| M35BSSBusiness Process Integration | Coursework Reflective Pieces | Module leaderMark HaylesStudentFernando del Rio PerezSID: 40201587/27/2012 |

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Contents

Contents 2
List of Tables 2

Reflective Piece1: SAP and Article Review 3 SAP- Company ,products/services and benefits 3 Article review: Enterprize resource planing in reengineering business…………….....6

Reflective piece 2: Impact of Internet Technology on ERP 7 Benefits and adrawbacks of Web - based ERP systems 8

Reflective Piece 3: Understanding of ERPsim Game 10

Reflective Piece 4: Data mining and competitive advantage 12 Applications of Data mining 13

Reflective Work 5: ERP Sim Experience 15

List of References 17

List of Tables Table 1. SAP Business suite applications 3 Table 2. List of benefits and drawback of ERP systems 5 Table 3. Benefits and drawbacks of web - based ERP systems 9 Table 4. Individual roles of the group members 10

REFLECTIVE PIECE 1 – SAP and Article Review

SAP- SAP – company, products/service and benefits

Formed in 1972, SAP (Systems, Applications, and Products in Data Processing) is seen today as the largest inter-enterprise software firm in the global market. Due to the wide range of products that they have, SAP has become the third largest independent software solutions supplier for businesses. The headquarter of the company is located In Walldorf, Germany, However, they have subsidies in over 50 countries and thousands of customers in more than 150 different countries. SAP is present in the America's, Asia and Europe (SAP 2012).
SAP provides a Business Suite which is a package of applications that offers companies the opportunity to integrate information and processes as well as improve functionality which allows the company to compete more effectively in the market. SAP Business Suite is composed of five applications being the following: CRM (Customer Relationship Management) | * Integrates and automates many customer servicing processes * Customer insight and customer retention | ERP (Enterprise Resource Planning) | * Integration of processes across the whole organisation | PLM (Product Lifecycle Management) | * Support for all the processes related with the product during the product life cycle | SCM (Supply Chain Management) | * Support companies to strengthen relationships with customers, suppliers and contract worldwide manufactures | SRM (Supplier Relationship Management) | * Support companies to build collaborative relationship with suppliers * Support for all purchase-related processes |

Tabla 1: Business SAP Business Suite applications (own table created from SAP 2012)

By using these applications companies are able to get and retain customers, integrate manufacturers with all the information related to product, gain procurement from suppliers; achieve marketing and customer insight and process resourcing. In addition, SAP implementation has many other benefits among which are the following: * It supplies solutions for workflow and back-office processes * SAP helps companies to reduce costs and increase flexibility * Better efficiency and productivity by leveraging processes and functions across company * Immediate access to all the information needed by the staff at all levels * SAP supports companies to integrate and optimize business processes as well as reduce integration costs * Improve financial management and increase profitability (SAP 2012, SAP SD 2010)

ERP is one of the most popular and best-selling packages of SAP. It was developed from the evolution of MRP (Manufacturing resource planning), MRP II and JIT (Just-in-time). ERP allows companies to integrate all the processes and synchronise each function within an organisation in order to get the real-time information required to have a wide visibility for key performance indicators needed to meet company objectives. The main functions included in an ERP could be named as warehousing, sales, finance, distribution, marketing, supply chain systems, asset management and human resource management (Siriginidi 2000: 378- 379)

Nowadays, in a world driven by high competition and complex processes ERP could be the key to get competitive advantage over rivals. Other benefits as well as drawbacks are shown in Table 2.

BENEFITS | DRAWBACKS | Integration of all company’s functions from sales order to customer service | High implementation costs andtime-consuming process | Reduction in operating costs (lower inventory control cost, lower marketing and production costs) | Investments for staff training is required | Full Integration of external and internal operations (suppliers-related processes) | Organisation must have a complete understanding of the ERP to work successfully with it | Increase flexibility in order to react to changes in business needs | Due to the high cost of this technology most small and medium size business cannot implement ERP systems | Improved productivity through greater flexibility | The selection of the wrong module can reduce efficiency and profitability | Reduce data redundancy | Companies need to have a fast and secure IT infrastructure in order to implement an appropriate ERP system. | Enhanced customer satisfaction by providing better quality and reduced product cost | Data integrity ( Integration can generate data leaks and security breaches) |
Table 2: List of benefits and drawbacks of ERP systems
(Own table created from Shehab et al. 2004, SAP SD, Siriginidi 2000)

Article review: Enterprise resource planning in reengineering business
Summary and Key learning Points: * Nowadays the world is facing a lot changes for instance, higher competition, complex processes, higher technology, customers’ preferences and environmental changes. In order to keep up with them all, Business Process Reengineering (BPR) is becoming a crucial element for organisations.

