Organizational Structure and ERP Systems

This assignment focuses on evaluating the organizational structure of a company and its existing Enterprise Resource Planning (ERP) system. It analyzes the challenges the current ERP system presents and proposes modifications to enhance flexibility and efficiency. The analysis involves understanding the company's micro and macro environment, integrating links within the organization, and suggesting strategies for effective marketing and sales development.

Abstract
The purpose of this assignment is to do a complete assessment of the company
XYZ, I actually work for from a CEO point of view, while using strategic analysis
assessment tools and provide arecommendation for change. Theassessment
willinclude ananalysis of the company’s internal and externalenvironments and the
services it offers to its more thanseven thousand clients.
The company background informationwill offer a basis to conduct an analysisthrough
differentanalysis models that are critical for applying a change in the systems. The
analysis will reveal that there are different areas that the company needs to attend
towhile developing better methods to become competitive in the larger markets.
Introduction
Globalization and technological advancement has seen businesses look for the
beststrategies to ensure that they are competitive within the market. In every
entity,organizational changes become at some point pertinent and necessaryfor the
continuity andgrowth of the organization; developing the best strategies and
organizational behaviorpractices is critical for ensuring that there is sustainability and
growth within the entity.
Global competition, technology changes, consumer behavior and needs, political
climates, emerging markets, economic factors and much more are all elements of
importance that leadto develop and apply new strategies and are determinant in the
adaptation of the organization.
Different business analysis tools are available and can be used to asses an
organizationsuch as PESTLE, SWOT, Porter’s five force, balanced scorecard, The
McKinsey 7-S Framework andmany more.Some of these tools emphasize on the
internal environment of the organization, some other on theexternal environment and
some cover both environments.

In my assessment I will be conducting all SWOT, PESTLE, Porter 5 and 7-S analysis
to analyze the company and market and the different aspects that are critical in
ensuring that XYZ is sustainable in the market,I will also accordingly establish a
balanced scorecard to outline the main elements and make a proper assessment
and model of change.
Company Background and Information
XYZ is a Lebanese local company that has been involved in the development and
implementing of ERP systems solutions in the last 30years. The company
implements integrated management solutions of core business processes and
mediated software and technology for clients in a dynamic growing market.
The company’s major line of ERP business solutions cover financials, logistics, retail,
manufacturing, construction, project management, procurement, job costing, media
booking and creative production solution. These are the main services that the
company offers and have been selected among a large pool of its ERP services.
The company has its headquarters located in Lebanon, but it has also set up two
satellite offices in Dubai and Saudi Arabia. The offices support its vast network of
clients and services across the United Arab Emirates, Oman, Kuwait, Qatar,Jordan,
Egypt, Tunisia Morocco, KSA and Lebanon clients. The company has more than
7000 customers spread across the Middle East and North Africa with huge potential
of the markets only opening up for more opportunities and customers in the region.
XYZ looks to establish itself as a major brand and increase its market share in the
region.
XYZ is a medium size, family owned, companythat operates within the Middle-East
and North African markets. XYZ has more than 80 dedicated consultants that are all
specialized in systems design and solution integration that are important in
developing the company. (Organizational Chart Appendix a)
The huge potential in the region has however, started attracting medium size
competitors from the West as well as the East, along with the existing major big
players (SAP/Oracle/Microsoft Dynamics).This is increasingly leading to stiff
competition in the markets; It is therefore, critical to ensure that the company
develops the best strategic actions and methods to position itself in the market and
develop better sustainable methods of change.
As the company looks to develop and grow, it is imperative to ensure that the proper
systems have been developed. An analysis of internal and external factors
determining growth and development of the company is therefore critical.

