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The following three ERP solutions by were explored for a for small to large companies. The first two solutions require that the company: 1) host data on its premise, 2) use hardware owned by the company, and 3) use a preconfigured, but customizable, solution based on industry practices. SAP Business One is for small businesses, defined as companies with users ranging from 3 to 100 or with $40-50 million in revenue. This small business solution is quick and easy to implement, however limits future growth due to the scalability of the package. Due to the growth limitation, this solution is a lower investment than the other two options. SAP Business Suite is similarly hosted on premises, but intended for a medium to large sized business with a minimum of 100 users. It differs from SAP Business One because it is scalable, and a company can use it as it grows, even to the size of a company like Walmart. SAP Business byDesign is a Cloud-based ERP for business with a range of 15 to 300 users. This great range provides versatility in company types that leverage this product solution. The Business byDesign is part of SAP’s most recent product High Performance Analytical Appliance (HANA) launch. With this recent product enhancement, in-memory computing enables complex data to be accessed seamlessly on mobile devices. Experts expect that this will drive most of SAP’s growth (“Key Trends, 2014). ERP has been estimated to take 18 months to install and the investment can range from hundreds of thousands to millions of dollars. (Clash of the Titans, 2014). With the investment being so high it is important to understand the complex decision and plot the implementation. There have also been times when the implementation of ERP systems go awry (Gallaugher, 2014).
SAP ERP consists of several modules: utilities for marketing and sales, field service, product design, development, inventory control, human resources, finance and accounting. SAP ERP collects and combines data from the separate modules to provide the company or organization with enterprise resource planning. With these modules, the business will acquire intelligence that improves functionality, integration, flexibility, openness, reliable that leads to potential cost savings and efficiencies.
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SAP’s ERP operates at the core of IT departments. It makes communication between departments and lines of business function more efficiently with each other. It enables managers to make good decisions using data from the system. Perhaps, more importantly, it can automate crucial business functions and eliminate the risk of human error. “‘The CIO of Colgate Palmolive also praised their ERP, saying, ‘The day we turned the switch on, we dropped two days out of our order-to-delivery cycle.’” (Gallaugher, 2014).
In the context of IVK, as described in “Adventures of an IT Leader,” Austin, et al (2009), the firm could benefit from SAP ERP to help manage loan operations. SAP ERP’s Business Suite is recommended for IVK, using the “General Services” configuration and to work with one of SAP’s representatives to customize the software to meet IVK’s needs. The key features that make Business Suite the best choice are that it is scalable and that it is not cloud-based, eliminating privacy concerns. IVK already has its own IT department, and can utilize SAP’s online learning systems to train and certify the department’s staff. SAP has a cost configuration online, and the minimum investment to implement SAP ERP is $579,000 with a maximum of near $1,300,000 (see cost analysis in EA3). It should be noted however, that ERP is rarely a one-time fee, and because of decreasing competition, firms are raising service costs. Both the firm, IVK, and it’s IT department are experiencing changes and IVK is likely to face an IT reorganization. “Experts warn, however, that this isn't always a necessary or prudent path. ‘Reorgs should have a strategic rationale behind them, not just a sense, for example, that it's been awhile since the last reorg,’ says Stansbury [CIO of GE Capital Treasury.]” (Hein, 2014.). Jim Barton, will need to find ways to use IT to recover its former growth, cut costs, and enable efficiency for the firm’s operations. However, “Without behavioral shifts by senior leaders, their organizations won’t realize the full power of the artificial intelligence at their fingertips.” (Dewhurst and Willmott, 2014.) Using SAP ERP, Jim Barton can implement a rapid, user-friendly system, and they could install other modules of an ERP suite for each department that can be useful to coordinate and integrate many of the functions of IVK.
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ReplyDeleteThis detailed analysis highlights the crucial role of SAP ERP in optimizing business operations. Specifically designed for medium-sized enterprises, it offers scalability without compromising privacy. The automation of business functions and the resulting efficiency are key aspects for success, especially in sectors like finance. I strongly recommend SAP for medium enterprises seeking to enhance the management and coordination of their operations.
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