Strategic Information Systems: ERP Systems for Australian SMEs

This report delves into the realm of Enterprise Resource Planning (ERP) systems, specifically focusing on their implementation and impact on Small and Medium Enterprises (SMEs), with a particular emphasis on the Australian context. The paper begins by highlighting the growing importance of in...Read More

Strategic Information Systems 1
Strategic Information Systems
Student name
Course Title
Professor’s Name
University
City and State
Date

Strategic Information Systems 2
Part 1
Introduction
Integrated, responsive and streamlined words are common terms used in the
description of what a company is supposed to develop to become profitable and sustainable
regarding SMEs in the highly competitive business age. Over the past two decades,
technology has greatly advanced in the field of Information Technology. Consequently, this
has led to wide enterprise technology adoption enabling the development of enterprise
resource planning (ERP) systems which are regarded as a key contributor to business
transformation. Accordingly, ERP is known to bring splendid business returns in a more
competitive market. As a result, for companies to run effectively, there is need for them to
move towards effective information systems such as ERP. Unfortunately, SMEs are facing
numerous challenges of integration with ERP solutions (Tarhini, Ammar, and Tarhini, 2015,
p. 25). Thus, this forms the core reason for ERP dealers to provide ERP systems to SMEs.
Hence they have begun to divert their efforts to target small businesses. This paper discusses
how the vendors are striving to implement and deploy ERP systems for SMEs. The target of
vendors is the SMEs market. Therefore, they are repackaging ERP systems to suit the
functionality of SMEs. The primary objective of this paper is to determine the limitations
based on the literature as well as other aspects that affect the acceptance and execution of
ERP systems in SMEs which are the same in the perspective of Australia.
Literature Review
Initial research studies done with Australia SMEs have shown the significance of
human resource for ERP choice and execution as well as implementation as merely done. The
reason is that they use simple technology to fix problems instead of taking it as a strategic
business venture. Seethamraju (2015) notes that with the progressive latest technology such

Strategic Information Systems 3
as cloud computing, it is essential that the process is revisited because the constraint expenses
and other factors differ by a huge margin (p. 479). Despite the fact that most of the
contemporary study in Australia has been based on ERP implementation in higher education
ERP is stillyoung now is when it is advancing paths in business sector. According to Sedera,
Gronau, and Sumner (2015), the present turbulence in the business setting it is mounting
much pressure on companies to become sure that it is possible for them rapidly attain
consumer needs and wants as well as making of sound and timely decision on their resources.
Thus, most of the corporation in Australia have been forced to employ ERP system as
substitute for a unified information system support functions. Also, these companies have
implemented a packaged ERP solution for creating an integrated core system instead of
outmoded system development. SAEP an internationally recognized ERP vendor has reported
more than 70% of Fortune, over 100 companies that have already installed or are in the
process of installing the R/3 system. Therefore, the ERP market share in Australia is
constantly advancing with approximately 5% yearly, and it is moving towards the extended
ERP solutions like CRM and SCM.
Regardless of ERP dealers recording a lot of successful cases, different stories have
also emerged concerning the failed or out-of-control projects. For example, it has been
debated that the bust of FoxMeyer was facilitated by its adoption of ERP system. Another
example is Mobil, Europe which makes use of a colossal amount of money but in the end it is
rejected since its merger associate refute the idea to adopt ERP system. Venkatraman and
Fahd (2016) note that most corporations such as Dell Computer, Dow Chemical, and
Foodland supermarkets have gone through a lot of challenges in ERP implementation as well
as stabilization due to the haphazard training organization that takes the advancements
negatively. These corporations concentrate on training as the most significant element instead
of integration. Indeed, Australian firms have suffered from similar difficulties in the

