Global Drinks’ Enterprise Resource Planning System

Executive Summary

This business project proposal provides the description of a new enterprise resource planning (ERP) system offered to the company Global Drinks. The paper aims at investigating the essence of ERP systems and their effects on the company’s work. Microsoft Dynamics NAV is the ERP system that is chosen for the analysis. Its effectiveness is justified by means of the properly developed rationale, a three-tier architecture, identified strategy (parallel adoption), a list of components and requirements, and the description of the changes that can take place in the organization.

The process of a new ERP system implementation is not easy. The company is informed about the possible challenges and mistakes that are usually associated with Microsoft Dynamics NAV implementation. The employees of Global Drinks are not satisfied with the conditions under which they have to work and analyze information offered by their clients. Much time is taken to identify the main facts and store them in the current IS system. Microsoft Dynamics NAV has three important tiers (Client, Server, and Database) within the frames of which ordinary customers are able to share their information, and the system addresses it to the server, and it is analyzed and elaborated to be sent to the database section.

The possibility to store information and find the required facts or extracts within a short period of time makes Microsoft Dynamics NAV captivating and effective for implementation. It is concluded that the offered ERP system can help to improve the manufacturing and distributive functions of the company. The necessity to use Microsoft platform that is usually available to many users does not create a challenge during the installation process. In general, many companies do not understand why they need to use appropriate ERP systems and face many challenges. This proposal provides Global Drinks with the necessary explanations of why the choice of the system has to be properly identified and justified.

Introduction

There are many ways on how a company may organize and control its complicated business environment. One of the most evident and effective ways is to analyze the existing and available ERP system and implement the one that is more accessible. ERP stands for enterprise resource planning (Grabski, Leech, & Sangster, 2013). It means that any ERP system is a crucial organizational tool that can be used to facilitate various transactions, achieve operational benefits, and create appropriate standards to the processes that take place in a company. Taking into consideration the fact that the technological progress cannot be stopped and neglected, and global competitions continue developing and threatening many developing and developed companies, the ERP system implementation is the best way to gain control over product planning, marketing, manufacturing, and other business activities.

The current project is an attempt to introduce a new ERP system to the company Global Drinks with 100 employees and 12 key managers in the accounting and manufacturing department and prove the effectiveness of the offered system. The necessity of a new ERP system is based on the fact that much time is spent to complete all transactions, control all payable and receivable accounts, and succeed in financial and manufacturing reporting. It is suggested for the company to implement Microsoft Dynamics NAV as the main ERP system as it is the closest match regarding the peculiarities and the current IS structure of Global Drinks.

Current IS Structure

The evaluation of the current IS should help to understand why a new ERP system is necessary for the chosen organization. It is not enough just to prove the appropriateness of the choice. In this proposal, it is necessary to explain why the ERP should be implemented and what outcomes can be expected. At the moment, the employees of the company have to take a number of steps to complete a historical analysis and spend much time to achieve the desirable results. In order to correlate the purchases of the customers, the manager should find the data in separate tables and put it into a special spreadsheet. Then, it is necessary to compare information taken from different years and consider the results. Even the necessity to spend more than 15 minutes to such activities influences the level of productivity and frustrates employees (Ciecierski, 2013). There is no required level of automation and access to management data. It is possible to say that there is a kind of system in the company; still, it is inefficient.

Need for an ERP

Due to the challenges and dissatisfaction with the current system, Global Drinks should implement a new ERP system to replace the old one. The need for a new ERP system can be explained by the benefits that are usually inherent to any ERP system: a possibility to promote business process automation, considerable improvements in the supply chain, decreased costs, better market responsiveness, and information management control (Grabski, Leech, & Sangster, 2013). Global Drinks needs a new system because it is necessary for the company to enhance its organizational effectiveness and create appropriate conditions for the connection of the internal and external units between customers and sellers.

The experiences of different companies prove that it is possible to benefit with implementing ERP systems, as well as to fail because of the inability to comprehend the essence of an ERP system and disinterests in the implementation process from the very beginning (Armstrong, 2013). Global Drinks’ workers have already suffered from the inability to control the amounts of data and various financial operations. It is difficult to create the standards and provide the staff with flexible working conditions so that they can integrate information, make appropriate decisions, and improve market profits (Motiwalla & Thompson, 2012). Because of the fact that the business world is characterized by the globalized environment, the majority of organizations should work with people, who speak different languages, live in different countries with different currencies, and prefer different accounting models. Instead of spending time on the analysis of the information about every customer all the time, it is better to spend a certain portion of time to create an effective ERP system and use it on a regular basis.

At the same time, it is necessary to admit that there are many organizations that have faced a lot of challenges while implementing their ERP systems, spent much money, and lost. This process requires the involvement of many human and financial resources, and Global Drinks should be ready to work hard to implement a new ERP system successfully. A properly chosen system can help the company identify the standards according to which all information provided by customers can be evaluated by vendors and introduced logically. Correctness and order of the information gathered should be checked by the chosen software as soon as some points are added to the system. That is why there are fewer chances to make informational and technological mistakes with a properly implemented ERP system.

