2
Airport 3
………..……………………… 4+ YES YES
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Operational level system What is your qualification? Are you an authorised person? Understanding of suppliers about IS? Is every data is accurate? Do you need to know the level of stock value? Do you need to know the level of stock volume? How fast is the ERP to upload information? NO Not at all Not at all Never Never
If you need you can circle several answers
…………………………………………………………………………………………………. YES It could be better It could be better Sometimes Sometimes Slow It could be better Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral Sometimes Sometimes Good Good Often Often Fast Good Agree Agree Agree Agree Agree Agree Agree Agree Agree Agree Agree Often Often Very good Perfect Very often Very often Instantaneous Very good Totally agree Totally agree Totally agree Totally agree Totally agree Totally agree Totally agree Totally agree Totally agree Totally agree Totally agree Very often Very often
Very slow
Do you understand complete management level and Not at all strategic level planning by ERP? ERP helps in faster completion of my daily routines ERP is convenient ERP saves time ERP is reliable whenever I need it It is easy for me to remember my tasks using my company's ERP I prefer ERP to the old system Do you still use your old system parallel to ERP Working on ERP is difficult and tiresome ERP is capable of communicating data between systems ERP helps for better team work ERP is easy to update Do you use the ERP to order to the suppliers? Do you use the ERP to do planning? Disagree Disagree Disagree Disagree Disagree Disagree Disagree Disagree Disagree Disagree Disagree Never Never
Thanks for your answers and for your time
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Management & Strategic level system Which level of security do you require? Is every data is accurate? Do you need share some of your area in the ERP? Are you getting every information for the Decision? Do you need access on your staff accounts? What is the cost of current ERP? Do you need to know the level of stock value? Do you need to know the level of stock volume? Do you use the ERP to long term planning? How much did ERP fulfil your business strategy? The introduction of ERP increased efficiency of your department ERP provides information clarity Do you still use your old system parallel to ERP What managerial problems did you face with ERP implementation? What ERP module do you use in your work? Different departments are integrated through ERP Accurate employee status is available on ERP Low Not at all NO Never Never Low Never Never Never Low Disagree Disagree Never Cost Financial Disagree Disagree
If you need you can circle several answers Medium It could be better High Good Very High Perfect YES Sometimes Sometimes Medium Sometimes Sometimes Sometimes Medium Neutral Neutral Sometimes Employee resistance Sales Neutral Neutral Neutral Neutral Maybe Forecasting Cost accounting Cash flow Personnel Budgeting Often Often High Often Often Often High Agree Agree Often Conflicts Production Agree Agree Agree Agree Always Always Very High Very often Very often Very often Very High Totally agree Totally agree Always None ………………… Totally agree Totally agree Totally agree Totally agree YES Purchasing Order entry
Managing the organization structure is easier Disagree with an ERP Introduction of ERP is a futuristic step for Disagree MC Mann cars Do you want an access in all function on the ERP NO in each department? Inventory What do you want ERP application in MC Mann car?
Sales Analyse Audit
SOX analyse ……………………
Thanks for your answers and for your time
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Part 3: Report for Information Systems in McMann Cars
8 Why invest in ERP?
Enterprise Resource Planning is a software system that enables managing of the business in a more integrated fashion. The software works like a well-oiled machine as applications in the software are connected to each other which makes the information flow all the more smoother. These can be the beginning of the long list of reasons why companies should invest in ERP software matching its requirements. To start with ERP software gives any business the power to streamline and centralise all its processes and information and make it work as a unified integrated system. This is possible as all the applications are connected to each other. The data entered at one point moves from one department to another as all the applications sit on a common database which eradicates the need to enter the same data at different points. Thus also brings down the confusion created by duplicate data to almost zilch. The centralised data would solve some of the major problems McMann cars is currently facing. With the data becoming centralised and changes reflecting in real-time, sharing information between the departments would become much easier as all departments would be accessing it from the same database. This would also enable operations to be controlled centrally rather than being scattered as all the offices of McMann cars in all different locations would be working off the same software and same database unlike the current situation. This would also considerably enhance the quality of service as data would change in real-time. The supply chain management would be much more efficient as the data entered at any point would be visible in all machines accessing the related information. Use of hand held devices like scanners by all the employees working in manufacturing, assembly, logistics and inventory would facilitate quick data entry. These features would have a comprehensive impact on important divisions like inventory tracking, product and parts traceability, stock information, quality management, overall manufacturing and assembly flow and thus, accentuate customer service. (ERP Advantages, 2012; Rudo, 2011; SAP – ERP: Business Benefits) As more and more businesses are going global and more of their employees are on the go, mobility has become a necessity more than a luxury. Loads of information is entered into databases of the companies on a daily basis and the employees or managers who are on the go do not want to be left behind but want to be on top of everything. The ERP software would also offer mobility to its employees and the organization as a whole. As the data is centralised, the information can be accessed by the employees from wherever they are, whenever they want over the network which can be intranet or internet. Intranet might not be the best solution in case of McMann cars as it has offices in different locations. Therefore, in order to enable all the branches in different locations to use same software and enter data into the same database, internet would be very important. This would also let the managers who are always on the go for meetings, stay updated with all that is going on in the office, manufacturing department and
