Answer To: ITECH 5402 – Enterprise Systems Assessment Tasks 4&5 – Research Report and Presentation (Percentage:...
Nerdexpert answered on May 28 2021
Introduction
The current research has two variables: ERP system and digital business transformation. The research aims to link the role of ERP system in resulting digital business transformation. Therefore, understanding what digital business transformation is will help the research to explain how ERP enables it. Digital business transformation is the change of organizational process, activities, and competencies with the help of digital technologies. This change impacts on the society, economy and technology as the managers takes digital transformation as a strategic priority. ERP software was formerly introduced as a replacement of MRP software and since that time it gains considerable popularity among business software tools. The main functions of ERP is to assist the managers in enterprise resource planning through various activities, like automated process in workflow, data centralization, adaptability with changes and decision making. It constantly helps the managers by delivering real time data of the external and internal business area and centralizes the data. The following report attempts to give deeper insight on the role of ERP in the digital transformation of business. In this effort, the research includes a real life example of an example of ERP implementation in the case study section.
Theoretical foundation
The research analyses decision usefulness theory to describe the influence of ERP in deriving segmental information and delivering cohesive information.
Decision usefulness theory:
The Decision usefulness theory was propounded in 1955 during the period when the stakeholders were struggling to find the financial statement to support their opinion on decision making. This theory gives the reader realization that financial statement is an essential report for the decision makers; according to this theory, the usefulness of financial information delivers benefit to the external environment of the business. The lack of information in the financial information leads to wrong decision making and confusion of the stakeholders. The theory aims to increase the relevance level in financial information. Later, (Alsène, 2007) added to the Decision usefulness theory that the adequate information in financial report assists the investors to determine the future performance. Therefore, clarification of financial report is required to derive more satisfactory results. (Chauhan, Dwivedi & Sherry, 2012) explains that financial report possesses qualitative and quantitative data which support the stakeholders or the decision makers to evaluate, analyse and recommend.
The strategies of ERP software
Resource allocation
ERP helps the organizational operations like resource allocation through its data driven strategy. The resource allocation refers to the allocation of human resource or employees and also allocation of physical resources like buying equipment for the business. The managers’ work is challenging as they have to put the right resource at the right place at the right time which are specific o their organizational needs. The weaker resource allocation creates issues like low utilization of employees’ potentiality, delaying of tasks, continuous changing of project planning etc. In order to manage this, the managers hire the contractors when the deadline is near. As a result, it deduces their company profit and also creates dissatisfaction among the customers. ERP software eases off the task of resource allocation and resource management by focusing on the financial decision which will give direct impact on their revenue. ERP helps the managers in allocation among a large number of resources by matching the skills of the employees with the work by understanding their skill levels. In modern data science, could base ERP software aligns the human resource management and revenue management by delivering the financial data which gives insight on the possibilities of business and this insight helps to create action plans of the business
Segmentation of data
The ERP system allows a business to focus on only the required data instead of every touch point of this data through their segmentation principle. They develop a hierarchy of metrics which better assists them to focus on their business objective. Cloud ERP system divides the organizational activities in different segments and collects the informative insight for improving the efficiency of the internal activities. It segments the organization’s internal data by its departments like operational management, resource management and resource planning, revenue management, sales management etc. Modern business organizations uses cloud ERP which helps them to segments the market which helps the managers to understand the new customer demands in each segments and the revenue margin of the company related to these segments. This way, the ERP software integrates the external data with the internal financial data and assists the managers in decision making.
Future growth plan
ERP implantation gives organizations an opportunity of transformation by assuring the greater visibility of all corners of a business. The organizations are using ERP data to gain competitive insight which helps them to create growth strategy. The ERP delivers real time information to the businesses by the support of an augmented intelligence, like PSA or Professional service automation. This tool helps the managers to get accurate and real time information across the industries that are compared with their own performance data. This augmented intelligence also collects the internal information like data of business performance and integrating these data, the managers makes future growth action plans. For example, in order to be aligned with the company vision, the managers of a manufacturing company have to be assured that they are storing right amount of inventory; to create a forecast plan, they need to know the financial data derived from the sales and revenue department. The decision support tools of ERP supports the managers of the early warning of a decision.
Customised ERP
In order to identify the particular...