ERP and Rationale

Taking into consideration the current financial situation of Global Drinks, its plans, and possibilities, it is suggested to focus on the implementation of Microsoft Dynamics NAV as the main ERP system used by the workers of the company. Microsoft Dynamics NAV is a well-known global ERP idea that provides a variety of small and medium businesses with an opportunity to control their financials and improve their organizational aspects (Microsoft Dynamics NAV, n.d.). The developers of Microsoft Dynamics NAV software admit that this product can help its users to simplify such aspects of work as supply chain, manufacturing, and operations (Microsoft Dynamics NAV, n.d.).

Besides, in comparison to other ERP models, the chosen Microsoft Dynamics NAV does not take much time to be installed and implemented in a company. With the help of Microsoft Dynamics NAV, the company gets the required portion of tools to connect and manage business within a short period of time. However, Global Drinks should remember that they have to be ready to take a number of steps before, during, and after the implementation process. All these costs are necessary at the initial stages of the system’s implementation. With time, the employees get used to the chosen software and start getting benefits only.

There are several facts that should be mentioned about the chosen ERP system before the rationale of the choice is given:

1. Microsoft Dynamics NAV is not a traditional type of ERP system because it offers new applications that can help to organize finances, sales, and accounts. However, the basis of these applications turns out to be all those familiar Office tools.
2. Microsoft Dynamics NAV is the tool that is supported by the cloud. That is why the company that chooses this system gets a chance to work with it anywhere and anytime.
3. People can use the chosen system on any devices and receive the same portion of information, as well as the opportunities to protect the interests of the workers and customers.
4. NAV 2015 is one of the latest achievements of Microsoft that addresses such areas as basic accounting, inventory, order processing, planning, management, manufacturing, marketing, etc. (Studebaker & Studebaker, 2015).

All these characteristics may serve as a solid part of the rationale for the implementation of this system. However, the identification of the following factors should clarify the situation and convince Global Drinks to implement Microsoft Dynamics NAV as its ERP system, the solution to the majority of the company’s problems and challenges:

1. Global Drinks, as many similar organizations worldwide, faces the challenge of increased competition that define the quality of financial performance of the company. Microsoft Dynamics NAV is a chance to control financial activities.
2. Global Drinks suffers from the inability to speed up order processing. The accounting and manufacturing departments should hire more people to process the information sent by the customers. Due to the necessity to work with huge amounts of data, a number of mistakes take place, and much time should be spent to make sure of the informative credibility. Microsoft Dynamics NAV is a properly working system that does not take much time to elaborate information.
3. Global Drinks does not have the system (or calls this system inefficient); therefore, it is a challenge to manage customer account properly in regards to the global standards. Microsoft Dynamics NAV provides the company with an opportunity to focus on customers and their needs but not on the necessity to elaborate their information.
4. Global Drinks can have access to a variety of application systems and get lost in several seconds. It may happen that one application system is perfect for one country and unacceptable for another country. One of the Microsoft Dynamics NAV characteristics is flexibility. The chosen ERP system corresponds with the global standards and can be used on any device in any country.

The core modules of the offered Microsoft Dynamics NAV are:

1. Accounts receivable and payable due to complete flexibility on payment terms, currency, and even taxation (Studebaker & Studebaker, 2015);
2. Manufacturing with the possibility to improve working centers, calendars, orders, etc.;
3. Inventory management with the ability to learn such inventory’s characteristics as levels, location, status, etc.;
4. Project and service management because of the order and control followed while fixing prices, sales and costs’ budgeting, developing schedules, evaluating response time, etc.

ERP Architecture

ERP architecture helps to understand how the chosen system works. Any system is dependent on the amount of data that should be stored because any kind of information should be processed by a variety of programs of the ERP software. The architecture is the concept that unites such processes like information storage, processing, and presentation. There may be two-tier architecture and three-tier architecture. The chosen Microsoft Dynamics NAV has three-tier architecture:

1. Data tier introduces a database where all Microsoft Dynamics NAV information can be found;
2. Server tier helps to manage business logic and promote communication;
3. Client tier represents the actual interface that is used by the company with several properly identified clients: Windows Client, Web Client, Tablet Client, the Role Tailored Client, SharePoint Client (Studebaker & Studebaker, 2015).

The choice of such architecture makes it possible for different servers perform different functions. Customers’ requests are satisfied with the help of two or more connections. Then, it is necessary to achieve the Application server. Finally, the connection with the database server takes place. The following table represents the connection and transition of information with the help of Microsoft Dynamics NAV.

Development and Implementation Strategy

Global Drinks is offered to use a parallel adoption implementation strategy on the basis of which the implementation process is taking place during a certain period of time. In spite of the necessity to make some evident changes and corrections or extend the deadlines of the implementation process, it is possible to adopt the system during the time when all employees deal with the old system. In fact, parallel adoption seems to be a less risky implementation strategy because the users are able to learn the peculiarities of a new system and not to stop working with the old system.

