ERP Implementation for Small Businesses

The assignment focuses on Enterprise Resource Planning (ERP) systems and their implications for business growth. It highlights the advantages of ERP, such as improved customer service and operational efficiency. However, it also acknowledges the financial burden of ERP implementation, particularly for small businesses. The document stresses the importance of a thorough needs assessment before implementing an ERP system, considering factors like required modules, budget constraints, and organizational requirements.

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TASK A
ICT SWOT ANALYSIS FOR NATIONAL AUSTRALIAN BANK (NAB)
Strengths:
 Incorporation of the Siebel and Teradata Customer Relationship Management (CRM)
systems in NAB’s operations has made it one of the leading financial service provider
and the largest business bank asset-wise.
 UBank delivers a way of saving and provides home loans online thus enhancing the
efficiency of operations in NAB.
 It also offers satisfactory personal and business financial services.
Weaknesses:
 UBank is unreachable by people with no access to the internet
 Inaccessibility by illiterate people
 It has no global approval
 Installation and maintenance expenses
 Subjectivity to system malfunction which could lead to loss of incredibly high amounts
of money as was the case in November 2010.
Opportunities:
o Fast growth as a result of increase in efficiency
o Increase in market size
o Customer satisfaction due to increased operational effectiveness.

o Ability to install modern technology as a result of its good revenue (Pandya, S., &
Pandya, S., 2017).
o Expansion of UBank in other countries all over the world
o Diversification of customer portfolios
o Incorporation of different types of loans, for example school fees.
Threats:
I. Competition from other financial institution who provide online customer services such
as Commonwealth Bank, Australia and New Zealand Bank (ANZ) and Westpac Bank.
II. Assimilation of Information Technology (IT) in the bank subjects it to cybercrimes, cyber
warfare and cyber espionage, such as hacking. This could lead to corruption of essential
irreplaceable files thus loss of currency and possibly some clients (Ramkuma et al, 2016).
III. Changing government policies such as decrease in interest rate
IV. Changing economic conditions which could lead to a recession.

TASK B
ENTERPRISE RESOURCE PLANNING (ERP)
Abstract
Enterprise Resource Planning (ERP) is an integration of a business’ fundamental processes
facilitated by technology and the organization’s need for expansion. It grasps all the departments
of the specific organization such as accounting and finance, sales, purchases, Supply Chain
Management (SCM) and inventory. Just like other technological aspects, ERP has evolved over
time aiming to capture all the essential features of a business. Its advantages include enhancing
flow of information in the business and protecting sensitive data from competitors and other
external agents while its drawbacks revolve around high installation and maintenance costs.
Connecting ERP to the plant floor data takes place in various ways such as direct integration and
custom integration solutions depending on the vendor involvement. ERP implementation can be
a long process depending on the organizational needs, number of modules, the organizational
promptness in obtaining the software, the size of the organization and availability of financial
resources.

Introduction
Enterprise Resource Planning (ERP) is a cross-functional technology strategy that supports all
the activities of a business. It is the most important component of the IT strategy and therefore
should be well implemented to integrate all facets of an operation such as marketing and sales,
manufacturing, product planning and development, service delivery, inventory and materials
management, finance and human resource. ERP continuously updates the core business
processes by use of common databases maintained by a database management system. Through
the use of ERP, the business can use a system of integrated applications to standardize and
automate its back office and client-based functions and activities related to technology thus
increasing the efficiency and effectiveness of its operations. This is because everyone uses the
same data thus reducing confusion and mix-up when carrying out the organization’s various
activities (Tarhini et al, 2015). During ERP installation, the project manager must ensure that the
software is customized and takes into account variation in business requirements, processes and
technologies, in addition to supporting the company’s strategy and plan of action.
ERP Expansion over the years
ERP was established to outspread the capabilities of Material Requirements Planning (MRP) or
Manufacturing Resource Planning (MRP II) and Computer Integrated Manufacturing. ERP
systems experienced a rapid growth in the 1990s where many companies decided to use them to
replace their old legal systems as a result of disruption of the latter by euro introduction and the
year 2000 problem.

