BISY2005: Enterprise Systems Report - Business Drivers and Challenges

This report delves into the realm of Enterprise Systems, examining the core drivers that propel businesses towards their adoption. It explores the principal reasons behind organizations integrating systems like Enterprise Resource Planning (ERP), Customer Relationship Management (CRM), and Sup...Read More

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Enterprise Systems
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Introduction
In the current competitive business environment, numerous organizations are increasingly
depending on the information systems to enhance efficient business operations as well as rely on
the systems to keep updated information available all the time(Wei, 2014,p.55). These systems
are referred to as enterprise systems; complex information systems that aid organizations to
integrate all data transactions with business activities to provide seamless operations. These
include Enterprise Resource Planning, Customer Relationship Management, and Supply Chain
management.
Enterprise systems adoptions by organizations are driven by different principles and these
include: Need to improve productivity is one of the organization’s objective. Through the
adoption of ES components such as ERP and CRM, organizations can manage their resources as
well as their customers (Morin & Hovav, 2012, p.156). ERP enable all the business departments
that always function as a watertight compartment tend to have little interactions. Through the
systems, departmental coordination is interacted to have real-time information. The information
shared through the systems eliminate duplication of data, thus helping in quick decision making
since information is always centralized.
The second driver is the need to reduce the operational cost. Organizations have different
operational cost such as production cost. It is the responsibility of every organization to
strategize on the best ways of getting all the activities done more efficiently at a lower cost to
remain relevant in the competitive market. High production cost tends to lower the profitability
of companies, thus through the adoption of ES such as ERP helps the organization to control

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shipments and manage inventory all integrated into a single program as well as facilitate mass
production.
The third driver to the adoption of ES by the business organization is the need to increase
business agility. Business agility refers to the ability and qualities of a business organization to
rapidly respond to both internal and external changes without losing focus on its objectives.
Business agility is characterized by the adaptability, flexibility, and balance to the changes.
Through the adoption of ES, business organizations have the capability of surviving in the
competitive envelopment for quite a long time (Qu, Ding, Shou, Zhou & Du, 2014,
p.570).Technological changes require the organization to have a skilled employee that can
rapidly respond to the changes; thus systems such as cloud computing enhance scalability as well
as reducing the complexity of organizations. Consequently, cloud computing has the capability
of increasing agility through on-demand self-service and rapid elasticity. Mobile phones enhance
communications, social media permits real-time interactions while ERP enables quick and
constrictive decisions are making. Series shows that business that has adopted
The last driver to the adoption of ES is the organization’s need to identify new business
avenues. Every business organization always thrives on creating more business avenues to have a
large market share and command (Cao & Xue, 2012, p.2629). Through the adoption of ES, a
business organization can increase their resilience in the technology industry and become one of
the major providers of the cloud services to other organizations. Additionally, when a business
implements a private cloud system and tends to have a spare capacity of the system, can decide
to sale the additional capacity as a public cloud to any other business entity thus increasing its
revenue collection.

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However, all these factors tend to drive the organization to adopt the ES and will only
enhance performance when they are planned and implemented strategically. Enterprise systems
contribute to organizational performance in varied ways. To fully explore the impact of ES on
organizational performance, the pair focuses on different types of ES: Enterprise resource
planning, customer manager relationship, and supply chain management.
Enterprise Resource Planning has a great impact on the financial performance of an
organization. ERP refers to packages of software that entail different modules such as human
resource, sales, finance, and production, proving cross-customization integration of data through
embedded business practices(Soja & Paliwoda, 2013). Financial performance is conceptualized
as the maximization of profits to meet the fiscal objectives or an organization and always
subdivided into two categories: return on investor and accounting return.
Secondly, ERP enhances organizational performance by impacting the learning process
of the organization. Organizational learning is conceptualized as the information management
system that entails systematic knowledge transfer through the entire organization. The
organizational learning thus focuses on the ability of a firm to enhance an employee’s career and
skill development as well as performance through knowledge sharing. ERP system enhances the
information processing thus enable a business organization to achieve better business planning
and decision-making process (Närman, Johnson & Gingnell, 2014, p.543). Through this, all the
stakeholders of an organization have easy access to vital information thus improving the
performance, since the key to organizational growth depends on the speed of information
accumulation and assimilation.

