Innovation and New Technology in Linfox: ERP System Implementation

This report explores the importance of innovation and new technology in the logistics industry, specifically focusing on the implementation of an ERP system in Linfox. It discusses the benefits of ERP, identifies leading software options, considers cost factors, and examines challenges in successful implementation.

Innovation and New
Technology

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
About organisational requirement...............................................................................................1
Description upon ERP system.....................................................................................................2
Business value of ERP system for Linfox...................................................................................3
Identification of the leading ERP software’s and selection of the one which is best suited to
company needs.............................................................................................................................5
Determination of the cost of ERP system and comparing the ERP vendors...............................6
Discussion of challenges in successful implementation of ERP system for Linfox....................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Innovation is about development of new aspects for the fulfilment of new and future needs.
This has huge importance towards fulfilling the future targets of an organisation along with
attainment of market competence. It is the process of developing something new which is more
strengthened from the previous one that simultaneously have different features for improving the
scope of functioning. On the other hand, the concept of implementing new technology has same
importance within an organisation but conceptually exist different from the point of innovation.
It is called new because of the first time implementation or use within organisational operation
otherwise already having existence in market. The both concepts help the organisations in further
growth because help to remove the hindrances along with assisting in better future operational
functionalities (Chofreh, Goni and Klemeš, 2018). The current report is based on Linfox an
Australian logistics organisation. It is headquartered in Melbourne. The organisation also has
global operations where around 24000 employees are working in 12 different countries. It is
known as Asia Pacific’s largest privately owned logistics organisation. The main aim of this
organisation is to improve the internal business processes and overall business performance of
the company.
The aspects cover in report includes description of ERP system, business value of ERP for
Linfox, working of the ERP system for Linfox and identification of the leading ERP software
along with selection of the best that suits the need of an organisation. Also, covers research upon
the cost of ERP system along with comparison between ERP vendors and discussion of the
challenges facing at the time of successful implementation of ERP system for Linfox.
MAIN BODY
About organisational requirement
Linfox is the Australian organisation. This is logistics company that have global
operations. It has its headquarter in Melbourne. There are around 24000 employees are working
within the organisation in different twelve countries. This organisation also has the title of Asia
Pacific’s largest privately owned logistics organisation. Now, the main aim of the organisation is
to improve the internal processes and overall business performance. In this regard, the
management of an organisation want to integrate the information of different business processes
and departments such as manufacturing and production, finance and accounting, sales and
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marketing and human resources. Also, the another aspect that an organisation wants to achieve
from their future operations is to reduce labour cost, IT expenses and better interaction between
staff and companies. Here, management of an organisation focusing over the implementation of
ERP system for the purpose of achieve all the aspects mentioned above. It is important before to
the direct application to gain information about the system and different software’s it prevails
along with cost. The benefit of this will be ascertained in future regarding better application and
usage of best resources that are not cost efficiently in nature but also aid in attaining maximum
outputs (Costa and et al., 2016).
Description upon ERP system
ERP represents Enterprise Resource Planning and alludes to programming and frameworks
used to design and deal with all the centre supply chain, producing activities, administrations,
money related functionalities and different procedures of an association. ERP programming can
be utilized to robotize and improve singular exercises over a business or association, for
example, bookkeeping and acquisition, management of venture, client relationship, accidental
administration, consistence and supply chain activities (Gool and Seymour, 2018).
Individual ERP applications can offer programming as a help (SaaS), while a total set-up
of ERP applications frames an ERP framework that can be utilized to viably convey and unite
business procedures to empower a progression of information between the applications,
ordinarily through regular databases either on location/on premise or in the cloud.
ERPs associate each part of an endeavour. An ERP programming framework takes into
account better execution and venture the executives that enables plan, to spending plan,
anticipate and precisely report on an association's money related wellbeing and procedures (ERP,
2020).
ERP programming is viewed as a kind of "big business application", which alludes to
programming intended to fulfil the product needs of an association and improve business
execution. There are a wide range of ERP frameworks accessible today that run extraordinarily
relying upon the size, capacity, and necessities of an association. Kinds of ERP frameworks for
the most part allude to sending alternatives and incorporate cloud ERP, on premise ERP and
Hybrid ERP (a few frameworks of the cloud and some of premise). Each ERP arrangement
framework is frequently custom fitted to help various parts of a business, meet an association's
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business necessities and have various strategies for organization. The description of the three
most common types of ERP systems is provided below:
On-Premise ERP software: It is implemented onsite where maintained in physical office
space within an organisation. It is totally hosted on the organisational own computers and servers
for the purpose of providing full control, support and ownership of the entire system once
implemented within the organisation.
