Analyzing The ERP Implementation Of Companies Information Technology Essay

Analyzing The ERP Implementation Of Companies Information Technology EssayLooking into the transmission line processes carrying out of Tesco one of the leading provender retail companies in the UK which has gone from strength to strength in the food retail and established it is presence in Europe, US and Asia and analyse Enterprise Resource supplying implementation in one of the leading food retailers operating in 14 countries around the world and how these trading operations atomic number 18 run and analyse the ch every(prenominal)(a)enges faced and lessons learnt. hold DELIVERABLES1. Identify five critical work processes2. Plot the process map of the organization3. Analyze the type of BPR implementation in the company4. Analyze the ERP implementation in the company and the challenges5. Business benefits and learningsCompany BackgroundWe deem selected to study the food retail giant Tesco PLC the largest food retailer in the UK employing over 470,000 pack with revenue of o ver 54 billion in 2009. thither are about 4,331 Tesco stores in fourteen countries worldwide. This famous food retailer was founded in 1919 and in 1929 opened its first ever food retail store in Edgware, London. It has rapidly evolved over the years and has established itself a prominent position among the food retails giants in UK. Tescos Core Business is based in the UK and has operations mainly in USA, Europe and Asia.Fig 1 Tesco Operations around the worldWith its intricacy to other countries Tesco had to standardize the IT dusts and art processes to sustain the overseas profession which has facilitated a unique and homogenize way of working in 3,263 stores in all 14 countries.This project involved standardising the business processes and IT systems used to dealing with customers and twenty-four hour period to day running of stores, financial and in-store systems warehousing, payroll and dispersal systems. This execution of business process was initiated a couple of years after Tesco-in-a-Boxsystem to even out an enterprise resource homework system Oracle in each region of business operation.Tesco carries out and provides services via online retail websites tesco.com and Tesco Direct and offers financial services through Tesco Personal pay and broadband internet connections services.Fig 2 UK Food Retailers by Market shareTesco products fall under the category of Fast Moving Consumer Goods (FMCG) and (Non-FMCG) or durable consumer goods.Sourcing and ProcurementTIS Tesco International Sourcing Hong Kong does the procurement, commercial design, circumspection, look control, production and deals with all the 50,000 product lines customs documents. The operation is of a phenomenal scale. This station deals with 800 suppliers in more than 1200 factories.International Sourcing manages the end-to-end procurement processTIS Tesco International Sourcing Hong Kong does the procurement, commercial design, management, quality control, production and deals wi th all the 50,000 product lines customs documents. The operation is of a phenomenal scale. This station deals with 800 suppliers in more than 1200 factories.Hong Kong-based global supply and sourcing operations was founded in 1970.It supplies 12 countries, supplies 60% of UK clothing, durable goods 41% UK, 44 countries from 50,000 sku, 58 seaports, 72.000 containers, 533 employees and No. 1 retailer in the UK buying officeSix virgin regional get offices will be soon opened by Tesco to boost local sourcing from close by supplier and farmers.Tesco procurement includes the following processes for acquiring goodsProcurement planning identifying and determining which product or products motif to be acquired, the quantity, quality and Product descriptionSearching suppliers Having identified the products and product specifications, the search for suppliers and sources beginsTendering Receiving quotes, offers, and negotiation with potential suppliers beginsSupplier Selection the bids, o ffers and proposal are assessed in send to choose the right oneFormal Agreement making certain that supplier will suffer the expected requirements of the business and terms and conditionsSigning the Contract formal legally binding agreement is signed based on the mutually agreed business termsPurchasing Non-Food Costs and LogisticsCentralized procurement system is used by Tesco in its growing business. The procurement system is Oracle retail that supports Tescos centralize buying of non-food items in bulk and the centralized purchasing system facilitates order generation through which supply chain and procurement are controlled centrally.Buying part bulk buying discounts critical mass drives down addresss.Direct Sourcing (65% UK clothing) eliminates intermediary agent mark-up captures greater percentage of gross margins.International Purchasing low cost factors of textile production (labour, corporeals) in Asia (India, Sri Lanka, China, Indonesia).statistical distribution Init ially utilized existing purchasing and distribution channels. Subsequent development of efficient dedicated N-F infrastructure warehouses, logistics and narrow down management systems.Inventory controlAll products of Tesco PLC have different shelf life and one of the key performance indicators accepted by Tesco PLC is the right products at the right time in the right condition Indexes of the products delivered by them to the consumer. Inventory control allows Tesco PLC to hand low inventory levels thereby reducing cost and achieve greater value index. Inventory control however, does not aim to specifically reduce inventory, a sufficient inventory levels must be maintained to have a service level at the Depot of 95% RAD. It also helps to reduce distribution runs thereby saving transportation and logistics costs.Human Resource and FinanceHuman resources management is a pivotal element of any successful business company the randomness received through this area should be incessantl y monitored and correct evaluation for professional development and social protection of workers. Nonetheless, owing to the fact that large amount of information which is processed in this area, the job gets harder day by day. ERP is depicted as a useful tool to assist and guide users to focus their work in direct relationship with staff, and to relate face-to-face skills and aspirations of staff related to the companys goals and objectives.The crucial practical application and system of cash management