XYZ looks to establish itself as a major brand and increase its market share in the
region.
SWOT Analysis
The SWOT analysis is a tool used for planning services, that helps build the strategy
of the organization and allows to analyse its actual strengths and weaknesses and
define the threats and opportunities that it may faces whether internally or externally.
Strengths
1. Full fledge ERP solutions adaptable to many lines of industries.
2. Cost effective and competitive line of prices.
3. Flexibility and customization of the services provided.
4. Competent and cohesive workforce that understands the underlying goals and
objectives of the company. The entity has seventy members within its
workforce that are highly productive.
5. The company also has a strong market share in the region and prides itself in
having more than 7000 clients in the region.
6. The company can be considered as a major player in the Lebanese market.
7. High profit in the Lebanese market.
Weaknesses
1. Low brand awareness in the regional market.
2. XYZ ERP solutions are Client Server basedonly whereas competition has
alsoWeb based and orCloud basedERP solution, which means less flexibility
and additional IT costs for customers.
3. Less competitive product if considering the new trend in technology.
4. Lack of diversification of the different services that are offered under the ERP
system.
5. Weakness of the Dubai and KSA branch in terms of sustainability and profit.
6. Lack of strong presence in all the countries where the company has clients
across the Middle East. The company does not have offices or people spread
through the different countries in the larger region.
7. Lack of motivation and /or orientation of a big number of staff.
8. Autocratic leadership system where most, if not all, decisions lies in the hands
of the CEO.

9. Family business following a one-man leadership point of view.
10. No unity in command and direction. Employees are receiving orders at the
same time from the CEO and the head of departments.
11. Overloaded operational capacity leading to lower efficiency.
12. Lack of financial resources that is slowing the recruitment process for
acquiring new talents and development of new technologies.
Opportunities
1. The huge potential in the region with growing businesses and entities needing
the ERP services offered by XYZ.
2. Widening the number of ERP services offered in the market thereby
increasing the company’s portfolio.
3. Add web or cloud based technology which will allow growing business with
the actual clients and pitching for new ones.
4. Target more dynamically and cover more countries in the MENA region.
5. XYZ ERP solutions are compliant and tested with the VAT tax that will be
implemented in the GCC countries as of January 2018.
Threats
1. Increase in the level of competition in the region.
2. Dynamic changes in technology in the market.
3. The clients’ employeesand managers are resistant to development and
change in their ERPsystems therefore representing barriers for XYZ new
business and sales.
4. Critical economic situation in the MENA region due to the drop of oil and gas
prices.
5. Critical political situations in all MENA countries; namely Qatar and GCC
being in conflict, Syria and IRAK.
Analysis of SWOT Analysis
The SWOT analysis reveals that XYZ offers a strong and competitive service that is
flexible and can be customized upon customer’s needs.
The company is in a great position within the Lebanese market especially due to its
market share and brand. Branding and market share are important facets in every
market since these aspects ensure that the company can be competitive against any
other brand names from abroad.
The positioning of the company in the Gulf regionhowever is weak. The company
needs to take advantage of the opportunities available in the market especially

through increasing its services portfolio and reaching out to more potential clients
throughout the MENA region. The numbers of services that are offered by the
company also lack the proper level of diversification in the market and new
technologies are to be considered.
Motivation of employees and engaging the members of the team is a critical aspect
that the company needs to address sincethe company is mainly driven by these
employees who offer the services that are critical to the entity. Increasing the number
of qualified and committed employees within the different regions is as well critical.
Also the leadership style needs to be addressed and reviewed.
The threat of changes in technology in ERP systems has also been identified as a
major threat to the company. Therefore, developing proper and dynamic
technologies while updating the individual systems is fundamental for gaining market
advantage.
PESTLE Analysis
The PESTEL model is used to analyse and identify the external macro environment
thatmight affect the organization. The PESTEL model includes various factors in the
externalenvironment: The Political, Ecological, Socio-Cultural, Technological,
Economic and Legal fields. It studies every element and defines the potential impact
of each of them on the organization.
Being aware of these factors and elements allows the company to face any changes,
stay on top of the competition and be ready to react quickly. It can also serve as а
checklist to verify that the SWOT analysishas not forgotten any important factor.
Political
XYZ has already navigated through most of the political hurdles that are present in
the Middle-East and North African countries. The company is a Middle East based
entity meaning that it is a homegrown entity within the region and cannot be curtailed
by most of the bureaucratic government and political models that are present in the
region. The political atmosphere in theregion is somewhat stabilized in some of the
countries like Lebanon, KSA, Egypt, and UAE but still unstable in IRAQ, Syria and
QATAR.
However, as opposed to companies from other regions and new entrants in the
market, XYZ may deem the political atmosphere and indicators as positively
impacting the market and industry to its advantage. While concentrating for the time
being on the stable markets, the other MENA countries will represent huge emerging
markets when the political situation stabilize and reconstruction time comes.

