Developing ERP System for Blach Construction Company

This proposal suggests developing an ERP system for Blach Construction Company to streamline business operations and improve efficiency. The proposal includes a cost-benefit analysis and a seven-step SDLC methodology for development.

Running head: RESEARCH PROPOSAL
Letter to the sponsor
To,
CEO
Blach construction company
Norther California
Date: 21-01-2019
This is to bring into your kind consideration that from the last fee years our company is
totally dependent on the manual system for managing the construction related operations.
However, due to the increasing inconsistency of the manual system, the technical team of our
organization have suggested to develop ERP system within the organization. The
development of the ERP system will be helpful in streamlining re entire business process by
making it much more efficient for the company to properly engage in data collection. In order
to develop the ERP system, we need a budget of around $50, 000.
I am looking forward to hear your feedback by discussing the attach proposal on the
development of the ERP system.
Regards,

1
RESEARCH PROPOSAL
Assessment 2-Research Proposal
Name of the Student
Name of the University
Author’s Note

2
RESEARCH PROPOSAL
Executive Summary
With the development of IT application, the management mainly considers the IT strategy
which is mainly considered as a part of overall strategies of the organization. The trend helps
in reflecting that the new IT management system would be helpful for the Blach construction
company. It is identified that presently the organization uses manual system for managing its
business operations however due to the inconsistency of the manual system, it is quite
necessary to develop proper ERP system. With the help of the ERP system, the entire
operations of the Blach construction company will be managed effectively. It is analyzed that
in this paper seven steps of SDLC methodology is mainly used for developing the ERP
system. For the development of the ERP system, the ASP approach is utilized as this
development methodology will be helpful in meeting the objectives of the organization.
Moreover, the paper reflects that phased approach is used for the implementation of the ERP
system as this implementation method helps in providing a chance of fixing the issues before
the system is installed within the system. In addition to this, the paper also reflects on risk
management, change management as well as project management so that the entire ERP
system will be developed successfully.

3
RESEARCH PROPOSAL
Table of Contents
1. Introduction............................................................................................................................4
2. Description of the organizational context..............................................................................4
2.1 Brief description of the organization................................................................................4
3. Discussion about internal and external operating environments............................................5
4. Identification of the problem/opportunity for IS/IT...............................................................7
5. Justification about the proposed system.................................................................................8
5.1 Planning phase.................................................................................................................8
5.1.1 Identification of the selected system.........................................................................8
5.1.2 Project feasibility including cost-benefit analysis.....................................................9
5.2 Analysis plan..................................................................................................................11
5.3 Design phase..................................................................................................................11
5.4 Development phase........................................................................................................12
5.5 Testing phase..................................................................................................................12
5.6 Implementation phase....................................................................................................13
5.7 Post implementation phase.............................................................................................14
6. Discussion about project management, risk management and change management related
with the implementation...........................................................................................................15
6.1 Project management.......................................................................................................15
6.2 Risk management...........................................................................................................17
6.3 Change management......................................................................................................19
10. Conclusion..........................................................................................................................20
Bibliography.............................................................................................................................20
Appendices...............................................................................................................................24
Appendix 1: About Blach construction company................................................................24

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RESEARCH PROPOSAL
1. Introduction
The paper mainly reflects on the seven steps of SDLC methodology that is used by
Blach construction company for developing a new ERP system. The main aim of the
organization is to implement ERP system in order to avoid the problems that occur due to the
use of manual system. In order to develop the information system, sponsorship from the top
management of the organization is needed.
The report illustrates the organizational context that includes description about the
selected organization, internal and external operating environment as well as the problem of
IS/IT. The paper also provides proper justification about the proposed system by undertaking
cost benefit analysis. Moreover, the paper reflects on the system analysis as well as system
design methods including the steps that are used for developing, testing and implementing the
ERP system. In addition to this, the paper also discusses project management, risk
management as well as the changes that are mainly associated with the implementation.
2. Description of the organizational context
2.1 Brief description of the organization
Blach construction company is one of the construction company of Australia that
helps in providing commercial building as well as construction management related services
in Northern part of California (Blach.com 2019). This construction company helps in
providing number of services including sustainability consultation, program management,
pre-construction services, virtual design, building information modelling and more.
Mission: The main mission of the organization is to build proper people, projects as
well as relationship that helps in enhancing the communities in which one live and work.
Vision: The main vision of the Blach construction company is to become of the best
company to work with within Northern part of California.