helps manage your account which includes credit cards, banks and saving institutions and all these required functions are entirely based in one place. The cash management applications offer making deposits, printing checks, cost of funds transfer and reconciliation of cash accounts facilities to accounting staff.Logistics and DistributionLogistics management deals with the activities related to the physical flow of goods and products, raw materials and the obtaining of materials f rom sales to the customers which include distribution of products and goods, storage and production. Logistics environment integration is achieved by bringing together all and every activity constituting it.Tesco distribution centres are responsible for ensuring that the goods are delivered to the stores on time. Tesco has primary and secondary distribution areas. Primary distribution has the duty of delivering the products and goods from suppliers to the Tesco depots. Secondary distribution has the job of getting products and goods from depots to Tesco stores. The team and channel of distribution is very important for Tesco operations who should try to make operations simple, cheaper and better and Tesco stores should get the right products at the right time in the right condition. Distributions are also fundamental in strategic decision making around opening new depots, and sustenance the operators throughout the whole process from business case concept, through to build and open ing.Level 1 business processesTesco Retail BuyingCENTRAL HEAD assuranceMarketingLogisticsHumanResourceManagementInternationalOperationsNon-StoreOperationsPropertyFinanceBuying MStoresSuppliersDistributionCentreInternational= rate of flow of products= Flow of informationStoresCustomersLevel 2 Business Processes sort one of RPM ProcessUnderstanding the needs of retail CustomerRealization of requirements of new productExisting customers requirements trackingAvailable Information sourcesInformation obtained from internal sales informationInformation from consumer publications and suppliersMarket research and Competitor analysis variant two of RPM processRequirements and design of product to satisfy customer needsTurning the realised need into product opportunityMixing a few attributes to benefits customerPrescribed specifications of product qualities build three of RPM processLook out for a suitable SupplierLook and interpret a supplier that can provide, make and deliver the right p roductEvaluate and assess suppliers for suitability on the basis of value such(prenominal) as product quality, short lead time and priceRPM PROCESS STAGES 4 and 5Award the contract or Spell out orderStage 4 Place OrderDetailed quantity such as packaging, size, variety,How, where and when the goods to deliveredStage 5 Assess the performance ofProduct for example, the sales and salary of product etcAssess supplier for on time and accurate deliveryIncluding qualitative measures such as customer feedbackPlanningLogisticsWarehouse capacity fixture planningSchedulingDispatchingProvision of Human Resource SupportDeveloping Human Resources information and facilitiesMaking sure that the site is safeSupervision and management of Team RelationsAdministering and Planning benefits and compensationProvision of Financial SupportComplete the Receivable AccountsComplete the Payable AccountsGive Financial Accounting and absolute SupportPerform Budgeting and PlanningCapital Assets PlanningComplete Ca sh ManagementSupervising and managing External RelationsType of BPR implementationCustomer, competition and counterchange are the three driving forces behind the ever-changing business world. Hence, companies are constantly seeking novel solutions for the problems in their businesses as of late, some established business and corporations have turned to the great solution of business process reengineering. Reengineering is critical and fundamental redesign of business processes in order to radically improve brisk business measures such as speed, quality, cost, service and overall performance. BPR is not about small scale changes it is rather about radical rethinking and innovation, so BPR is not for companies desiring a 10% improvement, but for corporations and companies that expect and desire 1o fold improvement and increase.Business processes reengineering aims at the business processes and endeavours to radically redesign the strategic processes of added value which lies at the tit of business. When a company rethink what processes need to carried out in what way, then it falls up on how best that can be achieved. Reengineering targets the business processes of an organization such as the procedures and steps and resources used to make products and customer services rules which are applied to meet particular customers needs and demands. Analysis, identification, and redesign of an organizations core business processes are done by reengineering in order to obtain big improvements such as speed, quality, cost, service and overall business performance.The main motive behind BPR is the unceasing implementation and development of advanced net deeds and information systems. Big companies are using more and more forms of technology to back up novel processes of business sooner of sticking to their normal ways of carrying out work. BPR is one way of redesigning how an organizations work should be done in order to back up the organizations reduce costs and miss ion.BPR is not just a centralized storage system. It helps organizations pave the way for the automation of business processes based on the rules pre-defined. Business processes automation saves time, reduces costs and manual of arms process handling time. Processes automation help eliminate human errors related to date entry for example in Excel and most manual work.ERP effectuation METHODOLOGYTo meet the challenges of the modern business demands and run its business economically and efficiently Tesco PLC implemented the ERP in five fundamental stagesPhase 1 The Planning PhaseTesco established the necessary information and need for the implementation of ERP systems and successful implementation and redesign physical bodys and laid the ground work.Phase 2 The Redesign PhaseDuring the redesign stage training was stipulation to the BPR team was trained and followed by the method of transforming the chosen processes and applying the solutions which were recommendedPhase 3 The Implem entation PhaseImplementation phase turned the recommendations by the team to reality