Chapter 3 : Strategic Initiatives for Implementing Competitive Advantages

Enterprise Resource Planning System

The Importance.

An ERP combines several traditional management functions into a logical integrated system and facilitate flow of information across these functions. It is designed to model and automate basic processes across the organization over a centralized database and eliminates the need of disparate systems maintained by various units of the organization

Business integration and Improved Data Accuracy: 

 ERP system is composed of various modules/ sub modules where a module represents a particular business component. If data is entered in one module such as receiving, it automatically updates other related modules such as accounts payable and inventory. This updating occurs at real time i.e. at the time a transaction occurs. Since, data needs to be entered only once at the origin of transaction, the need of multiple entries of the same data is eliminated. Likelihood of duplicate/ erroneous data is, therefore, minimized. The centralized structure of the data base also enable better administration and security provisions, which minimizes loss of sensitive data.   

Planning and MIS: 

 The various decision support tools like planning engines and simulations functions, form integral part of an ERP system which helps in proper utilization of resources like materials, human resources and tools. Constrained based planning help in drawing appropriate production schedules, thereby improving operation of plant and equipment. As a part of MIS, an ERP system, contains many inbuilt standard reports and also a report writer which produce ad hoc reports, as and when needed. 

Improved Efficiency and Productivity: 

 In addition to provision of improved planning, ERP system provides a tremendous boost to the efficiency of day to day and routine transactions such as order fulfillment, on time shipment, vendor performance, quality management, invoice reconciliation, sales realization, and cash management. Cycle time is reduced for sales to cash and procurement to pay sequences. 

Establishment of Standardized Procedures: 

 ERP system is based on processes of international best practices, which are adopted by the organizations during implementation. Department silos are purged and maverick practices are done away with. Because of top down view available to management, chances of theft, fraud and obsolescence are minimized. 

Flexibility and technology: 

Due to globalized environment, where production units, distribution centers and corporate offices reside in different countries, organizations need multi currency, multi language and multi accounting modes, in an integrated manner. These provisions are available in most of the ERP systems, particularly in products offered by tier 1 and tier 2 vendors. ERP vendors are also quick to adopt latest technologies, from mainframe to client server to internet. Unlike a bespoke system, Upgrading to latest technology for a running ERP system is uncomplicated, involving mostly adoption of service packs and patches.

Exercise Chapter Two Case : Say "Charge It" with Your Cell Phone

Questions & Answers

1. Do you view this technology as a potential threat to traditional telephone companies? if so, what counter strategies could traditional telephone companies adopt to prepare for this technology?

Answer : Yes, traditional telephone companies have to upgrade their technology for in tandem with other companies. Example, traditional telephone companies upgrade their microchips and be creative in their telephone design. Also, they have to make traditional telephone more appealing to people and possibly cheaper packages then what they already have.

2. Using Porter's Five Forces describe the barriers to entry for this new technology.

Answer : 

Entry Barrier -  traditional telephone companies must offer customer an array of services that this new technology will provide.

Supplier Power - traditional telephone companies have to find the suitable supplier to determine the right price. Also, they have to find the suitable supplier for the right technology.

3. Which of Porter's three generic strategies is the new technology following?

Answer : 

Focused Strategy - target a specific market.

Targeting the growing market of cell phone users and purchasing products and services from the cell phone.

4. Describe the value chain of the business of using cell phones as a payment method.

Answer : Value chain increase the infrastructure of phone companies and improve technology development by using the payment method can receive or store information from the consumers purchases and send that to the phone company. More people will engage in this type of payment method.

  

5. What types of regulatory issues might occur due to this type of technology?

Answer : People will be skeptical with putting personal information out there not knowing what kind of security protection the company has. Anyone will find a way to hack into cell phones.

Chapter One : Business Driven Technology

Nowadays, electronics that connect to one another are found anywhere and improve technology such as Bluetooth eliminates many of the wires that clutter at homes and office.

IT’s has impact on business operations such as on reducing costs in paper and time. Before technology widely use, paper is one of the medium to deliver information. With technological development, information can be delivered in instant. With the growing technology, a company can increase productivity by promoting products through domains and nowadays a lot of people prefer to visit domains rather than go to the shop. Other than using the usual approach, it can also increase profits by increasing sales in various ways.

Information technology basics are covering in two which are Information Technology (IT) and Management Information Systems (MIS). Information Technology (IT) is related to the use of technology in managing and processing data. Its covering many filed that deal with the use of electronics computers and software to store, covert, protect, process, transmit and retrieve information securely. It is important component for company to reach business success and innovation. It cannot be useful for those who not understand unless there are the right people know how to use it effectively.

Management Information Systems (MIS) is a business function for marketing, finance, operations and human resources to collecting information and solve business problems. Basically, this MIS is business function and academic discipline covering the application of people, technologies and procedures. There are three important elements of MIS and the first important elements are data, information and business intelligence. Before it gathers as information, raw facts such as date, item number, item description, quantity ordered, customer name, shipping details are characteristics of an event and after that, the data will converted into meaningful and useful context. The information will be analyze and making efforts to support the decision. This way helps companies gain a more comprehensive knowledge of the factors affecting their business.