Economic
The economy of the Middle East is one of the first growing economies in the world
with the UAE reporting increased growth since the turn of the 21st century. The
region is rich in oil making it one of the most productive regions and bar the political
conditions that curtail growth it has a vibrant economy (Minefield, 2012). However,
the drop in oil and gas prices and some critical political issues in the region have
slowed down the growth index.
XYZ needs to take advantage of the general economic growth to tap into more
markets and expand its service portfolio (Minefield, 2012).
The region is placed perfectly towards being a strong economic hub. The company
needs to capitalize on the changing political atmosphere and expand to other
countries within the region. The opening up of the markets will give, on the longer
run, impetus to the company to engage in other entities all over the world and look to
expand globally and not only regionally.
Social
The social factors are also favorable for XYZ Company with the employees mostly
coming from the region. However, to ensure that there is diversity and tap into the
growing market of other markets from abroad, the company needs to integrate and
engage in diversity models especially in the workforce (Robbins et al, 2010).
Technological
The technological aspects of XYZ are the most important attributes of the entity.
ERP systems are run through developing and running the most efficient models that
are meant to widen the business and create a stronger and more potent system
(Ludwig and Frazier, 2012).
Since the company engages in different technological processes, it is therefore
fundamental to integrate the proper technology in its systems and services.
The dynamism of technology combined with the high level of competition across the
industries, offers a major challenge to XYZ Company and is a major precept towards
creating a better and more structured model (Ludwig and Frazier, 2012).
Legal
The business is within the legal structures that have been set across the region.
However, the company needs to keep up to date with the legal models and issues
that may arise from different systems and approach that are critical for change within
the company.

Porter’s Five Forces
The Porter’s Five Forces are important in decision making and working out a proper
model towards changing and developing the best organizational methods.
Threat of New Entry
The Company is facing a threat of new entry from companies looking to enter the
market especially from the West. Technological companies are looking to enter the
market and start selling similar and newer ERP services to the clients or the region
as a whole (Ludwig and Frazier, 2012). It is one of the major threats that the
company can be facing and the entity needs to be ready to face this threat.
Buyer Power
The buyers have considerable bargaining power that is gained from the fact that the
services offered by the entity are tailored for individual entities. The entities have the
sole power to engage the company and elicit their services through the market with
their clients not needing their sole service in the market (Ludwig and Frazier, 2012).
Supplier Power
The supplier power does not represent a challenge to the company. The high level of
competition among the suppliers means that the entity has the freedom to engage
the services of different companies/individuals and as a result the supplier
bargaining power is not a major challenge to the entity.
Threat of Substitutes
The threat of substitutes represents a challenge to the growth and sustainability of
the entity. ERP systems can be substituted to other companies and the competition
is increasing within the region which means that the company could be facing major
problems.
Competitive Rivalry
The level of competition within the market is a major problem to the company with
increasing brands entering the market. Although the brand of XYZ as well as the
market share of the company is in its favor, the company still faces major challenges
from new brands entering the market. The level of competition has increased
exponentially as newer brands and models have been introduced in the market. It is
important for the company to ensure that it reinvents itself and develops a dynamic
model towards growth within the region.
McKinsey’s 7 Model

The seven’s model is a very useful framework that was developed to assess and
analyze changes in the internal models that are used within the organization. The
McKinsey’s 7s framework incorporates skills, strategy, style, staff, systems, structure
and the shared values (later becoming superordinate goals) implemented within the
entity.
These are the fundamental attributes that the management needs to assess and
monitor in every organization. In an entity, it is critical to improve performance as
well as align the department goals to the larger organization. It is also helpful in
taking strategic action to proactively deal with different market conditions that are
present in the market.
The assessment of McKinsey’s 7s reveals the below regarding XYZ:
Strategy:
1. Lackofa clear definedstrategy spread amongst the company.
2. Inexistence of long term goals.
3. Immediate Profit and market growth are the main targets without the
existence of a clear path to achieve them.
4. Growth and expansion plans are not defined.
Structure:
1. Headquarters are based in Beirut.A major division is established in Dubai and
a business unit /representative office is set in KSA.
2. Many resources are shared between the different offices.
3. Centralized authority and no autonomy for the different offices.
4. Lack of delegation and responsibility at head of department’s level and no
decision making power.
5. Nonexistence of Marketing and strategic planning departments.
6. No sales force; the project managers being the direct contact with the clients.
Systems:
1. Lack of accountability and measurement throughout the different levels of the
organization.
2. No proper reporting systems.
3. Existence of Productivity measuring tool.
4. Good financial control system.
5. Lack of synergy and coordination between departments.
6. Overlap and Duplication of functions in some departments.
Style
1. Centralized control where most of the decisions are taken mostly by the CEO.