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RESEARCH PROPOSAL
The Balch team works properly with the clients of the organization in order to
develop proper customized solution that helps in providing proper roadmap for achieving
success. The roadmap that is mainly considered depends on the project budget as well as
schedule. In addition to this, it is found that for managing the business process, the
organization helps in providing number of services that include program management, IES,
in-house scanning tools as well as pre-construction services.
3. Discussion about internal and external operating environments
Internal operating environment analysis
SWOT analysis is considered as one of the useful techniques that is mainly used for
understanding the strengths, weaknesses, opportunities as well as threats that are associated
with the operating environment of Blach construction company.
Strengths: The main strength of Blach construction company is that they are very
much efficient which helps in reducing the expenses of the company and improving the
profit. Moreover, the construction company have experienced and skilled project managers
with the help of which they can be able to complete the project on time (Almajali et al. 2016).
Weaknesses: The main weakness of Blach construction company is that the
organization works only in Northern California with some specific clients and therefore they
are vulnerable to slowdown. In addition to this, they lack in proper team member skill which
is considered as one of the major disadvantages.
Opportunities: The company wants to expand and therefore the company is trying to
leverage its present operations so that they can be able to work effectively with different
clients on various other types of projects (Shatat 2015). Moreover, the organization is
keeping eye on the various developing trends that assists in creating one of the easiest ways
for creating much more sustainable work.

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RESEARCH PROPOSAL
Threats: Changing market preferences is considered as one of the major threats for
the Blach construction company. Moreover, the cost structure of the organization is higher as
compared to its competitors and therefore it can cause major threat to the organizational
operations.
External operating environment analysis
Porters Five force model will he helpful in providing a simple perspective for
analyzing the external environment of Blach construction company. It is identified that both
the bargaining power of the customers as well as threat from substitutes are considered as two
forces of framework competition.
Threats from new entrants: New entrants will bring innovation as well as new ways
of tackling the construction projects but the pressure that will be created on the Blach
construction company due to the new entrants are high with the help of lower pricing
strategy.
Bargaining power of the suppliers: The raw materials for the construction purpose
in Northern California will not be buy the raw materials from a single supplier and therefore
the bargaining power of the suppliers are low because the suppliers are not be dominant
(Saade and Nijher 2016).
Bargaining power of the buyers: the buyers of the organization generally demands a
lot and they generally help in buying best offer that is available by paying the minimum
process as possible. It is found that as the Blach construction company is small therefore the
bargaining power of the buyers are high.
Threats of substitutes: As there are number of construction company in Northern
California, therefore the customers can be able to get better services of construction from
some other company and thus the threat from substitutes is high (Altamony et al. 2016).

7
RESEARCH PROPOSAL
Rivalry from the present customers: If the rivalry from the existing industry is
intense then it will be helpful in driving down the prices as well as helps in decreasing the
entire profitability of the industry.
4. Identification of the problem/opportunity for IS/IT
Presently, the Blach construction company uses manual system in order to manage its
business operations. However, it is found that due to the use of manual system the
organization faces number of problems including more time consumption, misinterpretation
as wellas inconsistency. It is quite necessary to implement ERP system within the Blach
construction company so that the company will be able to manage the operations of the
organization effectively.
If ERP system will be used in the Blach construction company, then the organization
will be able to remove the repetitive processes and helps in reducing the requirement of
manually entering the information and data. The new system will be helpful in streamlining
re entire business process by making it much more efficient for the company to properly
engage in data collection (Bakunzibake, Gronlund and Klein 2016). Moreover, ERP system
will be helpful in making much more accurate forecasting and as the details and information
are accurate therefore the business can be able to make proper business-related decisions that
further enhances organizational profit.
5. Justification about the proposed system
It is found that the entire ERP system will be developed with the help of seven step
SDLC methodology. According to Ibrahim et al. (2018), SDLC methodology is mainly
defined as one of the systematic approaches that is used for solving the problems by
developing the new information system. The ERP system that will be developed will be

8
RESEARCH PROPOSAL
helpful in managing the business operations by eliminating the repetitive processes that helps
in reducing the need of manually entering information.
Figure 1: SDLC methodology
(Source: Saade and Nijher 2016, pp.56)
5.1 Planning phase
5.1.1 Identification of the selected system
There are different types of ERP system in the market like SAOP R/3, SAP B1, LN,
Microsoft Dynamics, JD Edwards and more. The development of the ERP system by using
proper software mainly depends on the objectives of the organization (Permana 2015). As
ERP software helps in collecting, storing, managing as well as interpreting various types of
data therefore, it is quite necessary to identify the business needs first and as per the need of
the organization, proper system must be selected.
5.1.2 Project feasibility including cost-benefit analysis
Economic feasibility is considered as one of the terms that is mainly utilized for
measuring the expected saving of cost or benefit from the proposed new system. The Blach

