COIT20255: Evaluating the Feasibility of an ERP System for AMTM

Desklib provides past papers and solved assignments. This report analyzes ERP system implementation for a wholesale toy store.

COIT20255
Assessment 2
Group Business Report
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Executive Summary
An enterprise resource planning application based information system is a complete application
package which integrates all business operations and activities into a single application to
increase the efficiency of the organization. There are several types of benefits of enterprise
resource planning to the organization including amendment of business process and
configuration of the several different business activities like supplying product, importing,
warehousing and selling of the items. The ERP application integrates the core activities which
help to support the organization and maximize the work efficiency to make improvement in
organization business functions. It may be possible that an employee face complexity in using
the ERP application. So this research work will address the need for change, feasibility analysis
and issues which could be rise because of incomplete elicitation of organization requirement
including the risks associated.

Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
An argument to persuade management that an ERP is required.....................................................4
The reason for organizational change..........................................................................................4
Alignment of an ERP with the organization’s goals...................................................................5
Benefits and limitations of ERPs in the context of this organization..........................................6
Organizational commitment from management..........................................................................6
Feasibility analysis...........................................................................................................................6
Issues that may arise due to incomplete elicitation of requirements and misalignment..................7
Risks associated with BPR and ERP customization........................................................................8
Current business processes..............................................................................................................9
Proposed changes to the business processes....................................................................................9
BPR AS is to accurately model the key existing business processes............................................10
BPR to be- to make insightful analysis over the business process in the context of the process of
goal................................................................................................................................................10
Conclusion.....................................................................................................................................11
Recommendations..........................................................................................................................11
References......................................................................................................................................12

Introduction
Enterprise resource planning also called ERP is a framework stands for the framework of
business programming which has characteristics of adjustable high rated application program
allow for the identification of centre controlling information like arrangement and control,
administration of stockroom etc. along with the capacity of organization. An enterprise resource
planning helps to integrate the vital operations of the business process within one application that
boost overall efficiency and enhance the throughput of organization. The implementation of
enterprise resource planning helps to maximize efficiency in period of delivery, throughput, and
forecast ability that directly enhance the customer service quality.
This report is contributed to highlight of enterprise resource planning by Andrew Mega Toy Mart
also called AMTM. It is a wholesale toy selling organization including toys, bicycles, scooters
and trampoline and etc. They have spent more than 30 Years in business and because of tough
competition from online sellers and auction website, face a big drop in overall sales. Now the
Andrew wanted to implement an information system because of understandings about benefits of
enterprise resource planning.
An argument to persuade management that an ERP is required
The reason for organizational change
Within this case, it is found that Andrew owns a wholesale toy store where he sells a variety of
toys including children toys, bicycles, scooters, trampoline and etc. since for last 30 years and
earns loyalty of a huge number of customers who purchase toys regularly because of quality of
service and competitive price range. He has two types of customer like individual and business
and facilitates them through six warehouses those are located at six different locations. A
customer is allowed to make an order for a number of times as per need whereas the organization
create a final bill at the end of the month for all orders on first working day of every month.
Due to high-level competition from different online sellers, the auction websites and importer the
domain organization face a big drop in sales. Now Andrew has to keep track of all customer
details, toys and selling, an order he imports and etc. Andrew also wants to keep track warehouse
detail and wants to keep a record of all items purchased from different locations and sell to the
customers. Moreover, he wants to keep records for each and every item including item name,

manufacturer, model number, price along with the manufacturer detail including manufacturer
id, name, contact number, address, email id and website address. The process of import of goods
requires a proper record of product details with retail price. Moreover, Andrew needs to keep
track of total sales, sales revenue and information that needed to facilitate the customer in a
convenient way. Currently, Andrew Mega Toy Mart records all this information manually and
maintains register only.
After having a big loss in sales now, Andrew wanted to implement a computerized system to not
only get increase the work efficiency in recording transactions but also generate reports to
understand the whole business processes along with detail of customers order, list of all
customers, profitable customers, popular tots and etc.
So to effectively accomplish the ERP based information system there are several changes carried
out within the AMTM organization after installation of it. The whole working structure of
organization will change and to work in an optimal way the employees of organization needed
good training on use of ERP system modules so that each individual can easily process their job.
Once the system gets installed, organization didn’t have to maintain a register and all. All work
get computerized and online. Now no need to have a large number of employee, a group of few
employees can easily maintain a record of all customers, detail of products, warehouse and
overall sales because all data get feed into the system automatically and can be extracted on the
go as per need (Hintsch, 2019).
Alignment of an ERP with the organization’s goals
An enterprise resource planning application allows help in managing day to day workflow
inefficient way. The reporting power of employee get enhanced after implementation of ERP
application, and thus the top level authorities of the organization can take better decision to
increase the sales and revenue of the AMTM organization. Moreover, it is very important to
make sure that an ERP system requires to get consideration and proper formatting to align the
goal and objective of the Andrew Mega Toy Mart.
To accomplish the purpose, top leader of management can create and set the goals and can create
strategies to successfully implement a new design ERP solution. So the ERP system and modules
should be operated by the staff in an effective way to increase the sales and achieve the