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Thirdly, ERP enhances the customer management process by enhancing the relationship.
Customer relationship management refers to the practice, technology, and strategies that analyze
and manage customer’s information such as buying behaviour, attitude, and preferences with the
focus of improving the relationship between the common and organization. With the customers’
information, organizations can customize and develop a product that meets different customer
needs thus capturing their attention and enlarging the customer’ base. The larger the customer’s
base the large the revenue collection and thus the better the competitive advantage.
Fourthly, ERP enhances organizational permanence through improving the customers’
satisfaction. Through the adoption and implementation of ERP, quality of services and products
as well as the efficiency which in turn enhance customer experience and satisfaction. Orders are
always taken very fast, process and delivered within a short period thus reducing the order cycle
times since all the information are centralized in one database. According to Seddon,
Constantinidis, Tamm and Dod, (2016,p.238) satisfied customers tend to be more loyal than
unsatisfied customers, and thus tend to have high and positive purchase behavior, thus increasing
the sales of the company.
Lastly, ERP has a great impact on Supply chain management of an organization. Supply
chain refers to the ability and components of the product movement from the point of production
to the point of consumption through different partnerships. In the current competitive business
movement, companies do not compete against themselves rather compete along the supply chain.
The success and performance of an organization depend on the capability of an organization to
deliver a right product to the right consumer, at the right time and price; and this is only
achievable through a well-developed supply chain management with the development of lean
thinking and management in the supply chain.

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Lean supply chain inventory management entails the usage of computers and other
computerized software in taking, analyzing and processing orders as well as payments of
suppliers and receiving payments from consumers. Computerized chain management has
transformed the current supply chain management of many organizations (Ciganek, Haseman &
Ramamurthy, (2012). Computerizing of the supply chain management allows international
organizations to have easy visibility and tracking of the shipment. The rough the technology,
international organizations, have the capability of having the real time of the movement of the
shipment that helps in keeping the customer updated on the arrival of the orders.
Success or failure of the ES implementations in an organization is determined by
different set standards. There are numerous methods that different organizations use to measure
ES contributions to the organizations. Some of the measurements and strategies used are the
return on profit; when there is an increase in the return on capital facilitated by high sales, then it
means that ES has a positive impact on the organization, and when there is no change or the
return on capital reduces then the ES has failed the organization (Kini & Basaviah, 2013, p.101).
Secondly, an organization can use the cost leadership, differentiation and focus strategy to
determine their extent of the comparative advantage over the competitors (Raza, 2018).
Consequently, customer’s satisfaction can be determined through the use of numerous indicators
such as increased customer service, reduced complaints from customers, improved product and
service quality as well as improved the firm’s customer relationship.
The success and failure of the ES majorly depend on the management of the
organizations. Studies indicate that more than 90% of companies ES adoption tend to fail due to
inability to manage the change from the old system to the new system .Therefore some of the
management strategies and styles need to be changed to ensure successful adoption and

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implementation of the ES into an organization. The major organizational change management
that is significant to the successful adoption of ES into an organizational is top management
commitment and Training of all stakeholders.
a) The management of an organization is the key driver of the organization in the correct
direction (Teoh, Yeoh & Zadeh, 2015). The inadequate commitment of the management
tends to lead to failure. Thus all the top managers need to in include in the decision-
making plan and implementation. When the management is not committed to the goal
just as in the FoxMeyer drugs, the whole process thus is destined to fail (Tuan, 2010).
The senior management of FoxMeyer felt that the introduction of the ERP system was an
overhaul and introduced the Delta III project to avoid a bad reputation.
b) Effective training of all stakeholders ensures that the required skills and knowledge are
driven into the employees to enable them to operate the system. Employees are the major
source of resources of an organization, and when their technological skills are down, they
tend to fail to operate the systems more efficiently (Zhao, Hwang & Pheng 2014, p.817).
Without proper training, most of the employee will end up feeding wrong data into the
system just like in FoxMeyer employee got disgruntled, destroyed inventories, filled
inventory wrongly and led to the accumulation of inventory transactions more than $34
million were eventually lost (Chou, 2018). Training thus should entail a variety of
methods tailored to the audience to enhance the acceptance of the system such as
classroom-based training, e-learning, guidance materials, and on-job training.
Conclusion
It is evidential that In the current competitive business environment, numerous
organization are increasingly depending on the information systems to enhance efficient business