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RESEARCH PROPOSAL
construction company mainly utilizes cost benefit analysis for analyzing whether the
investment that is made on the development of the system will be beneficial and it will be
helpful in providing some benefit to the entire organization. The cost benefit table for the
proposed ERP system development is generally provided in the table that is mainly given
below:
Project
Cost-
Benefit
Analysis
Analysis
Variables:
Discount
Rate Used
10.00
%
Annual
Benefits
$
1,08,0
00.00
Annual
Operational
Costs
$
20,20
0.00
One-Time
Developmen
t Cost
$
2,00,0
00.00
Year of
Project
0 1 2 3 4 5 TOTA
LS
Economic
Benefit
$0.00 $
1,08,00
0.00
$
1,08,00
0.00
$
1,08,00
0.00
$
1,08,00
0.00
$
1,08,00
0.00
Discount
Rate
1.000
0
0.9091 0.8264 0.7513 0.6830 0.6209
PV of
Benefits
$0.00 $98,18
1.82
$89,25
6.20
$81,142
.00
$73,76
5.45
$67,05
9.50
NPV of all
BENEFITS
$0.00 $
98,181.
82
$
1,87,43
8.02
$
2,68,58
0.02
$
3,42,34
5.47
$
4,09,40
4.97
$
4,09,4
04.97
One-Time
COSTS $(2,00
,000.0
0)

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RESEARCH PROPOSAL
Recurring
Costs
$0.00 $
(20,200
.00)
$
(20,200
.00)
$
(20,200.
00)
$
(20,200
.00)
$
(20,20
0.00)
Discount
Rate
1.000
0
0.9091 0.8264 0.7513 0.6830 0.6209
PV of
Recurring
Costs
$0.00 $
(18,363
.64)
$
(16,694
.21)
$
(15,176.
56)
$
(13,796
.87)
$
(12,54
2.61)
NPV of all
COSTS $(2,00
,000.0
0)
$
(2,18,3
63.64)
$
(2,35,0
57.85)
$
(2,50,23
4.41)
$
(2,64,0
31.28)
$
(2,76,5
73.89)
$
(2,76,5
73.89)
Overall
NPV
$
1,32,8
31.08
Overall
ROI
0.4803
In addition to this, another feasibility analysis is mainly considered in technological
area. Technical feasibility is mainly undertaken for making sure that the hardware as well as
software that will be used for developing the ERP system for the Blach construction company
successfully (Dawson, Leonard and Rahim 2015). ERP is considered as 360-degree
projection that requests proper technological implementation. The Blach construction
company is capable of developing the ERP system by using the required hardware and
software.
5.2 Analysis plan
After proper evaluation of the project feasibility, the Blach construction company
generally plans a formal as well as approved document for the execution of the project. The
plan that is developed must contain proper information including the schedule, scope as well
as resources for the proposed project.

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RESEARCH PROPOSAL
Requirement gathering: After the development of formal plan, proper requirements
that are needed for the development of the ERP system are gathered. It is the responsibility of
the organization to properly understand the various management structure, people as well as
business. The higher authority of the organization must appoint a project team including the
developer, IT manger, risk analyst, quality analyst and more for developing the system
successfully (Mousaei and Gandomani 2018). The Blach construction company also provides
proper guideline that helps the adding all the details about the organizational operations
within the ERP system. As per the analysis, the ERP system must have features which
includes accounting, payroll, human resources, marketing and more.
Creation of process diagram: The arm of setting proper process modelling must be
developed in order to represent the capturing, manipulation, storing as well as distribution of
the information between a system. Data flow diagram is one of the approaches that is mainly
used in order to represent the entire system of ERP which will be developed for the
organization “Blach construction company”.
5.3 Design phase
Design system helps in illustrating the steps with which the system will be able to
achieve the goals and objectives of the organization. It is quite necessary for an organization
to develop proper IT infrastructure for supporting the entire IT system. As the risk that is
related with the internet security as well as confidentiality of data, it is suggested that the
ERP system must be properly installed (Joslin and Muller 2015). It is found that the design
that is made for the project must be strictly followed by the developers for developing as well
as implementing the ERP system within the Blach construction company.

