Introduction

Enterprise systems are the big scale software that used to host as many as application in one

software system. Enterprise system used to have the data of all the application at one place so

that all the application can be connected with the same database and can get the updates or data

in real time manner. Applications having the data in real time can leverage the organization for

effective decision-making and data analytics that can help in business growth. Enterprise system

used to get effective RoI in terms of the money and other matters. It used to deploy the

application which is more consumer-centric and having all the data at one place and people

looking for the data do not look here and there for a small piece of data. Initially may be the

implementation of the Enterprise system like ERP (Enterprise resource planning) become painful

and costly as compared to the traditional software used for managing the organization data but

later on it has been observed that enterprise system become the crucial element for the success of

the organization.“Enterprise System is a cross- functional information system that provides

organization-wide coordination and integration of the key business processes”. This report

focuses on the contributions made by enterprise systems towards the performance of the

organization, measurement of such contributions, principle drivers behind the adoption of supply

chain management system by businesses and the necessary organizational change management

considerations for the successful adoption of an enterprise system. Contribution of Enterprise

Systems to Organizational Performance and Its Measurement Enterprise systems contribute

towards the performance of the organization in a variety of ways. Enterprise Systems refers to

the general application of computer software and hardware, used by businesses to establish and

running its processes. Incorporated Enterprise System usually tackles various procedures on
behalf of a company to enhance its day to day running. A lot of companies prefer embracing

Enterprise Systems like Customer Relationship Management (CRM), Enterprise Resource

Planning (ERP), among others nowadays. The utmost used of all the Enterprise Systems by

many businesses is the ERP. There are various vital reasons why many companies embrace using

Enterprise Systems as expressed below.

Principal drivers behind businesses adopting Enterprise Systems

Enterprise system are large- scale application software packages that assist an organization in

information flows, business processes, data analytics and reporting. Enterprise system enables an

organization to significantly reduce its information technology cost along with the minimization

of manual input of data. These systems have the capability of replacing multiple independent

systems that are responsible for processing data for the purpose of supporting specific business

processes or functions. Organizations have deployed enterprise systems or ESs to achieve

integration of business activities, improve organizational effectiveness and increase operational

efficiencies. Some case studies were conducted in three manufacturing firms that have

implemented ESs reveal how these companies transform disparate corporate data into knowledge

for monitoring performance and achieving the results. ES tools like business intelligence in

conjunction with balanced scorecards and digital dashboards aid in tracking progress towards

accomplishing operational goals. The ES technology provides the analytical and knowledge-

leveraging support to maximize value from their performance management processes. Also,

many organizations have implemented enterprise system (ES) technology to improve inter-

business unit integration, increase organizational effectiveness and enhance operational

efficiencies. ESs model different business processes to cohesively put related tasks together and

optimally utilize organizational resources and the key benefits of ES implementation depends
upon the extent of integration established within different organizational processes. ES

implementation pointers, identified in the probes to interview questions, were based on time

(phases, time-to-implement, modules, and locations), geography, implementation models, and

size (cost, number-of-users, and project structure). Organizational drivers of interest that

emerged from the analysis of interview notes included organization size, IT maturity,

organizational ownership, organizational profit-making status, and organizational global reach.

Most informants used revenue, not the number of employees as a measure for organizational

size. Furthermore, all informants agreed that future ES implementations are likely to happen in

SME-sized organizations. However, two different definitions for an SME organization emerged

in the analysis of informants’ responses. Some defined SME organizations to have a revenue of

NZ$20M-NZ$100M. Others stretched the SME organization size to a revenue of NZ$150M-

NZ$200M. Comparing the two definitions with the survey results in the 2001 IDC Forecast for

Management report (Hind, 2001) confirms the validity of the two definitions in capturing the

state of ES implementations as measured in organizational size. The 2001 IDC survey revealed

that around 75 percent of newly reported ES implementations in NZ are in organizations where

annual revenues are between $10 and $250 million (Hind, 2001). Approximately 50% of these

implementations are in organizations that are $50M-$250M in size while 25% are in

organizations of $10M-$50M size. The remaining 25% are divided to the two-thirds in large

organizations ($250M and over) and the one-third in small organizations that have revenue under

$10M. Most informants agreed that the size of the organization is a driver in deciding who they

want to do business with. One vendor commented that they made sure that their “customers have

resources not just big ideas.” They further agreed that “business complexity is the same for both

small and big organizations; however the size of their wallet is not the same.” IT maturity IT
maturity is the term used to describe the level of IT/IS adoption in organizations. Our findings

suggest that ES adoption is positively associated with the IT maturity of the organization. ‘IT

mature’ organizations are these that “have taken care of their ES needs and are now extending to