Strategic Information Systems 4
introduction of international standard practices such as new information system needs and
unit measures to make a comparison between their old-style native practices as well as the
initial IT level of legacy systems.
Ultimately, implementation of ERP demands numerous investment in solution license
charges and hardware in addition to consultation cost for the goal of ERP knowledge
distribution solution functionalities and project management (Ram, and Corkindale, 2015).
But it may not be possible to realize the substantial intention of the business operations which
place companies at a point of missing strategic business chance. Overstressing on the
outstanding justification and implementation of these issues and lack of understanding on
ERP potential as well as an influence to the organizational performance in the ERP
implementation lifecycle. Particularly the post-execution stage is very crucial to keep
receiving constant improvement.
Domestic and International SMEs Context
Internationally companies are adopting a wide range of descriptions for small-medium
enterprise (SMEs) but the primary difference is the size choice and the threshold used in
measuring. Most companies use balance sheet, size of the workforce and total revenue to
define SMEs (Ahmad, and Malik, 2016). In Australia, diverse corporations use dissimilar
measures to describe SMEs, for instance, the Australian Stock Exchange (ASE) classify
entities that have less than fifty workers as SMEs (Chong, 2014, p. 44). Contrary to big
organizations, SMEs depend upon other companies for services which include training and
marketing. Therefore SMEs are vital components of the economic policy and particularly
experts in developing and creation of employment. Consequently, with the implementation of
ERP system, it is view as a significant plan towards creating new robust bookkeeping
practices which will also aid in the enhancement of the survival of SMEs (Chong, 2014, p.

Strategic Information Systems 5
42). But SMEs are showing opposing forces to the adoption of ERP through the barriers and
constraints involved in both domestic and international contexts.
Constrictions of Standard ERP Implementation in SMEs
Typically, the standard ERP system execution demands substantial support from the
organization in the form of capital, time as well as labor. When compared to big corporations
SMEs have merger resources regarding skills, money and limited time. As per the view of
Pearlson, Saunders, and Galletta, (2016) SMEs lacks the latest technology such as IT setup,
and the quantity and quality of present commercial data. Subsequently, these constraints act
as barriers to ERP implementation and even adjusting to ERP. Accordingly, research from
different parts of the globe define differently the core obstacles and limitations facing SMEs
in the adoption of ERP and implementation. Some of the chief constraints faced by MSE for
the standard adoption of ERP include:
Long Implementation Time: The implementation of ERP need more time unlike another type
of software. Thus, the long period of SMEs resources does not favor the organization’s major
business.
High Costs of Standard ERP Implementation: The cost of implementing ERP is higher
because it entails some things such as training, customization, resources and maintenance
costs. Therefore, due to financial constraints, it makes it challenging for SMEs to adopt ERP.
SMEs call for a solution at a lower price from ERP vendors thus it becomes impossible for
ERP sellers to provide solutions at a lower cost (De Salas, Lewis, and Huxley, 2017, p. 428).
The nature of Standard ERP is resource-intensive: The implementation of ERP demands
specialized professionals, topmost leadership commitment, and intensive training. Moreover,
when ERP customization is required it strongly emphasizes the resources.
Strategies Applied by Vendors for SMEs

Strategic Information Systems 6
In order to realize SMEs needs and constraints, ERP vendors have been forced to
offer a solution established on scaled-down types of the ordinary and massive applications
that are mainly intended for big corporations. Therefore, the function of ERP is scaled down
to ensure that it is affordable and fit with SMEs, which are small in size and complexity.
ERP Implementation Methods
The method of implementing ERP has been evolving to a fast trajectory performance with
the intention to minimize the cost time and SMEs effort. Some of these methods include
hosting
MIS Role in Enhancing Decision Making
Decision making is a central part to any business since the majority of operations if
not all within the business revolve around decisions completed by the company’s
administration and another shareholder in the company (Laudon, and Laudon, 2015). In order
to ensure a swift and smooth flow of operation in an organization, it calls for a sound
information system because the decision is made from the available information. In relation
to Ruivo, Oliveira, and Neto, (2015) they note MIS plays a significant role in the choice of
the decision to be undertaken. Therefore, corporations ought to make sure that they are
equipped with the outstanding information system. Generally, a good management
information system helps to enhance sound decision making just like poor MIS will foster
arriving at poor decisions. Galliers and Leidner, (2014) support this thought by arguing that
“the value of administrative decision-making is directly related the quality of existing
information.” Therefore, managers are required to nurture a surrounding that support the
progress and viable emergent of excellent information. Basically, before making a decision
on which MIS strategy to take, it is significant to ensure that the taken option will be
completely compatible with the existing system. Indeed, with this information in place, it will

