Stage 4

Preliminary Investigation Report on Precision Electronics Parts, Inc

Name

Institutional Affiliation

Preliminary Investigation Report on Precision Electronics Parts, Inc

Introduction

Precision Electronic Parts, Inc., is a small private business organization that manufactures electronic parts. The organization makes different electronic components and replacement parts for medical equipment. As such, its main customer is the medical fraternity. The organization expanded its manufacturing capacity; hence it is experiencing an increase in the number of orders. However, it is not well equipped with automated billing and payment system, which slows down its operations in relation to billing the customers and receiving payments from them. Furthermore, the existing system slows the sharing of data with other departments that rely on the information from the accounts receivable department. Due to this challenge, the Chief Information Officer –CIO, Mr. Mark Temple contracted for a preliminary investigation to be done in the organization to unveil the opportunities in the organization in relation to the existing system, document the findings, including the cost of the new system, conduct a feasibility analysis in relation to the new system and lastly make recommendations on the way forward.

Problem/opportunities presented

The investigation at Precision Electronic Parts, Inc., shows that the organization is using an inefficient method for invoicing and payments processes. Specifically, the organization is using a Microsoft Access-based solution which is not effective at optimizing the invoicing, billing, and payment processes. Furthermore, there is the separation of the different processes in different departments which creates inefficiencies in information exchange. For instance, the billing process is handled by the invoicing department, whereas the customer payment process is handled by the accounts receivable department. Importantly, the information from the invoicing department is needed by the sales department for purposes of creating new customer accounts and updating or closing existing accounts where necessary. Furthermore, the accounts receivable department, which handles customer payments, is also responsible for updating customer account records. In this case, there is a duplication of duties because the sales department is also responsible for updating or closing existing accounts. Importantly the invoicing process is not automated because the invoices cannot be sent by email to the customers. The organization collects personal information from customers such as their name, the email address, the street address, and the state. Such information should be protected in accordance with data protection and regulation laws 2021. Based on these findings it is clear that Precision Electronic Parts, Inc., lacks the necessary system to ensure efficiency in operations that could handle the increasing orders and reduce cost, it also lacks a system that can ensure the safety of data collected from customers. Consequently, the existing system is labor-intensive because some duties have to be duplicated by the different departments, which results in increased operational costs. Secondly, the existing system is prone to human errors because there are no controls, it is also prone to delays; for example, the accounts receivable department has to wait for the invoicing report; as such any delays in invoicing effects the operations of the accounts receivable department. It is incognizance of these challenges that the organization has to shift to an automated system that can secure customer data including payment and invoicing data processed by the organization.

Findings

According to Musher, Rabah, and Yaseen (2012), the billing system is a competitive weapon in organizations because it enables them to receive product orders, the amount owed, expected payments, and customer account information. This helps the management to develop reports promptly without going through the tedious and time-consuming exercise of perusing through the worksheets. Importantly, the new billing system will have different interfaces that include the accounts receivable, the marketing, and the customer care. In this case, the system would be integrated such that there will be no duplication of work, which will enhance efficiency.

Scope of the proposed system

The proposed system will include an e-mail system for customer interactions, the billing interface, which will enable the invoicing department to send invoices to customers through e-mail. It will have the payment option, which will auto, automatically be updated by the accounts receivable department whenever a check is received. It will have the sales interface for purposes of updating customer accounts or deleting them where appropriate. The system will generate receipts automatically. Importantly, it will have access controls with necessary logs as a security measure. Furthermore, the system will be cloud-based hence enabling necessary employees to access information promptly.

Constraints

There is necessary technological infrastructure such as the first internet connection and general acceptance to using technology among the various stakeholders. In this case, the enabling environment is available in the United States of America. Therefore, the only constraint is financial because of the cost of installing the system.