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also the inventory. Another, major feature can be the virtual project teams and audio/video communication over the internet that would help in bringing down the travel of managers for meetings considerably. With this option managers would be able to hold their meetings online from their own offices in their locations and would have to travel only in unavoidable circumstances or when video conferencing would not be able to meet the requirements. The latest technology of cloud computing can be exploited here by having company’s own cloud private, public, community or hybrid. The most suitable option out of these could be a private cloud which offers more security when it comes to data. All the geographically dispersed divisions of McMann cars would be using the same software and the same database. But, all these divisions do not concentrate on same areas. Some may be engrossed in manufacturing while others maybe attending to after sales service customers and there would be some who would be pondering over research and development for next generation ideas. As a result, all the divisions might not need the same modules of the ERP software. Thereupon, only those modules should be installed which are required at the respective divisions so that each division can concentrate on their key processes and key areas. When a company introduces ERP software into its operations it enters all immense amount of data into its system, let it be critical, strategic, important or miscellaneous. Thus, it gets more important than ever to protect this data and keep it secure from any theft, misuse or damage. The security system of the software can be configured accordingly to take care of the same. It is foremost to make sure that only authorised users have access to company’s data and have authorised rights on it. The rights can be set for users e.g. a particular user will only be able to view some data and the other will be able to view and enter/edit. This is important so as to make sure that any entry or update is done by an authorised user only. This also helps in making sure that the data entered is correct and as a result reliable. Strategic decisions taken by the top management are based on the data recorded by the data entry users. If any mistake happens at this level it can lead to some major erratic decisions. The list of threats does not end with authorised users and surrounding environment; the database needs to be protected from virus, malicious programs, hackers and not to forget competitors. Thus, data needs to be protected at both hardware and software levels by having enough security including software security like data encryption, data backup at a different site and so on. (Robinson, 2012) As discussed above, maximum use of ERP software can enable McMann cars in many ways which are somehow connected and dependent on each other. If the latest technology is exploited optimally by McMann cars they can very soon leave their competitors behind when it comes to quality of service as the employees would be working in a more efficient and productive manner. And no longer would geographical distances be an obstacle in achieving their ambitious international goals. ERP till now has been projected as a stupendous advantage but like any other project in business and life ERP can also come down crashing if some aspects are not taken care of
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cautiously. The most important aspect is defining the requirements and then on its basis looking for the best fitting ERP software. Secondly, deciding which vendor the product should be bought from is also very important. There have been many instances where companies do go ahead and spend loads of money on ERP software but do not use it optimally. Thus, lastly, the employees and the management should use the software optimally by adapting it in its processes and also regular and careful entering of data. If these key points are not adhered to, no ERP software can provide what it claims to provide and has the potential to provide. 9 Which vendor to select?
As the demand for information systems is increasing so is the mushrooming of vendors for the same. In such a situation it becomes strenuous to select one of them. However, the leading contenders in this field are Oracle, SAP and Microsoft. Oracle is the champion when it comes to database management and SAP when it comes to ERP software as this what these two companies started with in the beginning. Microsoft is an established operating system and business software supplier. All three of them have an ERP product, Oracle’s E-Business Suite, SAP’s SAP ERP and Microsoft’s Microsoft Dynamics. Panorama (2011) ERP Vendor report brings to light that clients opting for one of these leading vendors are more satisfied than other vendors however 29.7% clients were either very satisfied or unsatisfied. As database management is one of the key issues to be addressed currently in McMann Cars, it is paramount to select a vendor that can handle complex issues when it comes to database management. Nazim (2012) reveals that Microsoft Dynamics AX 2012 would not be supporting Oracle database and the users would be ‘forced’ to move to Microsoft SQL server. With cloud computing becoming so prominent and appealing it would be interesting to contemplate if the database should be on-site or hosted on the cloud. All the three vendors have cloud solutions for ERP as well. All three also seem to be almost equal on viability and reach. Panorama (2012) Clash of the Titans, presents comparison of these three competitors. The report states that the SAP controls the largest share of the market (22%) with Oracle following behind at 15% and the third is Microsoft (10%). This report also highlights that SAP (35%) is most preferred when it comes to being shortlisted, followed by Oracle at 24% and then Microsoft at 17%. However, SAP (28%) is the least preferred when it comes to actual selection after being shortlisted and Oracle leads in this area at 34% closely followed by Microsoft at 32%. The selection rate after being shortlisted for Oracle was 22%, 19% for SAP and 14% for Microsoft Dynamics according to the Panorama (2011) Clash of the Titans. Nevertheless, the report clarifies that it is hard to make any specific conclusions from these numbers as it is not sure if the product chosen was the perfect fit for the companies. When it comes to payback from the software, only 22% companies present payback in a period of one year, 9% in 2 years and 16% in three years. 36% of the implementations of SAP took more than 3 years to contribute any payback, 18% took 1-2 years and 9% less than one year. These percentages might not seem very
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flattering but these are the highest as Oracle is at 20% in more than 3 years duration, 17% in 1-2 years and 5% in less than a year; Microsoft stands at 15%, 15% and 6% respectively. In the the area of benefit realisation the report brings forward similar results with SAP leading and Oracle and Microsoft following. Benefits realised included availability of information, increased interaction across business, decreased labour costs and improved lead time. The results reported by Panorama (2012) Clash of the Titans do not highlight any single product when evaluated overall. It only shows that all the three competitors are in close competition and SAP having spent more time in this industry enjoys more market value and recognition while Oracle and Microsoft seem to be struggling to make a similar niche for themselves. But they do give a good idea of the market trends. Thus, it really depends on the requirements of the company and which vendor and software features fit the bill most closely. This report suggests SAP and Oracle should be considered by studying the features they are offering and then comparing them with requirements identified. The one that fulfils the requirements should be chosen. The next issue to consider would be to buy a off the shelf product or develop a customised software. Once the software is deployed should the software be maintained in-house or outsourced? 10 Outsourcing or In-House software development/maintenance?
