Organization of enterprise improvement through implementation of integrated IS.

Stojkic, Zeljko ; Veza, Ivica ; Majstorovic, Vlado 等

1. INTRODUCTION

A synonym for a successful organization of the manufacturing enterprise was process-oriented reorganization of all flows in the late nineties. What became a regular practice for big enterprises is becoming also an obligation for small and medium enterprises.

Enterprise resource planning system (ERP/PPS) is an adequate tool for management and tracking of orders through the process in manufacturing enterprises. The introduction of ERP/PPS system is necessary to use and to take advantage of for generating a more qualitative organizational structure. Those changes are making bases for long-term subsistence of the enterprise. Nowadays more and more manufacturing enterprises appropriate funds for various kinds of software packages, even for production planning and management systems. The term ERP/PPP is often portrayed in a negative light. This is first of all for the reason that introduction of production planning and management system does not yield gains as could be having been expected from it. For that reason it is necessary to find a concept for process-oriented introduction of production planning and management system. This concept should improve: quality, effectiveness and transparency of introduction of those systems in enterprises. In so doing it is necessary to reach fast results the new information system should bring into being the new information system and fast return on capital employed. On the other hand, the problems in implementation of integrated information systems are represented by their complexity. The implementation process of such systems is a long-term process having the impact on target groups of this concept which are manufacturing enterprises willing to achieve the effects of rationalization. As well as to have more transparency in the very process by introduction of new information system and at the same time to make necessary customizations of existing organization flows through necessary analyses.

2. IMPLEMENTATION OF INTEGRATED IS IN SMEs

The implementation of information system in an enterprise is very important project for the enterprise itself. Such project is not only a remarkable involvement of necessary enterprise's resources but it is also the important risk for economic performance of the project. Hence it is needed to pay a special attention to planning of such projects.

The beginning is in the selection of strategy for project implementation. Basically there are two possible implementation strategies: gradual introduction and simultaneous introduction.

Apart from the selection of strategy and standard performance factors of a project the substantial impact on project result has:

* Type of selected program solution from the aspect of: functionality of program solution, reputation of program solution provider, reliability of program solution, use of reference models, technological completeness and modern approach to the solution, customization of solution to the business practices,

* Contractors from the aspect of : experience in introduction of new program solutions, partnership relation of enterprise and supplier (contractor), confidence of users in capacity of contractor,

* Enterprise making introduction of new IS from the aspect of: support of top management, conformity of IT and project with the enterprise strategy, wide support to the project, transparency of data and procedures in the organization, levels of information technology and IT knowledge within the enterprise, use of modern types of communication and team works, knowledge of technique of project management, quality of users level of competence, duration of the project.

The implementation concept describes and regulates in general the whole process from the outset through implementation to completion of the project. Since there is a whole range of various information systems project implementation there is also a whole range of implementation concepts described in the literature. From the classical waterfall model or spiral model to individual implementation concepts offered by providers of standard ERP systems. The implementation concept of information system should have such characteristics to take into consideration all elements affecting the success of introduction of information system. The implementation concept of standard ERP systems shall be described hereafter, which is affecting the improvement of: quality, effectiveness and transparency of introduction of those systems with simultaneous innovation of existing business processes. At the same time it is necessary to reach results that new information system should provide and result in the return on capital employed.

Target groups of this concept are manufacturing enterprises, which would like to achieve the effects of rationalization through the introduction of new planning and management information system as well as more transparency in the very process and thereby to make possibly necessary customizations of existing organization flows by way of necessary analyses.

3. CONCEPT OF IS INTRODUCTION

The implementation of information system is performed in two parts.

1.) implementation of system in the whole enterprise thus achieving the basic system functionality

2.) implementation of system from the achieved level in the first part of implementation until the desired level of system applying standard tools for improvement of business processes.

