ISY2005 Enterprise Systems: Performance, SCM & Change Considerations

This report assesses the contribution of enterprise systems to organisational performance, exploring how this contribution can be measured using performance metrics such as ROI, sales, and customer retention. It identifies key drivers behind businesses adopting supply chain management systems, including cost reduction, demand measurement, inventory buffering, low-cost shipping, and risk mitigation. Furthermore, the report highlights critical organisational change management considerations for successful enterprise system adoption, emphasising the importance of training, communication, employee engagement, addressing cultural concerns, and effective leadership. The analysis concludes that enterprise systems are vital for modern businesses, enhancing operational efficiency and requiring careful change management for successful implementation. Desklib provides past papers and solved assignments for students.

ENTERPRISE SYSTEM

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Contents
INTRODUCTION.................................................................................................................................2
Contribution of enterprise system in enhancing organisational performance and ways to measure it3
Principle drivers behind businesses adopting supply chain management system...............................4
Organisational change management considerations necessary for successful adoption of an
enterprise system...............................................................................................................................5
Conclusion.............................................................................................................................................6
REFERENCES......................................................................................................................................7
INTRODUCTION
This is an age of technology based business (Da Xu, 2011). Use of IT systems in the
business has not only helped companies in increasing their smoothness of work but also

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helped in increasing the efficiency of the firm. There are many kinds of enterprise system that
is available in the market that helps the companies in managing their various operations. The
use of different type of enterprise systems depends on the operations that are performed
inside the unit. These systems help in improving the performance of the firm. Adoption of
any enterprise system requires some kind of organisational change management. This is due
to the reason that there are many resistive factors that inhibits its successful implementation.
This report highlights the contribution of enterprise system on the organisational performance
as well as the ways in which this contribution can be measured. It also reflects about the
principle drivers behind business adopting a supply chain management system. It also reflects
the considerations related to organisational change management that is necessary for the
adoption of enterprise system.
Contribution of enterprise system in enhancing organisational performance and ways to
measure it
Enterprise system contributes to the organisational performance in many ways (Bi, Da
Xu and Wang, 2014). It can be understood in the way that enterprise systems helps in brining
smoothness and efficiency to the work process which is major attributes of organisational
performance. Some of the ways in which enterprise system enhances organisational
performance are as follows:
 Data management: One of the most important way in which enterprise systems
contributes is that it helps in managing the data that is produced in various operations
at various units. These data can be recalled at the required time for the process of
decision making (Salleh, Teoh and Chan, 2012). It helps in making the decisions that
are more specific as well as more reasonable and based on facts. Better decisions
always help in enhancing the organisational performance.
 Automating customer service process for employees: Systems like ERP helps in
streamlining their customer service experience (asidharan, et al., 2012). This
automation helps in streamlining all the back end operations so that a constant service
can be given to the consumers. This results in increasing the organisational
performance.
 Scaling the resources: It helps various companies in scaling their resources up and
down as per the requirement of the firm at any time (Kim, 2011). This helps in
making sure that a firm can utilise its resources for the longer time and as per the
requirement which is necessary for increasing the organisational performance. This

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also reduces the cost on the purchase of IT hardware as internet based enterprise
systems like cloud computing is helpful for managing the data of the company
without extensive cost.
 Standardisation of process: This system helps in maintaining the standards for any
procedures which helps in producing products and services of best quality
(Themistocleous, Soja and da Cunha, 2011). This is necessary for achieving higher
employee satisfaction and hence enhances the organisation performance of the
company.
 Improving supply chain management: One of the major factors that enhance the
organisational performance of the company is when its supply chain management gets
improved (Linington, et al., 2011). Enterprise system helps in streamlining the supply
chain management in the large part is through the use of data about how, where and
when consumer’s orders and suppliers deliver. This helps in making sure that
products are delivered to the consumers more reliably that too at the lower cost.
There are several ways in which this contribution can be measured. It can be done by the use
of performance metrics. There are several metrics that can be used for measuring the
contribution. Evaluating the previous and next values of these metrics one can understand the
contribution it has made (Weichhart, et al., 2016). The increase in the values can be easily
measured. Apart from this it can also be seen that the number of errors in the processes also
gets reduced. The inconsistency can be seen to be removed. Return on investments can be
useful in this regards. Some of the other measures:
 Higher sales
 Higher repeat sales
 Higher sales conversion rates
 Higher customer retention rates
 A better public image
 On-time completion
 Output production
 Effectiveness of network performance
Principle drivers behind businesses adopting supply chain management system
Supply chain management system has become very important part of the modern day
business (Trinh-Phuong, Molla and Peszynski, 2012). This is due to the reasons that it helps