* BPR improves efficiency and effectiveness of companies’ processes as well as increase the speed of decision making.

* IT implications have a very important role for organisations as it improves coordination and information can be managed to provide visibility of key performance indicators and used for decision making. For instance, transfers information rapidly and with ease across large distances, thus making the processes independent of geography;

* Nowadays, ERP systems can be seen as one of the fast developing IT segments. ERP allow companies to integrate all the processes and synchronise each function within an organisation

* ERP is appropriate for companies with big inventory, lack of coordination and poor efficiency. In spite of being very expensive and time- consuming, it is recommended to carry out BPR before the ERP is implemented.

* Before the implementation of ERP, an appropriate package must be chosen by taking into consideration several external and internal factors. The former could be provider’s history, its company’s record, and availability of suppliers, software functionality or availability of updated .The later can be seen as management’s commitment, staff training’s availability and company’s infrastructure

* The most famous ERP vendors are SAP, the Sage Group, Oracle Applications and Microsoft Dynamics

REFLECTIVE PIECE 2 – Impact of Internet Technology on ERP

It is known that ERP systems are very expensive these days so small and medium business may be not able to purchase it. Nevertheless, other alternative ERP systems can be delivered through internet technology
Cloud computing is a model where customers can connect into the “cloud” on Internet to access applications, data and IT resources so it replaces the company data server performing the same function. As services can be individually provided, customers pay only for the resources needed (Burford, D. 2010). Consequently, companies can increase flexibility and react to changes on demand quickly. In this model customers do not have to install it in their computers as the responsibility of hardware acquisition and maintenance is assumed by the cloud providers. However, as you data is in someone else’s server, there are many concerns related to security.
An Application Service Provision is a business that provides software services to multiple customers, using a secure centrally located server to host and manage the service. It is becoming very popular and valuable for small and medium organisations which are not able to purchase the software license or do not have the infrastructural resources to manage it. In addition, companies using ASP model do not have worry about software upgrades which is a great advantage due to the high prices and complexity of it. For example, for a company where there is a important amount of computers, software upgrades can cost a fortune. Downsides of ASP are related to high costs of customization and hardware compliance (Brain, M. 2011)
A Software as a Service (SaaS) can be defined as an application which is hosted by a service provider and is made available to multiple customers through the internet at the same time. Businesses using SaaS have the advantage of being able to order additional components and features without any licensing or technical barriers. In addition, this model provides a powerful communication features such as voices calls (VOIP) or instant messaging (CHAT). In contrast to ASP, SaaS has low customization cost as provider possess an entire domain knowledge over the service. However, SaaS has some limitations such as security and confidentiality as the data is stored in third party servers, risk of data loss (if the vendor is gone out of business) and dependence of high speed internet (can be a big issue in developing countries) (Exforsys Inc 2009).

Nowadays, another model that comes into reality is open source phenomenon (OSS).It can be defined as a combination of delivery and development (Johansson 2010:169). The main characteristic of this model is that the software is delivered on internet and users can use, change, improve the functionality and redistribute the software totally free. Nevertheless, availability problems can emerge as it may be difficult to find the appropriate software for the business (Sen et al. 2008).Within the development of alternative ERP methods focussed on SMEs, many open source ERPs software have been created, for instance OpenBravo, Compiere, WebERP and TinyERP (Johansson 2010:169)

Benefits and drawback of web-based ERP
It is known that Internet technology has contributed to ERP Systems by giving way to much different forms of business services and applications available to meet the requirements of small and medium sized business. In the past, businesses needed to purchase very expensive and standardized software. Consequently, businesses had to adapt their strategy. Nowadays, companies can select the appropriate software or individual application which allows them to optimize processes at lower costs. When a web-base ERP is selected, the software resides in the provider’s host server so companies can decrease their IT expenses in both hardware and personal. In addition, most of the Web-based ERP application supply professional upgrades and support which one again reduce company costs. Further benefits and drawback of web-based ERP systems are shown in Table 3

