Analysis of Diet Center's SAP ERP System Implementation Decision

This report analyzes the case study of Diet Center, a nutritional health firm in Lebanon, and its decision to implement a SAP ERP system. The report explores the firm's growth strategies, mission, and vision in the context of the ERP implementation. It examines the need for an ERP system in Diet Center's operations, detailing the costs and benefits associated with its implementation. Furthermore, the report analyzes the impact of the ERP system on various activities within the firm, including human resources, financial management, and inventory. Finally, it assesses the potential future of the firm by analyzing the impact of the SAP ERP system, considering factors like cost accounting, managerial and financial reporting, and overall operational efficiency. The study emphasizes on the streamlining of processes, data management, and the integration of various business functions for improved productivity and customer satisfaction. The report also acknowledges the costs associated with implementation, including the need for extensive planning and financial investment.

Running head: ENTERPRISES RESOURCE PLANNING
ENTERPRISES RESOURCE PLANNING
Name of the Student
Name of the University
Author Note:

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Table of Contents
Introduction..........................................................................................................................2
Discussion............................................................................................................................2
Mission................................................................................................................................3
Vision...................................................................................................................................4
Need of ERP system for Firm Operation.............................................................................4
Costs and benefits of implementing an ERP system...........................................................6
Effect of ERP system on different activities of firm...........................................................6
Future of the firm by analyzing the potential impact of the SAP ERP system...................7
Conclusion...........................................................................................................................8
References..........................................................................................................................10

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Introduction
The following report is all about Diet center which focus on nutrition health in Lebanon.
This particular firm is known to be first firm that provides customized meal plan along with
providing nutritional consultation. It is generally followed up for any medical condition for
fitness goal in Middle East and region of North Africa. The organization has led to market of
products in between 1992 and 2000. Due to the availability of weight management products and
programs, consumers are becoming much health conscious (Fredrick and Christopher 2019).
Customer loyalty is becoming very much difficult to harness with the growing newcomers in
industry and easy access of information. Development of technology has completely changed the
way in which business is conducted so that it can attract much more industry competition. The
organization has approached SAP which is a mutational provider of ERP software for proper
business management (Shen, Chen and Wang 2016). Wazzan, co-owner of diet center has
completely agreed to fact of the purchase and implementation of ERP system.
In the coming pages of the report, an evaluation has been done with respect to firm
growth strategy, mission and vision for SAP ERP implementation decision. There is need of
accessing the role of ERP system which is required for operation of firm. An evaluation has been
done with respect to cost and benefits of ERP implementation. An analysis has been done with
respect to the effect of ERP system of different activities within the firm.
Discussion

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Firm’s growth strategy
In the upcoming years, it is expected that Obesity is expected to affect one of the five
adults by the year 2025. Due to the increase in weight of both child and adults, there are many
health related problems (Alcivar and Abad 2016). It has ultimately led to the setup of
organization like diet center. Some of the growth strategy used by firm by are
Market Penetration Strategy: One of the best growth strategy in business is complete
market penetration of current products. This particular strategy can be used in market penetration
when it takes up the decision of marketing its products in the same market.
Product expansion strategy: Diet Center can also expand the product line or even add
new features for increasing their sales and profit (Ali and Miller 2017). The organization can
come up with a product expansion strategy also known as product development where they can
sell within the present market.
Growth diversification: Growth strategy is business merely includes diversification
where an organization sell a wide variety of products in the current market. This kind of strategy
is found to be very much risky. There is need of proper planning by the help of diverse growth
strategy.
Mission
Being the leader in the diet industry, Diet Center mission is all about advocate for the
consumer rights. It is mainly done so that they have right access to different products which will
help in maintaining and improving health (Tenhiälä and Helkiö 2015). The organization aims to
fight for the right of retailers and supplier so that they sell required product.

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Vision
Diet Centre aims to look for broader and accessible marketplace for various products so
that it can improve the life of worldwide consumers.
Need of ERP system for Firm Operation
Enterprise Resource Planning (ERP) software can help Diet center for bringing different
activities under the same application. It mainly helps in streamline of different process and their
agility. ERP aims to store all the provided data in the single database which allow the department
to easily work with the same given information (Tenhiälä, Rungtusanatham and Miller 2018).
The collected data is completely organized, analyzed so that reports can be made from it. In Diet
Center, ERP system aims to bring different aspects like human resource, financial management
and inventory and supply chain capabilities. There are large number of benefits of ERP system
like
Cost Efficient: In the last few years, most of the vendors have introduced flexible price
for ERP packages. ERP system aims to unify most of the system which is being used in Diet
Center (Li, Chang and Yen 2017). It ranges from product development to accounts payment
where they need to access certain tool needed for centralized system.
Enhanced Collaboration: The feature of ERP system can easily vary based on the
program which is being used. All the system aims to improve the collaboration somehow.
Centralized database is the unique part of ERP system. In this database, employee are given
single source for working (Shatat 2015). It ultimately reduces any kind of error which are
brought about by working with in-correct data.