We would highly recommend outsourcing software development/maintenance to McMann cars. The decision to develop/maintain the software in-house can prove exceptionally risky as this is not their core competency. They are car manufacturers. This is the best they do and they should stick to and work in their core competencies to bring new innovative ideas in this area. Software development is not something that the company has experience in and they would have to start from square one and that means extensive hiring and now updated knowledge of software development. If the project is outsourced the designated company would have required knowledge, skilled manpower and technologies at their disposal while developing the software as this is what they do. Outsourcing would also bring down the overall cost of the project. The company that the project is outsourced to has the skills and competencies to handle them whereas in case in-house production the company would have to build and hire completely new teams in new area. Overhead costs like the back end operations, maintaining of database would come down substantially. Moreover, this can prove to be a competitive advantage if the competitors are not outsourcing as McMann cars would be focussing in the direction of their core competencies and the designated would be doing their job developing/maintaining the required software while using the required resources. (Flatworld Solution, 2012; Mark, 2011) But, outsourcing is also not free from intricacies. If outsourced it is gets very challenging to control the employees, speed and pace of the development, after implementation support and also the quality processes. Secondly, there can be difficulties in communicating the errors and
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lapses when the project is being implemented. The employees of the designated company might not be able to reproduce the issues being raised in the offices of McMann cars. Lastly, there is a colossal threat to the security of the data of the company as it is being handled by a third party now. However these issues can be controlled to some extent by including relevant terms and conditions in the contract and also roping in a legal expert in this area. (Flatworld Solution, 2012; Mark, 2011) 11 What does the future hold for ERP?
The world technology changes by the second. Technologies go obsolete or older by version in matter of days. Every company related to technology tries to be innovative and wants to be the first one to launch a new dimension. And if it is not the first one then it has to be close and adopt the change quickly to stay in this competitive field. Enterprise Resource Planning software field is not left out from this cut throat competitiveness. It is very difficult to forecast what the face of ERP would be ten years but there are some trends that can be foreseen looking at the changing working environment of the businesses. First of all more mobility ERP. Companies might not have to wait very long for this one. Very soon, the picture of mobility would have changed from laptops to tablets and smart phones. With cloud computing becoming so popular with the companies required information would be soon available to managers on their tablets and smart phones which would wash out the need to carry laptops and risks that come with it. With increase in ease to access data, the threat to security would also increase with the chances of unauthorised access to data increasing. As a result, the need to protect sensitive data would also increase. Authentication to limited data through usernames and passwords is quite prevalent now but very soon the scenario might change and using fingerprints, voice or even eye recognition systems for the purpose of authentication might become the norm. While these systems are used for attendance or authentication mediums for access to sensitive or confidential areas it is still a new area for ERP.
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REFERENCES
ERP Advantages (2012) [Internet] ERPPANDIT. Available from <http://www.erppandit.com/erpadvantages.html> [Accessed 9 November 2012] Flatworld Solutions (2012) The Pros and Cons of Outsourcing [Internet] Available from <http://www.flatworldsolutions.com/articles/pros-cons-outsourcing.php> [Accessed 9 November 2012] Mark (2011) 8 Pros and Cons of Outsourcing your Workforce [Internet] YFS Magazine Available from <http://yfsentrepreneur.com/2011/11/17/8-pros-and-cons-of-outsourcing-your-workforce/> [Accessed 9 November 2012] Nazim, A. (2012) Microsoft Dynamics AX 2012 won’t support Oracle database [Internet] Microsoft Dynamics AX Blogs, Microsoft Dynamics AX. Available from:< http://community.dynamics.com/product/ax/axtechnical/b/amirsaxspace/archive/2012/05/31/mic rosoft-dynamics-ax-2012-won-t-support-oracle-database.aspx> [Accessed 9 November 2012] Panorama Consulting Solutions (2012). Clash of the Titans. An independent Comparison of SAP, Oracle and Microsoft Dynamics [Internet]. Available from: http://panorama-consulting.com/Documents/Clashof-the-Titans-2012.pdf [Accessed 9 November 2012] Panorama Consulting Solutions (2012). 2012 ERP Report. An independent Comparison of SAP, Oracle and Microsoft Dynamics [Internet]. Available from: http://panorama-consulting.com/Documents/2012-ERPReport.pdf [Accessed 9 November 2012] Panorama Consulting Solutions (2011). 2011 Guide to ERP Systems and Vendors [Internet]. Available from: http://panorama-consulting.com/Documents/2011-Guide-to-ERP-Systems-and-Vendors.pdf [Accessed 9 November 2012] Panorama Consulting Solutions (2011). Clash of the Titans. An independent Comparison of SAP, Oracle and Microsoft Dynamics [Internet]. Available from: http://panorama-consulting.com/Documents/Clashof-the-Titans-2011.pdf [Accessed 9 November 2012] Robinson, A (2012) The Future of ERP [Internet] Business Computing World. Available from <http://www.businesscomputingworld.co.uk/the-future-of-erp/> [Accessed 9 November 2012] Rudo, P. (2011) A Beginners Guide to Enterprise Mobility and ERP [Internet] Enterprise Features Available from <http://enterprisefeatures.com/2011/09/a-beginners-guide-to-enterprise-mobilityand-erp/> [Accessed 9 November 2012] SAP – ERP: Business Benefits [Internet] United States, SAP. Available from:<http://www.sap.com/solutions/business-suite/erp/businessbenefits/index.epx> [Accessed 9 November 2012]
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BIBLIOGRAPHY
Agarwal, A., 2012. Most Popular Email Clients [WWW Document]. Digital Inspiration. URL http://www.labnol.org/internet/email/most-popular-email-clients/9340/ Bélanger, F., Crossler, R.E., 2011. Privacy in The Digital Age: A Review of Information Privacy Research in Information Systems. MIS Quarterly 35, 1017–A36. Bottazzo, V., 2005. Intranet: A medium of internal communication and training. Information Services & Use 25, 77–85. Bowling, A., 2009. IT’s new role in driving business improvement. Computer Weekly 16–16. Getting What You Measure, 2012. . Communications of the ACM 55, 54–59. HP, 2006. Driving toward change: the new role of IT and the CIO in the automotive industry. Official website of HP. Microsoft Dynamics (2012) Microsoft Dynamics|Dynamic Business|Manage you customers |Manage you business [Internet] United Kingdom, ITP Available from <http://www.microsoft.com/engb/dynamics/default.aspx> [Accessed 9 November 2012] Sørensen, C., Al-Taitoon, A., Kietzmann, J., Pica, D., Wiredu, G., Elaluf-Calderwood, S., Boateng, K., Kakihara, M., Gibson, D., 2008. Exploring enterprise mobility: Lessons from the field. Information Knowledge Systems Management 7, 243–271. WFT Cloud (2012) SAP Cloud Computing|Cloud SAP ERP on demand cloud solutions, services [Internet] Available from <http://www.wftcloud.com/> [Accessed 9 November 2012]