BENEFITS | DRAWBACKS | Provide real information of the whole company (order, finance, purchase….) World-wide access | Dependence on the resource planning website reliability | Increase productivity and reliability | Concerns related to privacy and security of data | Provide better service to suppliers, customers and partners | Reduced flexibility | Implementation time is eliminated (Can be used from day one). Optimized performance and support | Loss of control | Reduce costs of business | Integration problems | Table 3: Benefits and drawback of web-based ERP systems
(own table created from Mardjan, M. 2010, Martin, C. 2011)

REFLECTIVE PIECE 3 – Understanding of the ERP Sim game

Our team was chosen ensuring that all its members are motivated about the ERPsim game and meet the necessary requirements to carry out its role. During the first seminar and before the start of the simulation, our team analysed different strategies to choose the more efficient one and our individual roles were organized as following:

Student Name | Student ID | Responsibility in the Game | Fernando del Rio Perez | 4020158 | Inventory management | Niwat Chandontrikit | 3461978 | Marketing management | Jednada Sithonsuraphana | 3777846 | Pricing adjustment | Ndiyo Lise Clairia | 3869820 | Sales and market reports |
Table 4: Individual roles of the group members

The individual roles and responsibilities were organized between the group members equally to ensure a well-organized participation of each member. As it is shown in table 4, one member was assigned for sales and market reports, one for inventory management, one for pricing adjustment and the last one for marketing expenses. However, the market and sales reports were followed for all team members. Hence, the group is totally aware of the market situation and able to react quickly to the changes

In order to discuss and assure the more appropriate strategy for next round, our group get together before and after of each quarter .Information generated for the ERP system allows us to be aware of the market situation,(better selling product, overall market price etc..) react quickly to the changing environment and change strategy if it is necessary. Also, alternative plans are discussed in order to be ready to react to the changing environment in the market.
Our overall strategy in the first three rounds of the game (Quarters 1, 2, 3) was based in pricing in order to increase turnover and profits. We focused on the best-selling products and we increased the price considerably. As there was a high demand in the market at that point, it was still selling very well so we kept pushing the price up. By doing so, we were able to maximise not only the sales but our profit as well.
Regarding marketing, our team used a rapid skimming strategy combining high prices with high promotions in order to increase our sales and market share. We concentrated the marketing expenses in one specific area where the sales were lower but still targeting the other two regions as well with less marketing activities. During the game, the market environment suffered different changes, for example, competitors were selling under price or customers do not pay high prices. In order to react to the changing environment and try to meet customers’ demand, our team had to adapt the marketing strategy and reduced prices in some products in all regions.

Our inventory strategy worked very well. We focused our plan on keeping the stock at minimum level (200-300 units) in order to reduce company’s costs. We used a fixed order process where the order was placed once the minimum stock was reached. In addition, we usually ordered at the end of the quarter to ensure enough stock for the next round. The main goal of our strategy is to maintain enough stock to be able to serve customers and meet their demand.

The ERPsim game is very helpful to acquire knowledge about how an ERP works, how to create a marketing plan in a business using an ERP and how all the company departments are integrated in order to access to real time information, improve decision making and ensure flexibility to meet customers’ demand.

