Reference no: EM133049532
Develop a business case for the company board for a new ERP system given.The following Case Study below.
The primary objectives are:
- To demonstrate developing a business case
- To make realistic projections of opportunities and risks of procuring an ERP system
- To present these in a compelling way that would allow the executive team to allocate capital funding and support from the organization for the project
Review the following information below and write a business case recommending what Metal Fabrication Company should consider: upgrade or replace the current accounting system in production.
The Metal Fabrication Company is a worldwide metal fabrication manufacturer who is currently facing inefficient use of its global resources due to the incompatibility of multiple legacy systems. As a result, they are operating inefficiently, unable to determine where to cut costs, and having trouble providing satisfactory customer service. The ERP system offered by SAP will allow for the global integration of processes and communications to reduce the manual procedures. Since the system will also operate with the ability to connect with the internet, the company will be able to accept orders online and accept electronic funds transfers from customers. Most ERP systems allow for customization; it would be ideal to include the Advanced Planning and Optimization (APO), Inventory Management, and Global Purchasing modules when customizing. The system should be implemented using the assistance of professional consultants with experience within the manufacturing industry, stored on the cloud and using the phased-in approach. Most importantly, the change should not be made until senior management is "on-board" with the decision.
The purpose of this assignment is to develop a business case report justifying whether the Metal Fabrication Company should invest in new accounting information systems software to upgrade the numerous legacy systems used in the daily operations of the company. The recommendations will be based on the following analysis: (1) the advantages of an ERP system, (2) how the new SAP APO module will be beneficial to the company, as well as (3) what improvements can be made in inventory management and global purchasing through investing in a more advanced accounting information software application.
Background
Annual sales: $500 million
Employees: 1000
Number of plants: 2
Distribution centers: 3
Manufacturing process: Fabrication and assembly
Product: A complex assembled make-to-order product, with many options
Pre-tax net profit: 10 percent of sales
Annual direct labor cost: $25 million
Annual purchase volume (production materials): $150 million
Annual cost of goods sold: $300 million
Current inventories: $50 million
Metal Fabrication Company produces specialty provides metal fabrication products used in consumer and industrial products. The company employs over 1,000 employees in 5 locations and over 3 countries around the world. In order to remain competitive within the industry, the firm is considering investing in a new ERP system. Currently, various legacy systems are used for business applications, including accounting, logistics, purchasing and manufacturing. Many of these applications are almost 25 years old and cannot link to the internet, making it extremely difficult to share information. Customers are often dissatisfied with the limited ability to conduct e-business as it is a growing trend.
It is recommended you answer the following questions prior to writing up the business case.
What were some of the key business/technology challenges faced by Metal Fabrication Company prior to implementing SAPTM ERP? Describe the business needs/ rationale for Metal Fabrication Company to have access to real-time information by answering the following:
(a) What were some of the unique information requirements that Metal Fabrication Company experienced?
(b) What is meant by "closing the books"? Why is it essential to reduce the time to close the books at month-end?
(c) What is Sarbanes-Oxley Act? How could Metal Fabrication Company failure to comply with such regulations seriously impair the company's ability to conduct business?
Describe why/how SAPTM was the right fit for Metal Fabrication Company as per the following:
(a) Describe how implementation of an ERP system ensures good work processes based on best practices.
(b) What does it mean to configure a system and why is this recommended to customizing the system?
(c) Identify a key challenge that Metal Fabrication Company was able to overcome and the value gained by engaging the services of a third party ERP consulting firm.
4. Describe the key benefits/improvements of the SAPTM ERP system to the business and how they were made possible from the following perspectives:
(a) Inventory Management and Global Purchasing. What were the improvements in inventory management and global purchasing systems?
(b) Distribution and Materials Management. Describe how the new SAPTM Business Information Warehouse (BIW) and SAPTM Advanced Planning & Optimization (APO) modules will benefit Metal Fabrication Company. Describe the specific components/features that make up these modules and what benefits are they expected to provide.*