Understandung The Importance Of Enterprise Resource Planning Information Technology Essay

The feasibleness survey is an analysis survey, which helps to clear up the aim of the proposed systems development undertaking and to better understand a concern job. The feasibleness survey presented here determines whether the proposed upgradation of the bing ERP system at Velogic Airlines Limited, can efficaciously run into the specified concern demands of the company. That is, it gives an thought of whether the system will be worthwhile. It involves the appraisal of jobs and challenges those are being presently experienced at the organisation by taking into history the proficient, operational, societal and economic feasiblenesss. It besides considers the costs of the undertaking and the advantages that Velogic Airlines Limited may bask one time the upgradation is executed.

Introduction

Before migrating to the following degree of the ERP ( Enterprise Resource Planning ) execution, it is of import to see foremost whether it will be worthwhile and besides whether it will truly be a benefit to the company.

Organizations today confront new markets, new competition and increasing client outlooks. The efficiency of an endeavor depends on the speedy flow of information across the complete supply concatenation. ERP ( Enterprise Resource Planning ) systems have been used by concerns today, in hopes of deriving a competitory advantage. Upgrading the bing ERP by including three more faculties should profit Velogic Airlines Limited significantly.

There are many ways that an ERP system can assist an organisation. First, an organisation ‘s operating costs can be reduced. An ERP system integrates all parts of an organisation. Hence it is possible to pull off it expeditiously. Besides, an ERP system increases the organisation ‘s clip efficiency. Workers have faster entree to their information, which improves the clip and resources for decision-making. For now, holding an ERP system means increased information handiness for the organisation that means that the organisation can entree information rapidly and easy[ 1 ]26.

To be able to find if the system can efficaciously run into concern demands of the company, a feasibleness survey has been carried out and is presented here.

A feasibleness survey is an appraisal of the proposed system to find whether the system can efficaciously run into specified concern demands of the company and whether a concern option exists for developing such a system.

If executable, the feasibleness survey leads to demands specifications, which takes the agreed concern system option and develop it so as to add exact inside informations of informations, maps and events to be included in the hereafter system.

It is a short-run analysis survey, which helps to:

Clarify the aim of the proposed systems development undertaking

Supply a better apprehension of a concern job

Assess or urge what class of action are taken against the proposed solution

Issues to be addressed

This portion is already discussed in old subdivision.

The feasibleness survey comprises of the undermentioned subdivisions of the survey:

a. The Technical feasibleness

B. The Operational feasibleness

c. The Social feasibleness

d. The Economic feasibleness

Technical feasibleness

The chief facet at this phase is to measure whether the ERP system being proposed is technically executable. This means to measure if the system is capable of being implemented utilizing available hardware, package and other equipment.

The purpose is besides to happen out whether the degree of technological promotion needed for the intent is in a place to to the full back up the proposed application.

As Velogic Airlines Limited has already implemented the ticketing, the disposal and the client attention faculties, its bing ORACLE based application demands to be upgraded by adding the three extra faculties viz. :

Finance and accounting

Human Resource and Payroll

Inventory

To implement the ERP system, Velogic Airlines Limited shall necessitate to upgrade its bing waiter as its capacity may non be as such powerful to suit the three new faculties for the expanding of the ERP system. Besides, the existent Oracle 8i installed on the waiter shall be upgraded to Oracle 9i standard Edition. In add-on, appropriate web cablings should be put in topographic point for the 60 users of the system since each section consists of 20 employees.

The bing waiter will be upgraded to the undermentioned constellations:

Server constellation

The Sun Fire x4540 waiter:

27

SUN artworks card

Solaris Media Kit

Backup device

Solaris 9 waiter licence

Compared to the current system ( described in old subdivision ) , ERP attempts to incorporate all sections and maps across Velogic Airlines Limited onto a individual computing machine system that can function all those different sections ‘ peculiar demands. ERP is an endeavor broad system that integrates primary concern applications, including all countries and degrees of an organisation. All the applications in an ERP suite portion a common set of informations that is stored in a cardinal database.[ 3 ]26

In this manner, assorted sections can more easy portion information and communicate with each other. This incorporate attack can hold a enormous payback if companies install the package right.

Therefore, on proficient evidences the undertaking seems to be executable as a ground of the benefits mentioned above. Furthermore, Velogic Airlines Limited will merely hold to purchase the extra faculties and upgrade its bing waiter for the new system.