Cloud based ERP software: It is a web based solution. This is also known as Software as a
Service (SaaS). This provide the flexibility regarding access and storing of data on any device
with the aid of internet. Here, continual support, updates, training and other flexible
customisations provided by the software provider (Jafari and Zolfagharian, 2019).
Hybrid ERP software: This is about the combined application of cloud based and on
premise ERP system solution. The combination of hosting and deployment services is totally
depending over provider. It further provides the flexibility to ERP users regarding migration
between delivery models or integrating benefits that are ascertained from the existing
implementation.
Business value of ERP system for Linfox
The main aim of Linfox is to integrate the all business processes along with reduction of
cost. In overall manner, an organisation wants to attain improved business performance that will
be sufficient in direction of providing competitive edge. Now, an organisation wants to use the
ERP system for accomplishment of the desired outcomes. The different business values created
by ERP system for business of Linfox is understood from the description provided below:
Reduction of cost and help to saviour the money: ERP help in lessen managerial and
operational expenses through robotized forms. This permits clients to professional effectively
oversee tasks and forestall delays. A cut in operational expenses is directly associates with a cut
in working capital cost. An ERP System further permits to run business at a lower cost.
Additionally, help in lessening waste inside their associations and augment stock productivity.
Creation of streamlined business processes and operations: ERP help in ascertainment of
information at centralised location along with complete visibility among all functionalities. An
ERP System further permits you to computerize business forms. Here, in this circumstance
decision makers can screen tasks and doing the activity of creation progressively (Jirava and
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Toseafa, 2017). This likewise gives an open door with respect to automation of many following
procedures, and precisely assurance and upkeep of stock levels.
Improved financial consolidation: In this regard, ERP help eliminates data silos that
basically arise due to the use of disparate systems. In the absence of ERP, many businesses are
using different programmes in different departments which is costly in nature and ineffective too.
The system of ERP help in virtual elimination of tasks through performing of functions
automatically on behalf of an organisation.
Optimisation of supply chain: The application of effective ERP system provide an
opportunity about real time visibility of supply chain and other processes. This information is
further used by decision makers to ascertain better picture of supply chain, reducing planning
cycles and ascertaining top situation in exercise of production scheduling.
Effective response to market conditions through usage of data analysis information:
The application of ERP system provide real time information about data analysis upon changing
market needs so the same will be used by an organisation for effective response in accordance to
market requirements. This improves decision making through consideration of accurate reports
and realistic forecasts.
Improved traceability: In highly regulated industries, the task of allocation and detection of
inventory and stock is critical in nature. The application of ERP provides the opportunity in easy
tracking of stocks, defects and hazards (Mahmud, Ramayah and Kurnia, 2017).
Help in digital transformation of business: As per the changing needs of business
according to its growth, ERP also adapt the changes in its working and provides the more
flexibility to business operations. It shifts to the option like premise, cloud and mobile app in
direction of gaining better control.
Help to improve customer satisfaction, service and relation: Effective implementation
of ERP solution provide the opportunity in production of right product on right time. This
ensures accuracy of stock in satisfaction of needs. The feature of on time delivery is great under
this towards maintaining of customer retention and service.
Increase competitiveness within an industry built system: Development of industry
based ERP solution provide the opportunity to satisfy the different market needs. This has direct
contribution towards the direction of attaining competitive edge in market through ascertaining
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the aspects like compliancy, agility and the ability to expand and adapt with little to no
downtime.
Identification of the leading ERP software’s and selection of the one which is best suited to
company needs
There are many types of ERP software’s that exist in market. These are adopting by the
organisations according to their needs and requirements. The description of all these different
types of software is provided below along with the selection of the best as per the requirement of
Linfox.
Microsoft Dynamic ERP: This ERP causes organizations to deal with their supply chains
and different pieces of significant business tasks. This ERP programming originates from a
pioneer in big business administrations, with the entirety of the usefulness and intensity of a far
reaching ERP framework.
SAP Business One: It is a business management ERP arrangement made for SMEs. SAP
Business One programming offers moderate and simple to-utilize industry-explicit answers for
assembling and circulation organizations. The item is famous for its cross functionalities,
management timing, limited manual blunder and ideal use of assets.
