Strategic Information Systems in Automotive Industry

This report analyzes the implementation of Management Information Systems (MIS) in the Australian Motor Industry, focusing on the need for SAP Financial ERP to enhance operational efficiency and address challenges in accounting processes. It discusses the organizational structure, operational problems, advantages of ERP, industry challenges, and the competitive landscape, concluding that effective MIS can drive operational excellence and improve decision-making in the automotive sector.

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Strategic Information Systems
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Introduction
The foundation of manufacturing business has been temperamental and is very unpredictable
because of challenging business environment. As the competition is increasing day by day, it is
becoming threat to the survival of business. Hence, the strategic planning become necessary in
order to get the result. Management Information Systems (MIS) is the main element that
encourage as well as achieve effective leadership process in an association. This paper analyze
the degree by which administration data frameworks actualized influence effective vital
intending to process of automobile industry. It is necessary for the business in this competitive
environment, to implement some necessary elements like management information system for
achieving adequacy of the organization. MIS can be defined as the imperative component for
designing as well as implementing the strategies. In this paper, I have taken the automobile
industry “Australian Motor Industries” that needs to implement Financial SAP ERP due to the
complication in the processes of the industry. (Bogabol, A., O., A. & Dr. Musadieq, M., A.,
2014).
SAP Financial ERP consists of full integrated tools set that are used to automate as well as to
manage all the financial and accounting processes of the automobile industry. Its financial
activities includes ledgers, inventory management, and receivable as well as payable accounts. It
will help to automatically calculate tax like sales tax, value added tax or any additional tax and
will manage all the different currencies calculations. This ERP will help to manage all cash flow,
will monitor budget and also it will help to calculate revenue as well as expenses in very easy
steps. Hence, it will help to create balance sheet in easy processing. This ERP is very much user
friendly. It will also help to monitor all the processes of finances whether it is cheque payment,
credit card payment or cash payment. (SAP Business One, 2007).

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Organization Structure of Australian Motor Industries
Australian Motor Industry is a pioneer in the Australian car industry as well as it adds to the
economy of Australia through direct or indirect business, purchasing, the venture investment as
well as to maintain the revenue. The automobile industry has its distribution branch offices that
are spread in all territory Australian states. The industry's fundamental mission is to manufacture
the top automobile products as well as should be top in its services to the customers, community
as well as working environment. The organization has a number of employees who works in its
branch offices and the supplier network. In order to advance a developing manageable business,
they endeavor to be useful for the earth as well as the society. The main stakeholders they
include are suppliers as well as distributors. Their long term relationship with them is the reason
for success. The main problem they are focusing is lack of accounting processes. They are
required to implement MIS that can help to centralize their accounting data of all the distribution
centers. For this I have selected SAP Financial ERP that can help them to centralize all the
processes. (Toyota Motor Corporation Australia Limited, 2008).
Operational Problems
With the absence of ERP, the manufacturer lack the perceivability to the inventory, they mainly
face the problems of either less inventory whenever required or delivering excessively stock and
in this manner diminishing revenue with the increase in its expenses to distribution center
additional materials. If the required stock is not present in the warehouse, it can make the
wasteful aspects in the stockroom which helps to moderate its operations and also makes the
expenses. (Blanchard, D., 2013).

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To accomplish consistence with government directions, manufacturers must have the capacity to
follow each segment inside their individual items to seclude issues rapidly and with pinpoint
accuracy. With the absence of ERP, they precisely track singular receptacles, containers, as well
as packages as they course through the assembling procedure and the distribution chain. The
capacity to oversee production quality is main point to be considered to car producers. The
automobile industry is lacking to track ongoing information on all parts of assembling and
supply during manufacturing, and to store the information in documents for reviews or future
reference. Their procedure of dealing with all records on papers is moderate. They are also
unable to maintain and track their financial and accounting information on papers. They are
unable to manage changing tax rates. It is very difficult to keep the track of history like which
tool or raw material is used to make a particular type of car. (Plex, 2014).
Advantages of Implementing SAP Financial ERP in Automobile Industry
Considering the mission of Australian Motor Industry, controllership may enhance its business
viability and operational productivity using IT. The execution and the utilization of ERP
frameworks describes the adjustment in connection to past advancements, as business forms are
related by an automated flow of work and a solitary database. ERP frameworks force their
rationale on the procedure, the culture of the industry as well as on the association of the
organization; as their plan mirrors various theories that are related to the various processes of the
association and they are produced to demonstrate great business processes and generate high
revenue. The adjustments in the procedures and in the culture of the association are a part of the
intrigue processes in ERP frameworks. (Ebner, G. & Buvat, J., 2013).
Controllership is an authoritative region in automobile industry. ERP helps managers to improve
the decision making process in a very efficient way. Taking care of control demand requires data

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innovation. Hence we can say that by implementing ERP, the industry may add to and impact
Controllership capacities in their processes. The implementation of ERP for the motor industry is
appropriate when they are looking for the advantages of integrating and great practices for their
data frameworks that also includes various functionalities. It will help to advance data integration
over the association, for the most part created progressively, that is of top quality and without
any type of irregularities, with regularized systems. ERP frameworks prompt the
institutionalization of schedules and procedures and take into consideration the amendment of
procedures through great models, tried and working in various automobile organizations. (Lira,
A., M., D. & Parisi, C., 2012).
Industry Challenges for the Implementation Process
Implementation of an ERP framework is greatly challenging as it includes redesigning of all the
processes, changing observation as individuals approach their work. The good thing will be first
the inefficient processes should be known and then they must try to make processes better. (Dr.
Conteh, N., Y. & Akhtar, M., J., 2015).
By implementing ERP frameworks ordinarily prompts incorporation of information, which has
the impact of incorporating proprietorship. The implementation of ERP is able to change power
in the associations, generally supporting central organization to the detriment of auxiliaries. The
inspiration to embrace ERP frameworks was frequently financial as well as accounting based.
Producers are additionally persuaded by a want to supplant MRP frameworks, keeping in mind
the end goal to support complex operations including various plants, providers and for the
situation of multinational operations, managing various currencies. Demand for the advancement
of software engineers is low whereas it has higher demand of the user involvement.
(Soltanzadeh, J. & Khoshsirat, M., 2012).