Strategic Information Systems 7
help to prevent erratic choices. Thus, this save the company time and resources as it makes its
operations fast and swift..
Part 2
The dawn of computer-based information systems has made it possible for leading
organization such as Zappos to adopt information systems for all its operations.
Consequently, Zappos has been able to triumph to greater heights due to the implementation
of MIS in its decision-making practices. Accordingly, MIS comprise of the flowing compute
based decision-making software, Decision support system (DSS), Management information
system (MIS); Transaction Processing System and Executive Information System (EIS).
Decision Support System: Decision Support System (DSS) is a computer-based
information system that supports companies in the process of making decisions (Wager, Lee,
and Glaser, 2017). DSS has helped Zappos to be in the position of enjoying high-quality
services regarding operations, management, as well as organization planning because it offers
it with support regarding decision making. According to Johansson, and Neto, (2017) the
theorists note that DSS can be fully computerized or human. Researcher has comprehended
DSS as a device that is useful for decision making. Accordingly, Zappos Company
acknowledged DSS as a powerful business tool, and out of that, it has helped in simplifying
its operations. According to Dwivedi et al. (2015). DSS is mainly used with the topmost
management to solve problems that are not are unspecified and unstructured (145). DSS
combines analytic techniques with conventional data access as well as recovery functions.
DSS emphasizes on the need for a business to become flexible. The flexibility allow for easy
accommodation of changes in the business setting as well as different users’ decision making
approaches (Power, Sharda, and Burstein, 2015).

Strategic Information Systems 8
Management Information Systems: The software provides information that is required
by the company for effective and efficient management. Tatoglu et al. (2016) state that
management information systems come in dissimilar functionalities whereby some are used
for purposes of analysis while other facilitates for tasks and practices which are meant for
strategic operation management.
Transaction Processing System: defines TPS as a system that allows for the execution
and day to day record keeping practices in business. TPS systems are primarily developed to
help in achieving daily business transactions in the most effective way.
Executive Information System: Ram, and Corkindale, (2015) describes EIS as a
management system that is capable of simplifying operations to support in decision making
necessities of topmost leadership in an organization. As a result, the software provides easy
access to internal and external information which is suitable for the mission and vision of a
company (Stair, and Reynolds, 2017).
Conclusion
Currently, organizations are supposed to ensure that they have streamlined their
operations to improve productivity, lower costs, heighten efficiency, gain flexibility and
empower workforce. Since the business environment is constantly changing. Therefore, for a
company to attain the above operation features it must be ready to invest in information
systems through integration of data across all processes within an organization.
Consequently, the best way to realize success is through enhancing good information
management systems by applying different management information systems. Whereas, there
is an increase in the use of ERP systems, it adoption among SMEs is growing slowly,
therefore, there is need for an incorporated ERP system to retain features and circumstances
to realizing user information fulfilment, flexibility, improved system usage, scalability as

Strategic Information Systems 9
well as complete benefits which will lead to its implementation in SMEs (Olson, 2014). With
the aggressive speed with which ERP vendors are moving at to implement the integration of
ERP application into the SMEs market, ERP is likely to come up with a lasting solution in the
cloud and will help to sweep off the mythos that ERP is solely practical for large-scale
organizations (Cecez-Kecmanovic, Galliers, Henfridsson, Newell, and Vidgen, 2014, p. 809).
Therefore,s this paper makes use of SMEs as a case study in Australia to uncover the present
information system challenges and limitations, particularly since the SME is getting it costly
and difficult to integrate data with the increasing franchising.