CRM, SCM.” ‘IT ready’ organizations are “keen to do and understand IT value.” They are at the

stage where they are planning to develop their IT backbone in either an ES or some kind of

proprietary system. ‘IT hesitant’ organizations think that “IS is a cost to the business and do not

believe in spending money.” Most informants concluded that although NZ is a small country,

technological advancement is mature and the number of companies that fall in the third category

is decreasing. Specifically, NZ ES implementations, apart from being smaller in size are “on par

with what’s happening in the US. For example, everyone has ES implementations and Internet

presence now.” Furthermore, most NZ organizations implementing enterprise systems had ES-

like solutions that were implemented during the 1980s. Organization ownership and profit-

making status Organization ownership and profit making status was suggested by drivers that

influence the way implementation decisions are made. For example, in an ES implementation

where the business is owned by individuals, the way decisions are made is more personal. One

informant suggested that in these organizations, decisions are made “by looking you in the eye

and saying I want to do business with you.” Furthermore, whether the organization is a business

organization or public sector would impose major differences in the way the business operates,

thus affecting the ES implementation decision-making. Organizational reach: Global vs. national

Two drivers associated with organizational reach were found to impact on ES implementation.

The first is related to SMEs that have a global reach. Although these organizations are relatively

small in size, they are more likely to implement an ES solution than their NZ-only counterparts,

and the solution they choose is more likely to be a 1st tier ES. The second driver concerns multi-
national organizations that implement an ES in their NZ companies. These implementations are

often based on a global template that includes standard business processes. Regional teams have

only minor involvement in providing the localization that includes things such as NZ taxation.

Therefore, whenever possible, the global template prevails and most critical decisions are “all

made off shore,” while “NZ businesses have little input into their decisions.”

Enterprise Systems contribute to organizational performance and how do we measure such

contributions?

Enterprise systems assist in communicating the critical firm- wide information on the

performance of business to the managers of the organization instantly which enables them in

making right decisions at the right time thereby enhancing the performance of the organization.

Moreover, it helps in improving the efficiency and quality of production, distribution and

customer service by way of integration of internal business processes of the company in finance,

sales, custom logistics, production, etc. Also, the performance of the organization automatically

improves when a uniform organizational culture is created where similar information and

processes are used by everyone for performing business activities. Enterprise systems help in

reducing the cost involved in hardware, software; transaction processing and IT support staff.

When the costs of the organization are reduced, its performance significantly increases.

Furthermore, the functions of the different departments are synchronized in an effective way

with the help of implementation of enterprise systems in the organization. The time required for

the processing of documents such as payrolls is reduced to a great extent. Enterprise systems

enable transparency and information visibility within an organization which in turn facilitates

various operations performed by different departments thereby contributing towards the

organizational performance. The measurement of the contributions of enterprise systems to the

organizational performance is difficult due to its complex nature. Various measurement models

can be used for assessing the contributions such as a priori model which uses five separate

dimensions of success: information quality, system quality, individual impact, satisfaction and

organizational impact. Another model is the revised model which has four quadrants namely

organizational impact, individual impact, system quality and information quality. The

measurement of these dimensions provides the snapshot of organization’s experience of the

enterprise system. Moreover, the contributions of enterprise systems to the organizational

performance can be measured in higher and repeated sales, better public image, higher customer

retention rates and sales conversation rates. The position of the organization in comparison to the

competitors, flexibility and efficiency in responding to the changing conditions can also be used

for measuring the contribution of enterprise systems to the performance of organization.

Principle Drivers behind the adoption of Supply Chain Management System by Businesses

Nowadays, businesses have increased their reliance on the suppliers. Each and every aspect of

the business requires procurement. In other words, all the requirements of an organization is tied

to the suppliers which creates the need for managing supplier relations, contracts, information

and following various regulations. Business require a supply chain management system (SCM)

for the purpose of establishing an efficient supply chain management process with the view to

realize the best value from the amount spend by them through supplier analysis of risk, cost and

performance. There are a number of reasons which drives businesses to adopt supply chain

management systems. Some of them are following: Supply chain management system assists the

business in managing its contractual obligations for assuring that a continuous supply is

maintained and delivery disruptions by the service company are avoided. Quality techniques are

incorporated within the business with the help of supply chain management system which further
assists in improving operations. Therefore, quality assurance drives business to adopt SCM

systems. Inventory buffer levels are included within the supply chain management systems that

have been determined after the complete analysis of historical trends. This helps in effective

management of inventories by the company by way of minimizing the holding costs and

providing required flexibility for meeting the demands of the customers. Optimal way for

shipping are determined with the help of SCM systems along with the reduction in costs to the

lowest possible levels. It allows the businesses to ship their orders quickly and accurately which

is the key for the success of the businesses. This drives the businesses to adopt SCM systems.

