Enterprise resource planning (ERP) refers to software applications used by businesses to manage and connect information from key areas of the organization with the objective of improving the efficiency of enterprise management (Sumner, 2005). The primary goal of ERP in an organization is to have one integrated system that covers the operations of the whole company. With business process re-engineering, the concept concerns business environment whereby it focuses on the changes in structures and processes within it. Precisely, the changes involved include the technological, human and organizational dimensions. Therefore, business process re-engineering refers to the radical redesign of core business processes to achieve substantial improvements in performance such as time, productivity and quality (Sumner, 2005). The paper focuses on providing an analysis of the case that involves re-engineering the payment process system at Reliable Finance Company (RFC). The analysis will entail the association between the ERP system and business process engineering and the benefits derived from embracing best practices concepts. Lastly, the paper will cover the obstacles encountered due to the implementation of changes in workflow, work methods, and systems.
This case study utilized the ERP system. The project under this case study entails the descriptions and discussions of the business process re-engineering that occurred during the implementation of the ERP system. With the Reliable Finance Company, the expansion of the organization required the redesigning of the existing system (Sumner, 2005). Similarly, in situations when the organization commits to implementing the ERP system, it is critical to re-engineer the current business processes so that they adhere to the best practices that are ERP software based. On the same note, information technology facilitates ERP system. For instance, the existence of client-server computing in an organization gives room for increased power and control in the system. The same goes to integrated databases whereby they result to reduced redundancy, provide support to multiple functional units and ensure data is maintained separately from application modules.
Best practices entail the act to use past successful experience on the new ERP project to ensure an effective and efficient implementation (Axson, 2013). The ERP system supports the “best practices” concepts and the business benefits from implementing the concepts included the following. The first benefit included improved interaction with customers. When employees improve their skills, they tend to create a better working environment with the customers (Axson, 2013). Second, best practices resulted in improved order management. The organization was able to learn from their experience and improve on how they manage orders. Third, there was quickened response time. The organization responded more quickly to creativity and innovations in its sectors. Changes in processes forced all payments to be made directly to the bank. Besides, settlement figures are processed upon request whereby the urgent requests take overnight for a job to be done. Fourth, through the adoption of best practices, there was reduced operating cost. Best practices helped the business to minimize wastage and develop a more efficient operation. Lastly, there was improved on-time delivery. The people in production focused on available capacity and the timing of the capacity and ensure promised deadlines are met.
The obstacles that the organization needed to overcome due to the implementation of changes in the workforce, work methods and systems included the following. First, there was a need to overcome resistance from people who have been affected by changes in workflow, work methods and work system. Therefore, it is important for the company to educate individuals who have been affected by changes in business processes about the benefits of implementing the ERP through effective training. Second, there were delays in payment processing. This complicated the cash flow making it difficult to identify revenues on a timely basis.
In conclusion, with the implementation of the ERP, the organization should ensure that it re-engineers the existing business processes based on the concepts from best practices. The business process re-engineering is important since it allows the company to rethink and radically redesign its business processes. The processes in the business are standardized and enhanced by teamwork. With the adoption of best practices, the organization benefited with improving interaction with customers, reduced operating cost, quickened response time, and improved on-time delivery. The obstacles included resistance from individuals and the need to maximize productivity without increasing the workload.
Axson, D. A. J. (2013). Best practices in planning and performance management: Radically rethinking management for a volatile world. Hoboken, N.J: Wiley.
Sumner, M. (2005). Enterprise resource planning. Upper Saddle River, N.J: Prentice Hall.