ERP System Implementation, Costs, and Challenges for Linfox

This report provides a comprehensive overview of Enterprise Resource Planning (ERP) systems, specifically focusing on their application and value for Linfox, a major logistics and supply chain firm. The report begins by defining ERP systems and their function in integrating various business processes. It then discusses the business value of ERP for Linfox, highlighting benefits such as increased productivity, time savings, better insights, simplified IT, reduced risk, and cost reduction. The report uses examples to illustrate how an ERP system works within Linfox, including the integration of finance, human resources, manufacturing, customer relationship management, and distribution modules. Furthermore, the report identifies leading ERP software options, such as Oracle JD Edwards, and discusses their key features and benefits for Linfox. It also includes research on the costs associated with implementing an ERP system for a large firm, considering factors such as software type, deployment method, and human resource requirements. Finally, the report addresses the challenges of successful ERP system implementation, providing a holistic view of the topic.

Report

Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. What is meant by an ERP system?..........................................................................................1
2. Discuss business value of ERP system for Linfox..................................................................2
3. Using an example, discuss how does ERP system work for Linfox.......................................3
4. Identify leading ERP software.................................................................................................4
5. Research on the cost of the ERP system for large firm...........................................................5
6. Challenges to the successful implementation of ERP system.................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Information system is a formal, socio-technical; organisational system framed to gather,
process, store and distribute or allocate data or information. Basically, information system is the
software that assists in organising and analysing information. The major purpose of an
information system is to turn raw data into useful information that can be utilised for
determination devising in a business venture (Laurini, 2018). This report is based on Linfox
which is logistic and supply chain firm. This company was incorporated in 1956 and is
headquartered in Essendon Fields, Victoria, Australia. The organisation operates its business
globally in more than 10 nations. This written document will cover information about ERP
system, value of ERP system for business and different leading ERP software. Further, will
explaining about challenges that can be faced by a firm during making implementation of ERP
system in business.
MAIN BODY
1. What is meant by an ERP system?
Functioning of any business organisation is dependent on a number of processes which are
very essential to run a company such as Human resource management, production and
manufacturing process, distribution network management, supply-chain management, functions
of procurement etcetera. Enterprise Resource Planning (ERP) system is an application based
software which is used by the management of these organisations to integrate all of the key
operational areas and activities of the business organisation into one single system. ERP software
are designed with the purpose of providing assistance to managers of large business
organisations to assess every department and its operations within one system (Elragal and
Haddara, 2012). Use of ERP software is now gaining popularity and extending to not just large
organisations but medium-sized enterprises also who wish to have a proper integrated system of
managing all the business processes and key areas. ERP software make use of latest technology
and innovation such as Artificial Intelligence and machine learning with an objective of
providing guidance, visibility, expertise, intelligence and efficiency with respect to every
dimension of a business organisation. ERP systems are designed to track the various activities
that are taking place in an organisation such as production, cash flow, inventory management
etcetera and prepares a database to provide information about these aspects to departments and
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management of the company. It facilitates easy flow and exchange of information between all
the departments and sub-departments of the organisation.
2. Discuss business value of ERP system for Linfox.
It can be argued that this decade has witnessed one of the biggest waves in technological
changes and innovations which have almost influenced the operations in every industry. ERP
software system is of great value in resource planning and implementation for any organisation.
Benefits and business value associated with implementation of ERP system in Linfox can be
better understood and comprehended with the help of considering the following points:
Higher Productivity: ERP system assists the managers of business organisation to increase
the automation of business processes and help the employees and workforce of the organisation
to achieve more with fewer resources as a result of streamlined operations which is a desirable
business value for the managers of Linfox (May, Dhillon and Caldeira, 2013).
Saves Time: Implementation of ERP systems in the company can help the managers of
Linfox in taking fast and better decisions as the flow and exchange of information in an
organisation where ERP systems are enable is very effective and quick which also improves the
timeliness and effectiveness of the overall decision-making process.
Better insights: The management of Linfox can get better insights and information related
to the key operations and areas with the help of ERP systems and a single, authentic and reliable
source of information which is easily accessible.
Simpler IT: With the help of implementation of ERP systems in the organisation and using
shared databases, the role of IT and communications department can be simplified to a great
extent which is another important business value of ERP systems for Linfox. In the logistics
department, IT and communications has an important role to play in smooth flow of business
activities and simplifying the role and task of IT with the help of ERP is a huge advantage of
ERP systems for Linfox.
Reduces Risk: Every business organisation has a primary objective of mitigation of risk
and taking calculated risks to earn revenue and profits. ERP systems provide a better visibility to
the top-management of the company and can help the managers of Linfox to prevent risk with
the help of ensuring compliance with rules and regulations and statutory requirements.
Reduces Costs: The management of Linfox desires to the reduce the cost of operations and
the IT systems in the company which can be easily achieved with the help of implementation of
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ERP system in the company. Reduction in cost is facilitated with the help of a rather efficient
planning and supply-chain management (Staehr, Shanks and Seddon, 2012). Cost reports and
budgets of various departmental activites can be easily reported directly to the managers to take
better decisions and reduce costs. Automation of processes also helps in further reduction of cost
for Linfox.
