Contribution and Principles of Enterprise System in Firm Performance

This report shares the contribution of the enterprise system in any firm for the betterment of its performance in terms of sales. Also, the principles of adapting to supply chain management are mentioned that actually are the reasons behind the adoption of SCM by any firm. In addition to that, the factors of the change management that are to be considered before any ERP implementation are also discussed widely.

Running Head: Enterprise System
Enterprise System
Contribution and Principles

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Enterprise System
Executive Summary
Enterprise Systems are the combination of the software and hardware system that is used in any
firm for better management of the data. This report shares the contribution of the enterprise
system in any firm for the betterment of its performance in terms of sales. Also, the principles of
adapting to supply chain management are mentioned that actually are the reasons behind the
adoption of SCM by any firm. In addition to that, the factors of the change management that are
to be considered before any ERP implementation are also discussed widely.

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Enterprise System
Contents
Executive Summary.....................................................................................................................................1
Introduction.................................................................................................................................................3
Contribution of ES in Firm Performance......................................................................................................3
Measuring the Contribution....................................................................................................................4
Principle Drivers in Adopting SCM...............................................................................................................5
Change Management Considerations..........................................................................................................5
Conclusion...................................................................................................................................................6
References...................................................................................................................................................8

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Enterprise System
Introduction
Enterprise system is a type of application software package which is mostly designed for
collecting all various operational wings of firm in a centralized zone. It can also be characterized
as the amalgamation of the software and hardware of the firm for ensuring a silky flow of data or
information across the functional units. Now these enterprise systems are not just confined to the
software of the firm but also it is related to the hardware prospect and they are interlinked with
the technology structure. These systems are applicable to all the large and the small size of
businesses and these can easily be utilized from anywhere only when there is necessity of its use
and it also depends on the efficient utilization if implemented. These systems are expensive and
critical and also they take a long time to get implemented in a company. This is the reason due to
which the contribution of ERP is actually taken to be as the motivation for the firm that decides
to go for it or see a future with it (Bhattacharya & Seddon, 2009).
Contribution of ES in Firm Performance
Enterprise Systems are also known as Enterprise Resource Planning and since more than 20
years from now, it is used in almost every company for the support of key processes such as
Finance and Accounting, Supply Chain Distribution etc. There are several benefits with which
the contribution of the ES in any performance of the company can be analyzed. They are:
 Better management of the Information via Business Automation: Evaluating the
performance of the business or the firm progress and also help in assisting in the goals of
the firm in the future. But it sometimes becomes very difficult to calculate the revenue or
sales etc. when the business grows. ERP gives that business automation degree and
support the organization (Mathrani & Mathrani, 2013).
 Workflow improvement: The workflow and some of the other processes are streamlined
when the access is allowed in an easy way via user friendly interfaces. ERP makes the job
of the employee easier this way (Elragal & Al-Serafi, 2011).

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 Modular and Integrated Approach: There are different processes which are necessary for
running the business and ERP amalgamates those processes into one single data base.
 Transparency: When the data of the firm is not safe, there are many people who are not
given the authority to share or avail that information. But with the help of the ERP the
data can be made transparent (Mangin et al., 2015).
 Redundancy Elimination: There is a big issue with the non centralized management
system that the redundant data is occurred continuously. When the data repeats itself, it
can create confusion at some point of time. This redundant data can be eliminated by ERP.
 Mingled insight: ES actually ties the data and all the other processes altogether so there
are a 360 degree view always. Now when an employee wants to access any process is it
financial, forecasting sales, pulling the customer record etc., he can find at one place.
 Customer Satisfaction: When a firm looks forward to satisfy its customers while managing
the sales and the inventory in an efficient way, it becomes a little difficult for the company
to sustain this way. ERP helps in getting a good customer satisfaction all the time (Wieder
et al., 2006).
Measuring the Contribution
There are a lot of models with which the measurement of the Enterprise System can be
measured. Out of which some of them are:
 The DeLone Mclean I/S Success Model: This is the best model and the most cited one
too in terms of measuring the field information systems and they are moved to the user
centered approach when there is a trial done t o judge overall progress in IS success.
 The Gable Model: Gable in the year 2003, created an inventory survey that was used for
the building of models. Then he built a model that was later used for measuring the
success of the ERP systems and was known as the Priori model. It in the initial phase’s
determined the success of ERP in terms of the size of the organisation (Kronbichler et al.,
2010).
There are many such models with which one can determine the success of the ERP in any
organization.

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Principle Drivers in Adopting SCM
There are several principles that are the drivers behind the adoption of the supply chain
management systems by the firms. They are as follows:
 To segment the customers this is based on the needs of the services by different groups
and adapts the Supply Chain for serving these segments in a profitable way.
 For customizing the logistics network as per the needs of the service and profitability of
the segments related to customers (Alzawawi, 2014).
 For listening to the signals that comes from the market and then aligning the demands
accordingly to plan them and making sure that the forecasts are consistent.
 For differentiating the product much closer to the user and for speed conversation across
supply chain (Singh et al., 2013).
 To manage the sources of supply in a strategic way for reducing the cost that the firm
owing the materials and other services.
 So that the supply chain wide technology strategy is developed this supports the decision
making on multiple levels and also provide the clear view of the products, services and
information.
 To adopt the channel spanning performance measures for gauging collective success in
order to reach the end user in an efficient way (Anderson et al., 2016).
Change Management Considerations
There are several factors of organizational change management that should be considered in the
successful adoption of an Enterprise System. They are:
 To start at the top of the pyramid: At the time of transition, all the seekers and the
eyes looks forward to the leadership team for the strength and support. Also, the
leaders embrace the naïve systems and the processes at first in order to motivate and
challenge the remaining of the firm adapting to the fresh atmosphere (Blaylock &
Lollar, 2014). With no buy in of the leadership team for digital transformation in