Fact-finding

Among the findings from the organization are; the billing and the payment processes are done by two departments that report to managers. For example, customer billing is handled by the invoicing department which reports to the Vice President-Business Administration while the customer payment is handled by the accounts receivable department, which reports with the Chief Finance Officer. The current system is based on Microsoft Access, which is controlled and managed by the IT department. As such, any information from the customer billing and customer payment processes has to be channeled to the IT department for the update of the Microsoft Access-based solution. The current system does not have e-mail capabilities; therefore, the billing information cannot be e-mailed to customers. Furthermore, there is security lapses in the current billing and payment system adopted because it is accessed by different departments without proper controls for security measures. Based on the findings, it is important to adopt a new system that will have advantages such as anywhere, anytime capabilities because it would be internet-based; hence enabling the different relevant internal stakeholders access information and offer solutions even in the comfort of their homes if the organization allows the bring-your-own-device program.

Current cost

The cost of the current system is estimated at $ 1 million. The cost includes the hardware, software, and associated peripherals. Notably, the current system is not internet-based; so there are some infrastructures that are not available in the organization.

Feasibility analysis

Organizations in the current era are shifting towards using the internet as a platform for gaining a competitive advantage. The internet enables organizations not only to interact with customers but also to receive payments from them. Studies on the feasibility of using automated payment and invoicing systems were carried out in different countries. In Bangladesh, the feasibility factors included the technological infrastructure such as availability of internet service providers equipment and data centers, the availability of skilled personnel to ensure the stability of the system handle security issues and ensure proper network infrastructure (Sourav&Andi, 2021). In the United States of America, there is an availability of skilled labor able to handle advanced technological advancements. Furthermore, the organization’s management is interested in change.

Technical feasibility

In relation to technical feasibility, the organization lacks a current computer system that can do both billing and payment processes. It relies on Microsoft access for data entry and other entries related to the billing and payment processes. Furthermore, the organization has no integrated network system that enables a prompt update of data unless it is done by the IT department. However, it has a qualified Chief Information Officer who is interested in updating the system from the current to a more modernized one.

Financial feasibility

The cost of implementing the new system is far below the expected long-term benefits. The financial feasibility is determined based on the cost-benefit analysis (Jawahar, 2021). For example, there will be efficiency benefits, which will mean that they will be high employee performance, better interaction with customers, and prompt data entry. Furthermore, due to increasing customer orders, the new system will be able to effectively handle the high number of orders without increasing the number of employees. Therefore, in the long-term, the organization is expected to save in terms of cost and improve on its performance, a venture that is good for competitive advantage.

Organizational feasibility

The organization’s management is interested in increasing the organization's competitive advantage. Consequently, the top management is interested in upgrading the existing system in order to cope with the increasing number of orders. However, due to the lack of existing advanced IT infrastructure, there will be the need for training of employees who will constantly interact with the new system.

Recommendations

General recommendation

Based on the feasibility analysis it is clear that the organization has the financial capability to implement a new system it's also clear that the organization has the organizational and technical ability to adapt and manage the new system. Importantly, there is general support for the adoption of a system that will increase efficiency and ensure the security of customer information. Therefore, the new billing and payment system which will be integrated with the marketing department, the sales department, and other departments will take six months to implement. The estimated cost of implementing the entire project will be $ 3 million. The cost includes the cost of acquiring new hardware the cost of acquiring necessary software the cost of acquiring necessary peripherals the cost of training employees to use the system and the cost of shifting from the current manual system to the new system.

Expected benefits

Among the expected benefits included workflow management because the new system will integrate the different departments such that each relevant employee will have access limits that enable him or her to carry out his or her work without waiting to be informed (Conger, 2008). This is a nontangible benefit. In addition, the system will enable faster billing and payment processes and subsequent updates of information. Importantly, the organization will be able to e-mail invoices to customers hence enabling faster interaction with clients.

Furthermore, the new system will reduce the cost of the operations, be efficient by reducing human errors, and being accessed accessible by the relevant personnel. Moreover, the new system will enable the different heads in the organization such as the Chief Financial Officer, the Director of accounts receivable, and the director of accounts payable among others to produce individual reports based on the information collected by the system.

References

Conger, S (2008).The new software engineering. Zurich, Switzerland : Global Text Project

Jawahar, (2021) Overview of system analysis and design.Web.Accessed on 29/10/2021.