REFLECTIVE PIECE 4 – Data Mining and competitive advantage

Data Mining
In a world driven by high competitive business environment companies need to collect large amount of information in order to react dynamically. As businesses try to get competitive advantage over each other, new techniques are used such us business intelligence and data mining (Sychevskiy, M. et al. 2007)
Business intelligence can be defined as the information related to the overall function of an enterprise such as client list, shareholders registers ,electronic copies of agreement with suppliers and customers, procedure documents, financials etc. It helps to analyse information about the past performance of the company that is used to predict the future as well as to bring out some emerging trends from which the business may get profit. Data mining tool allows companies to carry out a focused search for required data by sifting through the huge amount of information located in data warehouses. Hence, business intelligence data mining is the most adequate and efficient process to find and extract specific information quickly (Chaterjee, J. 2008)
Data mining can be described as the process of discovering patterns and correlations in data which can be extracted and interpreted to develop information (Palace, 2006)
All enterprises collect vast amount of data daily but the crucial things is how to use it If companies temp to analyse data manually to determinate opportunities and emerging trends it may be very expensive and time consuming. Then is when innovative business can gain competitive advantage
Data mining can be applied to any size of businesses. It is known that a small company does not need to use the same expensive services that are needed by large business. “Data mining applications are often structured around the specific needs of an industry sector or even tailored and built for a single organization (Martin, 2011).
Applications of data mining
Many companies have successfully set up data mining’s applications. While innovators of this technology have been found in information industries, data mining is now having an important role in businesses focussed in improving their customer relationship such as financial, marketing, communications or retail businesses. Two important factors must be taken into consideration for success with implementation of data mining: well-integrated data warehouse and good understanding of the businesses process where data mining is applied (Chaterjee, J. 2008)
Some successful industries using data mining can be named as:
The banking industry Data mining can be used to identify unusual and fraudulent transactions on a credit card. Banks can use data mining to classify customer segments so they are able to set up more effective retention programs. In addition, data mining helps banking industry by predicting customer’s lifetime value
The retail industry Data mining can be utilized to identify customers’ preferences to better market and manufacture the products in the future. Data mining can also help retails improve stoking, promotions and store layout strategies. Also, by using data mining retailers can examine time-based patents which allow them to run the business more effectively.
Manufacturing industry Data mining can be used in manufacturing industry to improve products and find defects through comparisons and trend recognition as well as to predict which features must be taken into consideration to meet customer demand
The telecommunications industry Due to the high competition around the world that the telecommunication industry is facing these days, companies need to focus in retaining customers and getting new ones. By using data mining, businesses are able to determine customers with the same patterns and develop special pricing strategies and attractive promotion. Also, manufacturers can use data mining to determine customers’ loyalty (Rygielski, C et al. 2006).
All these industries have something in common .Data mining brings a lot of benefits to these industries which can be used to gain competitive advantage. They use data mining in order to focus on reducing costs and improving customers’ relationship. They can focus on the most profitable customers and design specific strategies to reach them.
However, data mining has some disadvantages such as privacy issues, security issues and misuse of information. Due to that internet is recently booming with forums, social networks, e-commerce, blogs etc… people’s concerns are about their personal information to be used in unethical way. Information collected by businesses may be sold to others or lost. Hence, personal privacy is a big concern. Security is another important issue to take into consideration. Although businesses have this personal information about us available on internet, it is difficult for them to protect that information. For instance, the data base of Ford Motor Credit Company was accessed by hackers who stole valuable personal information of the customers. In addition information collected though data mining for marketing or ethical purposes may be misused. Information can be used against vulnerable or discriminated people

REFLECTIVE PIECE 5 – ERP Sim Experience

I consider that ERP Sim game in Business process Integration module was a really valuable and successful experience. The simulation helps me acquire knowledge about business process and develop technical and decision making skills to use in the real life. It allows us to experience all the benefits of ERP system in a real business scenario. By accessing the managerial reports in the simulation, we were able to analyse information to make profitably business decisions. Although we did not have enough knowledge of the game before the start and the simulation was quite limited it allows us to gain insight about using ERP system and how it integrates each business department in order to provide customer value from the company
In the first round of the simulation (Quarter 1) our strategy turned out very successful. We aimed to maximise sales and profits by using pricing skimming strategy focus on the best-selling products. We divided responsibilities between the team members equally in order to have an efficient collaboration and effective communication. After the first quarter, our team ranked 2sd with high turnover and great profits.
During the second round (Quarter 2),our team decided to remain with the same pricing focused strategy but using some marketing with the purpose of crate awareness of our products in those areas where the sales are lower as well as widen customer base. I spite of having some marketing expenditure, we were able to rank 1st position as we considerably increased sales with a high profit margin.
In the third round (Quarter 3), our team followed the same strategy as in the previous quarter but managing a successful inventory strategy as well. We kept our stock at minimum level (200-300 units) to reduce company’s costs and we ordered at the end of the quarter to ensure enough stock to start the next round. By doing so, our team was able to serve customers all the time and gain competitive advantage. We changed roles and responsibilities in this round to ensure all team members a full knowledge of the simulation. We ranked in 2sd position at the end of this quarter.
In the last round of the module where we played the three quarters straight, our strategy was not very successful. Our sales dramatically decreased in all regions due to the fact that other teams were selling under prices.In order to react to this change in the market environment and increase sales, we focussed our strategy in marketing investing high among of money in all areas with curbing sales efficiently. As a result, our team obtained very low profits and poor margin. However, in the last quarter of this round we used the same strategy that in previous rounds focussing our investments in those regions where we were selling well. Eventually, we ranked in 5th position. The information generated from the ERP allowed our team to know our week points and improve our decision making.
In addition, the ERPSim Game allows me to experience the benefits of Business Intelligent systems.BI allows companies to control and share information easier as so make it available through the whole company and to everyone within the organisation. It is known that information is power for business but if they do not focus it correctly it could be very painful in long time basis. BI provides and presents information in a more efficient and attractive visually way as well as prevent companies from extracting manually through irrelevant data. By using BI systems, companies can follow customers’ behaviour to improve relationship. In addition, BI systems allow organisation to track emerging trends, product sales and distributors in order to improve production, processes, supply and organisation’s competitiveness