3. Using an example, discuss how does ERP system work for Linfox.
With the help of the above diagram, the working of ERP systems for Linfox can be understood in
a better and effective manner. For example, the integration of finance module in the ERP system
of the company can help in increasing automation and increasing the efficiency in tracking
finances for Linfox. ERP system can extract information from the customer database about the
purchases made and amount owed and can automatically send pending invoices to the clients of
Linfox. Integrating the human resource management will help in payment of bonuses and
overtime with the help of databases and employee working hours registers for the company.
Manufacturing and purchasing modules of the company can be integrated within the ERP system
by the managers of Linfox to increase the effectivenss and efficiency of these functions. For
example, a tool of ERP might be able to identify and determine the point at production where
reordering of materials is required and automating this function with the help of ERP will ensure
smooth production process (Teittinen, Pellinen and Järvenpää, 2013). Customer relationship
management has a remarkable significance and importance for the managers of Linfox and with
the help of ERP systems into place, the relationship management can be improved with the
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customers by assessing the purchase history of customers and showing ads for services which
they might be interested in based on the previous databases. Distribution module of the ERP
system will help in integration and arrangement of all the acitivties required for managing
effective distribution network for the company Linfox. ERP system can also work in favour of
reducing the costs related to IT and increasing interaction between the company and the
employee. Since all the activities related to the organisation of Linfox such as production, sales
and CRM, distribution, accounting, supply-chain management etcetera are integrated with the
implementation of ERP systems, inter-department communication and exchange of information
will also improve and the communication between management and employees will also
improve.
4. Identify leading ERP software
ERP basically know as enterprise resource planning which is business process administration
software that permits an enterprise to utilise a system of integrated applications to administrate
the business and automate many back office functions associated to technology, services and
human resources (Pearlson, Saunders and Galletta, 2019). There are number of leading ERP
software like Oracle Net Suit, Acumatica Syspro, AccountMate, Cougar Mountain Denali
Summit, Open systems Traverse, SAP Business One, Epicor ERP, Sage 300, Microsoft
Dynamics, Oracle JD Edwards etc. In Linfox the administration of the company can adopt
Oracle JD Edwards ERP software in its business. This software will be effective and beneficial
to the company because with the help of and assistance of this tool, the venture can support web
client users EnterpiseOne Menu. This software is an HTML based menu system that offers the
ability to navigate EnterpriseOne Menus. This system is beneficial to the respective organisation
cause of its different features. The key features of this software are defined as under:
 Multiple computing- JD Edwards has the capability to run on diverse platforms and this
versatility permits for easy maintenance of information across a network.
 Integrated supply chain- The respective ERP software offers the capability to utilise the
internet and intranet to assist Linfox in making communication and distributing or
transmitting data with its workforce, target audiences and suppliers (Ismagilova and et.
al., 2019).
 Interoperability- JD Edwards software is able to leverage existing investments in
hardware, database, software and integrate them with legacy and third party commodities.
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 Adaptability- The respective software has an effective feature and able to adapts different
languages, currencies, reporting provisions and technological standards in easy manner
(Abualoush and et. al., 2018). This will assist in making the working process and
business operation effective as Linfox operate globally in number of nations.
 Usability- This software is easy in use due to have the features and attributes of point and
click, drag and drop, utilise fill in the blank forms to easily appropriately and adequately
accomplish the task of the firm in proper manner.
By adopting this software, the administration of Linfox can gain several benefits some of
them are defined as below:
 By using this tool, the firm can store personal information of employees, dependents
and beneficiaries. Workers can view, modify Address Book information though
Benefits Self Service.
 This software is able to support Safari on Mac OS, Mozilla o n Linux and Internet
Explorer on Windows.
 The Human Capital Management application of this software able to follows and
delivers information with the Human resource system in form of complete workforce
data, job information. Pay type. Deduction, advantages and accrual information, time
and labour data etc.
 By using this software, the administration of Linfox can calculate deductions,
benefits and accruals. This toll also beneficial to deducts advantages cost form an
employee’s pay check.
 This software also able to assist the management to manage financial activities
consisting allocating revenue and expenses among different division in the respective
venture.
5. Research on the cost of the ERP system for large firm
There are different kind of ERP system and the cost of them according their working style
and as per their utilisation purpose. The cost of enterprise resource planning software varies
depending on the type, size and location of the company and whether or not it is software as a
service or on premise deployment (Koivisto and Hamari, 2019). The price ranges for small
medium and large scale businesses can range from $600 per month and for the software
supported to users and user types. The cost of implementing an ERP varies highly based on the
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type of business, nation etc. For a large sized company like Linfox, estimated cost can be $1
million to $10+million. The actual cost of the ERP software is only a fraction of the
implementation and the majority of cost will go to intrinsic and extrinsic human resources.
