Issues Associated With Disparate Systems And ERP Systems

Question: Discuss the issues associated with disparate systems and how ERP systems overcome these issues? Answer: Issues with disparate systems The growth of the disparate system was once much acclaimed and it helped the business process to centralised the business data. However, with the growth of the business this system started creating data integration issues. According to Sullivan (2014) the disparate systems have lived their life while the scale and the span of the business was small. It became very difficult for the organizations to deal with the disparate systems when their business has expanded in multiple areas and multiple regions. The major issues that rose with the disparate systems are: Burden of managing multiple data sources Multiple unsynchronised window for each of the separate operations Higher chances of data redundancy Higher system maintenance cost (com, 2014) These are the four key reasons for which the disparate system became an unfeasible option for the most of the companies in present condition. The Capitol Coffee is a leading coffee service company with having multiple outlets in different locations. The business growth of the company started decreasing as the number of points increased. While analyzing the case it has been found that due to the disparity in the companys communication and reporting system the entire business process started losing its competency within the market (Netsuite.com, 2015). Encountering issues with ERP systems Figure 1: Simple ERP 3-Tire Architecture (Source: Haddara, 2014, pp.395) The birth concept of the ERP system was to develop and deliver such a kind of system that will provide an integrated platform for the different business purposes. According to Zensar.com (2014) the main challenge for the development of the ERP systems was to develop a single platform through eliminating the data processing disparity and connecting the multiple nodes into one single process. The other challenge was to determine the integrating business logic for the KPIs for different business processes. Therefore, while encountering the disparate system issues the ERP system development it has followed a systematic process through dividing the entire business process and its view into four distinctive processes. These levels are: Management Level view User level view Implementation/Vendor view IT level view for in-house support (Kumar et al. 2014) This segregation has enabled the companies to integrate the entire process according to the business logic. It has provided the much-required integrated platform through single database that allows the uniformity of the business process. Through the figure 1 it is very much evident that for the operation an ERP system uses a single database and multiple terminals. Therefore, through using the single database model it eliminates the chances of data redundancy, higher operational cost. Through following these basic measures, the ERP system successfully encountered the issues with the disparate systems. Sportingbet is the biggest bookmaker and service provider. In 2012, they have encountered a major problem in managing the business operation. The real time operation management and the data integration are very much important for them. However as they were using a disparate system it became very much difficult for them. Therefore, to encounter this issue they have implement the Biztalk and Azure architecture with SQL Database and soon it helped them to increase their profit (Breeze.net, 2013). Importance of Integration Integration of ERP system helps a company in multiple ways. According to Greenbeacon.com (2014) the key benefits what a comprehensive integration can provide to the companies are: It provides structured and systematic control over the financial issues through maintaining the country specific and region specific rules. It helps to increase the financial transparency for the company (Pan et al. 2014). Single interface through a common database helps the companies to increase the operation and the control efficiency. The single user interface with different view level s enables the quick access of the appropriate control. This integration enables the top management to monitor their business and to monitor the business and the product life cycle (Abbasi et al. 2014). It streamlines all the resources associated with the business and provides a cause-effect relationship view of the resources. This cause-effect relationship enables the companies to identify the key resources and helps to manage those resources to improve the business efficiency in the global environment (Kumar et al. 2014). The ERP integration enables the companies to automate their business. This automation provides greater level of accuracy in business forecasting. This forecasting accuracy will help the companies to define their business strategies to encounter the probable business challenges of coming days. A case study produced by Kinetic Information Systems (2014) on the Griffiths Equipment reflects