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ITM assignment


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ITM assignment

  1. 1. Graduate Business School Assignment Cover Sheet Student name: Sumeet Duhan Student number: 2804324 Course: MSC International Business Stage/ye ar: Study Mode: Full time Part-time Lecturer Name: Aine McManus Assignment Title: Information Technology Management No. of pages: 17 Disk included? Yes Additional Information: (ie. number of pieces submitted, size of assignment, A2, A3 etc) Date due: 5th Nov 2011 Date submitted: 5th Nov 2011 Subject: 1 JAMESON Y e s No 1
  2. 2. Table of Content Introduction……………………………………………………………………………………………………………… 3 Part 1: Report .................................................................................................................... 3 1.1 Problems Facing the Organization ......................................................................................... 3 1.2 Recommendations .................................................................................................................... 4 1.3 Web 2.0 tools………………………………………………………………………………………………………..5 1.4 Why Web 2.0 matters to you?.................................................................................6 Part 2: Report .................................................................................................................... 7 2.1 Considerations for implementing ERP in company ............................................................. 7 2.2 Success factors for successful integration of ERP for Jameson……………………………….8 2.3 Problems that might occur while implementing ERP in Jmaeson…………………………..9 2.4 Jameson pre-ERP IT architecture………………………………………………….10 2.5 Best- of Breed (Bob) Vs ERP for Jameson…………………………………………11 2.6 Jameson future with ERP…………………………………………………………...12 Outsourcing for Jameson………………………………………………………………..12 Conclusion………………………………………………………………………………..14 Reference…………………………………………………………………………………15 Bibliography……………………………………………………………………………...17 2 JAMESON
  3. 3. INTRODUCTION Jameson whiskey is one of the biggest brands in the alcohol market throughout the world. But now a days it is facing so many technical problems. So in order to eliminate them we are going discuss some technical tools and some IT solutions. Web2.0 tools and ERP system are the key factors throughout the assignment and we will see how they will help us to increase the sales, have the better communication system, privacy of data etc. PART-1 1.1 PROBLEMS FACING THE ORGANIZATION Jameson whiskey has recently faced several problems with communications along with other technologies. Major problems are as: Geographical differences If Jameson whiskey wants to open new branches in different countries then the managers need to implement an effective communication system because profitability of any company totally depends on the quality of communications within each division and with senior management, between company and their clients and component suppliers,. First of all the managers have to spend a great time on constant travelling, visit divisional headquarters and departmental sites for meetings with senior management and his project teams. Also the electronic mail system of the company is not very compatible with all the branches which create a big problem in communication and sending important information. With the new branches going to open in china and more to follow in future then there is need to improve the communication system in order to support geographically dispersed teams. The systems which installed previously are sophisticated to a certain level which cannot support the current growth. Existing systems Over the years Jameson whiskey has added some new telecommunication software‟s. Some of them are still sub optimum or on the verge of being obsolete and others are sophisticated especially those 3 JAMESON
  4. 4. supporting the exchange of massively detailed engineering plan. They have been developed on an ad hoc basis which is not good for the operations. The software‟s used for one function and installed separately as they are only wasting the company resources. Data corruption In the recent years, with the use of existing systems and services has resulted in the loss and corruption of data which is totally not good for the company operations. The Jameson whiskey has been using the facilities/services of different vendors to support its hardware and software as well as communication needs. There is no guarantee and maintenance of data which led to loss and corruption with the use of these vendors. 1.2 RECOMMENDATIONS The following recommendations for the existing problems are: Geographical differences They should be developed the better communication methods to handle the communication problem. Jameson whiskey should install Microsoft outlook or Lotus in order to solve the problem of electronic mail system. These can be installed through board to the different branches and can be synchronized with one another. An address book database can be created and is very helpful for any member of any team and any part of the world to send emails to their co-workers. In order to solve the problem of the managers travelling, the company can provide smart phones to their management and team members that can be synchronized with the company‟s official address so that they can talk face to face from any part of the world. And with the help of Intranet they can get the information about their colleagues in different branches. Existing systems In order to solve the problem of existing system, Jameson whiskey should get new software‟s and install them from starting. The sub optimum and obsolete systems should be removed. The company should install only those software‟s which are essential and are more central for the day to day operations needs. All the systems should be combined to a central server to protect, efficiently use the system. Specific ERP (Enterprise Resource Planning) will be very effective and helpful to the company‟s employees and will be effective for operations. Data corruption 4 JAMESON
