Nov 2, 2017 in Management

Introduction

People live today in technological world that relies on technology completely. It is logical to suggest a further development of technologies, as the driving force of the modern world, and, as the result, further influence of technologies on business. This paper is aimed at determining the main challenge that any organization could face on the way of further development (Stenzel, 2011; Lonergan, 2010). The emphasis is made on the implementation of new technologies to the business processes, such as supply chain management (SCM) system that can be outsourced. The goal of this paper is to create the plan of the SCM system’s implementation and to determine the challenges that project management, operations management and information systems management departments can face in the process. In this case, an abstract company will be regarded as the target of implementation (O’Leary, 2000).

Management of an organization is a very complex and multisided process, which involves various approaches, moves and decisions that can affect the situation in an organization drastically (Stenzel, 2011; Lonergan, 2010). That is why top management teams members are so important to be highest professionals in their areas. The SCM system implementation is a complex and expensive process, especially for outsourcing-based concept (McNamara, 2010). Therefore, it is utterly important to make the right decision regarding the necessity of such a radical rebuilding of the company’s business processes. The following manager teams should be directly involved into the process of decision-making: project management team, operations management team, and information systems management team (Deise, Wright, & Nowikow, 2000).

Supply Chain Management

It would be appropriate to use the example the company (not real) implementing SCM strategy using outsourcing. Thus, the main objective of the project is to plan, develop, and implement supply chain management (SCM) system for Rocky Mountain Outfitters (RMO). The modern supply chain management system is needed by RMO. It is important to achieve all the above-mentioned goals because only a fully computerized SCM will allow RMO to develop, expand, and eventually gain such an important competitive advantage. In the nearest perspective, RMO can become one of the largest players on the targeted market. SCM is the earnest of success in this situation because it is the first step before creation of a comprehensive customer support system (CSS) and other related information systems.

The development of SCM is directly connected with clear understanding of the company’s needs, suppliers, clients, and other partners. Therefore, the feasibility of the project depends on the level of this understanding. It means that preparation stage should take about one third of the project’s schedule in order to collect necessary information and create documentation. Such collection will require resources along with other stages of the project development (Stenzel, 2011; Lonergan, 2010).

Considering the above said, the project can be completed within three months in case of appropriate resource allocation and timely budgeting. The first month will be used for the following procedures: collection of information about company’s needs; negotiation processes with suppliers, clients, and other partners; creation of the appropriate documentation; and final meeting aimed to consider all peculiarities of the project, negotiate, and start the development of the system.

Then, two weeks should be necessary to take the creation of a database, designing of a user interface, and installation of the appropriate network and hardware infrastructure. The next two weeks will be devoted to the implementation of the system. The third month of the project will be necessary for testing, training, and maintaining procedures. The project will require a system analyst with a team; programmers; database designers; interface designers; network administrator team; and training specialists. The budget should be within $500,000.

Identification of System Requirements

The aim of the project is to produce the following products: first of all, the software (SCM system) for electronic supply-chain-related data management; physical infrastructure (networks and computers) in order to deploy and launch the project; and trained personnel on all levels of RMO hierarchy (trained users) to use this SCM system. Therefore, we are to have SCM system for RMO, needed to transfer the company from the current system to electronic system of supply chain management. This software is to be created along with network infrastructure, deployed within RMO and its regional offices. The project contains modules for work with suppliers, clients, and other partners.

The project contains the following instances: database module – to be able to process and store information in the central database (one of the two main modules of the system); suppliers management module – to allow users (employees) to work with information from the suppliers and then store it in the database; central database – to store information (the second main module of the system); and user-sided clients’ module – employees’ software allowing RMP personnel to work with the database. Figure 1 illustrates the approach to the fulfilling these requirements:

Feasibility Study

The project is rather large-scale. Therefore, the risks of different kind are inevitable. The major risks for the SCM system are as follows: inability to manage data from suppliers accurately; inability to work with clients in the appropriate way - assure absence of delays, refunds, returns, etc.; and low overall performance of the system. Therefore, in case of inability to achieve acceptable results within timeframe the schedule of the project will have to be adjusted accordingly, since it is one of the core modules of SCM system. It means loss of time, which is unacceptable for RMO’s plans.

As for the second risk, it could be even more dangerous for the company than any other possible risk. The core function of RMO is satisfaction of clients’ needs with the best service possible and correct work with suppliers. Therefore, if information is not correctly processed, it is impossible to guarantee satisfaction for both the clients and the suppliers. This risk can substantially slow down the implementation of the entire project, so time loss is guaranteed. Finally, low overall performance of the system can slow down the performance of the entire company. It can be rather costly.

The likelihood of the risks occurring can be described as follows: inability to manage data from suppliers accurately – moderate; inability to work with clients in the appropriate way – moderate; low overall performance of the system – low. The reason of such likelihood determination is in the efforts applied to avoid them. Project manager’s team should realize these major possible issues and be prepared accordingly. Table 1 summarizes our findings (according to each risk):

Table 1. Risk Assessment/Importance/Likelihood

Risk assessment

Importance

Likelihood

Inability to manage data from suppliers accurately

Moderate

Moderate

Inability to work with clients in the appropriate way

Hi

Moderate

Low overall performance of the system

Moderate

Low

Project Schedule

Project plan presupposes three major stages: creation and implementation of SCM system; development of the network infrastructure; and personnel training. The first stage will be completed by contractor, the developer of the SCM software. This stage will require minimum of RMO’s resources because the specialists of the contractor will be the major resource for this stage. The second stage will be completed by the third party contractor and will not involve resources of RMO as well. However, the personnel training stage will require all personnel, regardless of the level, to be available for the appropriate training sessions.

