Impact of Enterprise System on Organizational Performance and Supply Chain Management

This report discusses the impact of enterprise systems on organizational performance and the factors driving businesses to adopt supply chain management systems. It also provides organizational change management considerations for the effective adoption of enterprise systems. The report highlights the benefits of enterprise systems, measurement models for performance, and drivers for supply chain management adoption.

RUNNING HEAD: Enterprise System
Enterprise System

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Executive Summary
Enterprise system can be defined as the large- scale application software packages that help an
organization in its business processes, information flows, reporting and data analytics. This
report focuses on the impact of enterprise systems on the performance of organization and
businesses. The factors that drive businesses to adopt supply chain management system have also
been highlighted in this report. Furthermore, some organizational change management concerns
or considerations have been provided through which the effective adoption of enterprise systems
can be ensured.

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Contents
Introduction......................................................................................................................................3
Impact of Enterprise System on Organizational Performance and Its Measurement......................3
Key Drivers or Factors behind the implementation of Supply Chain Management System by
Businesses........................................................................................................................................4
Organizational Change Management Considerations For Enterprise System.................................5
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

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Introduction
Enterprise system can be defined as the large- scale application software packages that help an
organization in its business processes, information flows, reporting and data analytics. These
systems offer a number of benefits to the organization such as reducing the manual input of data
and minimizing the information technology cost (Waring, Wainwright & Skoumpopoulou,
2016). These systems have the capability of replacing various independent systems that process
data for the particular function of the business. The report focuses on the contribution of the
enterprise system to the performance of the business. The report also highlights the factors that
drive the businesses to adopt supply chain management along with the needed change
management concerns through which enterprise system can be adopted successfully.
Impact of Enterprise System on Organizational Performance and Its Measurement
Organizational performance is greatly impacted due to enterprise systems. The communication
of firm- wide information is facilitated by an enterprise system on business performance to the
managers. When such information is available with the managers, they are capable of making
accurate decisions at the accurate timing which enhances the organizational performance.
Enterprise system also assimilates the internal business process of an organization in the areas of
production, sales, custom logistics, and finance, etc. which assists in bringing improvement in
the quality and efficiency of customer service, production, and distribution (Weichhart, Molina,
Chen, Whitman & Vernadat, 2016). Furthermore, the enterprise system brings uniformity in the
organizational culture by ensuring that the same processes and information is used by all the
individuals in the organization. Such uniformity improves the organizational performance over a
period of time (Giachetti, 2016).
Enterprise system also brings a reduction in the costs involved in IT support staff, transaction
processing, hardware, software, etc. This cost reduction leads the organization towards
improvement in performance. The implementation of the enterprise system in an organization
ensures that all the departments perform their functions in harmony with the other departments.
Moreover, an enterprise system also reduces the time needed for document processing as the
results are easily available in a single click. Moreover, information visibility and transparency

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are facilitated by the enterprise systems within an organization which assists different
departments in the smooth performance of their operations. In this way, organizational
performance is automatically improved (Lech, 2014).
There are a number of complexities in measuring the contributions made by the enterprise
system to the organizational performance. The use of a number of measurement models can
assist in measuring the contributions. Such measurement models include priori model in which
success is measured under five dimensions namely system quality, satisfaction, information
quality, individual impact and organizational impact. Another measurement model is revised
model in which the results are assessed under four quadrants namely individual impact,
information quality, system quality and organizational impact. The impact of the enterprise
system on the performance of the organization can be measured under these dimensions (Hazen,
Boone, Ezell & Jones- Farmer, 2014).
Other than making the use of models, the contributions can also be measured through other
criteria such as higher customer retention rates, repeated and higher sales, better public image,
and high sales conversation rates. The performance can also be measured in the context of the
organization’s position as compared to the rivals. Efficiency and flexibility in responding
towards the dynamic environment can also be used as criteria for the measurement of enterprise
system’s contribution to the organizational performance (Chang, Kuo, Wu & Tzeng, 2015).
Key Drivers or Factors behind the implementation of Supply Chain Management System
by Businesses
With the passage of time, businesses are showing greater reliance on the suppliers. However,
procurement constitutes the basic requirement of every business. There is a need for the effective
management of contracts, regulation, supplier relations, and information as almost every
requirement of the organization is associated with the supplier. An effective supply chain
management system is needed by businesses so that a smooth supply chain can be ensured and
best value can be realized from the amount spent by them on suppler analysis of performance,
cost, and risk (Feldman, Shah, Chapman & Amini, 2016).
There are a number of drivers for the acceptance of supply chain management system. The
contractual obligations can be easily accomplished with the help of supply chain management