Oracle ERP Cloud: This ERP gives a solitary area to oversee and see business forms over
an association. It permits clients to imagine constant data utilizing dashboards. It additionally
contains progressed budgetary administration instruments to smooth out work processes and
improve income.
NetSuite OneWorld: This tends to the complex worldwide and multi company needs of
associations. It empowers organizations to change for money, tax collection and lawful
consistence contrasts at the nearby level, with territorial and worldwide business combination
and move up (Makori and Osebe, 2016).
Acumatica: It empowers clients to incorporate exchanges and to see an organization's
budgetary status progressively. The program interfaces highlights, for example, the general
record, creditor liabilities, debt claims and assessment the executives to guarantee that data is
depicted over all bookkeeping perspectives.
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It is clear from the above description that the one which is best to adopt within Linfox is
SAP Business One because associated with large number of advantages like cost effective and
provide customised solutions as per needs.
Determination of the cost of ERP system and comparing the ERP vendors
The cost of implementing ERP system within a large company like Linfox is always high.
Generally, the cost of ERP software depends upon the three main factors such as number of
users, industry of the organisation and number of locations. The cost of software is the range
between 15% to 30% of the total cost of implementation. Now, in the current situation Linfox
requires the access to high number of personnel’s, also the operations of logistics organisation
based upon the data and technology where use of software is prime and in last the business has
global operations so require in different locations. It is cleared from all the facts that the cost of
software and its implementation will be high for the large organisation specially in the case of
Linfox. There are some other different components that involves huge amount of costings which
are mentioned below:
 Database management system cost
 Infrastructure cost
 Software cost
 Human resources cost
 Recurrent costs
 Implementation of services from VAR or CSP
Discussion of challenges in successful implementation of ERP system for Linfox
The implementation of ERP within a large organisation like Linfox is not easy. There are
many challenges that will arise at the time of implementation. All these are defined below:
Consumption of large period of time: Linfox is global organisation and requires to setup
the software at all locations that will be accessed by large number of personnel’s. This is very
time consuming process which needs high period of time in effective implementation. So, it
would be difficult to use same in current financial year to get desired results (Shafi and et al.,
2019).
Technical issues: The implementation of ERP is totally technical nature of operations.
There is no guarantee of any kind of technical issue while implementing the ERP system in a
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large global organisation like Linfox that has business operations in different countries. This
increases the implementation time period where not able to attain desired outcomes on time.
Employee retention: It is difficult to retain employees because they rigid to accept the
changes. The main cause is requirement of large efforts and gaining knowledge of new workings
that hinders their comfort zone. So, the employment of new one impacts the organisational other
workings and workplace environment negatively.
CONCLUSION
It has been concluded from the above report that there is huge need of innovation and
new technology implementation in the successive growth of an organisation. This not improve
the internal strength of an organisation but help to gain competitive edge in market too. The use
of ERP system is effective in improving the integration between business processes. The one
which will be best for Linfox is SAP Business One.
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REFERENCES
Books and Journals
Chofreh, A. G., Goni, F. A. and Klemeš, J. J., 2018. Sustainable enterprise resource planning
systems implementation: A framework development. Journal of cleaner production, 198,
pp.1345-1354.
Costa, C. J. and et al., 2016. Enterprise resource planning adoption and satisfaction
determinants. Computers in Human Behavior. 63. pp.659-671.
Gool, S. and Seymour, L. F., 2018. Managing Enterprise Resource Planning System
Customisation Post-Implementation.
Jafari, S. and Zolfagharian, M., 2019. The Role of Enterprise Resource Planning System Usage
on User Satisfaction and organizational learning capabilities. International Journal of
Schooling. 1(3). pp.1-14.
Jirava, P. and Toseafa, E., 2017. An illustrative case study of the integration of enterprise
resource planning system. Journal of Enterprise Resource Planning Studies, volume
2017, issue: 2017.
Mahmud, I., Ramayah, T. and Kurnia, S., 2017. To use or not to use: Modelling end user
grumbling as user resistance in pre-implementation stage of enterprise resource planning
system. Information Systems. 69. pp.164-179.
Makori, E. O. and Osebe, N. M., 2016. Koha enterprise resource planning system and its
potential impact on information management organizations. Library Hi Tech News.
Shafi, K. and et al., 2019. Measuring Performance Through Enterprise Resource Planning
System Implementation. IEEE Access. 7. pp.6691-6702.
Online
ERP. 2020. [Online]. Available Through: <https://www.selecthub.com/enterprise-resource-
planning/how-do-erp-systems-work/>
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