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SUBMITTED BY FRANÇOIS-XAVIER SERIN (2836786) ANITA JOHNSON (2825034) QUENTIN LEGENDRE (2836520) ARVIND BAUDH (2831454) BANITA SHARMA (2838334) RAMYA NIKITA VANKAYALAPATI (2828474)
Information Technology Management
McMann Cars
TABLE OF CONTENTS
I. Part 1 – Study of Information Systems in McMann Cars 1. Introduction 2. MacMann Cars 3. Methodology for investigating the issues 4. Recommendations 2 2 4 5
II. Part 2 - Request for Proposal for Information Systems in McMann Cars 5. Common Survey 6. Operational Level System 7. Management & Strategic Level System III. Part 3 - Report for Information Systems in McMann Cars 8. Why Invest in ERP? 9. Which vendor to select? 10. Outsourcing or In-House? 11. What does the future hold for ERP? References Bibliography 11 13 14 15 16 17 8 9 10
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Part 1: Study of Information Systems in McMann Cars
1 Introduction Since the dawn of Information Technology it has always been like a new toy which the traditionally reputed organisations and companies held little respect for. They would eventually find it essential to make the shift in order to compete with the others who benefit from it. Change is inevitable and highly resisted by such companies especially the large multinational organisations because in their case change translates to huge investments. This section of the report details the current issues surrounding McMann Cars, the need to address them with a concurrent system and the alternatives that could be suggested to do so. 2 McMann Cars
McMann Cars have traditionally learned to adapt to the local environment and have built systems accordingly. While this strategy may have worked in the past, in this internet age McMann Cars realise the need for systems that allow better communication, control and centralisation of information. Following are the specific areas of concern arranged in the decreasing order of importance.
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2.1 Internal Communication Only with the rapid advancements in communication technology the idea of global companies truly took shape. It grew slowly from simple messages over a telegraph, to long conversations through a telephone to the here and now virtual meetings on handheld devices. This kind of mobile communication enables faster, better and reliable information exchanges that would help strengthen coordination, cooperation and harmony in the business operations of the organisation. Hence this is the priority at McMann Cars (MMC). 2.1.1 Broken communication channels across divisions It is vital for a harmony to exist between the various divisions of an organisation. Those divisions are connected to one another and hence need a certain amount of information exchange to happen in order for them to synchronise themselves accordingly. This is not helped in the case of MMC because of the geographical barriers between the individual divisions which combined with the incompatible systems at each of the site locations means that very little cross-divisional or cross-functional communication can happen without significant efforts. The incompatible electronic mail systems only makes things seem out of proportion in this regard. 2.1.2 Within an individual division It is noted that project managers are expected to make trips spanning the length of UK visiting divisional headquarters and departmental sites. If communication across divisions is important, communication within a single division or a project team is highly critical. In this day and age when virtual project teams and mobile internet are common place, scattered administration and management is not seen as a hindrance anymore. But because of the stop-gap nature of the systems that were developed to address this need, MMC is currently unable to upgrade itself to match the modern industry standards. 2.1.3 Distributed responsibility and control of operations Since the above mentioned communication systems are ineffectual, the knock-on effect is that the top management is hardly able to make a strategy that could count and be executed in the manner planned. This is because the strategic management is having limited communication with the individual divisions and very less control over the operations within each division and are thus unable to help the division’s senior management, monitor and streamline the execution of the operations. 2.2 Inadequate Supply Chain Management These days companies have made much less evolution in improving the effectiveness of communication between their facilities and those of their suppliers and customers. The automotive industry also faces this challenge on a bigger scale as it usually is on a global range that it gets its supply of parts and other resources. It is therefore difficult but necessary to convince a supply chain partner in a far away country to share and integrate their IT systems and file standards to the company. A lack of commonly accepted and implemented values for the layout and content of communication that flows between MMC and its supply chain partners is
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decreasing the potential for supply and cost savings, dissipating effort due to repetition, safeguarding against redundant systems and investment in non-ideal information process. 2.3 Redundant systems Because of the wide variety of proprietary applications, operating systems, databases and hardware that are being employed by MMC at different site locations, outdated and obsolete systems within each division are slowing down the information chain within the whole system. They add to the confusion and error in data that lead to misinterpretation and could potentially have larger impact when it happens on a larger scale. Resources that utilised for that process are better deployed for a system that supports the objectives of the organisational information system plan. 2.4 Data security Data critical for generating important information such as the time of delivery and warehouse stock count are at a risk of being lost, corrupted or misinterpreted due to the lack of clear communication and protocol standards at MMC. Most corporate businesses encrypt all private information to keep sensitive information out-of-the-way from interfering eyes and also have a measure to account for the loss of it. This ensures that there is right information available at the right time to the authorised personnel. MMC currently employs no such system on an organisational basis. 3 Methodology for Investigating the Issues
3.1 360 Degree Feedback Though the issues aforementioned are a fair assessment of the situation, an opinion of the people who are facing the issues would go a long way in gauging their validity and importance. It would also then be useful as a catalyst for change by keeping all the stakeholders informed of the need for change and in getting them ready for it when required. A feedback analysis from the suppliers, distributors, top management, senior management of each division, and the lower tiers of the organisation would give a complete picture of the opinion of each sector and their individual requirement. 3.2 Cost-Benefit Analysis After establishing the critical nature of the problems a comprehensive list of the strategic options available are to be arrived at. By then factoring the costs involved in the development and implementation of each of those options against the potential benefits that those solutions could provide, the feasibility of the alternatives could then be determined.
