International retail corporation limited is a small family owned business which specialises in fast moving consumer good. They are experiencing difficulties with their system as the current accounting software is out of date and causes problems. The problems consists of a limited support for large orders and inaccurate and inconsistent data across the inventory and sales database. The software package was developed in-house and led by an accounting manger which lacks I.T technical skills.
1. Current System Deficiencies
The current accounting software package used in IRCL is not the most appropriate software package for their business as it is out of date and not meeting the businesses requirements and is incompetent in terms of sales as there are problems with the system as it has a limitation on the maximum daily amount of sales. The data provided by this system for sales and inventory is also 'inaccurate' and 'inconsistent' which is significant problem as the business is not able to optimize its buying and selling process therefore creating a bottleneck effect on the businesses net profit.
2. ERP Justification
-Reduced operating costs
-Standardization of business processes
Reduced operating costs
A benefit of implementing an ERP system for IRCL would be a reduction in overall operating costs as it reduces the cost for inventory control as well as lowering production costs and marketing costs through avoiding the duplication of information but does not change the normal business process.
Standardization of business processes
Majority of ERP vendors design their products based on the industries best practices , these can be used by IRCL to standardise their own processes. A benefit of this would be process consistency and consolidation of the business across the different departments of the company such as finance and inventory , this would reduce human error as well as increase transparency as the process of intercompany transactions would become automated.
ERP systems are typically centralized therefore it would make it easier to track and manager inventory levels at a much faster rate as well as monitor inventory which is currently in transit and future orders that may be received. By increasing the visibility of inventory it can allow IRCL to better control their capital requirements and even make the decision or strategy construction process faster , efficient and improved.
By implementing an ERP system it would increase the long term sustainability of their system as ERP is able to integrate other various systems to adapt and customize to the organizations business needs , such as using and API (Application Programming Interface) to incorporate barcode readers into a ERP. A benefit of longer system sustainability would be a reduction of costs in the long term as the system can be used for longer without needing to have it...