12
RESEARCH PROPOSAL
5.4 Development phase
Development phase helps in formalizing the detailed design of the documents into the
actual system from the design step. The main activities of the stage include development of
database, IT infrastructure as well as programs. There are four different types of approaches
that are mainly used which mainly includes internal development, outsourcing, acquisition as
well as application service provider (Raman 2017). It is important to have a trial version ERP
system for meeting certain modifications within the entire system. After analyzing the
benefits that is achieved from the different development phase, it is found that ASP approach
can be used for meeting the objectives of the organization.
5.5 Testing phase
Testing is considered as one of the important steps that helps in avoiding and
eliminating the software related problem before it is generally converted to a business
operating system. It is found that testing phase generally involves assembling all the sections
of the project together (Akbar et al. 2018). It generally helps in controlling the quality of the
entire system for verifying whether the system is able to meet all the objectives of the
organization or not. There are four different types of tests that are generally undertaken in
order to make sure that the system is working properly with the help of different combing
approaches.
5.6 Implementation phase
The implementation phase of the project is considered as one of the steps that is
mainly undertaken in order to implement the ERP system successfully within the Blach
construction company. The steps that are generally executed during the implementation phase
of the project mainly includes the following:

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RESEARCH PROPOSAL
Formulation of the user documentation
It is necessary to create proper user documentation that must include details about the
utilization of the system, system requirements, guidelines about handling the system as well
as administration. Proper literatures are generally used for providing training facility to the
employees.
Selection of implementation method
The implementation method that can be used for the implementation of the project
mainly includes plunge, parallel, phased as well as pilot (Kostic 2017). It is found that the
analysis of each of the method of implementation is generally provided in the table that is
provided below. For the development of the ERP system, it is found that phased approach
must be considered as most appropriate for the implementation of the ERP system as this
implementation method helps in providing a chance of fixing the issues before the system is
installed within the system.
Conversion
approach
Characteristics Advantage Disadvantage
Parallel They mainly run
both the old and new
system at the same
time.
Helps in fixing
problems related
with the new system
Slower than the
direct approach
Plunge They generally shut
the old system and
starts the new
Fast and lower cost New system may not
be helpful

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RESEARCH PROPOSAL
system
Pilot The system is
installed as well as
tested only in one
part of the
organization.
Helps in fixing
problems without
create impact on the
organization.
It creates problems
due to high volumes
of transaction
Phased The system is
installed in a
sequential manner at
different locations.
It needs less
installation staff and
helps in in fixing
problems.
Different location
does not use same
version of the
system.
5.7 Post implementation phase
System maintenance generally emphasizes for continuously monitoring, evaluating as
well as modifying the operation system after the entire system is implemented. The main
activities include post implementation review, building proper assistance for supporting the
system users, for making performance changes and for giving proper supportive environment
(Raman 2017). The project team must properly examine the new ERP system and check
whether the entire system is working properly or not. All the historical performance related
changes must be recorded for helping the system improvements. The activities that are
needed to be undertaken in the post implementation of the ERP system mainly includes:
 Reviewing the project
 Making proper documentation
 Analyzing the problems as well as issues for providing solutions
 Stakeholder sign off

15
RESEARCH PROPOSAL
6. Discussion about project management, risk management and change
management related with the implementation
6.1 Project management
Project management is defined as the application of the knowledge, skills, tools as
well as techniques that is used for meeting the requirements of the project. It generally
involves management of scope, quality, time, as well as human resource, risk as well as
procurement aspects of the project quite successfully. It is found that in order to manage the
project successfully, it is quite necessary to follow the project plan that is used for the
development of the ERP system within the organization.
WBS Task Name Duration Start Finish
0
Implementation of ERP
system within Blach
construction company
134 days Mon 21-01-19 Thu 25-07-19
1 Initiation phase 14 days Mon 21-01-19 Thu 07-02-19
1.1 Business case 3 days Mon 21-01-19 Wed 23-01-19
1.2 Cost benefit analysis 4 days Thu 24-01-19 Tue 29-01-19
1.3 Project charter 3 days Wed 30-01-19 Fri 01-02-19
1.4 Recruitment 4 days Mon 04-02-19 Thu 07-02-19
2 Analysis 44 days Fri 08-02-19 Wed 10-04-19
2.1 Project plan 5 days Fri 08-02-19 Thu 14-02-19
2.2 Resource plan 6 days Fri 15-02-19 Fri 22-02-19
2.3 Financial plan 4 days Mon 25-02-19 Thu 28-02-19
2.4 Risk management 5 days Fri 01-03-19 Thu 07-03-19
2.5 Creating risk plan 5 days Fri 08-03-19 Thu 14-03-19