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4 Recommendations Several solutions exist in the current IT market that could effectively address the above mentioned issues but as with any other aspect in a business organisation there is no one-stop solution. A detailed explanation and analysis should entail the investigation of all the problems and a comprehensive global IT consolidation strategy needs to be developed and implemented. That being said, a few suggestions seem to be apparent after the initial identification of the issues which are explained below. 4.1 Standardisation of common IT practices While the IT landscape across countries varied hugely in the yesteryears, the global IT standards are now validating and establishing themselves in an assured fashion. Incompatible email format systems, hugely varying governmental and legal requirements and differing security policies across the width of the organisation are things of the past and MMC also need to change their age-old practices in these regards along with the industry. Thus, the first and foremost directive in the new strategic information system plan should be about implementing organisational IT standards and best practices that would allow smooth informational flow. Among those standards would be the adaptation of a common crossplatform email client like Microsoft Outlook, AOL Mail, Lotus Notes or Thunderbird which is essential for official communication, the identification and phasing out of redundant systems and replacing them with simplified procedures that are in line with the rest of the organisation. 4.2 Project Management Software A client–server or web-based type of project management application which could link up to the organisation’s database would be able to provide the project managers, team leaders and top management the kind of real time information which could be key to synchronisation and harmony within the teams and divisions. It would also ensure that the resources are not wasted in the project due to the geographical or communication barriers. Either a customised version through an ERP solution provider or standard software like Microsoft Project Server or Basecamp could serve the purpose. 4.3 Intranet Portal To better increase the communication across the organisation an organisational intranet and Virtual Private Network (VPN) access could be the preferred solutions for MMC. The advantages in intranet is that it could then provide the facilities of access to the company’s database, a platform for the project management software and serve as a forum for the entire organisation’s base with increased mobility than what a LAN or WAN could achieve. It would be the knowledge bank that collects and preserves useful pieces of information such as a calendar of events, bulletin boards or documents which would be accessible to all the employees on a controlled private access basis. It could serve as a virtual office which could be personalised and which reminds each employee of the list of tasks and when they are due to be completed.
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4.4 Centralised Database Standardised single-instance data access and Enterprise Resource Planning (ERP) solutions could be utilised to build those common processes that could provide access to reliable information to the top management and each division so that they could then use this data to drive their systems and generate an accurate real-time picture of the information available to be used. This uniform system also ensures that it is easy to manage and modify the data at any of the company’s various locations making it highly adaptable to accommodate new technology that allows secured login access on the go. 4.5 Supply Chain Performance Monitoring Portal MMC’s global supply chain means that its suppliers are increasingly valued for their coordination with the production units. This can be synchronised by convincing them to share, integrate and collaborate with MMC on a web-based supply chain portal that allows for exchange of information and files on common standards. It also increases the security and visibility for both the partners. It would have the ability to track a shipment or delivery thus reducing wastage of resources and eliminating confusing and redundant systems.
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Part 2: Request for Proposal for Information Systems in McMann Cars
To fit with the employee’s needs for ERP, we have to create and send a questionnaire to all groups of employees. This survey will deal with general apprehension and with the current and future ERP of Mc Mann cars. All employees of the MC Mann cars, for each division, have to answer to the questionnaire. This survey is subdivided into two parts, one part is for everyone and another part is according to their level of hierarchy in organisation (i.e., Operational level, Management level and Strategic level). There are some shortcomings, what we have faced: Not every Operational level worker use ERP, so if they have problem we cannot find with questionnaire. Mentality: The interviewers may be of little or no interest at the time of filling questionnaire. There are some hidden question & answer, which is known by some specific personal only. It’s very lengthy process to distribute & collect “Page Questionnaire”. We think to overcome these shortcoming we should follow some other types of survey method also i.e., Managers may conduct individual interviews with each employee, group interviews with groups of employee who the same job, and supervisor interviews with one or more supervisors who know the job. We should also use group interviews when a large number of employees are performing same work. We can do telephone survey, which can be a useful alternative to the personal interview because it is quicker and less expensive to conduct than are personal interviews. We should do everything on ERP questionnaire online, so in this way we can save so much time. We think these can be quick way to gather information. The Surveys are listed below according to the level of hierarchy in organisation 5 Common Survey 6 Operational Level System 7 Management & Strategic Level System
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Name: Common survey (circle the answer) Your work experience in McMann Cars Which one is your department?
Employee No. :
Designation :
<1year Plant Disagree Disagree NO Not at all
1-3 years R&D Neutral Neutral
3-5 years Sales Agree Agree Sometimes
>5 years After-Sales Totally agree Totally agree YES Very good Very easy YES
I feel I can voice my opinion without fear I am proud to work for our company Do you use the ERP ? Is IS (Information System) is user friendly? Complexity of IS? Do you encounter any problem with ERP If yes, the problems are of degree Do you have some crash system? The specifications of computer are up to standard? Help from IT services? Speed of IS? Do you want the same password on all your application in the ERP? Do you need a smartphone access? Do you need a wireless access? Is every data cover in IS? Do you upload information in the ERP? Do you find everything in your research in the ERP? Do you need an external access of ERP? How many methods in ERP you have to Communicate? Is every data sharing done in ERP? Do you need more than one per day data refresh?