milestones of the firm. The organizational head can also monitor the performance of an idea that
is implemented and take possible actions on the go without facing losses.
Benefits and limitations of ERPs in the context of this organization
The major benefits of having an ERP system in organizational context concluded better central
controlling power, avoiding duplication issue, improved communication channels and minimize
of existing gap. The supplier and buyer both will get the best channel of communication. The
organization can make improvement in making analysis for profit, master decision-making
process for the Andrew and better use of delivery and business operation time period. Now the
Andrew will be able to collaborate with all type of suppliers and vendors in a most effective way
and will be able to track each and every department and warehouses including shipment and
product inventory using the information system on the go.
Apart, all of this there is some disadvantage associated with the proposed ERP system
installation. The major concern is high cost of the implementation and maintenance of modules.
Moreover, the employee of the organization also needed training on initial stage of installation to
use of the system. The organization will face the problem in internal work environment and
inflexibility of the system.
Organizational commitment from management
To successfully install and effectively use the enterprise resource planning information system
within the organization it is very important to receive organizational commitment not only from
the top level management but also from the employee of the AMTM. It is also needed to
implement technique of management changes to overcome from resistance. The other
commitment from the management is need of training on different modules of the ERP solutions.
The important decision is to motivate the employee to use the new system through offering
seminar or session from the top management so that the employee will feel comfortable during
use of system. The third commitment from the employee is to learn about the module of ERP
system and effectively handle them and if feel resistance then inform to top level for helping
hand (Kusters and Martin, 2019).

Feasibility analysis
The current approach of monitor and tracking importing goods, maintain records of sales,
warehouse details and selling of goods, all are completely on paper. Managing the stock in six
different warehouses create a problem because all the work is on register and it may be possible
to record the same data two or three times. The need for a powerful ERP system is very feasible
for the organization to manage the wholesale distribution and selling of process and to create a
clear and concise strategy for the company to stay in top. The feasibility analysis for the ERP
system in context of AMTM organization is as follows:
 It offers 360-degree sell optimization to efficiently process order on time and to process this
it is important that all operations work as per expectation. The organization often face
resistance in management of inventory and timely import and sale of products, so ERP
solution enables them to have a 360-degree view on import and sell which facilitate this to
make improvement in customer services, time-saving and lower accounting costs.
A Well formatted ERP system efficiently defines warehousing management. A well-defined
logistics system can effectively manage all warehouses and enhance visibility across the
shipment, orders and inventories which enable to take quick decisions and have control over the
major operations (Tambovcevs and Merkuryev, 2009).
The budget that is required for the implementation and installation of the ERP solutions are as
follows:
S.NO Factors Costing
1 Hardware cost $10000
2 Software Design $2000
3 Development $7000
4 Deployment $1000
5 Training $5000
Total $25000

Issues that may arise due to incomplete elicitation of requirements and
misalignment
The problems or issues that can be rise because of incomplete elicitation of requirement and
misalignment because of improper communication in between business processes and
organizational strategies are as follows:
 Problem of scope- When an organization define requirements too little to too bigger than
lack in consideration on little requirement create issues.
 Understanding- Within the group of developers and top-level management it is a most
common problem that if the organization define some long term requirement and wants a
customized system, and after installation the requirement does not address within the
system.
 Incomplete understanding of need- When a group of ERP system developer raise query
about their need then it may possible that the user of them system didn’t have knowledge
about their complete need.
 Poor knowledge- It may also possible that the organization make strategy by assumption
on employee to easily get familiarize with the system and after installation, they found
that the team face resistance in handling of a computer system (Emeraldinsight.com,
2019).
Risks associated with BPR and ERP customization
The risks associated with BPR customization are as follows:
 Incomplete information about modules of the system can destruct the whole system.
 Lack of computer knowledge can resist the organization to go through ERP system.
 If the database of the system gets corrupted, then no one can get extract valuable information
from the system.
 If the training for the use of system will not be provided, then the whole system is useless.
 If the top level management of organization failed to define work strategies, then the
organization will have to face bigger loss.