  5. 5. The Jameson whiskey should get a company specific system installed for the smooth day to day operations. It should be customized to the needs of the company. There should be one vendor among a host of others should install the system. So with the help of these servers will help to protect the loss and corruption of data. With this, only vendor should be there for all the maintenance and upgrading of software‟s and systems. The ERP (Enterprise Resource Planning) and CRM (Customer Relationship Management) system will be highly effective and helpful in retention of all the data for all the departments and branches. 1.3 WEB 2.0 TOOLS In 2004 Dale Dougherty, a vice president of O‟Reilly Media Inc. coined the term „Web 2.0‟ (Anderson 2007).There are so many definitions of web 2.0. But simply we can say that web2.0 represents an important shift in the way digital information created, shared, stored, distributed and manipulated. In the coming years, it will have a great impact in the way businesses use both the internet and enterprise-level IT applications. The name clearly explaining that it describes set of next generation internet technologies.web 2.0 tools are less expensive than the traditional software‟s and many are even free because they are web based. Buzz phrase coined: 2004, by Tim O‟Reilly of tech publisher O‟Reilly media. Thumbnail definition: Web 2.0 is a set of web based software services that encourages users to become more involved in the creation and manipulation of data. Enabling technologies: AJAX, RSS, XML, Atom, and Blogs. Prominent web 2.0 brands: Google apps, dig, LinkedIn, YouTube, Wikipedia, Flickr,, social text. Investment: Web 2.0 startups attracted 844 million in venture capital investment during 2006, more than twice as in 2005. Now a day‟s web based apps are very fast and dynamic and they behave as software installed on desktop computers. For example, Google spreadsheets is a spreadsheet tool that works like 5 JAMESON
  6. 6. Microsoft excel, with the three major differences: it‟s web based, so that‟s why users need not to install any software; it‟s collaborative, so many users can work on single spreadsheet at the same time; and the main and important difference is that it‟s free . Web 2.0 allows a number of groups of people to work on a document or spreadsheet at the same time, while in the background a computer continuously keeps track of what changes when, where and who made it. The key characteristics of web 2.0 are: Web based applications can be accessed from anywhere. Data can be readily shared. Simple applications solve specific problems. Value lies in content, not the software used to display content. Employees and customers can access and use the tools on their own. Distribution is bottom-up, not top-down. 1.4 WHY WEB 2.0 MATTERS TO YOU? There are mainly two reasons why it is relevant to business. First of all it reduces the costs associated with old enterprise applications. IT managers knows this things that it‟s very costly to install, configure, maintain, and upgrade important software on the personal computers and the company servers- and even more if you have many employees with many different computing needs. Web 2.0 tools remove much of this squabble and expense because web 2.0 applications reside on servers operated by the vendors themselves. Secondly, it is also changing the way information is made, used, shared and manipulated. The gap between a company and the consumers has never been so thin with web 2.0. Hierarchy and direct control are giving way to notions of collaboration, creativity, transparency and mass participation and the effects of this change are just starting to make themselves felt (Wolcott 2007). 6 JAMESON
  7. 7. PART 2 2.1 CONSIDERATION FOR IMPLEMENTING ERP IN COMPANY Enterprise Resource Planning commonly known as ERP systems have become vital strategic tool‟s in today‟s competitive business environment especially in a company like JAMESON which is already facing problems in deploying new technology its structure and its business process. ERP in basic definition is an enterprise-wide information system that helps organization to integrate and controls various business processes that are going in an organization. In simpler words we can say that ERP is single integrated software program that run off a single database so that various departments can more easily share information and communicate with each other. This integrated approach can have tremendous payback if an organization installs the software correctly like Philips and Nokia Dallas they both use SAP ERP software. However If in case it is not installed properly then it can become a nightmare for an organization like what happened with “The Fox Meyer Drug‟s” and after the ERP failure they went bankrupt in 1997. Successful implementation of ERP in a multinational company like JAMESON needs to be carried out very carefully. M. MARTIN in 1998 talks about “Implementation Complexity of ERP” and in case of Jameson this factor plays a very important role because Jameson in recent years is suffering from problems like data corruption and unsupportive current system so in this case chances failure increases. Not only has the implementation complexity ERP had one more problem of conflict with business process strategy (Loinsky 1995). ERP solutions though very effective but they are non-flexible in nature so in many cases they forces organization to fit the package and abandon their way of doing work which sometimes results in failure or bankruptcy ( Davenport 1998) like happened in “The Fox Meyers” (Scott). Integration is also a very important problem of ERP solutions. Although, ERP packages describe and promote them as “integrated suites” but them serious integration problems (Davenport 1998). And more over ERP implementation involves lot of money therefore budgets plays a very important role in deciding whether to go for ERP or not. 7 JAMESON