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Better Analytics: A central database information aims to improve the overall analytics
and reporting. ERP aims to record and store all kind of data as input so that it can work like best
business intelligence tool. ERP software can make the process much easier and faster for report
generation (Vasconcellos, Bezerra and Bianchini 2018). For Diet Control, ERP system can easily
provide dashboard so that the executives can easily see reports where they can log into the
system. The report is inclusive of everything like income and expense statement.
Improve Productivity: In traditional method, tedious task are considered to be completely
unavoidable. Different aspect like monitoring inventory, tracking timesheet and processing order
take huge amount of time for completing. The given process aims to lower the morale of
employee and also result in human error (Zeng, Wang and Xu 2017). ERP system can easily
automate most of the tedious task. Database in the ERP system removes the hectic task like data
entry. It merely allow the system to carry out some of the advanced task in minimum time.
Customer-Satisfaction: Proper management of customer is considered to be very much
important in the present digital era. The most suitable way is customer satisfaction so that it can
provide goods and services as per client demand. ERP system comes up with proper CRM tool
so that it has essay access to different business function. CRM system provides details of order
history and billing details (Hiebl, Gärtner and Duller 2017). It can be used for having better idea
about their need and wants. Enhanced visibility of customer help in creating sales strategy for
lead generation.
Better monitoring of inventory: For some big organization like Diet center, proper
tracking and monitoring of inventory is considered to be much difficult. ERP system makes use
of barcode and RFID tags for keeping a track of inventory at each and every stage. The tool can
be used for keeping a track of inventory level at various level of warehouse (Kramer 2017).

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Inventory monitoring help in providing proper reports like tracking technologies which can
provide much better numbers.
Costs and benefits of implementing an ERP system
Cost of implementing ERP system aims to vary as per the size, type and location of
organization. SAP is globally known provider of ERP business management. The overall cost of
implementing ERP system is completely based on business type. For small business the cost
ranges in between $ 10,000 to $ 150,000. For medium size organization, the cost ranges in
between $ 150,000 to $ 500,000. In large organization, the overall cost lie in between 1 million
to 10 million (Egdair, Rajemi and Nadarajan 2015). As Diet center is big organization, the
implementation cost will result in between 1 to 10 million. The overall cost of ERP software
ranges in between 15% to 30% of the overall implementation. Most of the vendor come up with
different pricing models but the overall cost depends on various factors like number of user,
industry of organization and lastly number of location.
There are various benefits of implementing ERP system in Diet Cloud like
 Emphasizes on overall IT cost.
 Better reporting and planning
 Better customization
 Enhancing overall efficiency
 Better data security and quality.
 Workflow and enhanced collaboration.

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Effect of ERP system on different activities of firm
In some of the developing organization like Diet Center, there is need of proper
management of procedures and different resources. ERP system has ultimately become a vital
tool that can help in coordinating different activities (Heinzelmann 2017). ERP system aims to
provide opportunity for integrating each and every procedure for improving the overall quality.
The areas are merely includes human resource, operation and lastly accounting. ERP help in
improving the overall level of production so that they can control the cost in much efficient way.
It merely highlights that user can easily control cost in much efficient way. The biggest plus
point of ERP system is that it can easily improve the information availability (Al-Jabri and
Roztocki 2015). It merely helps the organization to have information in real-time so that proper
decision can be taken. The point should be taken into account that ERP system are considered to
be powerful considering the processing and organization of different financial data. In both short
and long term, it merely helps in development of different commercial activities. Another vital
point which should be taken into account it that implementation of ERP system requires huge
amount of time.
Future of the firm by analyzing the potential impact of the SAP ERP system
SAP software are generally adopted by large organization and is mainly taken into
account for ERP system. It will merely facilitate financial and managerial reports by proper
integration of department of Diet Center. It merely provides 100 built-in features for required
templates and customized reports (Junior, Santos and De Medeiros 2017). It merely allow
different executives to provide standard templates and customized reports. SAP merely help
various executive to easily manage different business activities and related operation right from

