Strategic Implementation of SAP ERP in Business Operations

The strategic management of information systems is crucial for building a digital strategy that enhances business performance. This analysis focuses on the implementation of SAP ERP systems, emphasizing the importance of identifying and leveraging key success factors (KSFs) to ensure successful integration and post-implementation performance. The role of cloud computing in supporting supply chain information system infrastructure is also examined, highlighting when it is beneficial to adopt cloud solutions. Challenges such as skill deficiencies among workers, inadequate customer service, and data redundancy are addressed through targeted training programs and flexible business operation management strategies. By implementing SAP ERP effectively, organizations can achieve their strategic milestones with greater ease and efficiency.

Running head: STRATEGIC INFORMATION SYSTEM
Strategic information system
Name of student
Name of University
Author note

1
STRATEGIC INFORMATION SYSTEM
Table of Contents
Introduction......................................................................................................................................3
Company structure, products and services......................................................................................3
Operations and functionality............................................................................................................4
Current processes.........................................................................................................................4
Gaps during the implementation..................................................................................................6
Issues that the new system must resolve......................................................................................7
Proposed system requirements.....................................................................................................7
Difficulties in developing an Information Systems Strategy and probable solutions.....................9
Information Systems failures.........................................................................................................10
Information system failures related to implementation of SAP.................................................10
Solutions to the problems faced at Woolworths........................................................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................14

2
STRATEGIC INFORMATION SYSTEM
Introduction
Woolworths Supermarkets is a supermarket or grocery chain that has been managed by
Woolworths Limited in Australia. It is one of the major business organizations that has its
maximum shares in Australia and hold more than 80 percent of the supermarket n Australia. The
company mainly sells grocery items like fruits, vegetables, packaged foods though electronic
products, beauty and fashion items along with stationery items are also sold by the company. The
company has its stores all over Australia and there are more than 960 supermarkets and
convenience stores (Ahmad and Cuenca 2013). The company’s products and services are also
provided online at Woolworths.com.au where people can enjoy a good online shopping
experience and ensure that their needs and requirements are fulfilled. It is a retail company and
has its headquarters in Bella Vista, New South Wales in Australia. There are more than 111000
employees who are associated with the organisation and it has been introduced in the year
1924.The parent company is Woolworths Limited. The topic focuses on the implementation of
the strategic information systems for responding to the business initiatives and gain competitive
advantage in business.
Company structure, products and services
The structure of an organisation defines the hierarchy representing the various job roles,
organizational functions and business processes managed. It also includes the management and
allocation of tasks, coordination among the employees working there and the supervision of
employees for making them perform to the potential. To implement an effective strategic
information system, it is important to maintain a proper organizational structure for making sure
that the implementation of the strategic information system is successful and noteworthy. As the

3
STRATEGIC INFORMATION SYSTEM
report is concerned with the implementation of an effective SAP ERP system, so a proper project
management team should be developed and that would be possible by maintaining a project
organisation structure (Amrollahi, Ghapanchi and Talaei-Khoei 2013). Here the teams should be
developed based on the numbers of skilled and knowledgeable staffs available and then the tasks
must be allocated to create an effective project structure. The manager of the project has the
responsibility to show his power or authority and report to the sponsors and project board about
how the team members can interact with the project manager (Appandairajan, Khan and
Madiajagan 2012).
The products and services delivered by Woolworths are fruits and vegetables, meat, fish
and other sea food items along with dairy items and packaged food items too. It also sells liquor
items and drinks, food items for the pets, health and beauty products and even household items.
The products are of good qualities and hold most of the good features, which make it apart from
the products of other retail companies and this has kept the customers satisfied largely
(Arvidsson, Holmström and Lyytinen 2014).
Operations and functionality
Current processes
The current processes are associated with the management and implementation of the
strategic information system, i.e., the SAP ERP system for ensuring successful human capital
management. Woolworths has chosen SAP ERP for managing the processes of automation and
standardization and ensured that the project implementation is completed within the allocated
time and budget. By managing the process of automation, it has also become easy for enabling
sustainable growth, enhanced customers’ services and better production level too. The company