that the profit level of the company decreased even though the product sales have grown for the company. Therefore, while Kinetic Information Systems interpreted their business structure it has been found that the data redundancy, handling errors and the unsynchronised business errors are increasing the operational cost for the company. This was majorly decreasing their profit. However, after the implementation of the ERP system and an integrated mobile application dramatically increased the efficiency of the company. It has been observed that the accuracy level has been increased to 99% and the error occurrences within the process reduced by 80% (Kinetic Information Systems, 2014). Issues with integration The major issues rise while an integration of the ERP system is done for any company are:1. Lack in System analysis while the application development has been done for the company.2. The lack in training and development for the in-house staffs. It has been observed that some of the companies have faced major challenges in the middle of the ERP implementation and after the implementation. The only reason for this incident is that the lack of training and development of the staffs who will operate the system.3. Compatibility is a major issue with the ERP implementation. The ERP modules are very much vendor specific. Therefore, while implementing the ERP solution for an existing system the compatibility becomes a major issue for both the vendor and the company.4. Over the years, it has been found that the funding has been a major issue for the ERP implementation. The cost of ERP implementation is very high and this costing increases if the development and implementation prolongs. This i ncreasing cost sometimes hits directly to the profitability of the company. Benson Hedges encountered loss in 2009 due to the higher SAP implementation cost (Sullivan, 2014). Overcoming the integration issues To overcome the integration issue most of the IT companies follows an integrated team approach for the development and the implementation of the ERP system. In the development stage they extensively communicates with the management for identifying and developing a logical structure for the relating the KPIs. In the middle of the development the implementation, they start providing training to the employees for the operation process. These measures help in reducing the errors and issues in the developing and implanting the ERP system (Pan et al. 2014). Nature of achievement gained through encountering integration issues The encountering the identified issues will help to gain the knowledge on the following aspects. 1. Will help to develop an integrated development cycle within the development stage2. Will help to identify the key logical factors that help in developing a integrated data flow structure within the key KPIs.3. Will help to design more structured training and development program for the employees so that no unfavourable incidents happens in the middle of the implementation or after the implementation (Haddara, 2014). These lessons will help in increasing the efficiency for the development and implementation of ERP for any company. Reference List Books Pan, J., Snasel, V., Corchado, E., Abraham, A. and Wang, S. (2014). Intelligent Data analysis and its Applications, Volume II. Dordrecht: Springer. Sullivan, G. (2014). Surviving in SAP Projects. New York, NY: Galileo Press New York. Journals Abbasi, S., Zamani, M. and Valmohammadi, C. (2014). The effects of ERP systems implementation on management accounting in Iranian organizations. Education, Business Society, 7(4), pp.245-256. Haddara, M. (2014). ERP Selection: The SMART Way. Procedia Technology, 16, pp.394-403. Kumar, L., Rao, M. and Viswanadham, P. (2014). Addressing the Issues and Challenges in Implementation of Ias Ifrs With Oracle Erp. IOSRJEF, 4(5), pp.45-49. Websites Breeze.net, (2013). Sportingbet | Breeze. [online] Available at: https://www.breeze.net/customers/sportingbet [Accessed 13 Jan. 2015]. Greenbeacon.com, (2014). Enterprise Resource Planning (ERP) Benefits. [online] Available at: https://www.greenbeacon.com/GreenBeaconWebsite/Microsoft-CRM-ERP-Solutions/EnterpriseResourcePlanningERP.aspx [Accessed 13 Jan. 2015]. Kinetic Information Systems, (2014). Automotive. [online] Available at: https://www.kineticis.com.au/case-studies/automotive/ [Accessed 13 Jan. 2015]. Kinetic Information Systems, (2014). Griffiths Equipment. [online] Available at: https://www.kineticis.com.au/case-studies/automotive/griffiths-equipment/ [Accessed 13 Jan. 2015]. Netsuite.com, (2015). Capitol Coffee Systems Case Studies - NetSuite Australia. [online] Available at: https://www.netsuite.com/portal/au/customer-testimonials/capitol-coffee-wholesale-distribution.shtml [Accessed 13 Jan. 2015]. Zensar.com, (2014). Replacing Global IT Islands (Disparate Systems) with SAP Business Suite Software. [online] Available at: https://www.zensar.com/downloads/case-studies/1933-replacing-global-it-islands-disparate-systems-with-sapr-business-suite-software [Accessed 13 Jan. 2015].