by realizing the redesign goals which involved planning for, prioritizing and implementing project to realize the redesignPhase 4 The Finalization PhaseFinalized training program, end-user training, readiness assessment, production system prep, finalize cutover plan, communicate cutover plan, Inform external partners as necessaryPhase5 Production master data conversion, Execute cutover plan, varan process system usage, On-site support, Issue resolution, Communicate on-going support processTesco applied a gradual plan to implement ERP systems by adopting the step by step approach in the organization. The well-planned methodology resulted in low cost of integration in the state of careful and meticulous implementation. The chosen approach of implementation of ERP added hugely successful rate of implementing ERP.ERP systems fundamentally play the same role in the vast range of Tescos products. These ERP systems offer functionality to company internal all labyrinthine economic processing matters and providing realistic and up-to-date and accurate picture of the economic management of the company. On the basis of an intricate and current approach for managing the flow of information in the enterprise, today ERP systems are modular, open and controlled by parameters to be easily customized to the needs of the customer.One of the ERP systems keeping the latest development and functionality standards is ORASHEI alarge system supporting company internal economic management in complexity. The system allows for keeping tally of and processing all economic agendas as management of assets, material supplies, invoicing, tax documents, business trips, buildings and facilities, and financial flows. ORASHEI facilitates operative management of organizational units, planning, budgeting and evaluating economic data, especially in relation to MIS.ERP implementation benefits to TescoThe impleme ntation of ERP in Tesco since it is first long time has been nothing but a invention of success giving the business full edge of service quality, power, customer satisfaction and value for money products and long savings across all business functional areas some of which are as followsProductivity boost through using a common and homogenized sales applications and finance and human resources systems in all operations worldwideThe applications and systems are centrally managed from the Bangalore IT service centre instead of each business in every country having separate applicationsThe entire network is using uniformly Oracle financials both in core business and in global operations and finance applications and processes are centralized and consolidated globally across the Tesco conventionAll systems and applications including Oracle financial which is used for e-invoicing and HR software PeopleSoft and measuring budgeting targets application Terradata are centralizedIsotrak is a great hosted service which provides real time vehicle tracking and precise high service levels world class data centresProviding all the 26 UK distribution centres of Tesco a single transport fleet and transport management perspectiveImproving driver tribute through the purvey of a key fob panic alarm that operates in or out of the vehicle, plus the ability, through vehicle tracking, to guide a swift security responseTesco distribution system has improved quantity of products dispatched per litre of fuel used by 8 percent by using Isotrak systems, outperforming its target of a 2.5 percent increase which amounts to saving over 54,000 deliveries per annum.A common platform of technology and business processes and technology together with a standardized business processes contributes to the Tesco group to be competitive and also maintain the overseas expansion and using purchasing centralised systems and processes makes the other country productive too.Supply chain efficiency has im proved with Ortecs cutting edge supply chain optimization software, there is on going improvement and making certain the supply chain works effectively and efficiently, the operations cots are cut downLearning and recommendations from Tesco ImplementationEven though the implementation is top driven, it is vital to clearly communicate the need and benefits of the implementation with the employees so that they understand the worth and need and give their supportIt is extremely important to generate energy within the team members and creating monomania in the organization. It is important to have a top-driven implementation especially for a company that is focusing on a growth of 20-30%.It really important to gauge and decide whether to buy ERP or develop customized systems within organization and set time frame for the implementation.There has to be clear setting up of accountability and ownership in the implementation stage and a special team has to be set up for regular monitoring and controlStarting the integration with the finance module has been a time tested and proven implementation strategy that works almost every timeProper training has to be given to the employees during the implementation stage and monitoring has to take place to make sure the implementation has given desired results and that the user acceptance is ensured because of the ease of access and simple mindedness of the processDecide on the right implementation method of the systems to avoid failure assessing the needs and requirements and business demand and size. Trial runs are very important.There has to be a proper reporting and documentation system in any organization. This can be achieved by the implementation of ERP because it automates the reporting and documentation is purchasable in electronic media.It is important to know the total cost of ownership and identify if the implementation will produce results. ERP most of all gives a transparence in a system that facilitates overal l growth and empowers the people and motivates them as they know whats happening in the organizationConclusionERP Implementation and IT system entre and innovation have been a steady on going process at Tesco and always lies at the heart of business processes improvement and has been a story of success and achievement whether it is been partially Tesco developed system or collaboration. ERP/BRP and IT have not only contributed to core business growth, automation and efficiency of processes in business functional areas but also saving time, money, improving quality, safety and global growth and expansion and brand name in Tescos leadership drive.