2. Autocratic leadership style.
3. Execution role only for the heads of departments.
4. Individually competitive environment whereas team efforts are needed.
Staff
1. Overloaded and unmotivated staff working sometimes under incoherent
orders.
2. Qualified employees who fulfill the requirements of their job descriptions.
a. The company is however understaffed especially in terms of program
developers which can develop the web based ERP services.
3. Family style business environment which is enjoyable but not translated into
concrete motivational factors and benefits.
Skills
1. Qualified staffwith the required skills.
2. Lack of training mainly for the developers of ERP services for the web.
Shared values
1. Inexistence of company purpose.
2. Profit-driven company with no higher objective.
3. Family business; no identification of internal staff needs and the human factor.

SWOT analysis
As per the SWOT analysis that has been conducted, it can be critically analyzed that
as the company is already in a good position due to the higher authorities can make
the market share as well as the brand image of the company. However, certain
changes can be implemented by them wherein positioning of the company can be
changed and can open new outlets in the areas where they can attract customers
and gain competitive advantage as well. The other change is proper diversification of
products and services in the competitive market as to create proper customer base
and can be a competition to the other markets in the competitive industry.
Another critical aspect is providing proper motivation to the employees in the
organization, as they are the ones who help in achieving goals and success for the
entire organization by providing them both monetary as well as non-monetary
benefits as this will increase the morale of the employees in the organization. The
advancement in technologies has to be adopted by the respective company as it
helps in analyzing the advancement in the competitive market and it will help them in
gaining competitive market.
PESTLE analysis
According to the PESTLE analysis, on the political front there will be no such change
required in the company as they are politically strong in nature and have good
competitive advantage as well upon other companies. The economic factors has to
be revised by the company as this will help in reaching the larger areas of the entire
market and attract customers with proper advancement in technology and expand
globally as well (Gupta and Mishra 2016).
The social factors are desirable in nature for the company, however in order to
improve the diversity of the company it is essential for the company to improve the
market rate with proper usage of technology and resources and it will be helpful in
generating success in the organization as well. Proper structured models has to be
created by them as this will help in gaining advantage in the industry and create
better models in the market as well. Lastly, there are presently some issues related
to the legal structure of the company.
Recommendations
Therefore, it can be recommended that proper strategies need to be implemented by
the company, as it will help in understanding the threats that are faced by the
respective company from the new entrants in the market. The services related to
ERP have to be analyzed in such a way that it will help in understanding the needs
of the company and solve such issues accordingly. There are threats from
substitutes that are challenging in nature for the company, as this will have impact on
the brand image of the company. Lastly, the rivalry among the competitors is a
challenge for the company as this will have huge impact on the growth of the

company and affect the reputation of the company as well. Due to increase in the
brands in the market, proper dynamic model has to be implemented by the company,
as this will help in gaining advantage in the company.
As per the system is concerned of the company, proper reporting system is
essential, as this helps in measuring the productivity of the organization and it will
lead to generate coordination among the employees and the customers in the
competitive market. This will help in correcting and reducing the overlapping and
duplication of the functions in the different departments in the organization.
The skills that are required in the management team, proper training is essential as it
will help in gaining success and it will help in developing ERP services that are
essential to be successful in the competitive market as well. Lastly, the shared
values are essential to be properly maintained by the company, as this will help in
achieving objectives of the company and proper identification of the internal staffs
are essential as this will help in providing benefit to the clients and the employees in
the competitive market.
Balanced Scorecard Model
It is a quantifiable measure that is derived from the unique strategy of organization.
The measures that are selected for the scorecard helps in representing tool that are
used in communication with the employees as well as the outside stakeholders that
will help in achieving strategic aims and objectives.
Generally, a strategic as well as management tool helps the entire organization to
work according to the mandates and helps in improving the external and internal
process of communication. It helps in monitoring the performance against the goals
related to the strategies.
The model of Balanced Scorecard helps in understanding the four perspectives:
1. Learning as well as growth wherein it helps the staff and the other employees
in the organization about the mission and strategic goals of the company. XYZ
Company is investing in service to the customers and development of goods
and services.
The particular perspective helps in retaining the staff and it will benefit the
organization as well. The recommendations are providing proper development
along with connecting the growth as well as development with the appraisal of
annual performance.
2. Business Process is through which the managers in the organization can get
a close look at the processes of the organization that can provide safety to the
stakeholders and satisfy their wants as well.
3. Customers satisfaction is essential in nature as it helps in understanding the
conflicts of the customers faced by them and this will help them in enhancing
the issues by evaluating their needs and providing proper feedback as well.