Initially, it was meant to automate back office functions such as management in order to avoid
direct contact with customers and the public in general which could probably have affected the
business negatively. Currently, developers are making an effort to incorporate ERP in mobile
phones along with other business applications. The modern ERP contains networking, hardware
and even supply chains integration. It has a wider range of functions and roles which include
decision making, globalization, standardization and stakeholder relationship building.
Characteristics of ERP Systems
It is a common database that supports all the enterprise applications
It provides real-time access for all employees and stakeholders
It is an integrated system
Its installation is usually a mammoth task
It has a consistent reflection across all modules
Importance of Enterprise Resource Planning
a) ERP facilitates the flow of information in all the functions of the business.
b) It also manages information flow to the external world, for example to shareholders
c) ERP saves time and business expenditure as a result of integration of business processes
d) It makes decision-making easier, faster and more accurate
e) Enhanced data accessibility as ERP maintains a chronological history of all transactions
f) Enhances revenue tracking for the organization thus it can determine whether it is making
profits or losses
g) It enables sales forecasting which brings about stock optimization for business operations
h) It makes it possible to track orders and therefore make genuine sales

i) ERP makes allowance for legitimacy and transparency in business activities
j) Protection of the organization’s sensitive data
k) It provides an opportunity for increased teamwork among the employees as it displays a
collaborative platform that enables them to focus on content.
Disadvantages
 Customization of the organization’s needs may be difficult. ERP usually meets the
common requirements of the business which may then be forced to come up with other
means of meeting its unique demands.
 Installation of ERP software may be expensive offsetting the business’ competitive
advantage and revenue capability.
 It increases the expenses of the company due to maintenance and constant upgrading.
There is also need to train the employees on the usage of the new technology
 A lot of time is spent while trying to harmonize the ERP with the organization’s systems
and technologies (Galliers et al, 2014).
Enterprise Resource Planning Modules
A module, in software, is a part of a program or programs that is independently created and
linked to form the latter. Basically, ERP consists of several enterprise software modules
individually purchased or developed in accordance with the organization’s specific technical
requirements. Each module is focused on a particular core business process such as product
planning. The common ERP modules include:
 Customer Relationship Management (CRM): this aids in boosting sales by establishment
of strong customer relationship to make them feel highly valued. This module contains

the particulars of the clients in a chronological manner bringing about easy management.
It can be integrated with the sales module to create future opportunities for the
organization (Holmberg, N., & Johansson, B., 2017).
 Production: this module takes care of product availability in the organization. It includes
activities such as product planning, direct and indirect raw material usage, reporting of
the production status, production forecasting and the actual production.
 Sales and Marketing: this entails information on product promotion with the aim of
increasing sales, maintaining existing customers and expanding the market. The sales
module keeps records of all sales transactions such as accepting orders, handling sales
queries and tracking pending orders.
 Supply Chain Management (SCM): this involves demand and supply of products to and
from the manufacturers, that is, the supply of raw materials and demand for finished
goods by wholesalers and traders. The data found in this module include shipment
tracking and sales returns.
 Human Resource: this module deals with the organization’s employee records such as the
payroll system and personal details. It may also include particular employee expenses and
allowances.
 Accounting and Finance: contains all the financial details of an organization including
ledgers, balance sheet, receivables and payables, budgeting, tax information, activity-
based costing, cash management and details of the available fixed assets.
 Inventory module: it is used to keep track of individual items in the organization to find
out their location and usage rates. The functionalities of this module include inventory
reporting and stock utilization.