It could be better
Good Easy to use
Very complex Not really complex NO Moderate Never Not at all Never Very slow NO NO NO NO NO NO Home 1 NO NO
Please go to the next last page
Important Sometimes It could be better Sometimes Slow
Very imp. Often Good Often Fast
Huge importance Very often Very good Very often Very Fast YES YES YES YES YES YES
Hotel 2
Airport 3
………..……………………… 4+ YES YES
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Operational level system What is your qualification? Are you an authorised person? Understanding of suppliers about IS? Is every data is accurate? Do you need to know the level of stock value? Do you need to know the level of stock volume? How fast is the ERP to upload information? NO Not at all Not at all Never Never
If you need you can circle several answers
…………………………………………………………………………………………………. YES It could be better It could be better Sometimes Sometimes Slow It could be better Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral Neutral Sometimes Sometimes Good Good Often Often Fast Good Agree Agree Agree Agree Agree Agree Agree Agree Agree Agree Agree Often Often Very good Perfect Very often Very often Instantaneous Very good Totally agree Totally agree Totally agree Totally agree Totally agree Totally agree Totally agree Totally agree Totally agree Totally agree Totally agree Very often Very often
Very slow
Do you understand complete management level and Not at all strategic level planning by ERP? ERP helps in faster completion of my daily routines ERP is convenient ERP saves time ERP is reliable whenever I need it It is easy for me to remember my tasks using my company's ERP I prefer ERP to the old system Do you still use your old system parallel to ERP Working on ERP is difficult and tiresome ERP is capable of communicating data between systems ERP helps for better team work ERP is easy to update Do you use the ERP to order to the suppliers? Do you use the ERP to do planning? Disagree Disagree Disagree Disagree Disagree Disagree Disagree Disagree Disagree Disagree Disagree Never Never
Thanks for your answers and for your time
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Management & Strategic level system Which level of security do you require? Is every data is accurate? Do you need share some of your area in the ERP? Are you getting every information for the Decision? Do you need access on your staff accounts? What is the cost of current ERP? Do you need to know the level of stock value? Do you need to know the level of stock volume? Do you use the ERP to long term planning? How much did ERP fulfil your business strategy? The introduction of ERP increased efficiency of your department ERP provides information clarity Do you still use your old system parallel to ERP What managerial problems did you face with ERP implementation? What ERP module do you use in your work? Different departments are integrated through ERP Accurate employee status is available on ERP Low Not at all NO Never Never Low Never Never Never Low Disagree Disagree Never Cost Financial Disagree Disagree
If you need you can circle several answers Medium It could be better High Good Very High Perfect YES Sometimes Sometimes Medium Sometimes Sometimes Sometimes Medium Neutral Neutral Sometimes Employee resistance Sales Neutral Neutral Neutral Neutral Maybe Forecasting Cost accounting Cash flow Personnel Budgeting Often Often High Often Often Often High Agree Agree Often Conflicts Production Agree Agree Agree Agree Always Always Very High Very often Very often Very often Very High Totally agree Totally agree Always None ………………… Totally agree Totally agree Totally agree Totally agree YES Purchasing Order entry
Managing the organization structure is easier Disagree with an ERP Introduction of ERP is a futuristic step for Disagree MC Mann cars Do you want an access in all function on the ERP NO in each department? Inventory What do you want ERP application in MC Mann car?
Sales Analyse Audit
SOX analyse ……………………
Thanks for your answers and for your time
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Part 3: Report for Information Systems in McMann Cars
8 Why invest in ERP?
Enterprise Resource Planning is a software system that enables managing of the business in a more integrated fashion. The software works like a well-oiled machine as applications in the software are connected to each other which makes the information flow all the more smoother. These can be the beginning of the long list of reasons why companies should invest in ERP software matching its requirements. To start with ERP software gives any business the power to streamline and centralise all its processes and information and make it work as a unified integrated system. This is possible as all the applications are connected to each other. The data entered at one point moves from one department to another as all the applications sit on a common database which eradicates the need to enter the same data at different points. Thus also brings down the confusion created by duplicate data to almost zilch. The centralised data would solve some of the major problems McMann cars is currently facing. With the data becoming centralised and changes reflecting in real-time, sharing information between the departments would become much easier as all departments would be accessing it from the same database. This would also enable operations to be controlled centrally rather than being scattered as all the offices of McMann cars in all different locations would be working off the same software and same database unlike the current situation. This would also considerably enhance the quality of service as data would change in real-time. The supply chain management would be much more efficient as the data entered at any point would be visible in all machines accessing the related information. Use of hand held devices like scanners by all the employees working in manufacturing, assembly, logistics and inventory would facilitate quick data entry. These features would have a comprehensive impact on important divisions like inventory tracking, product and parts traceability, stock information, quality management, overall manufacturing and assembly flow and thus, accentuate customer service. (ERP Advantages, 2012; Rudo, 2011; SAP – ERP: Business Benefits) As more and more businesses are going global and more of their employees are on the go, mobility has become a necessity more than a luxury. Loads of information is entered into databases of the companies on a daily basis and the employees or managers who are on the go do not want to be left behind but want to be on top of everything. The ERP software would also offer mobility to its employees and the organization as a whole. As the data is centralised, the information can be accessed by the employees from wherever they are, whenever they want over the network which can be intranet or internet. Intranet might not be the best solution in case of McMann cars as it has offices in different locations. Therefore, in order to enable all the branches in different locations to use same software and enter data into the same database, internet would be very important. This would also let the managers who are always on the go for meetings, stay updated with all that is going on in the office, manufacturing department and
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also the inventory. Another, major feature can be the virtual project teams and audio/video communication over the internet that would help in bringing down the travel of managers for meetings considerably. With this option managers would be able to hold their meetings online from their own offices in their locations and would have to travel only in unavoidable circumstances or when video conferencing would not be able to meet the requirements. The latest technology of cloud computing can be exploited here by having company’s own cloud private, public, community or hybrid. The most suitable option out of these could be a private cloud which offers more security when it comes to data. All the geographically dispersed divisions of McMann cars would be using the same software and the same database. But, all these divisions do not concentrate on same areas. Some may be engrossed in manufacturing while others maybe attending to after sales service customers and there would be some who would be pondering over research and development for next generation ideas. As a result, all the divisions might not need the same modules of the ERP software. Thereupon, only those modules should be installed which are required at the respective divisions so that each division can concentrate on their key processes and key areas. When a company introduces ERP software into its operations it enters all immense amount of data into its system, let it be critical, strategic, important or miscellaneous. Thus, it gets more important than ever to protect this data and keep it secure from any theft, misuse or damage. The security system of the software can be configured accordingly to take care of the same. It is foremost to make sure that only authorised users have access to company’s data and have authorised rights on it. The rights can be set for users e.g. a particular user will only be able to view some data and the other will be able to view and enter/edit. This is important so as to make sure that any entry or update is done by an authorised user only. This also helps in making sure that the data entered is correct and as a result reliable. Strategic decisions taken by the top management are based on the data recorded by the data entry users. If any mistake happens at this level it can lead to some major erratic decisions. The list of threats does not end with authorised users and surrounding environment; the database needs to be protected from virus, malicious programs, hackers and not to forget competitors. Thus, data needs to be protected at both hardware and software levels by having enough security including software security like data encryption, data backup at a different site and so on. (Robinson, 2012) As discussed above, maximum use of ERP software can enable McMann cars in many ways which are somehow connected and dependent on each other. If the latest technology is exploited optimally by McMann cars they can very soon leave their competitors behind when it comes to quality of service as the employees would be working in a more efficient and productive manner. And no longer would geographical distances be an obstacle in achieving their ambitious international goals. ERP till now has been projected as a stupendous advantage but like any other project in business and life ERP can also come down crashing if some aspects are not taken care of
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cautiously. The most important aspect is defining the requirements and then on its basis looking for the best fitting ERP software. Secondly, deciding which vendor the product should be bought from is also very important. There have been many instances where companies do go ahead and spend loads of money on ERP software but do not use it optimally. Thus, lastly, the employees and the management should use the software optimally by adapting it in its processes and also regular and careful entering of data. If these key points are not adhered to, no ERP software can provide what it claims to provide and has the potential to provide. 9 Which vendor to select?