4
STRATEGIC INFORMATION SYSTEM
may face several problems due to the lack of skills, knowledge and expertise among the workers,
because of which the SAP ERP will be implemented for engaging the employees of the
organisation and make them spend some more time during the management of administrative
tasks (Boonstra 2013). The implementation of this strategic information system not only could
help in managing the human resources functions effectively but might also lead to improvements
in various areas including recruitment, development and retention of employees and even
appointing new leaders.
The current processes in SAP ERP are management of sales and distribution,
management of materials, planning for the production process, management of quality and even
human resource management. The processes of human capital management would include
payroll activities, recruitment and selection along with training and development opportunities
provided to the employees. The SAP ERP solution would enhance the efficiency of e-recruiting
and even manage the financial supply chains, i.e., financial accounting, management accounting,
etc. At Woolworths, this kind of strategic information system could strengthen the business
operations and processes and deliver the best human capital management system on the Success
factors platform (Cerrato and Piva 2012).

5
STRATEGIC INFORMATION SYSTEM
Figure: Organizational structure and processes associated (Cerrato and
Piva 2012)
Gaps during the implementation
There are certain gaps found while implementing the strategic information system at
Woolworths. There could be situations when the employees of Woolworths might not be able to
view their leaves taken, pay slips, balance regarding leaves and sometimes even might
experience difficulties to access the portal where the necessary information should be present.
Few gaps could be experienced during the deployment and implementation of the SAP ERP
system such as high labour cost and lack of expertise among the workers. The switching costs
might remain high whereas the return on investments for implementing the strategic information
system could take a lot of time to bring out the desired level of profit. The implementations could
also result in certain risks regarding failure of project too (Färber et al. 2012). Another gap that

6
STRATEGIC INFORMATION SYSTEM
might be found could be that the end users might not be trained and informed about how to
handle the project, because of which, the complex integration cost should be high as well.
Issues that the new system must resolve
Enterprise resource planning or ERP is an effective strategic information system strategy
that is suitable for businesses of every sizes and business types. There could be various issues
related to the human resource management and it could be challenge during the implementation
of ERP. The company might face issues while responding to changes and remain inconsistent
while managing the business processes. By implementing the SAP ERP, it would be easy to
enable participation of employees altogether and obtain their feedbacks to make necessary
changes and improvements, finally resulting in improving the user experience. By implementing
the SAP ERP system, the performances of employees could be understood based on which,
necessary training and developmental opportunities should be provided to them. Few other issues
could be inability to access the transactions, which further could create difficulties in mapping
the roles and even issues like redundancy of data and information (Hasibuan and Dantes 2012).
The SAP ERP system could also enable business reengineering that would allow for obtaining
the feedbacks and responses of the employees, based on which, changes should be done.
Proposed system requirements
To meet the project requirements, a proper strategic planning is required where a project
team will be assigned and the various business operations and processes will be examined along
with the flow and exchange of data and information. The SAP ERP system would be
implemented as software as a service or SaaS for managing all the business operations
successfully and ensure adding a lot of value and benefits to the organisation. By using ERP, it
would also be easy to manage the databases, tables and documentation procedures during the

7
STRATEGIC INFORMATION SYSTEM
human capital management at Woolworths Limited, Australia. The ERP implementation would
further assist in changing according to the demands of the customers and work according to the
new laws, rules and regulations for ensuring flexibility and future growth in business too. To
meet the requirements, it is important to assess and review the software capabilities, identify the
manual processes and establish standard operating procedures for handling tasks efficiently. It is
also useful for collecting data and information and reviewing those in order to check the
accuracy. The testing should be done after that for making necessary adjustments and ensuring
that the inventory holds enough resources for making the SAP ERP implementation successful.
Information Systems (IS) Strategy
The strategic information system or SIS is a kind of information system technology that
is used within the business organizations to apply various metrics and manage utilization of
analytical tools. This will help in understanding the scopes and opportunities to enable growth
and furthermore manage innovative ways or approaches to create high quality products and
deliver those at reasonable prices. The SIS will also allow for managing the differentiation of
products and ensure that various market segments are targeted for generating more revenue in
business. The information system strategy is to implement an effective SAP ERP system for
managing the human capital and at the same time, align the strategic goals and objectives with
the structure of the organisation. It should be done for enabling participation of every employees
and ensuring that the strategic information system is implemented.
The most important components of the information system are the hardware and software
components, telecommunications, databases and data warehouses along with the human
resources and business procedures. The information systems strategy constitutes of the data
integration, virtualization of data, management of meta data and even stream processing too. The