Strategic Information Systems 10
Bibliography
Ahmad, C.S. and Malik, S., 2016. Critical Success Factors for Implementing ERP Systems:
Study in Context of SMEs in Pakistan. Abasyn Journal of Social Sciences–Special
Issue: AIC.
Chong, S., 2014. Business process management for SMEs: an exploratory study of
implementation factors for the Australian wine industry. Journal of Information
Systems and Small Business, 1(1-2), pp.41-58.
Cecez-Kecmanovic, D., Galliers, R.D., Henfridsson, O., Newell, S. and Vidgen, R., 2014.
The sociomateriality of information systems: current status, future directions. Mis
Quarterly, 38(3), pp.809-830.
Dwivedi, Y.K., Wastell, D., Laumer, S., Henriksen, H.Z., Myers, M.D., Bunker, D., Elbanna,
A., Ravishankar, M.N. and Srivastava, S.C., 2015. Research on information systems
failures and successes: Status update and future directions. Information Systems
Frontiers, 17(1), pp.143-157.
Stair, R., & Reynolds, G. (2017). Fundamentals of information systems. Cengage Learning.
Ram, J. and Corkindale, D., 2015. Developing a framework for the management of critical
success factors in organisational innovation projects: a case of enterprise resource
planning systems.
Seethamraju, R., 2015. Adoption of software as a service (SaaS) enterprise resource planning
(ERP) systems in small and medium-sized enterprises (SMEs). Information systems
frontiers, 17(3), pp.475-492.
Sedera, D., Gronau, N. and Sumner, M. eds., 2015. Enterprise Systems. Strategic,
Organizational, and Technological Dimensions: International Workshops, Pre-ICIS

Strategic Information Systems 11
2010, St. Louis, MO, USA, December 12, 2010, Pre-ICIS 2011, Shanghai, China,
December 4, 2011, and Pre-ICIS 2012, Orlando, FL, USA, December 16, 2012,
Revised Selected Papers (Vol. 198). Springer.
Tarhini, A., Ammar, H. and Tarhini, T., 2015. Analysis of the critical success factors for
enterprise resource planning implementation from stakeholders’ perspective: A
systematic review. International Business Research, 8(4), p.25.
Venkatraman, S. and Fahd, K., 2016. Challenges and success factors of ERP systems in
Australian SMEs. Systems, 4(2), p.20.
Tatoglu, E., Bayraktar, E., Golgeci, I., Koh, S.L., Demirbag, M. and Zaim, S., 2016. How do
supply chain management and information systems practices influence operational
performance? Evidence from emerging country SMEs. International Journal of
Logistics Research and Applications, 19(3), pp.181-199.
Ruivo, P., Oliveira, T. and Neto, M., 2015. Using resource-based view theory to assess the
value of ERP commercial-packages in SMEs. sComputers in Industry, 73, pp.105-
116.
Johansson, P.R.B. and Neto, T.O.M., 2017. The Drivers of ERP Value Among Scandinavian
and Iberian SMEs. Handbook of Research on Global Enterprise Operations and
Opportunities, p.17.
De Salas, K., Lewis, I.J. and Huxley, C., 2017. Using the critical process targeting method to
improve SMEs’ process understanding: A tale of two Australian case
studies. Business Process Management Journal, 23(2), pp.425-447.

Strategic Information Systems 12
Laudon, K.C. and Laudon, J.P., 2015. Management Information Systems: Managing the
Digital Firm Plus MyMISLab with Pearson eText--Access Card Package. Prentice
Hall Press.
Galliers, R.D. and Leidner, D.E. eds., 2014. Strategic information management: challenges
and strategies in managing information systems. Routledge.
Wager, K.A., Lee, F.W. and Glaser, J.P., 2017. Health care information systems: a practical
approach for health care management. John Wiley & Sons.
Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016. Managing and Using Information
Systems, Binder Ready Version: A Strategic Approach. John Wiley & Sons.
Power, D.J., Sharda, R. and Burstein, F., 2015. Decision support systems. John Wiley &
Sons, Ltd.
Olson, D., 2014. Information systems project management. Business Expert Press.