Information Technology Report: ERP Systems Benefits and Challenges

This report provides an overview of information systems, focusing on Enterprise Resource Planning (ERP) systems and their role in modern organizations. It begins by defining information systems and categorizing them into Transaction Processing Systems (TPS), Management Information Systems (MI...Read More

Managing information
and Technology

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Categories and types of information system................................................................................3
ERP systems and various benefits to these systems....................................................................4
Challenges to use of deploy ERP systems...................................................................................6
Solutions to the challenges..........................................................................................................7
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Information system is defined as a collective set of parts essential for storage, collection and
processing information. In addition to this, it is basically a software which is vital in organising
as well as analysing information thereby making it solutions within the operations of company
(Agozie, Nat and Edu, , 2020). The purpose of information system is to turn information into
effective and useful data which can be used at the time of decision making procedure of an
organization. The main objective of the report is to discuss categories and forms of information
system. In addition to this, there is a discussion regarding ERP systems along with its benefits.
Moreover, challenges to deploy and use ERP system along with the solutions to deal with such
challenges is elaborated in the report.
MAIN BODY
Categories and types of information system
Organisations make use of information technology systems which help them to manage a
specific business unit as well as organisational level. The different forms of information systems
used by companies is given below:
Transaction processing system: It is defined as an information system which is mainly
used to record day to day transactions of the company. In addition to this, such information
system is used at operational level with an objective to answer routine questions. It is analysed
that with the help of TPS an organisation is able to know about data produced from the
transaction processing system in detailed. The examples of transaction processing system is
payroll systems, stock control system, point of sale system and so on.
Another example is Tesco as it record all the data about its customers or the record of a
client customer relationship management information (Alahyari, Ehsan and Moghimi, 2020). By
the assistance of this, Tesco can gain a higher level of accuracy and reliability and is easily able
to decline the level of potential human errors.
Management information system: This type of information system is mainly used by
tactical managers or higher authorities in order to monitor the current performance status of an
organisation. It is analysed that management information system analyse the input with regular
algorithms that is summarize the overall results in order to develop report which is further used
in order to control, monitor as well as predict future performance. Some of the examples of

management information system is human resource management systems, budgeting systems,
sales management systems and so on.
Another example is input from a point of sale system can be used to determine the overall
trends of products which are functioning well and which are not functioning well. This assist
company such as Asda to make future inventory orders in a timely and effective way.
Decision support system: It is defined as a type of information system which is used by
higher authorities in order to develop non-routine decisions. In addition to this, it is determine
that decision support systems use input from the internal system that is basically from
management information system and transaction processing system. One of the main objective of
using this type of information system is to give solutions to issues which is different and
modified rapidly (Jatto, 2021). Some of the examples of decision support system is bank loan
management system, financial planning system and so on.
Another example is the net profit of an organisation is calculated with the help of formula
and that enable higher authorities to ask what is the cost of goods, total sales and so on.
Office automation system: It is a network of different tools and technologies, individuals
needed for conducting managerial and clerical activities. It is analysed that office automation
system integrate with word processing applications or e-mail in order to ensure all
communication information is easy to access and is at one centralized locations. The various
functions performed by such information system is mailing paperwork, producing reports,
printing documents and so on.
Another example is Ssinsbury’s which is the second largest supermarket of UK. The
company make use of office automation systems that help in improving communication between
different departments as it help in effective collaboration and completion of activities timely.
Apart from this, it also help company to streamline managerial activities, improve
communication among workers, optimize knowledge management etc.
There are also another forms of information management system that is executive support
system, knowledge management system and many more.
ERP systems and various benefits to these systems
Enterprise resource planning system are the business management software tools that is
used in order to manage enterprise information. In addition to this, it also allow an organisation
to automate as well as integrate procedure across the company that is from sales, supply chain,