Businesses are exposed to a number of legal liabilities and risks which can be managed with the

effective implementation of supply chain management systems. It helps in identifying the critical

risk factors in a business or with their suppliers. The potential for failures is ascertained and the

risk is mitigated by the management through the supply chain methodologies. The linkage of

supply chain management systems with all the business software systems improves the

collaboration with the partners. SCM systems provide businesses with an opportunity to share

information to the shareholders and keep them informed. Other tasks such as forecasts, reporting,

quotation, order statuses and other transportation plans are accelerated through these

collaborations in real time which acts as a driver for the adoption of SCM systems by businesses.

Higher levels of customer satisfaction are ensured by supply chain management system by way

of getting right products in the hands of top buyers of the organization at the right time. This

optimization leads to high revenue and improved profitability for the business. Necessary

Organizational Change Management Considerations for the Successful Adoption of Enterprise

System Organizational change management can be defined as a framework that manages the

outcome of new business processes, cultural changes or organizational structure changes within
an enterprise. The entire organization is affected as a result of implementation of new enterprise

system.

Organizational change management considerations necessary for successful adoption of an

Enterprise System

One of the biggest mistakes we commit with ES projects today is not realizing the need

for organizational change management. It is a curse that many organizations feel that change

management is an unnecessary expense. Change management is often misunderstood and

devalued by higher-ups who think that simply instructing the employees to use the new ES

application without any internal changes would work. However, the reality starkly contrasts this

belief. Change management is integral to ES implementation. One must thoroughly understand

the impact of the new ES application on business processes and the key users prior to

implementation. The approach towards organizational change management should be based on

business objective along with factors such as region, culture, language and experience. A new ES

application affects the entire organisation, irrespective of its size. Organisation Change

Management helps prepare the employees for the impending transformation that otherwise may

not be well accepted. Employees need to know as to why the organisation moved to a new ES

system and how will it benefit the organisation. It is quintessential that the all the employees are

on the same page as the top management. Since ES implementation directly impacts the

employees’ day-to-day activities, it is important to treat it as learning curve that can be

effectively managed with Organisational Change Management initiative. Employees can’t

embrace what they don’t understand, so it is vital for them to get familiarised with the features of

the new ES application through a well-planned and executed change management programme.

Communication within a global ES project is absolutely vital but incredibly difficult. While
email is very effective, face-to-face communication is certainly more effective. For instance,

most employees would like to hear about project updates from their managers during team

meetings. Project and communications teams must work in tandem to deliver the message in a

manner those results in expected behavioral changes. Lest we forget, language, culture and level

of education of the end-users govern the communication strategy employed and its effectiveness.

Change management plans must be devised to address workforce transition to the new ES system

with clear demarcation of super-users and trainers. A comprehensive training strategy should

account for organization specific nuances, locations and testing prior to go-live. Failing to fully

develop a training strategy can have serious implications on the success of a global ES

implementation. Organizational readiness assessments are critical with global ES projects to

ensure all issues and opportunities are captured across the enterprise. While this is often skipped

on account of budgetary concerns, investment incurred in engaging employees leads to

quantifiable benefits realization in the long run. Make sure that you get significant buy-in from

leadership spanning every department, office, and region. While employees may report to the

home office, their allegiance lies where their leadership resides. If you don’t have sufficient buy-

in, your ES project is doomed for failure. Language, education and demographic factors play an

important role in determining how employees perceive the goals, risks, and benefits associated

with the new ES application.

Conclusion

Enterprise systems appear to be a dream comes true. These commercial software packages

promise the seamless integration of all the information flowing through a company—financial

and accounting information, human resource information, supply chain information, customer
information. For managers who have struggled, at great expense and with great frustration, with

incompatible information systems and inconsistent operating practices, the promise of an off-the-

shelf solution to the problem of business integration is enticing. In summary, the Enterprise

systems appear to have fulfilled its purpose as demonstrated in the changes in the accounting

practices brought in. Overall, the benefits achieved by ES strongly influence accounting

information and practices and also organizational planning at a strategic level. ES users’

perceptions of the quality of accounting IS in financial and management accounting as adequate

in terms of reporting and decision support and good in terms of transaction reporting.’ Therefore,

results between the two systems are comparable; indicating that there are still benefits accrued

for ES adopters. An enterprise system, by its very nature, imposes its own logic on a company’s

strategy, organization, and culture. It pushes a company toward full integration even when a

certain degree of business-unit segregation may be in its best interests. And it pushes a company

toward generic processes even when customized processes may be a source of competitive

advantage. If a company rushes to install an enterprise system without first having a clear

understanding of the business implications, the dream of integration can quickly turn into a

nightmare. The logic of the system may conflict with the logic of the business, and either the

implementation will fail, wasting vast sums of money and causing a great deal of disruption, or

the system will weaken important sources of competitive advantage, hobbling the company.