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in fulfilling the demands of the consumers. With the use of this system company can make
better relation with their consumers as it helps in fulfilling the demands of the consumers on
time. There are some of the drivers behind the businesses adopting supply chain
management.
 Reduction in cost: With the use of the Supply chain management system a company
can assure the quality of the products they are delivering. This is due to the fact that
this system helps in predicting the ways in which a good delivery can be made.
 Measuring demands: Other major driver for business that forces them to adopt supply
chain management system is that it helps in predicting the demands of the products
which is necessary for fulfilling the demands of the consumers at the required time.
 Inventory buffer: It also helps in bringing flexibility in the storage of the products
(Vakalfotis, Ballantine and Wall, 2013). As there is continuously variability in the
consumers spending, firms are required to manage their inventories at the minimum
cost while ensuring that consumer’s demands are fulfilled at the required time. This
prediction is made by evaluating the data that is stored in the system in their previous
operations.
 Low cost shipping: Since there are many ways in which consumers order products. It
can be in both the ways i.e. direct from the outlets or from online stores. In case of the
online order Supply chain management system helps the company to predict the path
through which shipping cost will be least (Panetto, et al., 2016). This system
readjusts the supply chain in such a manner that customer preferences can be met.
 Emerging risk in business: Amount of risk in the business is increasing at very faster
rate. This has forced the firms to adopt supply chain management system as this
system allows determining the critical risk factor in the firm or with their suppliers.
Risks are calculated in terms of quality of products, compliances with applicable laws
or safety related to operations (Sedera, et al., 2016). Without this system many
companies can be exposed to many kinds of legal risks and liabilities.
Organisational change management considerations necessary for successful adoption of
an enterprise system
In order to ensure that enterprise system contributes to the performance of the firm. Every
company needs to make sure that they have adopted change management consideration for
successful implementation of enterprise system. Some of the considerations are as follows:

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 Training: This is most important aspect of organisational change management that
every firm must check before implementing enterprise system. It is essential that
employees have the training of how to take use of the enterprise system for their
operations (Mathrani, et al., 2012). It is a transition from manual methods of
managing operations to automatic mediums and hence a serious of raining is required.
It is considered that the training must be done as soon as the plan for the
implementation is made so that there must be no chaos at the last time.
 Communication: This consideration of organisational transformation is also highly
necessary. An effective communication in an organisation helps in removing the
confusion that is present in the minds of stakeholders. Most of the consumers are
highly resistive towards the changes from manual methods of operations to automatic
system and hence a proper communication is required to eliminate any false
estimation. This will also help consumers in telling the reason why such changes are
required.
 Employee engagement: It is also necessary that while making such kind of system
implementation employee engagement must be ensured (Schubert and William,
2012). In the various units employees must be engaged in the process like in
calculating the cost of implementation, understanding the complexities of the systems
etc.
 Cultural concerns: There are people from different cultural backgrounds and hence it
becomes difficult for the companies to satisfy all of them while making any such
transformations. This is also due to the fact that every employee has their personal
perspective towards any such changes especially in terms of risks involved, benefits
of these systems, goal of implementation etc.
 Leadership approach: It depends on the leadership approach that how the system can
be implemented. It is also measured in terms of how much ready a leadership is for
facing the consequences of the transformation. There will be requirement of heavy
investments which must be provided by the leaders from time to time. For successful
adoption leaders needs to motivate their staffs by clarifying the goals for which this
transformation is made.

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Conclusion
From the above report it can be concluded that there are enterprise system has a very
major role in the modern day business. It not helps in increasing the speed of the operations
but also helps in removing the flaws that are present operational mechanism. It has a very
major role in the improving the organisational performance of the company. There are some
of the metrics like ROI that can be used for measuring the contribution of enterprise system
in enhancing the performance of the organisation. There are few of the drivers that is playing
role behind businesses adopting supply chain management systems. Apart from this there are
several organisational change management considerations that is necessary for successful
adoption of enterprise system.
REFERENCES
Bi, Z., Da Xu, L. and Wang, C., (2014) Internet of things for enterprise systems of modern
manufacturing. IEEE Transactions on industrial informatics, 10(2), pp.1537-1546.
Da Xu, L., (2011) Enterprise systems: state-of-the-art and future trends. IEEE Transactions
on Industrial Informatics, 7(4), pp.630-640.

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Kim, H.W., (2011) The effects of switching costs on user resistance to enterprise systems
implementation. IEEE Transactions on Engineering management, 58(3), pp.471-482.
Linington, P.F., Milosevic, Z., Tanaka, A. and Vallecillo, A., (2011) Building enterprise
systems with ODP: an introduction to open distributed processing. CRC Press.
Mathrani, S. and Mathrani, A., (2013) Utilizing enterprise systems for managing enterprise
risks. Computers in Industry, 64(4), pp.476-483.
Panetto, H., Zdravkovic, M., Jardim-Goncalves, R., Romero, D., Cecil, J. and Mezgár, I.,
(2016) New perspectives for the future interoperable enterprise systems. Computers in
Industry, 79, pp.47-63.
Salleh, S.M., Teoh, S.Y. and Chan, C., (2012) July. Cloud Enterprise Systems: A Review Of
Literature And Its Adoption. In PACIS (p. 76).
Sasidharan, S., Santhanam, R., Brass, D.J. and Sambamurthy, V., (2012) The effects of social
network structure on enterprise systems success: A longitudinal multilevel
analysis. Information Systems Research, 23(3-part-1), pp.658-678.
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.
Themistocleous, M., Soja, P. and da Cunha, P.R., (2011) The same, but different: enterprise
systems adoption lifecycles in transition economies. Information Systems
Management, 28(3), pp.223-239.
Trinh-Phuong, T., Molla, A. and Peszynski, K., (2012) Enterprise Systems and
Organizational Agility: A Review of the Literature and Conceptual
Framework. Communications of the Association for Information Systems, 31.
Schubert, P. and William, S.P. (2012) Benefits of enterprise system use. [Online]. Available
at:
https://www.researchgate.net/publication/224123317_Benefits_of_Enterprise_Systems_Use .
[Accessed on: 29th March 2018].
Vakalfotis, N., Ballantine, J. and Wall, A.P., (2013) A literature review on the impact of
enterprise systems on management accounting.

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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.