Question

You are the Information Systems (IS) Manager of
Ramsys IT Solutions. The Board of Directors of your
company has decided that your company should
purchase a new Information System software for its
use.
(a). Explain four factors that your company should
consider before (or when) sourcing for an ERP; and
provide appropriate reasons to justify your answer.
(b). Describe three strategic business objectives/benefits
that your organization can derive from its
investments in, and use of, the proposed Information
System.
(c). Explain the interdependence between an organization
(like Ramsys IT Solutions) and its Information
System, if any; and give practical examples to justify
your answer.

Answer 1

Ans:

Part a.)

We all appreciate that an ERP system is a large software purchase that costs time, effort and money. So how do you ensure that this investment pays dividends, immediately and into the future?

The short answer lies in partnering with the best ERP software experts for your industry. "Enterprise Resource Planning" system is a business management application that allows an organization to visualize all core business processes in an interrelated and integrated manner.Industry 4.0 (deemed the fourth industrial revolution) has brought about rapid change and digital transformation. It has also paved the way for businesses to reap the rewards of successful ERP implementations. With process and data automation, integration, increased efficiencies and many other business benefits, the question is no longer whether to invest in ERP but rather how best to go about it.
Here are some of the critical factors to consider when deciding on the best ERP fit for your business:

1. Successful ERP Implementation -

Technology is only as good as its implementation. Your ERP supplier should have the knowledge and experience to adhere to project management best practices from the outset, with all controls and governance activities strictly managed to ensure that all objectives and expectations are met. Ask to see testimonials from other customers within your industry to ensure that your potential ERP supplier delivers on its promises.

2. Support Wide Range Business Needs Integration -

The ERP system should ensure the integration of a wide range of business processes involved in the organization.

Because, through the ERP system only, the organization wants to make an end to end connection of business units.
For example, a newly created order automatically initiates processing of credit check, makes a view of product availability and updates the distribution schedule. Later when the order will be shipped, the invoice should be sent.

3. Long-term Continuity

A strong track record of success speaks for itself. Apart from the reasonable expectation of robust industry-proven software and great customer service, you can safely assume that a well-established ERP provider is here for the long haul, and has a vested interest in your current and future success.

4.Embracing the Age of Digital Disruption

With Artificial Intelligence (AI), cloud services and the Internet of Things (IoT), we’re living in a digital age that demands we stay ahead of the technology curve in order to remain competitive. Ensure that your ERP provider is up to the challenge, with a scalable, future-proof system that embraces new technologies and allows your business flexibility in how and where you work.

Part b.)

Although many managers are familiar with the reasons why managing their typical resources such as equipment and people are important, it is important to examine the growing interdependence between a firm’s ability to use information technology and its ability to implement corporate strategies and achieve corporate goals. Information technology and systems have revolutionized firms and industries, becoming the largest component of capital investment in the U.S. and many industrialized societies. Investment in information technology accounts for approximately 50 percent of all capital invested in the United States. Information systems are transforming business and the visible results of this include the increased use of cell phones and wireless telecommunications devices, a massive shift toward online news and information, booming e-commerce and Internet advertising, and new federal security and accounting laws that address issues raised by the exponential growth of digital information. The Internet has also drastically reduced the costs of businesses operating on a global scale.
There is a growing interdependence between a firm’s information systems and its business capabilities. Changes in strategy, rules, and business processes increasingly require changes in hardware, software, databases, and telecommunications. Often, what the organization would like to do depends on what its systems will permit it to do.
Specifically, business firms invest heavily in information to achieve six strategic business objectives:

1. Operational Excellence

Businesses continuously seek to improve the efficiency of their operations in order to achieve higher profitability. Information systems and technologies are some of the most important tools available to managers for achieving higher levels of efficiency and productivity in business operations, especially when coupled with changes in business practices and management behavior.

2. Improved Decision Making

Information systems and technologies have made it possible for managers to use real-time data from the marketplace when making decisions. Previously, managers did not have access to accurate and current data and as such relied on forecasts, best guesses, and luck. The inability to make informed decisions resulted in increased costs and lost customers.

3. Competitive Advantage

Doing things better than your competitors, charging less for superior products, and responding to customers and suppliers in real time all add up to higher sales and higher profits that your competitors cannot match. Toyota and Walmart are prime examples of how companies use information systems and technologies to separate themselves from their competition. Toyota worked its way to top of its industry with the help of its legendary information system. Walmart is the most efficient retail store in the industry based in large part on how well it uses its information resources.

Part c.)

An information system provides a solution to a problem or challenge facing a firm and provides real economic value to the business. The decision to build or maintain an information system assumes that the returns on this investment will be superior to other investments in buildings, machines, or other assets. These superior returns and interdependence between an Organisation and its information system will be expressed as:

Information Technology in Stakeholder Integration
Stakeholder integration is another important objective of information technology. Using global 24/7 interconnectivity, a customer service call originating in Des Moines, Iowa, ends up in a call center in Manila, Philippines, where a service agent could look up the relevant information on severs based in corporate headquarters in Dallas, Texas, or in Frankfurt, Germany. Public companies use their investor relations websites to communicate with shareholders, research analysts and other market participants.

Information Technology in Process Improvement
Process improvement is another key IT business objective. Enterprise resource planning (ERP) systems allow managers to review sales, costs and other operating metrics on one integrated software platform, usually in real time. An ERP system may replace dozens of legacy systems for finance, human resources and other functional areas, thus making internal processes more efficient and cost-effective.

Information Technology and Cost Efficiencies
Although the initial IT implementation costs can be substantial, the resulting long-term cost savings are usually worth the investment. IT allows companies to reduce transaction and implementation costs. For example, the cost of a desktop computer today is a fraction of what it was in the early 1980s, and yet the computers are considerably more powerful. IT-based productivity solutions, from word processing to email, have allowed companies to save on the costs of duplication and postage, while maintaining and improving product quality and customer service.

The technical approach to information systems emphasizes the “hard” side of technology. The behavioral approach to information systems emphasizes the “soft” side of technology. As technology plays an increasing role in a business’s success or failure, it’s important to mesh both sides. Adopting a sociotechnical systems perspective helps avoid a purely technological approach to information systems. Organizations can achieve more efficient and effective organizational performance by jointly optimizing both the social and technical systems.

There are three ways an information system can practically add value to a business:

• Help managers make better decisions
• Help make business processes more efficient
• Increase profitability

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