Data Collection and Organization

In order to mitigate possible negative aftereffects of the risks, it will be necessary to perform the following activities: the software development team should hire only the best specialists in the area; the most advanced methods and tools should be applied to achieve accurate and correct results; in order to improve performance in case of its insufficiency, the additional hardware should be acquired; the most advanced but yet balanced database management system (DBMS) should be reconfigured and installed, in addition to hiring the best specialists in this area. If risks did occur, the following steps should be performed: the additional specialists should be hired so solve the above-mentioned issues; in addition, more advanced hardware and software might be required to be purchased.

Considering the above-mentioned project constraints, the plan should be revised in order to include the buffer zones for the deadlines of each stage completion. Due to the moderate possibility of risks occurrence in the project of such scale, human resources might be reallocated to solve various upcoming issues (additional staff for testing procedures, for example). In addition, such non-project activities as assessment of the available documentation, calculation of suppliers’ records to be transferred to the electronic form, communication with current customers to notify regarding the situation, etc. can substantially influence the availability of RMO’s staff for project needs. Therefore, the time gaps should be added to each stage schedule to avoid deadlines failure and understand the real situation regarding the time needed for project completion.

System Design and Documentation

The plan must be thoroughly documented and reviewed in order to eliminate any confusing moments. The documentation should be available for all parties involved into the project. All interested parties of the project should sign the project plan to avoid any misunderstandings in the future. The plan should be approved by the stakeholders and third parties involved. Any changes to it should be performed at the joint meetings to assure the awareness of all parties regarding these changes.

It is also important to clearly understand what information the system will provide to the different levels of management. The RMO’s personnel will fill the forms with suppliers’ information; executives and supervisors will require the appropriate reports regarding the results monthly and quarters’ activities ; the management will be able to receive information regarding the statistics of the most common issues with suppliers and clients, including the feedbacks from the clients regarding the quality of services, etc.

All this amount of data will create electronic database, stored on the main server in the central RMO office. It will make administration and foremost, protection of this data more productive and effective. Electronic tools to create, process, and store supply chain data of different kind will make management information systems (MISs) (for different managerial levels) be as efficient as possible. Old paper-based MIS was not able to provide either quick search or comparison or other similar operations with papers, like extraction of some particular data for quick report creation, for example

Implementation Approach

The system analyst and the team will work on the initial stage of the project and will combine their efforts with programmers to create the appropriate design of SCM system according to the requirements. Database designers will design and develop the necessary DBMS, using existing developments of the contractor as well as creating new modules for this system. Network administrator team will be necessary to create and manage network infrastructure of the future system. Interface designers will be used by all teams on the final stages of each module creation to develop the most appropriate and convenient interface for RMO stakeholders. Finally, training specialists will teach the RMO personnel to use SCM system. All stages will involve the RMO personnel in different ways, discussed above.

The quality of the entire project is determined by the quality of each stage completion. Of course, one or two secondary issues with quality will not make the project fail. However, in case of the overall low quality of execution even the best plan will not succeed. Thus, our plan presupposes completion of each stage within the limited timeframe and involves numerous parties. Such state of things can decrease its overall quality. The main attention should be emphasized during the stages that concern software development and network creation. Employees can be trained as long as it is necessary so this aspect of the plan will not affect its quality too substantially.

The plan is developed to achieve RMO’s major objective – to develop, expand, and eventually gain such an important competitive advantage and provide the best service possible to the clients. Only the correct realization of the appropriate system modules will guarantee success of the plan. Therefore, the following can be concluded: the plan has aspects that must be of high quality in order to make the plan succeed.

Training Approach and Schedule for End Users

The existing personnel might not be able to cope with new features, capabilities, and opportunities provided by SCM system. Therefore, it will be necessary to work in two directions regarding the personnel issue: the existing personnel must be retrained to be able to work in the new environment; and new people should be hired to cover the areas that were not exploited earlier (if any).

In order to retrain personnel, it is necessary to hire professionals in this area that will increase the cost of the project implementation. However, these expenditures are investable in this case; the employees have limited knowledge to develop these skills, as it could have been possible in case of the previously utilized MIS of such kind. In addition, system administrators and other related personnel will be needed to be hired in order to design, create, develop, and implement new IT structure within RMO.

The clients will focus on the procedures that should be performed as quickly as possible. They will not have to wait while their information will be added to paper form – everything will be entered into the computerized database by a skilled professional, finally, the networking technologies will provide the customers with opportunity to avoid unnecessary duplication of data in case of visiting other offices of the company.

Conclusion

The executive summary of this paper is the implementation of SCM system to any organization’s business processes is very important. This is the next step in the development of the company. Such decision should be made by the group of the professionals from the project management, operations management, and information systems management teams to be adequate and wise. The implementation should be performed after the careful and comprehensive evaluation and planning. The plan in this paper allows implementing SCM system, according to the above-mentioned criteria. The enterprise resource planning system is an excellent instrument for controlling and enhancing the information flows in any organization. Information became the most valuable and important asset for the business. Outsourcing of such activities would allow any company to optimize its financial resources and improve overall efficiency of operations (Lewis, 2007). The appropriate usage of information can be advantageous for any company so SCM systems should be implemented, as the commonly used systems. However, this implementation should be performed with the appropriate preparation in order to be successful.

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