 Purchases: it has all data relating to procurement of items required by the company such
as vendor listing, recording received and sent quotations and preparing purchase orders.
 This module is combined with the inventory and the engineering/production modules for
constant updating of stock.
Government Resource Planning (GRP)
This is an integrated office system for government bodies, that is, it is the ERP for the public
sector. The differences in ERP software between the private and the public sector are culture.
This is because unlike the private sector, government agencies are mainly concerned with
offering services to the country’s citizens. The private sector usually prioritizes on organizational
expansion, achievement of set objectives and profit maximization.
Enterprise Resource Planning Systems Installation
Connectivity to plant floor equipment
Plant floor communications are the control and facts interactions found in automation
surroundings of manufacturing and processing plants. Manufacturing uses discrete control while
processing uses continuous control. Many plants, however contain a hybrid of both since the
automation systems are often a combination of multi-vendor products to create a single system
(Costa et al, 2016)
Connectivity takes place in a variety of ways for both real-time and transaction data.
Direct Integration: this is whereby ERP systems already have communications with the plant
floor equipment as a part of the after-sale service from the vendor. This therefore requires the
vendor or suppliers of the systems to be experts on the products with which they are dealing.

Database Integration: in this case connectivity is carried out by the systems integrator. ERP
software stage tables in a database onto which the plant floor systems deposit information. ERP
systems vendors do not need to know the particular technicalities of their product connectivity.
Enterprise Appliance Transaction Modules (EATM): these transact data with the business
systems in ways considered best by the latter through their ability to communicate directly to the
plant floor apparatus. The major advantage of this integration is that it offers a complete solution
off the shelf while still reducing long-term operational costs and customization expenses.
Custom Integrated Solutions: These are custom made and are created per order to meet site
and specific system requirements. They are mostly used on workstations even if they have the
highest level of initial installation and maintenance costs. The long-term upkeep costs can
however be minimized via proper documentation and watchful testing of the systems.
Implementation
This is the process of actually putting the ERP systems into the organization’s daily operations.
The nature and scope of ERPs implementation demands for changes in employees and partners
custom practices and activities. The three major tasks involved in the implementation process are
Consulting, Customization and Support. The time used up in implementation depends on the size
of the organization, customization needs, the readiness of the customer to begin use of the new
system and number of modules in the company (Chugh et al, 2017).
Before application, the project manager should ensure that he or she has a thorough
understanding of the systems that need to be changed and why the change is necessary (Tasevska
et al, 2014). In addition to minimizing the chances of project failure, analyses of the existing
automation solutions also decrease the possibility of mismatch between the two systems.

Generally, implementation of ERP in decentralized organizations takes a longer period of time
and is costlier due to presence of various decision-making and management units which may
have different development policies, procedures and regulations.
Configuration: this entails trying to balance the ERP software between its nature of
performance and the manner in which a specific organization requires it to operate.
Customization
Theoretically, ERP systems are created in industrial best practices and the developers expect the
organizations to use them as such. Room for configuration is however given to give these
organizations ability to gear the software towards their needs. Gaps in features often remain after
this practice whereby the organization can rewrite a portion of the software, write another
module that works within the software or create an interface with external sources. These
activities refer to customization of the ERP software and are aimed towards reconciling the gaps
in the system features.
Two tier Enterprise Resource Planning
This refers to ERP software that allows companies to run two different ERP systems at once one
at the management level and the other at the subsidiary level. This would further increase the
efficiency of workflows due to the availability of more systems that align with the organization’s
IT structures and improve the agility and flexibility of the business. This would, however,
intensify implementation and maintenance costs. Besides, many organizations believe in the use
of quicker and cheaper ERP implementations at the subsidiary level.

Conclusion
As observed above, Enterprise Resource Planning is an essential component of business growth
due to its numerous benefits such as increasing the effectiveness of customer services and the
rate at which business operations take place thus saving time and coinage. The implementation
process of ERP, however, demands an enormous amount of money which small businesses may
not be able to offer. Therefore, before installation of an ERP software the project managers
should carry out a thorough evaluation of the entire organization’s requirements to determine the
need for the ERP, the number of modules that should be upgraded and the amount of finances
that the business can afford to spare for the ERP enactment.
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