Operational feasibleness

It is a cardinal concern covering with human organisation. It concerns the manner the organisation does concern. It involves a alteration in direction duties, position, preparation and reorganisation.

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The purpose of measuring the operational feasibleness of the proposed system is to happen out whether the work force will be able to get by with the ERP system as this means a passage from the current system to the proposed system.

However, developing would be needed to do the users adapt to the new system.

Employees have to be trained as ERP involves the Business Process Reengineering ( BPR ) . The reengineering facet is really of import. ERP provides a generic concern theoretical account for the company to follow. Since the ERP package can merely be customized so much, Velogic Airlines Limited demands to seek to suit the theoretical account of the ERP. To properly balance and align real-world concern processes with ERP functionality, executives and ERP squads have to prosecute in an of import procedure known as a “ GAP Analysis. ” Gap Analysis is critical non merely to find the overall ERP execution scheme, but besides to nail the new demands for the ERP system. Gap Analysis helps to happen what the losing links are in the current system and the ERP system.

When a company tries to fit its entire functionality demands with the ERP Oracle application, it notices that some functionality of the ERP application demands to be customized so that the ERP application satisfies the standards of the company functionality.

Gap Analysis will clearly place those demands that are non to the full met by Oracle ERP Applications and will get at alterations to be incorporated in the system to provide to the full to the demands.

Requirements for ERP:

This portion is already discussed in old subdivisions

Hence, the undertaking should be operationally executable as the employees of Velogic Airlines Limited shall be interested with such a new system as accordingly they would be provided with preparation in order to utilize the system decently.

Social feasibleness

It examines the societal impact of the system on its users.

The switch from the current system to the ERP system introduces new methods of thought and working. Since people tend to defy alterations, they may be against the development and execution of the ERP system as this involves redrawing of occupation specifications. That is the employees will work in a different manner from that of the current system. The new system will make new functions within the company. However, Velogic Airlines Limited staff should be cognizant of the betterments and benefits they will acquire one time they are used to it. They should hold the expected accomplishment demands to run the new system and for this preparation shall be provided.

In the present system, the three sections Finance and accounting, Human Resource and paysheet, Inventory runs on three distinct and separate databases ensuing many times conflicting, elements in all three systems. Finance and accounting section use the Sun Accounting System, Inventory and HR section usage Ms Access and Ms Excel to make their work. Therefore, there is no coordination between Velogic Airlines Limited ‘s concern processes in the bing system.

ERP will unite the three sections all together into a individual, incorporate package plan that runs off a individual database. So, compared to the present system, different sections can more easy portion information and communicate with each other. Consequently, the employees working in these sections will confront alterations in the manner they work.

Velogic Airlines Limited can go more flexible and productive by organizing its concern processes more closely and incorporating these procedures so that it focuses more on efficient direction of resources and client service. For this, a powerful type of organisation alteration should be brought frontward – the concern procedure reengineering ( BPR ) besides known as Business Process Improvement ( BPI ) or concern procedure redesign. Mention to subdivision 4, ‘business Procedure Reengineering at Velogic Airlines Limited ‘ .

After transporting out the societal feasibleness survey, it seems that the undertaking is executable due to the fact that the employees shall respond positively to the ERP system since preparation would be given to them so that they could get the accomplishments needed to utilize the system.

Economic feasibleness ( rating of cost )

This concerns the returns from the investing with regard to ERP execution. This means that the undertaking must be “ a good investing ” that is whether it is worthwhile to put money in the execution.

For illustration the equipment and package costs, the expertness costs and the preparation costs of the ERP system shall be evaluated. These figures are shown below.

Economic Appraisal

This subdivision considers the costs for the upgrading of the ERP system every bit good as its benefits to Velogic Airlines Limited.

The costs involved:

Equipment and package costs

Expertness costs

Training costs

Equipment and package costs:

It includes the cost of seting the system into topographic point. It consists chiefly of the cost of computing machine peripherals, hardware and package substructure. Although the company is already computerized, there will be some equipment cost for the ERP system.

The waiter, which already exists at Velogic Airlines Limited, shall be upgraded to back up the other three faculties. In add-on, there should be necessary web substructure such as telegraphing. It besides consists of the cost of runing the system once it has started.