List of References

1. Shehab, E.M., Sharp, M.W., Supramaniam, L. and Spedding, T.A. (2004) ‘Enterprise resource planning: An integrative review’. Business Process Management Journal 10 (4), 359-386

2. Siriginidi, S.R. (2000) ‘Enterprise resource planning in reengineering business’ Business Process Management Journal 6 (5), 376-391

3. Kogent Learning Solutions, Inc. (2010) SAP SD. London: Jones and Bartlett Publishers

4. Sen, R., Subramaniam, C., Nelson, M., ‘Determinants of the Choice of Open Source Software License,’Journal of Management Information Systems (JMIS), Vol. 25, No. 3, pp. 209-241

5. Johansson, B. (2010), ‘ERP Systems Diffusion among SMEs: Does Development of Open Source ERPs Play a Role’. Proceedings Of The European Conference On Information Management & Evaluation, 168-174

6. Burford, D. (2010) ‘Cloud Computing: A Brief Introduction’, Lad Enterprizes

7. SAP (2012) SAP Business Suite [online] available from
<http://www.sap.com/germany/solutions/business-suite/index.epx> [10 June 2012]

8. SAP (2012) SAP UK | The Best-Run Businesses Run SAP [online] available from <http://www.sap.com/uk/index.epx> [10 June 2012] 9. Brain,M. ( 2011) How ASPs Works [Online] available from <http://computer.howstuffworks.com/asp3.htm> [ 25 June 2012]

10. Exforsys Inc (2009) Software as a Service (SaaS) model [online] available from <http://www.exforsys.com/tutorials/cloud-computing/saas-model-cloud-computing.html> [28 June 2012]

11. SAP (2012) SAP UK | The Best-Run Businesses Run SAP [online] available from <http://www.sap.com/uk/index.epx> [10 June 2012]

12. Martin, C. (2011). What Are Data Mining Applications? [Online] available from <http://www.wisegeek.com/what-are-the-different-types-of-data-mining-techniques.htm> [10 July 2012]

13. Palace, B. (1996). Data Mining: What Is Data Mining? [Online] available from <http://www.anderson.ucla.edu/faculty/jason.frand/teacher/technologies/palace/datamining.htm> [10 July 2012]

14. Chaterjee, J. (2008) Using Data Mining for Business Intelligent [Online] Available from<http://www.aspfree.com/c/a/MS-SQL-Server/Using-Data-Mining-for-Business-Intelligence/> [ 09 July 2012]

15. Sychevskiy, M and Villiers, D. (2007) ‘SAP Data Mining’,D Villiers Walton

16. Rygielski,C., Cheng Wang, J. and David C. Yen (2006) ‘Data mining techniques for customer relationship management’, Technology in Society,483-502

17. Mardjan, M. (2010) Business disadvantages using cloud computing [online] available from<http://www.slideshare.net/maikelm/disadvantages-of-cloud-computing> [28 June 2012]

18. Martin, C. (2011) What is Web-Based ERP? [Online] available from<http://www.wisegeek.com/what-is-web-based-erp.htm > [28 June 2012]