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FACULTY OF HIGHER EDUCATION

Individual Assignment

HS2041 Enterprise Systems

Trimester 2 2017

Date Due: Friday Week 8 by 5:00 PM

Marks: Weighting 10%

Student Name (Block letters) Student Number: ___________________________ _____________

HOLMES

INSTITUTE

FACULTY OF

HIGHER

EDUCATION

HS2041 Enterprise Systems - Trimester 2 2017

1

Assignment Description: In this assignment you need to read a case study on

Enterprise Resource Planning (ERP) implementation and answer three questions. This

assignment will let you define and describe the evaluation of Enterprise Resource

Planning (ERP) systems. It will also let you examine and judge the role of EPR and

their adoption process in organization. Most importantly, you will learn to analyse and

develop arguments organisation’s ERP selection, planning, implementation and

ongoing support phases. Student will also argue about the roles of key stakeholders in

an organisation’s ERP selection, planning, implementation, adoption and ongoing

support phases.

Assignment requirements:

You need to read the case study on ‘IGT ERP Implementation’ and answer the

following questions:

 What are the key goals IGT wanted to achieve using an ERP system?

 Discuss the pros and cons to customising the system.

 How should IGT handle change management during ERP implementation?

Answers to the three questions can be presented in a Question Answer style. A formal

business report structure is not required.

Word limit for this assignment is 1000 –1500 words

Marking Guide:

Assessment Components Description of the section

Define and describe Students are able to define and describe Enterprise

Resource Planning systems (ERPs).

Examine and judge They can examine and judge of the role of ERPs in

organisations and evaluate their adoption and use

characteristics.

Analyse and develop

arguments

Quality of arguments in relation to an organisation’s ERP

selection, planning, implementation and ongoing support

phases.

Describe and critically

analyse

Analytical capability of the roles of key stakeholders in an

organisation’s ERP selection, planning, implementation,

adoption and ongoing support phases.

Assignment Submission:

Assignment Date Due: Friday Week 8 by 5:00 PM

Assignment Submission Guideline: Please submit your assignment as a Word

document or PDF file on Blackboard.

HS2041 Enterprise Systems - Trimester 2 2017

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Case Study: IGT ERP implementation

International Game Technology, a maker of slot machines, uses an enterprise resource

planning system to tilt the odds in its favour by cutting production turnarounds and

streamlining staff access to company information.

At A Glance: IGT

Headquarters: 9295 Prototype Drive, Reno, NV 89521

Phone: (775) 448-7777

URL: www.igt.com

Business: Designs and manufactures slot and gaming machines for casinos and

government lotteries.

Technology Chief: Rayleen Cudworth, vice president of information systems

Financials in 2005: Revenue of $2.4 billion; net income of $437 million

In 2002, International Game Technology (IGT), a leading manufacturer of slot

machines and lottery machines, depended on several different systems to manage its

sales, customer orders, manufacturing and accounting. When an executive, sales

manager or production staffer wanted to learn the status of a particular order, there was

no single system he or she could go to—each functional area had its own system that

contained a different piece of information about that order.

This dependency on a host of applications by different functional groups was common

among large manufacturers until the mid- to late 1990s. Keeping all of these systems

connected and talking to each other was an onerous, if not Sisyphean task for those

assigned to information systems.

By 2000, many companies had begun scrapping these older systems in favour of a

single core, or "backbone," information management system. Evolving out of what had

once been called material requirements planning (MRP), this new software package

was dubbed enterprise resource planning (ERP). It consisted of a set of core business

applications, including finance, manufacturing, distribution and human resources, all

linked together for the first time.

Although it was a little late to the ERP party, IGT was in many ways typical of

companies that adopted the enterprise technology. For one thing, the company

desperately needed a more cohesive information technology infrastructure that would

allow for growth. And, similar to many manufacturers, IGT had lots of business

information contained in applications that lacked smooth integration.

IGT’s accounting department wanted one system to do all the accounting, but IGT’s

management was concerned that if accounting started buying its own software, all other

departments would follow. It would be more sensible to acquire a full ERP system.

Emphasizing that the project was undertaken for business reasons and not simply to

upgrade the technology, the company assigned a project team that established a set of

HS2041 Enterprise Systems - Trimester 2 2017

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desired business functionality. The team then looked at competing ERP packages from

JD Edwards, Oracle and SAP.

At the end of the day, SAP won out, being the best fit with the least amount of business

gap. The finance and accounting system of SAP covered a gap we had. The financial-

consolidations and foreign currency modules were much better than the other ERP

systems."

In 2003, following a 2_-year implementation effort, IGT converted to a SAP enterprise

resource planning system. By using SAP R/3 version 4.6, IGT was able to integrate its

three major business functions—finance, manufacturing and product development—

through this common information platform. The company typifies many large

manufacturing companies that depend on an ERP system such as SAP or Oracle for

front-office applications that connect with existing plant-based control systems.

As has been the case at most of the thousands of manufacturers that have installed ERP

systems over the last 15 years, IGT found it necessary to change some of its business

processes to accommodate the new technology.

Even though SAP had a flexible product configuration engine that allowed

manufacturers to build to order, IGT had to revamp its order process to accommodate

the way the software works. "The greatest change in the order process was not releasing

a sales order to the production schedule until two weeks before the build," commented

by IGT. Also, more emphasis was placed on the quoting process to get a better-quality

sales order up front, she says.

There were benefits on the plant floor as well. Operations employees now can get

manufacturing process sheets online at their workstations. At each step, the ERP system

helps foster process gains through the discipline it requires. Employees who might

before have been able to cut a corner on a particular process now get stopped by the

system. The discipline enforced by the software in effect forces workers to do things

the right way. The end result is fewer errors and higher yields due to more efficient

processes. As an example, the company was able to establish a quick-turnaround

process enabling rush orders to be handled in four weeks instead of seven to eight.

IGT manufactures 140,000 machines annually at its Reno site alone. The company also

operates factories in Las Vegas and Manchester, England. The SAP system is used to

connect the company's operations worldwide, integrating customer orders, document

management and new product development.

On the factory floor, IGT continued to use its homegrown factory control system,

integrating it into SAP. The company already had experience with integrating the

factory control system with its old MRP system, Cudworth says, "and we knew the data

it required. This interface wasn't any more challenging than any other."

The factory control system coordinates the delivery of materials to the production line

at the proper location and time. Meshing it with ERP allows IGT customer order staff

to find out exactly which machines were built and at which plant locations. IGT also

uses SAP's project management system to monitor costs and design changes in

HS2041 Enterprise Systems - Trimester 2 2017

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developing and launching new products, such as its EZ Pay "cashless" feature—with

winners paid off in redeemable or reusable tickets—introduced on many gaming

machines starting in 2003.

IGT management commented: "SAP has a great configuration product, but getting all

that information into the system was not an easy task. SAP is customizable, but we

didn't have all the unique aspects of our products documented. And you can't test every

single configuration. That was the biggest challenge." The company overcame this

challenge by assembling a team of people from the order group and engineering

department, and assigning them the task of customizing the system to accommodate the

company's complex bill of materials for its various product lines.

Similar to most large manufacturers, IGT has installed other technologies in its

manufacturing and shipping areas to boost efficiency and throughput. For instance, the

company revamped its warehouse management process so that parts are delivered to

the assembly line faster, with employees using handheld radio frequency readers to pick

and deliver various parts and subassemblies to the production line

While IGT struggled a bit to adapt SAP's ERP system, the company has seen significant

improvements as a result of the shift to the newer enterprise-wide technology.