Though some people may think that the chosen strategy is time-consuming, it is better to pay more attention to the expected results of the implementation and the comparison with other ERP system implementation strategies. On the one hand, the changeover of the Microsoft Dynamics NAV implementation is slower than in a big bang strategy. On the other hand, the same stage is faster than the one of the phased adoption. Regarding this factor, it is possible to say the process of adaption during the parallel strategy is easier than the one during the big bang strategy and is a little bit difficult in comparison with the phased adoption. The parallel strategy used for the implementation of Microsoft Dynamics NAV in Golden Drinks is the required golden middle that should be used. The employees continue working with clients on the basis of an old system and start storing data in a new ERP system at the same time.

ERP Components and Database Requirements

In order to implement Microsoft Dynamics NAV, the company should check a number of issues. The most crucial are:

1. The presence of the required operating system (e.g. Windows 8.1. or Windows 7 Enterprise);
2. Hardware resources (Hard disks and memory of 2 GB per each disk);
3. Supported browsers (Google Chrome or Internet Explorer 11);
4. Additional software (Skype, Microsoft Office 2013, Outlook, Microsoft.NET Framework 4.5.2., and Windows PowerShell version 3.0).

As a rule, all these components should be installed at the beginning of the work with any ERP system. Still, all of them may be installed by an expert with time. Besides, it is necessary to underline the importance of network connection on the basis of which the whole work can be organized. As a rule, the source of information from which the file with Microsoft Dynamics NAV is taken contains the additional file with information on how to begin the installation process and which requirements should be met in regards to a particular ERP system. It is also possible to find or even develop a program with the help of which it is possible to compare the components that are necessary for the chosen ERP system and the components that are already present on the computers.

Finally, Global Drinks should realize that the chosen Microsoft Dynamics NAV is a complicated system, and each stage may have its own requirements. It is necessary to define the requirements for demo installation, client, server, and database option, and the requirements for developing reports.

Organizational and Process Change

The implementation of the system has to be properly organized. The company has to make a number of preparations to succeed in ERP re-structuring. It is not an easy task to create the ERP system and benefit with it soon. The employee should be ready to make mistakes and find the solutions that can be offered. The peculiar feature of the implementation strategy of Microsoft Dynamics NAV is that people should aim not at achieving the best results but getting ready to work on the mistakes. Anyway, certain organizational and process changes should be considered by Global Drinks during different stages of the implementation process:

1. Gathering and evaluation of the requirements (Global Drinks want to shorten time for working with client data and gain control over all financial operations and accounts within the company);
2. Analysis of the gaps and challenges (Global Drinks gives the reasons for why some changes are important);
3. Identification of the goals and expectations from Microsoft Dynamics NAV (customization, changes within business processes, and systematization of the work with accounts are the main changes to be expected);
4. Evaluation of the business process (the company investigates how much money is necessary for the implementation and what financial changes should be expected);
5. A strategy is chosen, and the real changes in work take place.

Additional Requirements

As soon as all recommendations are followed, and the information about the chosen ERP system is considered, it is possible to think about the effectiveness of Microsoft Dynamics NAV. This integrated business management solution is one of the best options for Global Drinks. Still, even the best ideas can be improved. Global Drinks can create better conditions for the implementation of the system by learning and training its employees far before the implementation process. It is possible to inform the staff about the coming changes in advance and make them learn what to expect with the changes. The improved theoretical background of the employees and the ability to practice a new system while working with the old one is a good chance to avoid crucial mistakes.

Conclusion

In general, the current situation of Global Drinks requires certain improvements and changes. The staff is not satisfied with the conditions of work. The customers are not able to use all their abilities because the employees cannot find the required portion of information in time. A new ERP system (Microsoft Dynamics NAV) is a good chance for the company to help employees and customers at the same time. This system is a solution that helps to gain better control over all financial operations, performance, manufacturing, etc. Taking into consideration all the requirements and components of the system, it is necessary to remember that the order and logic are the two factors to be considered at first.

References

Armstrong, A. (2012). Strategies for preventing resistance to change when implementing cloud ERP systems. In Class of Enterprise Systems (Ed.) Emerging Issues and Technologies for ERP Systems (11-13). Derby, UK: Lulu Publishing.

Ciecierski, A. (2013). Three examples of companies that used ERP software for a competitive advantage. EPR VAR. Web.

Grabski, S., Leech, S., & Sangster, A. (2013). Management accounting in enterprise resource planning systems. Burlington, MA: Butterworth-Heinemann.

Microsoft Dynamics NAV. (n.d.). Web.

Motiwalla, L. & Thompson, J. (2012). Enterprise Systems for Management. Upper Saddle River, N.J.: Pearson Education, Inc.

Studebaker, D. & Studebaker, C. (2015). Programming Microsoft Dynamics ^TM NAV 2015. Birmingham, UK: Packt Publishing.