marketing, human resource, customer service and so on. It is analysed that this tool centralise an
organisation’s data, automates routine activities and easily simplify the business procedure. One
of the main objective of enterprise resource planning tool is to optimise the overall operations
and free up staff members time as it help in performing more effective tasks (Lee and Lebedev,
2020). All this leads to raise in revenue margins as well as efficiencies at the time of enhancing
communications across the organisation. ERP involve end-to-end solutions as it has features
included human resource, manufacturing, customer relationship management, analytics and
reporting and so on. For running the business, it is crucial to have an effective system which
assist to integrate various components or aspects of business.
For instance, Tesco which is one of the largest supermarket of UK make use of ERP
system. As a merchandise retailer, the respective organisation itself has different business units
which require to communicate in order to work effectively. It assist Tesco to identify the
requirements of retail customers and provide required items to customer which is vital for
integrating and coordinating module that is inventory along with marketing and sales. The
various advantages gained by Tesco due to the use of Enterprise resource planning is mentioned
below:
Improve key business procedure: One of the major driver and factor of enterprise
resource planning system is to business process improvement. In addition to this, such aspect
help company to increased efficiency of sales leads, decline lead times, enhance responsiveness
to customer requirements and many more. In relation to Tesco, it provide an interrelation among
sales as well as support functions and also assist to improve customer service in an effective
manner.
Decline operational cycle times: It is analysed that implementing EPR system enable
more timely and accurate processing of receivable transactions, accounts payable, decline
financial close cycles, improved cash flow and so on (Momm and et. Al, 2021). All this help HR
system of Tesco to enable an integrated view of company’s human capital resources as well as
capabilities to different operational functions. In addition to this, it reduce the operational cycle
time that has positive influence on the overall profitability of an organisation.
Cost saving: ERP system declines operations and administrative costs, allow organisation
to optimally utilize their money, prevent delays and disruptions, make decision effective and
quicker and so on. All this assist Tesco to become smarter regarding saving and spending when

required. Apart from this, it also assist to decline the level of cost that has positive impact on the
profitability and revenue of an organisation.
Customized reporting: It is analysed that ERP software allow an organisation to make the
reporting easier and customizable that is to meet all the requirements. By the assistance of this,
Tesco is able to respond to complex information in a more effective and easy manner. All this
enhance productivity, finish the overall processes faster and also assist to close out projects in
less time period.
Apart from this, there are also other issues gained by company such as increased productivity,
flexible systems, regulatory compliance, data reliability, integrated information, department
collaboration, accurate and proper forecasting and so on.
Challenges to use of deploy ERP systems
It is determined that there are various challenges faced by an organisation at the of
implement ERP system and is given below:
Inadequate flexibility: It is analysed that if enterprise resource planning system is not
effectively flexible then it require time as well as resources in order to reorganise in a proper
manner. This sometimes leads an organisation towards ineffective management of data and
occurrence of high cost to reorganise the software.
Resistance to change: It is determined that despite the advantages of ERP system,
employees did not prefer to accept changes and resist it as well. In addition to this, it is analysed
that replacing such integral system will inevitable leads to delays and resistance .(Pozo-Sanchez,
Lopez-Belmonte and López-Núñez, 2020). It is important for an organisation to ensure that its
employees are fully trained before executing the new software such as ERP that make the routine
activities easier instead than make it complicated.
Maintenance cost: All enterprise resource planning system require continuous
maintenance that arise high cost to an organisation. It is determined that ERP system seems
cheaper to initialise bit to maintain it properly it require proper maintenance and cost as well. It
is consider as major issue as it impact directly on the overall profitability and revenue of
company in a negative manner.
Sufficient testing: It is analysed that the testing of ERP system did not mean whether its
working properly or not. It is required to be delighted by its performance and fulfil the

requirement as well. The insufficient testing of system can arise costly unplanned updating
which has influence on revenue negatively.
Solutions to the challenges
The solutions to deal with the challenges of ERP is given below:
Invite multiple ERP providers and select which most suits your needs: It is consider as
one of the solution that help in dealing with the issue. By the assistance of multiple ERP
provides, organisation such as Tesco is able to carried out successful execution within the
domain. Apart from this, it also assist to meet with the objectives in less customization needed by
company.
Ensure proper training and active participation of users to learn ERP Software:
Another solution is to provide training to the employees before executing ERP system as it help
in declining the level of resistance (Priya, Ponnavaikko and Aantonny, 2020). In addition to this,
the higher authorities and staff members should actively participate and go through an effective
understanding as it help to implement out daily activities by the use of ERP software.
Frequent data analysis and monitoring: This help company to effectively review the
reports and gain a positive results. The higher authorities should extract and demands reports to
review as well as analyse through enterprise resource planning. It help in regular use of ERP
system and focus that staff members must enter relevant information which is accurate and
uploaded.
There are also other solutions used in order to deal with challenges that is setting up change
management, ensure management backing, clearly define the parameters and many more. It is
important for an organisation to ensure that all this solutions is effectively implemented in order
to manage and control data in an effective manner.
CONCLUSION
From the above discussion, it has been concluded that many of the organisations work with
large number of facts that is organised within a database. In addition to this, there ae different
forms of information management system that is management information system, knowledge
management system and so on. It is determined that companies make use of information system
as per their working procedure and requirements as well. Moreover, it is determine that
enterprise resource planning help in managing and controlling company wide data streams.

There are various advantages gained by an organisation by using ERP system that decline in
cost, improve process system, customised reporting, decline operational cycle time that has
positive impact on the productivity of a company. In the last, it is analysed that there are various
challenges faced by company when they use ERP system such as high maintenance cost,
resistance to change, inadequate flexibility and many more.

REFERENCES
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