As the demand for information systems is increasing so is the mushrooming of vendors for the same. In such a situation it becomes strenuous to select one of them. However, the leading contenders in this field are Oracle, SAP and Microsoft. Oracle is the champion when it comes to database management and SAP when it comes to ERP software as this what these two companies started with in the beginning. Microsoft is an established operating system and business software supplier. All three of them have an ERP product, Oracle’s E-Business Suite, SAP’s SAP ERP and Microsoft’s Microsoft Dynamics. Panorama (2011) ERP Vendor report brings to light that clients opting for one of these leading vendors are more satisfied than other vendors however 29.7% clients were either very satisfied or unsatisfied. As database management is one of the key issues to be addressed currently in McMann Cars, it is paramount to select a vendor that can handle complex issues when it comes to database management. Nazim (2012) reveals that Microsoft Dynamics AX 2012 would not be supporting Oracle database and the users would be ‘forced’ to move to Microsoft SQL server. With cloud computing becoming so prominent and appealing it would be interesting to contemplate if the database should be on-site or hosted on the cloud. All the three vendors have cloud solutions for ERP as well. All three also seem to be almost equal on viability and reach. Panorama (2012) Clash of the Titans, presents comparison of these three competitors. The report states that the SAP controls the largest share of the market (22%) with Oracle following behind at 15% and the third is Microsoft (10%). This report also highlights that SAP (35%) is most preferred when it comes to being shortlisted, followed by Oracle at 24% and then Microsoft at 17%. However, SAP (28%) is the least preferred when it comes to actual selection after being shortlisted and Oracle leads in this area at 34% closely followed by Microsoft at 32%. The selection rate after being shortlisted for Oracle was 22%, 19% for SAP and 14% for Microsoft Dynamics according to the Panorama (2011) Clash of the Titans. Nevertheless, the report clarifies that it is hard to make any specific conclusions from these numbers as it is not sure if the product chosen was the perfect fit for the companies. When it comes to payback from the software, only 22% companies present payback in a period of one year, 9% in 2 years and 16% in three years. 36% of the implementations of SAP took more than 3 years to contribute any payback, 18% took 1-2 years and 9% less than one year. These percentages might not seem very
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flattering but these are the highest as Oracle is at 20% in more than 3 years duration, 17% in 1-2 years and 5% in less than a year; Microsoft stands at 15%, 15% and 6% respectively. In the the area of benefit realisation the report brings forward similar results with SAP leading and Oracle and Microsoft following. Benefits realised included availability of information, increased interaction across business, decreased labour costs and improved lead time. The results reported by Panorama (2012) Clash of the Titans do not highlight any single product when evaluated overall. It only shows that all the three competitors are in close competition and SAP having spent more time in this industry enjoys more market value and recognition while Oracle and Microsoft seem to be struggling to make a similar niche for themselves. But they do give a good idea of the market trends. Thus, it really depends on the requirements of the company and which vendor and software features fit the bill most closely. This report suggests SAP and Oracle should be considered by studying the features they are offering and then comparing them with requirements identified. The one that fulfils the requirements should be chosen. The next issue to consider would be to buy a off the shelf product or develop a customised software. Once the software is deployed should the software be maintained in-house or outsourced? 10 Outsourcing or In-House software development/maintenance?
We would highly recommend outsourcing software development/maintenance to McMann cars. The decision to develop/maintain the software in-house can prove exceptionally risky as this is not their core competency. They are car manufacturers. This is the best they do and they should stick to and work in their core competencies to bring new innovative ideas in this area. Software development is not something that the company has experience in and they would have to start from square one and that means extensive hiring and now updated knowledge of software development. If the project is outsourced the designated company would have required knowledge, skilled manpower and technologies at their disposal while developing the software as this is what they do. Outsourcing would also bring down the overall cost of the project. The company that the project is outsourced to has the skills and competencies to handle them whereas in case in-house production the company would have to build and hire completely new teams in new area. Overhead costs like the back end operations, maintaining of database would come down substantially. Moreover, this can prove to be a competitive advantage if the competitors are not outsourcing as McMann cars would be focussing in the direction of their core competencies and the designated would be doing their job developing/maintaining the required software while using the required resources. (Flatworld Solution, 2012; Mark, 2011) But, outsourcing is also not free from intricacies. If outsourced it is gets very challenging to control the employees, speed and pace of the development, after implementation support and also the quality processes. Secondly, there can be difficulties in communicating the errors and
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lapses when the project is being implemented. The employees of the designated company might not be able to reproduce the issues being raised in the offices of McMann cars. Lastly, there is a colossal threat to the security of the data of the company as it is being handled by a third party now. However these issues can be controlled to some extent by including relevant terms and conditions in the contract and also roping in a legal expert in this area. (Flatworld Solution, 2012; Mark, 2011) 11 What does the future hold for ERP?