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the live database. SAP software is very much costly in nature but it still requires much less in
comparison to annual labor, cost of material and food. Implementation of SAP can help in cost
accounting, managerial and financial accounting (Ali and Miller 2017). The optimal cost
structure can be seen by allocation of project and related cost center. Scope of SAP
implementation merely focus on proper payroll and stock management. The system merely focus
on centralization of all the required data on the single platform so that it is available to multiple
users. In addition, it will also result in red flagged database that offers customized solution for
different departments. It can be expected that SAP system will completely change the operation
of DC (Tenhiälä and Helkiö 2015). It will mainly reduce the cash drain problems as a result of
inefficiencies which the organization has faced in the past. In addition, the system will minimize
the overall expenditure by reducing both employee and overtime. SAP software will provide
opportunity for complete internal control of the organization. SAP system will bring new
business line for safeguard of data and budget monitoring. Implementation of SAP ERP system
will reduce various kind of associated waste and enhance the bottom line.
Conclusion
The report helped us in concluding the point that Diet center which has mainly three
basic concepts like dietetic clinic for treating obesity, a kitchen for production and retail outlets.
The organization offer health and diet nutrition which is served to community by creating health
awareness. This can be achieved by selling low-fat, low calorie food which has been designed
for weight management. Most of the customer diet control suffer from diabetes, obesity and heart
disease so they need to adopt a healthy life style. The organization was not promoting business
but in addition, it focused on production of food lines and healthy diets. The brand focused on a

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culture which long healthy living. In the beginning of 1990, DC was the leader in the whole
region but the organization incurred huge amount of loss in between 1995 and 2014. The loss
was merely due to political instability, high cost and lastly poor quality of customer. Most of the
profit was for paying salaries which stands at 30 per cent of the complete sales value. In addition,
there was 2 million debts that has incurred as a result of purchase of property that run for
increasing operation. In the above section, the requirement of proper ERP system for firm
operation has been discussed. The effect of ERP system on different activities within the
organization has been provided. The last section of the report deals with impact of SAP ERP
system operational and financial domain.

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References
Alcivar, I. and Abad, A.G., 2016. Design and evaluation of a gamified system for ERP
training. Computers in Human Behavior, 58, pp.109-118.
Ali, M. and Miller, L., 2017. ERP system implementation in large enterprises–a systematic
literature review. Journal of Enterprise Information Management, 30(4), pp.666-692.
Al-Jabri, I.M. and Roztocki, N., 2015. Adoption of ERP systems: Does information transparency
matter?. Telematics and Informatics, 32(2), pp.300-310.
Egdair, I.M., Rajemi, M.F. and Nadarajan, S., 2015. Technology factors, ERP system and
organization performance in developing countries. International Journal of Supply Chain
Management, 4(4), pp.82-89.
Fredrick, K. and Christopher, D., 2019. Investigative analysis of CRM System Implementation
and the challenges attached to its integration into existing ERP System. From an Organization
Perspective: A case study of a Freight Forwarding Company in Sweden.
Heinzelmann, R., 2017. Accounting logics as a challenge for ERP system implementation: a
field study of SAP. Journal of Accounting & Organizational Change, 13(2), pp.162-187.
Hiebl, M.R., Gärtner, B. and Duller, C., 2017. Chief financial officer (CFO) characteristics and
ERP system adoption: an upper-echelons perspective. Journal of Accounting & Organizational
Change, 13(1), pp.85-111.
Junior, J.M., Santos, S. and De Medeiros, C., 2017. CEI: A Process to Improve Communication
in ERP System Implementation.

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Kramer, M., 2017. Best Practices for Validation for an Upgrade or New ERP System. Review of
Business & Finance Studies, 8(1), pp.79-82.
Li, H.J., Chang, S.I. and Yen, D.C., 2017. Investigating CSFs for the life cycle of ERP system
from the perspective of IT governance. Computer Standards & Interfaces, 50, pp.269-279.
Shatat, A.S., 2015. Critical success factors in enterprise resource planning (ERP) system
implementation: An exploratory study in Oman. Electronic Journal of Information Systems
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Shen, Y.C., Chen, P.S. and Wang, C.H., 2016. A study of enterprise resource planning (ERP)
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Tenhiälä, A. and Helkiö, P., 2015. Performance effects of using an ERP system for
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Management, 36, pp.147-164.
Tenhiälä, A., Rungtusanatham, M.J. and Miller, J.W., 2018. ERP System versus Stand‐Alone
Enterprise Applications in the Mitigation of Operational Glitches. Decision Sciences, 49(3),
pp.407-444.
Vasconcellos, P., Bezerra, V. and Bianchini, C., 2018, October. Applying Event sourcing in a
ERP system: a case study. In 2018 XLIV Latin American Computer Conference (CLEI) (pp. 80-
89). IEEE.