4. Financial data is essential in the business, as this will help in managing the
data that is required in order to provide sustainability in the organization.
Organizational structure (Before)
Figure 1: Organizational structure
(Source: Created by author)
From the above diagram of the organizational structure, it can be analyzed that the
enterprise structure of ERP in the company is working smoothly and this helps in
understanding the client base as well as location of the storage of the organization
(Frankenberger, Weiblen and Gassmann 2014). Proper focus has to be given to the
sales department of the organization wherein legal entity along with accounting unit
is not functioning properly and proper infrastructure is required as to generate proper
profit in the company. The distribution of goods and services is not properly done by
the company and is reducing the sales of the company. The sales have to be
properly generated by the company as to negotiate the conditions of sale in the
market as well (Baden-Fuller and Mangematin 2013).
The distribution channels have to be properly set up by the company, as this will help
in gaining competitive advantage. The distribution channels need to reach the
different customers and the materials are delivered on time with implementation of
ERP strategies. The company needs to distribute the goods and services to the
customers in such a way that it helps the customer in understanding the ERP related
strategies and can trade without any issue faced by them as well.
However, there is little lack in the strategies that are to be applied by the company
and it has to be rectified properly as well. The sales division of the company needs to
represent product line properly as this will help in emphasizing on the services that
has to be provided by them as to generate sales in the company. The current
CEOSalesHRLegal

organization structure of the company is organized in nature but there are changes
that are required in order to make the ERP systems more flexible in nature
(Pedersen, Gwozdz and Hvass 2016).
There are few requirements needed that will help in making the system easier and it
will remove the complexity from the organization structure as well. The functions of
sales department along with other issues that are faced by the company presently.
There are certain changes required in the sales division along with the factory that
will help in making the tasks easier in the departments and it will boost the morale of
the employees as well (E. Dobbs 2014).
Organizational structure (After)
Figure 2: New organizational structure
(Source: Created by author)
Suggested changes and specifications
Proper rectifications are required in the sales and the factory division wherein the
tasks has to be delegated thoroughly as this will help in improving the tasks
performed by the employees in the organization and it will help in gaining competitive
advantage as well (Rothaermel 2015). The sales area of SAP is designed in such a
manner that it will help in combining the sales along with the distribution channels of
the organization and it will help in purpose of reporting of the ideas related to the
design of the sales division in the company (Ho 2014). Proper business development
segment has to be added in the organization as to analyze the sales and marketing
of the companies. The company needs to implement strategies related to marketing
as it will help in proper procurement of the actions that has to be taken as well.
Conclusion
Therefore, it can be concluded that proper analysis is required in the organization as
to analyze the micro and macro environment analysis and it will help in controlling
ChairmanCEOTest&QMITSupportTrainingSaleMarketingAdmnistrationHRLegal

the activities of the departments as well. The integration links has to be properly
analyzed, as this will help in gaining competitive advantage and understanding the
loopholes of the company as well. Lastly, proper strategies and system has to be
maintained as this will help in understanding the requirements that can help in
designing proper structure of the organization with implementation of various designs
and strategies as well.

References
Baden-Fuller, C. and Mangematin, V., 2013. Business models: A challenging
agenda. Strategic Organization, 11(4), pp.418-427.
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of
industry analysis templates. Competitiveness Review, 24(1), pp.32-45.
Frankenberger, K., Weiblen, T. and Gassmann, O., 2014. The antecedents of open
business models: an exploratory study of incumbent firms. R&D Management, 44(2),
pp.173-188.
Gupta, G. and Mishra, R.P., 2016. A SWOT analysis of reliability centered
maintenance framework. Journal of Quality in Maintenance Engineering, 22(2),
pp.130-145.
Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic
analysis. European academic research, 2(5), pp.6478-6492.
Pedersen, E.R.G., Gwozdz, W. and Hvass, K.K., 2016. Exploring the relationship
between business model innovation, corporate sustainability, and organisational
values within the fashion industry. Journal of Business Ethics, pp.1-18.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.