The world technology changes by the second. Technologies go obsolete or older by version in matter of days. Every company related to technology tries to be innovative and wants to be the first one to launch a new dimension. And if it is not the first one then it has to be close and adopt the change quickly to stay in this competitive field. Enterprise Resource Planning software field is not left out from this cut throat competitiveness. It is very difficult to forecast what the face of ERP would be ten years but there are some trends that can be foreseen looking at the changing working environment of the businesses. First of all more mobility ERP. Companies might not have to wait very long for this one. Very soon, the picture of mobility would have changed from laptops to tablets and smart phones. With cloud computing becoming so popular with the companies required information would be soon available to managers on their tablets and smart phones which would wash out the need to carry laptops and risks that come with it. With increase in ease to access data, the threat to security would also increase with the chances of unauthorised access to data increasing. As a result, the need to protect sensitive data would also increase. Authentication to limited data through usernames and passwords is quite prevalent now but very soon the scenario might change and using fingerprints, voice or even eye recognition systems for the purpose of authentication might become the norm. While these systems are used for attendance or authentication mediums for access to sensitive or confidential areas it is still a new area for ERP.
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REFERENCES
ERP Advantages (2012) [Internet] ERPPANDIT. Available from <http://www.erppandit.com/erpadvantages.html> [Accessed 9 November 2012] Flatworld Solutions (2012) The Pros and Cons of Outsourcing [Internet] Available from <http://www.flatworldsolutions.com/articles/pros-cons-outsourcing.php> [Accessed 9 November 2012] Mark (2011) 8 Pros and Cons of Outsourcing your Workforce [Internet] YFS Magazine Available from <http://yfsentrepreneur.com/2011/11/17/8-pros-and-cons-of-outsourcing-your-workforce/> [Accessed 9 November 2012] Nazim, A. (2012) Microsoft Dynamics AX 2012 won’t support Oracle database [Internet] Microsoft Dynamics AX Blogs, Microsoft Dynamics AX. Available from:< http://community.dynamics.com/product/ax/axtechnical/b/amirsaxspace/archive/2012/05/31/mic rosoft-dynamics-ax-2012-won-t-support-oracle-database.aspx> [Accessed 9 November 2012] Panorama Consulting Solutions (2012). Clash of the Titans. An independent Comparison of SAP, Oracle and Microsoft Dynamics [Internet]. Available from: http://panorama-consulting.com/Documents/Clashof-the-Titans-2012.pdf [Accessed 9 November 2012] Panorama Consulting Solutions (2012). 2012 ERP Report. An independent Comparison of SAP, Oracle and Microsoft Dynamics [Internet]. Available from: http://panorama-consulting.com/Documents/2012-ERPReport.pdf [Accessed 9 November 2012] Panorama Consulting Solutions (2011). 2011 Guide to ERP Systems and Vendors [Internet]. Available from: http://panorama-consulting.com/Documents/2011-Guide-to-ERP-Systems-and-Vendors.pdf [Accessed 9 November 2012] Panorama Consulting Solutions (2011). Clash of the Titans. An independent Comparison of SAP, Oracle and Microsoft Dynamics [Internet]. Available from: http://panorama-consulting.com/Documents/Clashof-the-Titans-2011.pdf [Accessed 9 November 2012] Robinson, A (2012) The Future of ERP [Internet] Business Computing World. Available from <http://www.businesscomputingworld.co.uk/the-future-of-erp/> [Accessed 9 November 2012] Rudo, P. (2011) A Beginners Guide to Enterprise Mobility and ERP [Internet] Enterprise Features Available from <http://enterprisefeatures.com/2011/09/a-beginners-guide-to-enterprise-mobilityand-erp/> [Accessed 9 November 2012] SAP – ERP: Business Benefits [Internet] United States, SAP. Available from:<http://www.sap.com/solutions/business-suite/erp/businessbenefits/index.epx> [Accessed 9 November 2012]
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BIBLIOGRAPHY
Agarwal, A., 2012. Most Popular Email Clients [WWW Document]. Digital Inspiration. URL http://www.labnol.org/internet/email/most-popular-email-clients/9340/ Bélanger, F., Crossler, R.E., 2011. Privacy in The Digital Age: A Review of Information Privacy Research in Information Systems. MIS Quarterly 35, 1017–A36. Bottazzo, V., 2005. Intranet: A medium of internal communication and training. Information Services & Use 25, 77–85. Bowling, A., 2009. IT’s new role in driving business improvement. Computer Weekly 16–16. Getting What You Measure, 2012. . Communications of the ACM 55, 54–59. HP, 2006. Driving toward change: the new role of IT and the CIO in the automotive industry. Official website of HP. Microsoft Dynamics (2012) Microsoft Dynamics|Dynamic Business|Manage you customers |Manage you business [Internet] United Kingdom, ITP Available from <http://www.microsoft.com/engb/dynamics/default.aspx> [Accessed 9 November 2012] Sørensen, C., Al-Taitoon, A., Kietzmann, J., Pica, D., Wiredu, G., Elaluf-Calderwood, S., Boateng, K., Kakihara, M., Gibson, D., 2008. Exploring enterprise mobility: Lessons from the field. Information Knowledge Systems Management 7, 243–271. WFT Cloud (2012) SAP Cloud Computing|Cloud SAP ERP on demand cloud solutions, services [Internet] Available from <http://www.wftcloud.com/> [Accessed 9 November 2012]
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