The risks associated with EPR customization are as follows:
 Incomplete requirement gathering.
 Missing of a required module like backup feature and online storage of data.
 Time availability for the customization and implementation of system.
 Lack of finance can interrupt the whole customization process.
 Improper work categorization can impact development of module and may have to
reconstruct the whole module which could possibly take more time.
 Maintenance and correctness problem.
 Security problem because there are several types of online threat available (Light, 2001).
Current business processes
As per the case study it is found that Andrew owns a wholesale toy store named as AMTM
where he sells variety of toys including children toys, bicycles, scooters, trampoline and etc. for
last 30 years and earn loyalty of huge number of customers who purchase toys regularly because
of quality of service and competitive price range. He has two types of customer like individual
and business and facilitates them through six warehouses those are located at six different
locations. The first type of customer get 5% off discount and other types of customer get a 15%
off discount. A customer is allowed to make an order for a number of times as per need whereas
the organization create a final bill at the end of the month for all orders on first working day of
every month. Currently, Andrew Mega Toy Mart records all this information manually and
maintains register only. The manual business approach works correctlyuntil past decades, but
after increasing online competition, they face big loss (Garefalakis, 2019).
Proposed changes to the business processes
To effectively accomplish the ERP based information system there are several changes carried
out within the AMTM organization after installation of it. The entire working structure of
association will change and to work in an ideal manner, the representatives of association
required a decent preparing on utilization of ERP framework modules with the goal that every
individual can without much of a stretch procedure their activity. When the framework get to

introduce, association didn't need to maintain paper-based report, all work get modernized and
on the web. Presently no need a vast number of worker, a gathering of a couple of
representatives can undoubtedly keep up record everything being equal, detail of items,
distribution center and by and large deals since all information get feed into the framework
consequently and can be extricate in a hurry according to require (Aladwani, 2001).
BPR AS is to accurately model the key existing business processes
The AMTM organization currently processes their business by having a paper-based approach.
From managing the inventory to selling of products all are manual processes. The BPR AS-IS to
accurately model the key existing business process are as follows:
 They record goods manufacturing id, address, email, contact number, website address and
manufacturing date to manage the manufacturer detail.
 Send billing to each customer at start of every month for the whole month including
complete detail of purchase.
 They maintain all six warehouse detail with id, address and other details.
 They also manage the supplier and goods detail to manage the current business processes.
 The first type of customer receive a discount of 5% and another type of customer receive a
15% discount.
 Delivery of order takes a maximum of one day (Gheitasi and Soltani, 2016).
BPR to be- to make insightful analysis over the business process in the context
of the process of goal
Now the proposed system should have capability to enhance controlling power of Andrew by
keeping tracks on all customer details, toys and selling, an order he imports and etc.
 The new system will capable to keep track warehouse detail and wants to keep a record of all
items purchased from different locations and sell to the customers.

 Moreover, an employee could be able to keep records for each and every item including item
name, manufacturer, model number, price along with the manufacturer detail including
manufacturer id, name, contact number, address, email id and website address.
 A module to track the process of import of goods requires a proper record of product details
with retail price.
 There should be a module in ERP to keep track of total sales, sales revenue and information
that needed to facilitate the customer inconvenient way (Timane, 2012).
Conclusion
ERP system provides a master control over the whole business process by integrating all work
activities into a single application. The whole study is based on ERP installation for the AMTM
organization to effectively and efficiently manage each division of organization and increase the
overall revenue. This paper helps an individual to conclude idea about how an ERP system can
automate the business process of organization and increase the overall sales. To effectively
complete this assessment, a detailed understanding of ERP and related module required that is
covered by going through online resources and support of colleagues helps to identify the critical
solutions.
Recommendations
 Organization has to record their all requirement by performing questions answer session
throughout the organization.
 The ERP experts have to perform an interview with all divisional leads to understand the
requirements.
 It is recommended that the organization has to implement the concept for one warehouse and
store at initial stage

References
Aladwani, A. (2001). Change management strategies for successful ERP
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Aladwani, A. (2001). Change management strategies for successful ERP
implementation. Business Process Management Journal, [online] 7(3), pp.266-275. Available at:
https://www.researchgate.net/publication/220066116_ERP_System_Implementation_and_Busin
ess_Process_Change_Case_Study_of_a_Pharmaceutical_Company.
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Feasibility of ERP Systems Implementation Strategies. (2019). [ebook] Available at:
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Emeraldinsight.com. (2019). ERP innovation implementation model incorporating change
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fullSc=1&journalCode=bpmj [Accessed 21 Apr. 2019].
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