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System Flow Chart of Sales Procedure
Contingent upon the request, that client demand can be naturally changed over into an objective
report such as quote, request, or receipt. An email with some tracking number which is
automatically generated can be sent physically or consequently. This tracking number will be
helpful for the follow up for a particular customer.
This tracking number can be helpful in updating the account status of the customer like last sales
made on which date, due payments etc. Client maintenance is a urgent mission for the

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automobile industry. This SAP ERP frameworks helps in emailing, generates sales requests to
follow up. The adequacy of promoting efforts can be measured by the income or gross benefit
created for this by connecting each archive like Receipt or Order to the pertinent crusade during
creation of invoice. This information can help in reporting. The process of pre-sales helps to
follow other sales activities before the order like it helps to generate quote for specific model. It
will help to meet unique customer's requirements. The ledger which is generated on monthly
basis will help to control financial activities. This ledger details will be linked with accounts
receivable, accounts payable, payroll as well as order costing functions that are parts of sub
ledgers. (Shukla, S., 2017).
Various Control Problems
Operational risk can be defined as various loss coming about because of lacking or failed interior
procedures, individuals or frameworks, or from outside happening. It incorporates notoriety and
distribution office related with a bank's business practices or market direct. It likewise
incorporates the danger of neglecting to agree to material laws, directions, Regulatory
Administrative Actions or bank's approaches. (Raman, R., 204).
The main operating risk in the implementation of ERP is the lack of the contribution from its
cross-utilitarian areas. Because of the optional idea of testing, numerous directors reduce the
testing to facilitate or meet the "go-live" date. Broad testing guarantees less costs for
maintenance during the post "go-live" period. The other risks are related with information
change as well as the validating insufficiency of organizing the time and required resources for
mapping MIS. In order to manage the change programs, organizations ought to altogether
monitor the processes and they must proactively asses the risks. Administrators are required to

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alter the framework until the point when it pushes back the schedules and it leads to increase in
the implementation expenses.
Numerous associations do not consider security seriously user access so as to minimize the costs
that are identified with the redesigning of process. This will make the pointless isolation of
obligations. Hence, security end user access ought to be driven by isolation of obligations and
access decides that are endorsed by internal as well as external auditor. (ERM Initiative faculty,
2014).
PART – 2
Accounting Software Package
Various transactions in SAP Financial ERP automatically locates various journal entries. Eg: a
products receipt is automatically generated that creates journal entries for updating inventory and
valuation and updates relating cost accounts. Primary accounts can easily be configured utilizing
standards, so the correct general record accounts are utilized as a part of every transaction. In
month-end closing process, ERP will help to develop financial statements that can help to make
better business decisions. It will help to reduce errors. We can easily get the financial
information what is required and that will reduce the time. External bank statements can easily
be generated which can produce incoming as outgoing payments and to accommodate balance
sheet. Furthermore, you can utilize a compromise engine to coordinate the due payments that are
not accommodated consequently. Various reports can also be generated using Financial SAP
ERP like balance sheet, profit and loss statements, budget reports etc. (SAP Business One,
2015).

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Current Market Size
German software designer SAP financial ERP is the worldwide leader in ERP (endeavor,
planning, and resource) application programming, having market share of 40% in 2015 and
yearly incomes surpassing $6 billion SAP has a lead over Microsoft and is the most well-known
programming for financial solution inside this group of organization. Among multinationals SAP
is the reasonable top choice, as 50% are using SAP. ERP programming sales add to around 31%
of SAP's stock cost, and is the most essential driver for the organization. SAP offers ERP
programming modules that serve organizations crosswise over different working groups that
enables them to oversee and upgrade their assets through its items, incorporating SAP financial
ERP. (Trefis Team, 2014).
Competitive Advantages
The main competitor of SAP ERP is NetSuite ERP. With the managing banking as well as
compromise tools that are available in SAP Financial ERP, it gets easy to process all the
payments that includes bank transfers, managing cash, check payment or any other bank
reconciliation statement. It also helps to support automatically tax calculation and have feature to
handle multicurrency transactions. Posting formats and repeating templates additionally
streamline as well as improve the accounting process. (SAP Business One, 2016).
Conclusions
In synopsis, implementation of management information system in fabricating procedures will
drive operational perfection by improving data flow and will help to remove waste crosswise
over assembling, production supply chain administration as well as the service operations.
Assembling associations ought to understand that advanced innovations offer them the better

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chance to productively interface procedures and individuals, and utilize data viably without
availability gaps. They ought to likewise consider lessons learnt from the prior era of innovation
organizations furthermore, avoid taking a storehouse based approach towards operational
excellence. Rather, the concentrate should be on utilizing digital technology to influence data
and drive operational perfection.
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