  8. 8. 2.2 SUCCESS FACTORS FOR SUCCESSFUL INTEGRATION OF ERP FOR JAMESON In today‟s competitive world successful implementation of ERP in Jameson will give company an edge over its competitors like Jack Daniels and Johnny walker. For successful implementation of ERP company should follow the correct methodology and should keep various success factors in mind while implementing ERP so that it does not result in a failure. The first and the foremost important factor to consider is the selection of ERP package that can suite the requirements of company. Acc to Wei and Wang (2004) there is no single ERP package that could provide all the functionalities to business so therefore selection of ERP package becomes first and foremost factor because it involve huge amount. Acc to Al-Mashari et al. (2003) and Zhang et al.(2002) top management support is the most important success factor in the ERP system implementation projects because they provide two main aspect for the implementation and that are providing leadership and providing the necessary resources. So therefore top level management of Jameson should involve themselves at each and every stage of the ERP implementation, so that they can give direction to implementation team and keep an eye on progress of the project. In this way they can have the full understanding of new system being deployed and also better control over it. A clear business plan and vision is another success factor that comes into play while implementing an ERP. Top level management before going for ERP should have clear vision of why we need ERP and after that Jameson should have clear business plan for it. Acc to Schwalbe (2000) project management identifies three competing and integral goals namely; scope, time, and cost of goals because primary stage of any project begins with conceptualization of the goals and possible ways to achieve these goals. So, therefore top management should have clear business plan and vision. Jameson in recent years is facing problems in technical field as well as in other business process so therefore in Jameson BPR or Business Process Re-engineering becomes way much more important so that it becomes easier to integrate the various systems in the company. BPR plays a very important role in early stages of implementation. Not only BPR at each and every stage then end user involvement is also very important so that they can get familiar with the system being developed and also they can learn various technical aspects and functionality of it. 8 JAMESON
  9. 9. 2.3 PROBLEMS THAT MIGHT OCCUR WHILE IMPLEMENTING ERP IN JAMESON Jameson currently facing problems with its system maintenance and its legacy system therefore need of ERP becomes essential for the company. But implementing ERP in any organization is not an easy task. There are so many factors that are supposed to be taken under consideration while implementing ERP because over the years it has been an expensive fix. Conflict with Vendors and ERP packages comes first among such factors. While implementing an ERP in an organization top management should carefully choose the ERP packages from number of ERP packages being provided by various vendors which specifically solves their problem because one ERP cannot solves the all ongoing problems in company. After selecting the packages management should choose the right vendor for implementing these packages because successful implementation of ERP depends a lot on the vendor‟s experience. In today‟s ERP market there are no of vendors like SAP, ORACLE, and MICROSOFT etc. So therefore management should carefully choose both ERP packages and vendor. Second factor that comes under consideration is conflict with business strategy. The implementation of ERP brings many good changes in the company‟s convention business model and also in daily practices. But in most of the cases ERP forces organization to fit the package and thus forcing company to abandon their way of doing work. And sometimes this inflexible nature of ERP results in nightmare for company like what happened with “The Fox Meyers” and “Hershey”. And for company like Jameson it becomes more necessary to take this factor into accounts because Jameson is already facing problems in these contexts. Next factors that need to be consider is employee resistance to change for the new system being implemented in company. Sumner (1999) urges that there is fair amount of resistance in company when it rolls out ERP. In many cases companies face quite fair amount of employee resistance during the implementation stages (Motsios, 1999) which sometimes results in delays of project like what happened Hershey in 1999 and further in the failure of ERP in company. Project delays correlate with the project cost overrun. These two are different problem but they often occur simultaneously. If during the implementation stage if company faces any problem whether it‟s external or internal it will result in project delays and thus resulting in project cost overrun. 9 JAMESON