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The costs that will be incurred one time the system is in operation are:

Support costs

Licensing costs

Care costs

To implement the new ERP faculties, Velogic Airlines Limited will take one time once more Oracle as ERP seller as it was the same for the old ERP faculties already implemented.

Since the cost of the Human resource and Payroll faculty is $ 90, it is tantamount to Rs 2700. ( $ 1 = Rs 30 )

As Velogic Airlines Limited has 2691 employees, the licensing cost for this faculty will be Rs 7 265 700. ( 2700*2691 )

The cost for the Finance and Accounting and Inventory faculties is $ 4000, which is tantamount to Rs 120 000.

As there are 20 employees in each section, it makes a sum of 40 users.

Therefore, the licensing cost for these faculties will be Rs 4 800 000. ( 120000*40 )

The entire licensing cost will be Rs 12 065 700.

The support cost will be 20 % of the licensing cost and the care cost will be 15 % of the licensing cost.

The costs are as follows:

Roentgen

Upgrade Server 500 000

Networking telegraphing 10 000

Support costs 2 413 140

Licensing costs 12 065 700

Care costs 1 809 855

The entire equipment and package cost is about Rs 16 798 695

Expertness Costss

They include costs of mensurating and analysing the bing system and costs of looking at the new system. They include software/consultancy work, hardware and package equipments for development, Integration and proving costs and Data transition costs.

The cost of consultancy is really high as a adviser approximately charges Rs 100 000 to the clip of one month.

Data transition besides costs money to travel corporate information, such as client and provider records, from the old systems to new ERP places.

It is assumed that the execution of the system will devour six months and that one adviser and one system decision maker are required. They will be paid Rs 100 000 each per month.

Therefore, for six months, the wage of the adviser will be Rs 600 000. As for the system decision maker, he will take five months for the customization, proving and informations transition and one month for preparation. So, his wage for the five months will be Rs 500 000.

The costs are as follows:

Roentgen

1 Consultant 600 000

1 System decision maker for customization,

Testing and informations transition 500 000

The entire expertness cost is about Rs 1 100 000.

Training costs

These costs will include staff preparation. Training disbursals are high because workers about constantly have to larn a new set of procedures, non merely a new package interface. With ERP, finance people will be utilizing the same package as people working in the Inventory section and they will both be come ining information that affects the other. To make this accurately, they should hold a broader apprehension of how others in the company do their occupations than they did before ERP came along.

As the system decision maker will give preparation to the 60 users of the ERP system within one month, his wage will be Rs 100 000.

The cost is as follows:

Roentgen

Staff developing 100 000

The preparation cost is about Rs 100 000.

Measure

Roentgen

Equipment and package:

16 798 695

Ascent waiter

1

500 000

Networking telegraphing

60 informations points

10 000

Support costs

2 413 140

Licensing costs

12 065 700

Care costs

1 809 855

Expertness costs:

1 100 000

Adviser

1

600 000

System Administrator for customization, proving and informations transition

1

500 000

Training costs:

100 000

System Administrator

1

100 000Below is a table demoing all the costs of the ERP system.

The entire cost involved in the ERP execution will be about Rs 18 000 000

Benefits of the ERP execution to Velogic Airlines Limited

Elimination of Costly, Inflexible Legacy Systems

Prior to the choice of an ERP system, Velogic Airlines Limited may be running many separate older systems. Elimination of those dearly-won to keep systems and implementing one individual integrated and updated system for the organisation can be really cost effectual.

Ascent of Information Technology Infrastructure

The complete IT substructure gets a face lift. ERP systems will necessitate a new constellation of hardware and package. The old and multiple hardware and package constellations normally supported by many sellers are now eliminated. Fewer engineerings and sellers create a more contributing substructure environment as relates to maintenance, support, and preparation costs.

Improved Work Procedures

A new ERP system incorporates many new and improved “ best of pattern ” concern procedures. Sellers conduct industry-wide research to specify the best concern patterns. The research information so becomes portion of their ERP system. Customers are so ensured of effectual and efficient work flow processes when implementing their ERP system.

Addition in Access to Data for Business Decision Making

Datas from all countries of the organisation integrate into one complete database shared by all members of the organisation. An ERP system eliminates the many databases members have to entree to get necessary concern determination information.

Reduced Paper Documents

Paper paperss are reduced, as there are on-line formats for informations come ining and recovering.

Unified Customer Database

Customer information is stored and maintained in one database. This allows all sites to use the same client information. Redundant record maintaining is reduced or eliminated.

