Over the years, the use of information systems by business enterprises has been on the rise. Most organisations use transaction processing systems that help to capture data items which are later passed to decision support systems to support the decision making process. Drawing from a study by Baltzan, Detlor and Welsh (2012), it is imperative to tightly integrate the different information systems in an organisation in order to ensure that data is handled effectively.
Generally, the integrated information system is referred to as an Enterprise Resource Planning (ERP) system. According to Rajesh (2011), an ERP system is a critical application that permits organisations to handle all processes through a central application. The use of ERP systems enables organisations to improve efficiency and provide high quality services to clients. This paper presents a discussion on enterprise information systems and new developments in the field of enterprise computing. It also looks at the challenges associated with enterprise computing.
Enterprise Computing Challenges
Generally, it is important for organisations to stay in touch with changes and challenges presented by technological advancements. As pointed out by Baltzan, Detlor and Welsh (2012), technological change and challenges have an effect on competition as well as on consumer behavior. In addition, technology provides organisations with an opportunity to do things differently. As a consequence, organisations are challenged to continue monitoring new developments in the marketplace in order to take advantage of new innovations. Some of the notable trends in the marketplace include the desire by many organisations to employ strategies that help to conserve the environment.
Many organisations are, for example, relying on affordable social networks to communicate or work on joint work assignments. Originally, so much print work had to be done and information was mainly passed around through books and numerous sheets of paper. Despite the fact that hard copies are still preferred by some organisations, their usage has drastically reduced in other places.
As noted earlier, technological changes present serious challenges to organisations. Any organisation with a desire to grow in the modern day business environment must thus make every effort to understand the changes and challenges that come with technology in order to make the necessary adjustments across the organisation and compete successfully. A good understanding of change and challenges as a result of advances in technology also helps organisations to devise new strategies that guarantee success. According to Baltzan, Detlor and Welsh (2012), the changes and challenges that are faced by organisations in the contemporary business world include the need to innovate, social entrepreneurship, the use of social networks, and virtualisation.
Unquestionably, organisations must continually innovate so as to stay relevant and be able to deal with stiff competition witnessed everywhere in the present business environment. Organisations must strive to come up with new things that will delight existing customers and help in attracting new customers. Among other things, organisations must determine what they are good at and work hard to provide excellent products and services in the chosen field. It is advisable to identify specific locations that can be used by employees for innovation purposes. Organisations should also have a reward scheme to recognise outstanding employees who work hard to innovate.
Diversity should also be encouraged in organisations. Among other things, diversity improves creativity considering that employees from different backgrounds bring different skills and perceptions that can be very useful to an organisation. Social entrepreneurship is mainly concerned with how an organisation can go green and contribute toward environmental conservation. It is about organisations being responsible for their actions and ensuring that everything is done to benefit all and not just a few individuals or organisations. Social entrepreneurship aims to control how energy is consumed, promote recycling of information technology equipment, and encourage individuals to go green.
Social networks facilitate interactions and collaboration using the Internet infrastructure. In the present business world, many organisations have turned to the use of social network to carry out business operations which include marketing activities. Specifically, organisations have been able to attract new customers using social network such as Facebook, Twitter, and LinkedIn. Despite the fact that a huge percentage of organisations are yet to adopt the use of social networks, these networks form a very strong foundation for business growth. Finally, virtualisation has completely transformed the business world. Through virtualisation, organisations get to create virtual teams used by employees scattered in different places around the world to work on joint tasks. The use of virtualisation also supports diversity and encourages creativity across the organisation as employees get an opportunity to learn from one another.
There are other challenges experienced by organisations as far as the use of ERP systems is concerned. The software used, for example, is usually complex and often requires adjustments in order to fit in a given situation. Adjustments are necessary because ERP systems are mostly designed to meet the needs of an entire industry.
Enterprise Resource Planning as a Management Approach
As has already been explained, an ERP system allows organisations to combine internal processes into one information system. Typically, the integrated information system permits organisations to handle operations such as procurement, human resource management, manufacturing, finance, and distribution from one single point. In management, ERP systems simplify the process of monitoring work flow processes across an organisation. Through the use of an integrated information system, organisations are able to reduce the cost of business operations and avoid the duplication of data mainly associated with the use of separate systems (Rajesh, 2011).