8
STRATEGIC INFORMATION SYSTEM
governance of data and management of quality are also integral components of the strategic
information system strategy. By enabling information system strategy as an integral part of the
organizational strategy, accessibility of data should be possible easily along with transformation,
exchange and delivery of data, which could not only prevent redundancy of data but would also
allow for meeting the performance requirements for the concerned information system strategy.
The virtualization of data would allow for managing federation, caching and maintaining
consistency of data flow and exchange of information within the organisation. This would create
flexibility and mobility of data and furthermore streamline the business processes’ efficiency. At
Woolworths, the event stream processing or ESP could allow the company to respond to various
opportunities and undertake actions immediately during a certain scenario. High volumes of data
have been monitored and checked for accuracy. The management of quality of data is also an
integral part of the information systems strategy that allows for standardization of data, validate
those and even evaluate the data management issues all throughout. It is considered as an
effective organizational strategy because of the improvement in technology solutions,
management of data safely, centralization of data and even provide better mobility and flexibility
for improving the processes of production and customers’ services too (Peppard and Ward 2016).
Difficulties in developing an Information Systems Strategy and probable solutions
The retail supermarket chain Woolworths was facing some serious issues to make a good
turnover and so various new brands should be introduced with additional discounts. There was
huge competition in the market and many employees were leaving the job as well. It was seen
that while implementing the SAP ERP system, there were issues such as disruptions in high
profile supply disruptions that not only reduced the ability of the company to generate enough
profit but also faced difficulties in surviving within the competitive business environment

9
STRATEGIC INFORMATION SYSTEM
(Prajogo and Olhager 2012). The organisation might face difficulties because the previous ERP
system was needed to be replaced with a new SAP ERP, which might cost a huge aount of
money and would require some additional efforts too. While implementing the information
systems strategy, various components should be hosted such as data, servers, database,
applications and software solutions with additional cloud based options, networks based on the
service model chosen (Ram, Corkindale and Wu 2013).
Information Systems failures
Information system failures related to implementation of SAP
The business organisation within the retail industry wanted to recover from its loss an
resolve the issues that were experienced during the information systems project implementation.
There might be management challenges, human resource management challenges, technical
challenges, technical and finally time challenges. At Woolworths, several problems were present
such as degrading customers’ services, lack of opportunities to make customers informed about
the new products and services introduced and the quality of products was not up to the mark as
well. It was seen that while implementing the information systems strategy, the approval of top
management should be needed for understanding the roles and responsibilities to implement the
plan prior to the confirmation of time and budget (Sankar 2012). Telecommunication issues
might deteriorate the communication level and could make the employees fail to understand their
roles and responsibilities during project implementation. Other issues included could be the lack
of ability to integrate the modules properly, which created compatibility issues and increased the
cost overheads too. The SAP ERP implementation at Woolworths would need great processing
speed and sufficient storage to store data and information for managing flexibility and

10
STRATEGIC INFORMATION SYSTEM
improvement of customers’ services. Without proper budget, the speed of processing might
deteriorate and result in software issues, which could hinder the level of security and database
management at Woolworths, Australia (Schniederjans and Yadav 2013).
Solutions to the problems faced at Woolworths
To maintain stability in the business processes, feedbacks from staffs and employees
should be gathered and a new sales system could be introduced through integration with the
NCR Retalix software for providing better responsive support and apply success factors for
improving the business functioning. The implementation of SAP ERP with the existing ERP
system would create enough scopes in moving into cloud and reduce the ownership cost, provide
better flexibility in terms of business operations and furthermore standardize the business
operations and processes for delivering better security too. Appropriate training and
developmental sessions should be arranged for the employees of the organisation to make them
skilled and knowledgeable of handling the entire project and work in coordination, as a team for
accomplishing the business goals and objectives with ease and effectiveness
(Woolworths.com.au 2018). Support from the senior management and appropriate analysis of the
systems project requirements would be required too for making operations successful in the long
run as well as prevent delay in operations and making of business decisions. This would increase
the profit level achieved by the company and even enhance the production level.
Servers and databases should be checked and pilot testing must be done for using the data
prior to the conversion or transfer of data to the entirely new system. The SAP ERP
implementation would create huge improvements in managing the human capital and keep the
employees informed about the project milestones. At Woolworths, feedback communication
channels should be established for allowing the staffs to generate new ideas and monitor their