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RESEARCH PROPOSAL
2.6 Quality plan 6 days Fri 15-03-19 Fri 22-03-19
2.7 Communication plan 4 days Mon 25-03-19 Thu 28-03-19
2.8 Acceptance plan 3 days Fri 29-03-19 Tue 02-04-19
2.9 Procurement plan 6 days Wed 03-04-19 Wed 10-04-19
3 Designing phase 5 days Thu 11-04-19 Wed 17-04-19
3.1
Developing design for
project
4 days Thu 11-04-19 Tue 16-04-19
3.2
Getting approval of the
design
1 day Wed 17-04-19 Wed 17-04-19
4 Development phase 53 days Thu 18-04-19 Mon 01-07-19
4.1 7 days Thu 18-04-19 Fri 26-04-19
4.2 Data migration 6 days Mon 29-04-19 Mon 06-05-19
4.3 Checking infrastructure 5 days Tue 07-05-19 Mon 13-05-19
4.4 Customization 7 days Tue 14-05-19 Wed 22-05-19
4.5 Change management 4 days Thu 23-05-19 Tue 28-05-19
4.6
Technology and
knowledge transfer
6 days Wed 29-05-19 Wed 05-06-19
4.7 Setting and development 7 days Thu 06-06-19 Fri 14-06-19
4.8 End user training 6 days Mon 17-06-19 Mon 24-06-19
4.9 Deployment 5 days Tue 25-06-19 Mon 01-07-19
5 Testing phase 5 days Tue 02-07-19 Mon 08-07-19
5.1 Performance testing 2 days Tue 02-07-19 Wed 03-07-19

17
RESEARCH PROPOSAL
5.2 Black box testing 1 day Thu 04-07-19 Thu 04-07-19
5.3 White box testing 2 days Fri 05-07-19 Mon 08-07-19
6 Implementation phase 7 days Tue 09-07-19 Wed 17-07-19
6.1
Formulation of user
documentation
4 days Tue 09-07-19 Fri 12-07-19
6.2
Selection of
implementation method
3 days Mon 15-07-19 Wed 17-07-19
7
Post implementation
phase
6 days Thu 18-07-19 Thu 25-07-19
7.1 Post project review 3 days Thu 18-07-19 Mon 22-07-19
7.2 Stakeholder sign off 2 days Tue 23-07-19 Wed 24-07-19
7.3 Documentation 1 day Thu 25-07-19 Thu 25-07-19
7.4
Milestone 4: Closure
phase
0 days Thu 25-07-19 Thu 25-07-19
6.2 Risk management
The risk management plan that is provided below reflects on the risks that are mainly
associated with the development of the ERP system with proper mitigation strategies for
resolving the project risks.
Risk Description Impact Probability Mitigation
Schedule
slippage
If the project
schedule is not
tracked on
regular basis
then there is a
High High Tracking the
schedule of the
project on
regular basis is
necessary for

18
RESEARCH PROPOSAL
chance of
schedule
slippage.
avoiding the
problem of
schedule
slippage.
Budget
overflow
Due to
improper
estimation of
budget number
of financial
issues can
occur.
High High The budget that
is needed for
the ERP
development
must be
estimated
before starting
of the project.
Technical issue Improper data
migration can
cause number of
technical issues.
High High Testing must
be conducted
for making sure
that the data are
properly
migrated.
Inexperienced
team members
As the team
members are
not experienced,
they face
difficulty in
completing the
project.
Medium High Training facility
must be
provided to the
team members
so that they can
achieve proper
skill of

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RESEARCH PROPOSAL
managing the
project.
Improper
management
If the project is
not managed
properly then it
can cause
number of
problems as
well as issues
within the
system.
Medium Medium Proper
management
strategies must
be followed for
managing the
system
successfully.
6.3 Change management
Change management is mainly considered as the changes that are generally required
within the mission, vision, strategy as well as within the organizational structure of the
organization. It is quite important to develop proper change strategy that helps in reducing the
risks as well as cost. During the development of the ERP system, some of the changes are
required which must be done so that the system will be developed effectively. The changes
that are needed within the Blach construction company include creation of changed vision
statement of the organization.
10. Conclusion
It can be concluded from the entire report, that seven steps of SDLC methodology is
used for developing the ERP system for the organization successfully. It is found that with
the help of the ERP system, the organization will be able to manage the operations of the
organization effectively. The paper properly illustrates the benefits that is gained by the
organization with the help of the new ERP system. In addition to this, change management,

20
RESEARCH PROPOSAL
project management as well as risk management steps are properly followed for properly
managing the entire project.

21
RESEARCH PROPOSAL
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Appendices
Appendix 1: About Blach construction company
For more than four decades, Blach Construction Company has remained true to its
mission: To build the very best people, projects and relationships that enhance the
communities in which we live and work. We achieve this mission with an unwavering
commitment to quality, innovation, sustainability and customer service.