  10. 10. 2.4 JAMESON pre-ERP IT ARCHITECTURE Now a days, Jameson is using AIS Applications across the company. Accounting information system (AIS) are an internal function which is used to handle financial information of a business. Earlier these system uses paper and ledger with information from multiple business departments or locations. Now, AIS uses computers and intranets which electronically transfer the financial information. While these systems provide information to the manager and owners which helps in decision making, they can face threats which hamper the overall effectiveness of business. There are some weaknesses in this system and are as follows: Complexity: In business operations, a company‟s AIS system can become very complex to be more effective for use. When company‟s owner and managers try to create IS which capture large information than use or use the system unnecessary without its original purpose than the complexity arises. They find these systems difficult to use if they are not familiar with the computerized accounting system. Company should make sure that their system is usable by all the employees in the company. Fraud: By the company employees, AIS can subject to be fraud or abuse. The employees gather the information for their personal use and change the information to make financial papers looks better than actual results. Owners and managers can‟t handle all the operations in the company so they rely on other individuals to give exact information through AIS on time. Others employees can also create problems in AIS. Age: If the company wants to take the advantage of current technology then they should keep their AIS up to date. Maintaining the computerized accounting system can be more expensive; leave the system inefficient just because of its age can create problems for the company. During the upgrade of old information system can also needs more money during the replacement process (Vitez 2011). According to the report, it recommended that we invest €100m in a company to buy ERP SYSTEM from one of the large vendors. It will allow the company to combine as a whole all of it‟s IS called single instance ERP platform. The CEO is not happy to invest this much capital in IT because he is concerned about the long-term competitive advantage and return on investment (RoI). But CIO and CKO argued that going towards the single instance ERP platform will be lower in cost in long run and provide cost saving. At the same time, CEO preferred the approach of Transformational Outsourcing Agreement with one of the biggest outsourcing companies which provide all the company‟s existing IT activities transferred to 10 JAMESON
  11. 11. the third party provider and also that provider would take all the responsibility for moving the system for seven years. This option would be „cash positive‟ and company will focus on all of its core activities. ERP is high end business applications that connect all the departments within a business, from human resource to finance department. Still it has some IT risk for implementation:Not fitted properly: At the time of implementing an ERP, one of the huge risks is that the ERP is not properly fitted It must be keep in mind to analysis any ERP fault in system while implementation. As, if the faults are not discovered then it will led to some hazardous impact on the business. Lack of Skills: If the manpower used for implementation are unskilled or not properly trained then it will raise the risk factor like if the ERP consulting is not able to troubleshoot the problems, lack of ERP experience. Mainly there should be better understanding and communication between the management and workforce and also with the external ERP specialist as well. Management issues: On an ERP‟s success, the members of management have a huge impact. The problems definitely arise when the management doesn‟t support an ERP and lack of communication with the workforce. So there should be better communication within the management and the workforce and management should take interest in ERP activities and motivate their workforce as well. User and training issues: The management and the workforce must be trained during the implementation of an ERP. To utilize the benefits of the ERP the proper training should provide to all of the users in the company (Lance). 2.5 BEST OF BREED (BOB) VS ERP FOR JAMESON Best of breed (BOB) means using a particular software program or package for each specific application or requirement (P. Robinson 2003). The best of breed approach provide optimal solution for each business area as richer functionality is supplied. But main problem of best of breed approach is for different processes in a company we require different best of breed vendors and addition to that there is big problem of integrating various applications. In Jameson if we go for best of breed approach we can save money but when it comes to integrating these applications or process then it might add to company ongoing problems. In addition to that selecting different vendors for different business process should done very carefully because it is 11 JAMESON
