WK6-02092021

Running head: ORGANIZATIONAL INFORMATION SYSTEM 1

ORGANIZATIONAL INFORMATION SYSTEM 7

Organizational Information Systems

Information System (IS)

An information system is defined as an integrated set of components that collect, store, and process data. The information system also provides information and knowledge. The importance of an information system is through processing the organization's inputs so that information is generated. This information is useful for managing the operations of the organization (Dantes & Hasibuan, 2010). The operations of the company depend on the information that is possessed. An information system is useful in providing complete and more recent information; therefore, it operates efficiently. Also, this information can be used to gain a cost advantage over the competitors.

Another importance of information systems is on the organization's decision making. An information system helps an organization make a better decision. This is achieved by delivering information that an organization needs. The results are modeled depending on the decision. Since a decision involves taking the best course of action, the information is accurate and up to date to make a choice more confidently. Moreover, the information system may run different scenarios for more than one choice that are attractive.

Characteristics and Features of the Enterprise Resource Planning Systems (ERP)

The chosen information system for this paper is Enterprise Resource Planning Systems (ERP). Enterprise Resource Planning is an information system that helps store all the data of an organization and arrange the work of different departments. It has several modules created to meet the needs of an organization. An organization's data is store in software and divides into specific areas that are common access. Therefore, ERP software splits the company data into particular areas that have shared access and store it.

The modern ERP has four main features. First off, an integrated system helps the system to integrate all the elements. Consequently, ERP works in harmony and therefore updates and react to changes efficiently and Secondly, it has a feature of a shared database. Therefore, an entire organization can access the data. Thirdly, reporting and analysis is a feature that provides an opportunity problem and resolves them. Lastly, some of the tasks are automated. This is useful in reducing errors and saving time. For example, tasks such as payroll and invoicing are automatic.

Functionalities: Functions and Business Process Support

A properly operating ERP system determines the time necessary to complete a business process. Moreover, it contributes to collaboration due to shared data. This results in much better decision making (Anderson, 2011). Supporting a standard and straightforward ERP system makes for a less rigid structure. This contributes to an agile organization capable of adapting quickly while increasing the level of collaboration. Also, the database of an ERP system is centralized, and consequently, it is more comfortable and secure compared to data scattered in several systems.

Limitations of Enterprise Resource Planning Systems (ERP)

There are various limitations to Enterprise Resource Planning (ERP). For example, training inefficiency. This means the factors such as skills, workforce, and resource and utilization are inadequate. As a result, it is hard to have smooth and efficient operations. Therefore, the individuals must be trained on ERP so that the system works efficiently. Another limitation is that the system is expensive. This is because the ERP is a costly software, and setting it up can also be costly. Also, the degree of customization of ERP is limited, and at times it may lead to changing the entirety of the software. Moreover, sometimes it can be a disadvantage to have various departments interconnected. This means that a chain is as strong as its weakest link. Therefore, if a department is weak, then it affects other departments.

Impact of Enterprise Resource Planning Systems (ERP) On Business Strategy

The ERP system-specific modules are implemented aligning with the business strategy of an organization. The primary purpose is to have a sustainable future and also give a strategic benefit. In addition to the specific modules in the ERP system, Business Process Reengineering (BPR) is also necessary for the business process. The organization gains a competitive advantage over its competitors. However, BPR is rarely used by both private and public organizations. The significance of BPR is that it forges radical changes that lead to employee reduction. BPR also influences the business processes that gave the organization direction for many years. Therefore, this means that the employees will have to learn new things, and consequently, this contributes to a decline in productivity. Thus, it is imperative to implement BPR before ERP, this means that BPR driving ERP implementation is very risky.

Evaluating Enterprise Resource Planning Systems (ERP) in the Organization

The Information system evaluation requires a systematic approach for it to be measured effectively (“Enterprise Resource Planning (ERP) Systems Success Measurement: An Extended Model,” 2006, Evaluation of Information Systems, n.d.). First off, the context of evaluation must be understood when being conducted. The second step is to classify the approach to information systems into four main categories; subjective, strategic, financial, and functional. The main goal of an information system is to measure its success and value. ERP is evaluated from a different perspective by many researchers. Scholars provide a method of investigating the financial performance of the company. It further evaluates the organization’s relationship between technical efficacy and the continuous investment in Enterprise Resource Planning. Therefore, a solution is performed regression analysis to investigate this relationship.