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Web Based Applications

ERP systems have progressively been designed to efficaciously use the cyberspace to use many of the ERP system solutions. Web interfaces offer easy entree to a broad scope of information.

Information is Received on a more Timely Footing

Information is processed daily and at real-time which allows for immediate entree to timely information ensuing in better and more antiphonal decision-making.

Greater Accuracy of Information with Detailed Content

Data is entered one time, which eliminates the human mistake consequence in a multiple system environment. Minutess in an ERP system can be maintained at a high degree of item, excellent for coverage and hearer satisfaction.

Addition in Customer Response Time

The client service at Velogic Airlines Limited could react more rapidly to clients since information would already been collected and processed.

Improved Monitoring and Quicker Resolution of Questions

Datas can be accessed rapidly and inquiries and replies sing operations can be address quickly.

Improved Information Access and Management throughout the Organization

An ERP system accumulates detail information in a information warehouse through which direction can entree from any location in the universe. Standard and/or customized coverage can choose necessary information to support concern determinations.

Provides Functionality to Interact with other Faculties

Since the chief bosom of an ERP system is to incorporate the full operations of an organisation, it is designed to interact seamlessly with all faculties.

Feasibility of ERP execution

Finally, I may state that the undertaking should be executable towards an upgrading of the bing ERP system at Velogic Airlines Limited. Even though the costs of Rs 18 million may look to be heavy, the ERP system would surely convey much benefit to the company.

Here are some illustrations of companies that have benefited from the ERP execution:

Data Exchange Corp. , a supplier of high-tech fix services in Camarillo, Calif, implemented Oracle ‘s suite of fabrication, HR, and fiscal applications.

Since get downing to utilize Oracle less than a twelvemonth ago, the company has been able to cut 10 % to 15 % from its entire cost constructions to improved procedures, reduced mistake rates, and increased client service. For illustration, if a client has a faulty duplicator and needs a replacing portion, Data Exchange can fulfill that request the following twenty-four hours 98 % of the clip. That ‘s because the package has a maestro scheduling faculty that lets the company anticipate failure rates in the field and better manage stock list by holding the right replacing parts on the right shelves at the right.

Pitney Bowes Inc. , a $ 4 billion shaper of facsimile machines, duplicators, and get offing systems in Stamford, Conn has seen several touchable betterments since it began utilizing ERP. The company says it has slashed the cost of its overall operations by 28 % , ensuing in an one-year nest eggs of $ 3.4 million. Gross saless productiveness has soared because gross revenues reps can configure and monetary value a merchandise right in forepart of a client in less than 15 proceedingss, as opposed to the hours it used to take. Gross saless reps are averaging a 3.8 % addition in overall gross revenues, and order truth has jumped 41 % , which means the right merchandises are traveling to the right clients more frequently. As a consequence, Pitney Bowes no longer has to blow money managing returns from clients[ 4 ]28.

A proper execution of the system could supply benefits, based on the company incorporating the system with its ain procedures to do it alone, and the cost and clip put in should be offset by the benefits of the system mentioned supra. The first measure in a successful execution undertaking would be a proper and equal preparation taking to a complete and solid apprehension of ERP systems and benefits in relation to the company ‘s ain concern outlooks[ 5 ]26.

Velogic Airlines Limited will profit greatly from the ERP system, as with the current system it would be hard for the company to take the burden of the work in the hereafter. For illustration, with the coming of new flights towards new finishs, addition in the figure of clients and aircrafts, information will be processed at real-time which will let for immediate entree to timely information ensuing in better and more antiphonal decision-making. ERP will assist to interrupt down barriers between sections within the company. Extinguishing the base entirely systems and implementing one individual integrated and updated system will be really helpful to Velogic Airlines Limited as the different sections will all hold entree to the up-to-date information that is needed to run swimmingly in the company. All information will be entered merely one time into the database, which will let for greater truth and will extinguish redundancy of information. In this manner, the minutess can be maintained at a high degree of item, excellent for coverage and hearer satisfaction. Since informations can be accessed rapidly, clip will be saved and therefore Velogic Airlines Limited will be able to offer a better quality service to clients. Therefore, it will pull more and more clients and therefore maximize net income.

By upgrading the bing ERP, many alterations will take topographic point at Velogic Airlines Limited but the wagess can be immense if a decently designed program is followed through from the beginning to the terminal.