3.1 The first part of IS implementation

The first part means the system implementation in the whole enterprise by way of two forms of problem description. The first form defines the phases of introduction of the new information system in the enterprise and the second one defines the reference organization model of enterprise customized to individual needs of process of that enterprise. This part of introduction of information system is divided into five stages:

1. Project management

2. Analysis of the current status

3. Development of a concept adequate to the enterprise needs

a. Reference models

b. Models within the ERP system

4. Installation of information system

5. Implementation stage

In the project management stage are defined the goal, preparation of project plan, establishment of project team and other activities needed for the project realization and implementation.

In the second stage of analysis of the current status is performed an interview process and documenting of process flows and defining the concrete measurement values, which would be further processed through the bottleneck analysis in the process.

In the third stage (Development of a concept adequate to the enterprise needs) the analyzed processes are discussed within the project team and a decision is taken on modifications needed to be made. Within the concept development there have been developed reference models (ARIS-Toolset). It is possible to customize those models to the functionality of the software package and its modules on the one hand. On the other, those reference models offer a transparent overview of business processes that could be adapted to the individual needs of enterprise and in the same time to serve as a base for software customization to the needs of enterprise. The other way is to customize the existing business processes to the predefined business processes within the standard software solution. Namely, the majority of standard ERP systems have integrated a wide range of coverage of business processes with developed variations within the system, representing specific qualities of the individual branch and its particularities within the branch. This feature of the ERP system is a potential of knowledge embedded in the standard ERP system that could be used during the implementation of information system. In the fourth stage is made a regulation, i.e. adjusting of parameters of information system. In the last fifth stage, perhaps the most important stage, the software implementation is performed as well as the system and organizational documentation. In the implementation stage it is necessary to pay attention to the sequence of realization of individual steps aiming at fast achievement of results by introduction of new information system. The return on capital employed has a very high priority in this stage.

The first steps in this five stage of implementation, in addition to basic ones linked to registry data are warehouse management and pertaining activities of filling orders, processing of customers orders and processing of production orders. Those jobs need to be completely implemented. It is necessary to perform optimization of performing jobs within individual departments in the second step. In the third step it is necessary to realize functions offered by the software package regarding statistics, reporting and other issues arising from as a result of work with the software package.

3.2 The second part of IS implementation

Upon performed information system implementation it is necessary to start the second part of implementation using standard tools for improvement of business processes (Total Cycle time, KAZIEN, Six Sigma).

[FIGURE 1 OMITTED]

Employees of the enterprise are greatly involved in this part of the information system implementation with a minimal involvement of consultants or programmers. More effects are taking place through the second step of the information system implementation and simultaneous application of methods for improvement of business processes. The first step of the information system implementation is setting information and data prerequisites for establishment of the controlling system for processes representing a precondition for implementation of methods for improvement of business processes. In the implementation of the methods for improvement of business processes shall be involved all employees and those improvements shall be integrated into the information system that shall bring additional quality and velocity within business processes.

4. CONCLUSION

The proposed concept wishes to achieve that the enterprise introducing new information system has insight into costs, duration as well as progress of the project as of the beginning. In addition to that it can take advantage also of a moment of information system implementation for change and improvement of processes. By way of this concept the jobs of introduction of new information system are becoming transparent and previewed and thus it is possible to control also achievement of the goal set for the project. This implementation concept enables a parallel improvement and upgrade of business processes of the enterprise as well as automatization of business processes through the implementation of integrated information system. The concept enables a transparent measurement of improvement business processes efficiency caused by the implementation of new information system. The lack of this methodology reflects in the implementation period. The implementation period is significantly longer by comparison with the standard methodologies, but the utilization rate of selected software solution is higher.

5. REFERENCES

Allweyer, Th. (2005). Business Process Management. Strategy, design, Implementirung, Controlling, Herbecke

Scher, A.W. (2002). APIS From Business Process to application system, Springer Verlag, ISBN 3-540-65823-8 Berlin

Stojkic, Z. (2008). Dissertation: Influence level of development of integrated IS on the quality of Business Process, Faculty of Engineering and Computing, Mostar