Another way of evaluations provided by researchers is through a six imperative framework developed after researching the impact of ERP systems (Evaluation of Information Systems, n.d.). The framework is useful in incorporating the required metric that can review the ERP systems. These two above methods evaluate ERP systems' success; however, their setback is that they do not emphasize user productivity. This has resulted in the popularity of technical and financial methods in ERP system evaluation. For example, the approach mentioned above finds no impact on users and SQ factors. Moreover, quality assessment is focused on the system's characteristics and its quality of information. Therefore, this has resulted in many studies considering user satisfaction as the measure for a system's success.

Dilemma in current Enterprise Resource Planning Systems (ERP) in the Organization

Several studies show that an ERP is most likely to fail if it focuses on the technical side of improvements and ignores the overall impact on the organizational system. Many organizations do not accomplish their original goals since they did not focus on the organizational changes caused by the technical change. An organization needs to decide on the future of the ERP system. This decision forms the basis of what to do next after that. An organization faced with a dilemma reviving its ERP endeavor has to consider the lessons from present failure carefully. Moreover, the focus should be made towards skillfully managing risks, technology, and commitment in the next ERP implementation.

Outsourcing the Enterprise Resource Planning Systems (ERP)

Technology is fast-changing, and the functions of an ERP application software extend more than the standard back-office functions (Why It Is Better to Outsource ERP Implementation Task, 2016). Consequently, the ERP implementation can be outsourced, firstly, when an organization does not have expertise in implementing a crucial ERP package. Secondly, outsourcing is a better alternative when the implementers have a systematic approach to installing these types of business systems. Thirdly, an organization is not capable of sparing its staff to work solely on implementation. The fourth reason outsourcing is a viable option when implementing consultants helps reduce the workload; is because the existing staff already have their full-time jobs within the organization.

The fifth reason is that assuming an ERP implementer’s responsibilities could lead to severe failure in the system. The sixth and last reason is when the organization's size and ERP package are significant, requiring help from outside. Also, outsourcing could be considered since it leads to financial benefits. Therefore, it plays an essential role in simplifying operational efficiency. Also, the ERP products have an opportunity to be enhanced and upgraded periodically. The vendors update the services of an ERP so to achieve the latest technology. Therefore, an organization does not need to purchase expensive software since the software can be upgraded and the personnel can be trained. As a result, outsourcing makes the implementation simple instead of complicated and eliminates the hiring costs and the cost of training IT employees to operate this particular software.

Enterprise Resource Planning Systems (ERP) Improvements and Developments

Maintaining ERP to match the modern business requirements can be challenging. The system should be improved, especially if it falls short of expectations and functionality. The following are examples of options an Information system manager can take to bring new functionality to users (Caserio & Trucco, 2018). The first approach is through replacing an old ERP with a new one. The main advantage of this is that the organization gains a powerful ERP that has been tested and provides the user with a modern feature that they need. Moreover, a new ERP can even provide the user with features than what was initially anticipated.

To demand from the ERP vendor the features that the organization needs is another viable option. This can be a suitable solution since the organization can get the features, they want without them developing or getting committed. The vendors can work with them the individual's organization. Also, desktop software such as access can be used to copy data. This creates separate solutions from the ERP database. This is a traditional end-user solution to ERP problems since it is easy to implement. Most significantly, the IT is willing to turn a blind eye. However, it has no scalability. The reason is that it quickly outgrows its initial purpose. Also, a package such as excel cannot handle hundreds of thousands and millions of records.

Moreover, an ERP software code can be customized through consultation with the vendor. This solves the current problem. Customizing the applications will create the features that are necessary on the issue. Therefore, the users will be happy in the meantime; however, it is temporary. This is because, after a while, the users will need other capabilities that were not foreseen. Therefore, the expensive customization will be overwritten in case an upgrade is needed. Consequently, it will double the expenses for the organization.

References

Anderson, D. L. (2011). Cases and Exercises in Organization Development & Change. SAGE.

Caserio, C., & Trucco, S. (2018). Enterprise Resource Planning and Business Intelligence Systems for Information Quality: An Empirical Analysis in the Italian Setting. Springer.

Dantes, G., & Hasibuan, Z. (2010). The Impact of Enterprise Resource Planning (ERP) System Implementation on Organization: Case Study ERP Implementation in Indonesia. In IBIMA Business Review Journal (pp. 1–10). https://doi.org/10.5171/2011.210664

Enterprise Resource Planning (ERP) Systems Success Measurement: An Extended Model. (2006). In Proceedings of the Eighth International Conference on Enterprise Information Systems. https://doi.org/10.5220/0002496400710078

Evaluation of Information Systems. (n.d.). Retrieved February 7, 2021, from https://www.civilserviceindia.com/subject/Management/notes/evaluation-of-information-systems.html

Why it is better to outsource ERP implementation task (2016, September 20). https://www.zeronetechnologies.com/2016/09/why-is-it-better-to-outsource-erp-implementation/