  12. 12. quite risky from technical point of view if not controlled properly then time and cost associated with development of system can go out control quite rapidly. ERP applications provide a single solution that comprises an array of functionality needed to underpin business core process (Morris 2011). ERP though very expensive but it provides several benefits to the organization like they reduce development risk (Kelly et al., 1999), increase global competiveness and business efficiency( Markus and Tanis,1999) etc. But the main problem with ERP is greater cost involved and complexity while implementing. In the nut shell, after pros and cons of ERP system and Best of Breed (BOB), Jameson is better suited for ERP because in Jameson we need deeper and industry specific solution to its various problems. And also Jameson needs minimal potential for software functionality gaps with lesser development risk for the system. So therefore keeping all these factors in mind Jameson should go for ERP. 2.6 JAMESON FUTURE WITH ERP ERP benefits framework and extent of tangibility and quantifiability (adapted from Shang & Seddon, 2000) Dimensions 1.Operational 2.Managerial 3.Strategic 4.IT Infrastructure 5.Organizational Subdimensions 1.1 cost reduction 1.2 cycle time reduction 1.3 productivity improvement 1.4 quality improvement 1.5 customer services improvement 2.1 better resource management 2.2 improved decision-making and planning 2.3 performance improvement 3.1 support business growth 3.2 support business alliance 3.3 build business innovations 3.4 build cost leadership 3.5 generate product differentiation 3.6 build external linkages 4.1 build business flexibility for current and future changes 4.2 IT cost reduction 4.3 increased IT infrastructure capability 5.1 support organizational changes 5.2 facilitate business learning 12 JAMESON Tangible? Full Most Most Some Some Some Some Quantifiable? Full Full Full Most Most Most Some Most Some Low Some Some Some Low Low Most Full Most Some Some Low Some Low Full Some Full Some Low Low Low Low
  13. 13. 5.3 empowerment 5.4 build common visions Low Low Low Low There is a framework of the benefits of ERP system given by Shang & Seddon (2000). They surveyed on 233 vendors success stories and 34 interviewed by phone from three biggest vendors‟ websites and they found that all the organizations get benefits from at least two out of five categories and in all the five categories, all the vendors‟ products had returned customer benefits. OUTSOURCING FOR JAMESON In recent years Outsourcing has become critical strategic decision that helps organization to drive greater efficiencies and cost reduction. Leading firms have been adopting more sophisticated outsourcing core processes such as design, manufacturing, and marketing and these organization have benefiting greatly from accessing the specialist capabilities of supplier in a range of business processes (Aron and Singh 2005). In simpler words Outsourcing is the practice of contracting out to a supplier work previously done within the operation (Slack, Stuart &Robert 2010) or we can say that planned transfer of business process to third party provider in order to allow an organization to achieve measurable benefits, long term relationship. Outsourcing helps organizations to enhance their own internal core capabilities that help them to drive competitive advantage over their competitors. Every organization in today‟s world does not does everything required to produce its products and services every now and then they use third party to do that work for them for example banks usually do not do their own credit checking they the services of specialist credit checking agencies with expertise and specialized information system to do that in better way this is called „Outsourcing‟ or Business Process Outsourcing (BPO). The organizations often outsource their back-office processes and human resource process like pay-roll, training and recruitments. They do this in order to save money and time. Jameson is going for ERP to solve its on-going problems with aim to expand globally. In this case outsourcing also becomes the very important aspect for the company. This is because outsourcing will help company to shape its business fundamentally. This will help Jameson in many ways because once company goes for outsourcing the its back-office work like Oder management, operation supports, marketing, advertisement etc. will outsourced to specialist companies. Similarly they can also outsource their human resource function simply to pay-roll services to more complex one like training and development process to specialist companies this will not only help company to reduce their cost but it will also help them to save time. 13 JAMESON
  14. 14. The out sourcing will not just help them in saving money and time but it will also help Jameson in following ways: 1. Improved quality: The specialist suppliers have specialized knowledge and are self motivated because of market pressure. 2. Improved speed: Speed of response is built in the supply contracts where commercial pressures will encourage good performance. 3. Dependability decreases: Late-delivery penalties in the supply contract encourage good performance thus dependability decreases unlike in house supply. 4. Flexibility increases: Outsource supplier may be larger with wider capabilities than in house suppliers and have more ability to respond to changes. 5. Cost decreases: Outsourced companies can achieve economies of scale and they are motivated to reduce their own cost because it directly impacts their own business. Keeping all the above factors in mind it good for Jameson to go for outsourcing. Now the main issue arises what all activities to outsource and what all not to for that company has to decide what all activity to keep in-house and what all to outsourced. All the activities with strategic importance, specialized knowledge etc. should be kept in house. this can be better explain by diagram. CONCLUSION For an organization to survive in today‟s competitive world needs to have competitive edge over its competitor. And for Jameson to not only survive and expand globally ERP plays a very important role to solve its problem of legacy and integration. It will also help Jameson to increase global competitiveness and business efficiency. Not just ERP Jameson is also in great need of outsourcing its few in house activities. 14 JAMESON
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