Besides helping an organisation to deal with business related issues as they arise, ERP systems allows users to automatically generate reports used for decision making (Baltzan, Detlor & Welsh, 2012). However, to ensure that the implementation of an ERP system is successful, it is imperative for organisations to spend as much time as possible to train users and to ensure that they are competent enough to use the ERP system with little or no challenge. As a management approach therefore, ERP systems improve organisational efficiency and ensure that growth is realised throughout an organisation. In addition, ERP systems enable users to gain access to any information they require in order to perform their duties.
Components of ERP Systems
The four common components of an ERP system are business intelligence, customer relationship management, supply chain management, and e-business. Business intelligence gives a description of the information that is needed to support the decision making process in organisations. The customer relationship management system helps to handle customer issues while supply chain management is used to manage the supply chain in order to ensure a smooth interaction with members of the supply chain (Oz, 2008). Finally, e-business provides a means for organisations to carry out business operations via the Internet infrastructure.
Business Value of Integrating Information Systems
By ensuring that an ERP system is implemented successfully, organisations benefit in many ways (Sousa & Oz, 2014). As has already been explained, ERP systems serve a very important role of bringing together various business processes in order to improve efficiency. Using an ERP system, organisations can integrate information systems that deal with the management of materials as well as sales and distribution functions in an organisation.
The integration of separate business information systems creates a single processing location that is centralised. ERPs also help to reduce the cost of operating a business. In addition, the use of ERP systems permits organisations to improve on efficiency and to delight customers with high quality services. According to Sousa & Oz (2014), ERP systems help organisations to move away from the traditional setup of functional units to business processes.
In general, this enables organisations to operate much better. Suppliers and customers, for example, do not care whose responsibility it is to think about their orders and payments. As a result, organisations are better off planning and managing processes instead of managing organisational units. Despite the risks and high costs involved, a growing number of companies adopt ERP systems for their business operations.
There are drawbacks associated with the use of ERP systems. As noted by Leon (2008), it is not easy for managers to generate reports normally used for decision making. Consequently, managers are unable to obtain critical information in good time. Furthermore, ERP systems provide users with current status only whereas managers need to examine records beyond the current status alone in order to make complete decisions.
Measuring ERP Success, Selecting ERP Software, and Using ERP in Small and Medium Enterprise (SME) Markets
To measure the success of ERP systems it is imperative to consider how satisfied users are with the use of the system. In addition, organisations can measure the success of ERP systems by checking performance against set targets or goals. Usually, a successful implementation of an ERP system facilitates the achievement of organisational objectives. Generally, the selection of an ERP system is an elaborate process that must be undertaken very keenly. One of the critical things that must be done by the selection team is to conduct a thorough background check of all vendors who submit their documents for consideration. To a large extent, SMEs represent a profitable market for developers of ERP systems. Research indicates that SMEs have been increasing their expenditures to improve their business operations over the years (Monk & Wagner, 2012). Apparently, the best ERP system for SMEs is SAP since it does not require major adjustments before it can be used in a particular business setup.
By integrating information obtained from separate functions within an organisation, ERP systems present a valuable strategy for handling business operations and improving performance. Beyond any reasonable doubt, ERP systems are vital for strengthening an organisation’s performance and ensuring that it can compete successfully.
As explained in this paper, changes and challenges that come with technological advancements require organisations to adapt in order to survive. Among other things, organisations are expected to be innovative, bold and outward focused. Although there are some drawbacks associated with the use of ERP systems, the benefits are greater. Organisations must thus be encouraged to take advantage of this important tool so as to improve efficiency and remain relevant to the needs of customers.
Baltzan, P., Detlor, B. & Welsh, C. (2012). Business Driven Information Systems. Ontario, CA: McGraw-Hill Ryerson. Web.
Leon, A. (2008). ERP Demystified. New Delhi, India: Tata McGraw-Hill Education. Web.
Monk, E. & Wagner, B. (2012). Concepts in Enterprise Resource Planning. Boston, MA: Cengage Learning. Web.
Oz, E. (2008). Management Information Systems. Stamford, CT: Cengage Learning. Web.
Rajesh, K. (2011). Advantages & Disadvantages of ERP (Enterprise Resource Planning) Systems. Web.
Sousa, K. & Oz, E. (2014). Management Information Systems. Stamford, CT: Cengage Learning. Web.