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system. It also assures the maintenance of continuous supply and avoidance of delivery
disruptions. It also ensures the incorporation of quality techniques within the organization
through which improvement in the operations is facilitated. In other words, quality assurance
acts as the principle driver for the implementation of supply chain management systems by
companies. These systems also help in finding an optimal way for shipping through which costs
can be brought down to the lowest possible level. The success of the business is ensured when
these systems facilitate quick and accurate shipping of the orders (Al- Jabri & Roztocki, 2015).
Management of inventories becomes easy with the help of supply chain management systems as
it includes inventory buffer levels that are determined on the basis of historical trends. Also, it
minimizes the holding costs and assists the organization in flexibly meeting the customer
demands. The implementation of these systems helps in managing the legal liabilities faced by
the businesses. The risk is mitigated by ascertaining the potential of failures in advance with the
help of supply chain methodologies (Hugos, 2018). These systems can also be linked with other
business software which can improve collaboration with the partners and can offer the
opportunity of keeping the shareholders informed. Businesses are also driven to adopt supply
chain management systems as it performs a number of tasks such as quotation, reporting,
forecasts, etc. Lastly, these systems assist in ensuring higher level of customer satisfaction by
providing right products to the right buyers at the right time. In other words, it improves the
profitability of the business (Fredendall & Hill, 2016).
Organizational Change Management Considerations For Enterprise System
There are a number of changes implemented in the organization through the use of enterprise
systems. The manner of performing the tasks is also changed. Enterprise systems can be
successfully adopted only when certain change management considerations are taken into
account. A framework is provided by the organizational change management which helps in
managing the change outcomes in the introduction of new processes, organizational culture, and
structure. The use of appropriate communication strategy constitutes the key to a successful
enterprise system as it will support key messages to the audiences. Opportunities and issues can
be captured when employees are engaged in the organization. For this purpose, organizational
readiness assessments are required to be conducted. Employee engagement, proper planning, and

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training will prove to be expensive but will offer a number of benefits in the long run. This will
ensure that the employees do not face any problems while switching to the enterprise systems. If
training is not provided, adoption of enterprise systems may become unsuccessful. Guidance can
be provided by the project leaders so that exceptional work can be performed by the employees
(Sedera, Lokuge, Grover, Sarker & Sarker, 2016).
Various other factors such as opportunities and risks need to be considered in organizational
change management for assessing and managing them on time through the adoption of needed
actions. This also involves the adoption of ways through which risks minimize and opportunities
maximize while ensuring effective change management. Proper communication of information
can be facilitated to the stakeholders through a communication plan. Shred vision should also be
supported in the organization for the leaders by a guiding union. The leaders will decide the
goals and priorities in accordance with the change. The future state of the organization will be
supported through the planning of the organizational structure. Introduction of enterprise systems
will affect the jobs of the employees for which they need to be prepared in advance by providing
proper training (Seethamraju, 2015).
Conclusion
Therefore, it can be concluded that the enterprise system performs the role of a multi- functional
information system which helps in coordinating different activities of the organization and is
advantageous in resource planning of the business. Organizational performance significantly
improves through the introduction of enterprise systems in the organization. There are a number
of criteria for measuring the contributions of enterprise system to the performance of the
organization such as customer retention rates, profits, and models like priori and revised model.
This report also focused on the factors that drive businesses towards the adoption of supply chain
management systems. Moreover, this report highlighted certain change management
considerations which are required to be taken into account by the organizations for the effective
management of the business processes.

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References
Al-Jabri, I.M. and Roztocki, N., 2015. Adoption of ERP systems: Does information transparency
matter?. Telematics and Informatics, 32(2), pp.300-310.
Chang, B., Kuo, C., Wu, C.H. and Tzeng, G.H., 2015. Using fuzzy analytic network process to
assess the risks in enterprise resource planning system implementation. Applied Soft
Computing, 28, pp.196-207.
Feldman, G., Shah, H., Chapman, C. and Amini, A., 2016. Technological, Organisational, and
Environmental drivers for enterprise systems upgrade. Industrial Management & Data
Systems, 116(8), pp.1636-1655.
Fredendall, L.D. and Hill, E., 2016. Basics of supply chain management. CRC Press.
Giachetti, R.E., 2016. Design of enterprise systems: Theory, architecture, and methods. CRC
Press.
Hazen, B.T., Boone, C.A., Ezell, J.D. and Jones-Farmer, L.A., 2014. Data quality for data
science, predictive analytics, and big data in supply chain management: An introduction to the
problem and suggestions for research and applications. International Journal of Production
Economics, 154, pp.72-80.
Hugos, M.H., 2018. Essentials of supply chain management. John Wiley & Sons.
Lech, P., 2014. Managing knowledge in IT projects: a framework for enterprise system
implementation. Journal of Knowledge Management, 18(3), pp.551-573.
Sedera, D., Lokuge, S., Grover, V., Sarker, S. and Sarker, S., 2016. Innovating with enterprise
systems and digital platforms: A contingent resource-based theory view. Information &
Management, 53(3), pp.366-379.
Seethamraju, R., 2015. Adoption of software as a service (SaaS) enterprise resource planning
(ERP) systems in small and medium sized enterprises (SMEs). Information systems
frontiers, 17(3), pp.475-492.

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Waring, T., Wainwright, D. and Skoumpopoulou, D., 2016. Enterprise Systems Adoption: A
Sociotechnical Perspective on the Role of Power and Improvisation. International Journal of
Systems and Society (IJSS), 3(1), pp.49-66.
Weichhart, G., Molina, A., Chen, D., Whitman, L.E. and Vernadat, F., 2016. Challenges and
current developments for sensing, smart and sustainable enterprise systems. Computers in
Industry, 79, pp.34-46.