ERP vendors refer to those companies that create the software and a representative of that
firm. ERP vendor indicates to that entity which sells the software to the client (Hassan and
Mathiassen, 2018). The comparison among Tier 1, Tier 2 and Tier 3 is mentioned as under:
Tier 1 Tier 2 Tier 3
There are systems that
designed and generated for
major enterprises with
subsidiaries or local offices
effectively. This kind of
software is developed to
handle the issue sand
complexity like enabling
numerous individual and
employees to handle the same
tasks. These kinds of systems
are greatly complex to
organize, take a long time to
implement and come with an
initial high cost and a high
overall cost of ownership. Tier
1 ERP software consist SAP,
Oracle, Infor and Microsoft
Dynamics.
The systems of this tier are
less hard, complex and costly
then tier 1. It can be more
comprehensive to accomplish
the needs across a business
like finance, sales, marketing,
human resource, and
operations and supply chain.
The software of this tier can
be greatly targeted to attain
particular needs like types of
production, distribution and
retail. There are several
vendors in this category,
consisting Epicor, NetSuite,
Plex, Sage and Syspro etc,
ERP tools (van Capelleveen,
Amrit and Yazan, 2018).
The software and system of
this tier are far simpler and
less costly to implement.
These kind of business highly
implement by small and
medium sized business with
one or only a few destinations.
Most of the enterprise
resource planning system and
software in this category target
a particular sector. There are
number of vendors in the tier 3
category, involving Appian
Corporation and JDA software
group. Some software like
QuickBooks and Sage 50 are
including in this tier category.
From the above information it can be concluded and summarised theta Tier 1 category
software is effective for the business of Linfox. Because with the help of this category software
the company can effectively manage its business activities and operation as Linfox is a large and
multinational business corporation. With the help of this group software are able to deal with the
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issues and complexity in effective manner. So by using ERP system of this tier, the
administration can appropriately run and operate its business.
6. Challenges to the successful implementation of ERP system
There are several issues, complexities and challenges that can be faced by Linfox during
the time of implementing ERP system (Cecez-Kecmanovic and Kennan, 2018). Some of them
are defined as under:
Selection challenges- During the time of implementing ERP software in the business, the main
challenge that can be faced by the manager of Linfox regarding selection of ERP system, its
type, scope, scalability and size of the ERP software as well as assure that it suits the firm’s
budge, preferences and able to fulfil the business sector requirements.
Technical challenges- It is another challenge that can be suffered by respective business venture
at the time o implementing ERP system. The reason of arise this issue is selection of technical
roadblock, revamping servers, workstations and other traditional management systems in the
company.
Managerial challenges- this issue can be occur due to lack of effective management in context
of ERP software. When a company implement adopt and implement new ERP system then it
need to introduce new managerial activities and principles (Kamariotou and Kitsios, 2019). By
framing effective management activities assist in overcoming this challenge in Linfox
appropriately.
CONCLUSION
This has been summarised from the preceding defined data that effective information system
assist in managing and running the business of the company by administrating its business
information and data in effective manner. There is several ERP (enterprise resource planning)
software or systems that are useful and essential to administrate employee, customers and
organisation’s business data in adequate manner. There are different kind of issues and
complexities that are faced by enterprises during the time of implementing these kind of tools,
techniques and software in business entity in successful manner.
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REFERENCES
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Staehr, L., Shanks, G. and Seddon, P.B., 2012. An explanatory framework for achieving business
benefits from ERP systems. Journal of the Association for Information Systems. 13(6).
p.2.
Elragal, A. and Haddara, M., 2012. The Future of ERP Systems: look backward before moving
forward. Procedia Technology. 5. pp.21-30.
Teittinen, H., Pellinen, J. and Järvenpää, M., 2013. ERP in action—Challenges and benefits for
management control in SME context. International Journal of Accounting Information
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Laurini, R., 2018. Information systems for urban planning: a hypermedia cooperative approach.
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systems: A strategic approach. John Wiley & Sons.
Ismagilova, E., Hughes, L., Dwivedi, Y.K. and Raman, K.R., 2019. Smart cities: Advances in
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Abualoush, S.H., Obeidat, A.M., Tarhini, A. and Al-Badi, A., 2018. The role of employees’
empowerment as an intermediary variable between knowledge management and
information systems on employees’ performance. VINE Journal of Information and
Knowledge Management Systems.
Koivisto, J. and Hamari, J., 2019. The rise of motivational information systems: A review of
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development. Information Systems Journal, 28(1), pp.175-226.
van Capelleveen, G., Amrit, C. and Yazan, D.M., 2018. A literature survey of information
systems facilitating the identification of industrial symbiosis. In From Science to
Society (pp. 155-169). Springer, Cham.
Cecez-Kecmanovic, D. and Kennan, M.A., 2018. The methodological landscape Information
systems and knowledge. Research Methods, p.127.
Kamariotou, M. and Kitsios, F., 2019. Strategic information systems planning. In Advanced
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Patel, S. and Patt, Y., 2019. Introduction to Computing Systems: from bits & gates to C &
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Online
How much does an ERP implementation cost ?. 2020. [Online]. Available Through: <
https://blog.cfbs-us.com/blog-1/how-much-is-erp >.
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