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using the new software tool and practices, people are not able to enforce and pull out
results from the downstream employees.
 Identify the Influencers: At the time of transformation programs like ERP
implementation, all the layers of the firm are affected. Hence, there are dedicated
plans needed for the identification, training and motivation for the influencers all
throughout the company in order to accept the new ERP system via the firm
(Buonanno, 2005).
 Structuring of Communication: Out of many function of the change management, one
is communication of scope and growth of ERP project at similar periods. It can be in
the form of the Flax Boards, newsletters, In house magazines or CEO messages etc.
The messages must include present status of the project, go live dates that are
expected and single or group achievements (Aladwani, 2001).
 Personal Win Factors: The outline of the plan can be forwarded to the employees.
The reason of doing that can help them adopt the change by developing and learning
personal competencies. The recognition which is hugely visible, gifts and rewards
could be used as the motivation for welcoming the change.
 Address the Anxiety: In case of any important transformation always develops
people’s issues. Out of many benefits, the biggest benefit of these programs for the
staff is the opportunities that are given in terms of training and the development
which generally brings change. The business which goes onboard on the
transformation always gives training and development programs. This is actually for
helping the staff members to cope up with new needs and decrease the non necessary
anxiety (Matende & Ogao, 2013).
 To watch for Saboteurs: There chances of getting all the employees on board are very
narrow. In case of the rude behaviors and the attitudes are welcomed, one might end
up with the trivial dependency of the staff for making the transition to fail.
Counseling of this kind of employees and to motivate them is necessary and that can
be done by special training programs or workshops.
Conclusion

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This report focuses on the Enterprise Systems which are also known as Enterprise Resource
Planning and it is widely used since 20 years from now in the organization to manage the
database effectively while handing the customer satisfaction effectively at the same time. With
the definition of the ERP, this report also discusses the contribution of this system in the
performance of the firm. This effective contribution can also be measured with the help of some
of the models which are mentioned in the report above. As everyone knows that ERP can be used
in many processes such as Supply chain, financial Accounting etc., there are some of the
principles that are the drivers behind using this system in the companies in order to maintain the
efficient supply chain of any firm. Those principles are also discussed in the report with the
major factors of change management to keep in mind before the adoption of ERP in firm.

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References
Aladwani, A.M., 2001. Change Management Strategies for Successful ERP Implementation.
Business Process Management Journal, 7(3), pp.266-75.
Alzawawi, M., 2014. Drivers and Obstacles for Creating Sustainable Supply Chain Management
and Operations. [Online] Available at:
http://www.asee.org/documents/zones/zone1/2014/Student/PDFs/109.pdf [Accessed 7 August
2018].
Anderson, D.L., Britt, F.F. & Favre, D.J., 2016. The 7 Principles of Supply Chain Management.
[Online] Available at:
http://www.supplychain247.com/paper/the_7_principles_of_supply_chain_management
[Accessed 7 August 2018].
Bhattacharya, P.J. & Seddon, P.B., 2009. Role of Enterprise Systems in Business
Transformations: A Management Perspective. [Online] Available at:
https://pdfs.semanticscholar.org/1c1b/ab7c14c6c4dcc1927ecff4844dedb6c4ef3e.pdf [Accessed 7
August 2018].
Blaylock, B.K. & Lollar, J.G., 2014. Selection and critical success factors in successful ERP
implementation. Competitiveness Review An International Business Journal incorporating
Journal of Global Competitiveness , 24(4).
Buonanno, G., 2005. Factors affecting ERP system adoption: A comparative analysis between
SMEs and large companies. Journal of Enterprise Information Management, 18(4), pp.384-426.
Elragal, A.A. & Al-Serafi, A.M., 2011. The Effect of ERP System Implementation on Business
Performance: An Exploratory Case-Study. 2011, p.20.
Kronbichler, S.A., Ostermann, H. & Staudinger, R., 2010. A comparison of erp-success
measurement approaches. Journal of Information systems and Technology Management, 72(2).

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Mangin, P., Hovelaque, V. & Bironneau, L., 2015. Enterprise Resource Planning contribution to
firm performance: A literature review over the last 15 years. [Online] Available at:
https://pdfs.semanticscholar.org/0e7c/909128cf8f7c66be5b8805cfcdb4e0365fdc.pdf [Accessed 7
August 2018].
Matende, S. & Ogao, P., 2013. Enterprise Resource Planning (ERP) System Implementation: A
case for User. Procedia Technology, 9, pp.518 – 526.
Mathrani, S. & Mathrani, A., 2013. Utilizing Enterprise Systems to Manage Organizational
Performance. International Conference on Information Management in the Knowledge Economy.
Singh, C.D., Singh, R., Mand, J.S. & Singh, S., 2013. APPLICATION OF LEAN AND JIT
PRINCIPLES IN SUPPLY CHAIN MANAGEMENT. International Journal of Management
Research and Business Strategy, 2(1).
Wieder, B., Booth, P., Matolcsy, Z.P. & Ossimitz, M.L., 2006. The impact of ERP systems on
firm and business process performance. Journal of Enterprise Information Management , 19(1),
pp.13-29.