11
STRATEGIC INFORMATION SYSTEM
performances so that the goals and objectives of the information systems project implementation
could be achieved within the allocated time and budget (Wu et al. 2013).
Conclusion
The SAP ERP implementation could facilitate the processes of recruitment, selection and
retention of employees and ensure that the gaps experienced during the implementation of
information systems strategy could be overcome. Few issues that might be faced included lack of
skills among workers, inappropriate customers’ services and even data redundancy and lack of
security of data present in database. The issues could be overcome by improving the skills and
knowledge among workers through training and on the other hand, should implement the SAP
ERP for maintaining flexibility in business operations management and reach the milestones of
achieving the best outcomes after implementation with ease.

12
STRATEGIC INFORMATION SYSTEM
References
Ahmad, M.M. and Cuenca, R.P., 2013. Critical success factors for ERP implementation in
SMEs. Robotics and Computer-Integrated Manufacturing, 29(3), pp.104-111.
Amrollahi, A., Ghapanchi, A.H. and Talaei-Khoei, A., 2013. A systematic literature review on
strategic information systems planning: Insights from the past decade. Verified OK.
Appandairajan, P., Khan, N.Z.A. and Madiajagan, M., 2012, December. ERP on Cloud:
Implementation strategies and challenges. In Cloud Computing Technologies, Applications and
Management (ICCCTAM), 2012 International Conference on (pp. 56-59). IEEE.
Arvidsson, V., Holmström, J. and Lyytinen, K., 2014. Information systems use as strategy
practice: A multi-dimensional view of strategic information system implementation and use. The
Journal of Strategic Information Systems, 23(1), pp.45-61.
Boonstra, A., 2013. How do top managers support strategic information system projects and why
do they sometimes withhold this support?. International Journal of Project Management, 31(4),
pp.498-512.
Cerrato, D. and Piva, M., 2012. The internationalization of small and medium-sized enterprises:
the effect of family management, human capital and foreign ownership. Journal of Management
& Governance, 16(4), pp.617-644.

13
STRATEGIC INFORMATION SYSTEM
Färber, F., Cha, S.K., Primsch, J., Bornhövd, C., Sigg, S. and Lehner, W., 2012. SAP HANA
database: data management for modern business applications. ACM Sigmod Record, 40(4),
pp.45-51.
Hasibuan, Z.A. and Dantes, G.R., 2012. Priority of key success factors (KSFS) on enterprise
resource planning (ERP) system implementation life cycle. Journal of Enterprise Resource
Planning Studies, 2012, p.1.
Peppard, J. and Ward, J., 2016. The strategic management of information systems: Building a
digital strategy. John Wiley & Sons.
Prajogo, D. and Olhager, J., 2012. Supply chain integration and performance: The effects of
long-term relationships, information technology and sharing, and logistics
integration. International Journal of Production Economics, 135(1), pp.514-522.
Ram, J., Corkindale, D. and Wu, M.L., 2013. Implementation critical success factors (CSFs) for
ERP: Do they contribute to implementation success and post-implementation
performance?. International Journal of Production Economics, 144(1), pp.157-174.
Sankar, C., 2012. Factors that improve ERP implementation strategies in an organization.
In Enterprise Information Systems and Advancing Business Solutions: Emerging Models (pp.
114-135). IGI Global.
Schniederjans, D. and Yadav, S., 2013. Successful ERP implementation: an integrative
model. Business Process Management Journal, 19(2), pp.364-398.
Woolworths.com.au. (2018). {{metaController.metaData.title}}. [online] Available at:
https://www.woolworths.com.au/ [Accessed 6 Jan. 2018].

14
STRATEGIC INFORMATION SYSTEM
Wu, Y., Cegielski, C.G., Hazen, B.T. and Hall, D.J., 2013. Cloud computing in support of supply
chain information system infrastructure: understanding when to go to the cloud. Journal of
Supply Chain Management, 49(3), pp.25-41.