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operations as well as rely on the systems to keep updated information available all the time. ES
such as Enterprise Resource Systems, Customer Relationship Management and Supply Chain
Management have become key component of organization sources of success.
Enterprise systems enhance organizational communication system, provide real-time
information that enables to track products and services, ensure that products are of high quality
that is in accordance to the needs, ensures that correct products are delivered to the correct
customers ant the correct time and price thus ultimately enhancing customers experience and
satisfaction. The success of the ES is determined by improved productivity, quality of products
and services, improved return on investment, and loyalty of customers to the organization.
However, the implementation of the ES into organizational is difficult and challenging unless
strategic change management are implanted, such as employee training and inclusiveness and
commitment of top management.

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List of References
Cao, H. and Xue, C. (2012). Self-Organization System Framework of Enterprise Information
System Based on CAS. Advanced Materials Research, 591-593, pp.2628-2631.
Chou, P. (2018). Workplace Social Support and Attitude toward Enterprise Resource Planning
System. International Journal of Information Systems and Social Change, 9(1), pp.58-76.
Ciganek, A., Haseman, W. and Ramamurthy, K. (2012). Time to decision: the drivers of
innovation adoption decisions. Enterprise Information Systems, 8(2), pp.279-308.
Kini, R. and Basaviah, S. (2013). Critical Success Factors in the Implementation of Enterprise
Resource Planning Systems in Small and Midsize Businesses. International Journal of
Enterprise Information Systems, 9(1), pp.97-117.
Morin, J. and Hovav, A. (2012). Strategic value and drivers behind organizational adoption of
enterprise DRM: The korean case. Journal of Service Science Research, 4(1), pp.143-168.
Närman, P., Johnson, P. and Gingnell, L. (2014). Using enterprise architecture to analyse how
organisational structure impact motivation and learning. Enterprise Information Systems, 10(5),
pp.523-562.
Qu, W., Ding, Y., Shou, Y., Zhou, H. and Du, H. (2014). The impact of enterprise systems on
process flexibility and organisational flexibility. Enterprise Information Systems, 8(5), pp.563-
581.
Raza, M. (2018). How to Measure the Immeasurable Degree to Which an Organization is
Sustainable?. Management of Sustainable Development, 10(1), pp.49-52.

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Seddon, P., Constantinidis, D., Tamm, T. and Dod, H. (2016). How does business analytics
contribute to business value?. Information Systems Journal, 27(3), pp.237-269.
Soja, P. and Paliwoda-Pękosz, G. (2013). Comparing Benefits from Enterprise System Adoption
in Transition and Developed Economies: An Ontology-based Approach. Information Systems
Management, 30(3), pp.198-217.
Teoh, S., Yeoh, W. and Zadeh, H. (2015). Towards a resilience management framework for
complex enterprise systems upgrade implementation. Enterprise Information Systems, 11(5),
pp.694-718.
Tuan, L. (2010). Organisational culture, leadership and performance measurement
integratedness. International Journal of Management and Enterprise Development, 9(3), p.251.
Wei, Z. (2014). Framework Model on Enterprise Information System Based on Internet of
Things. International Journal of Intelligent Information Systems, 3(6), p.55.
Zhao, X., Hwang, B. and Pheng Low, S. (2014). Enterprise risk management implementation in
construction firms. Management Decision, 52(5), pp.814-833.