Executive Summary:The Office helper corporation is really not in a secure situation as of now because instead of profits it is heading towards losses which really cannot be a purpose of any profit making organization. Today in the world of retailing where so many “pennies to millions” stories are so much in news the performance of Office helper has really been dismal. As the company is retailing more than 500% presumably high quality office items there can really not be a scope for any other problem except the inefficient management of the available resources and loose supply chain.
Therefore it is beyond doubt that its current business practices are not only inefficient but could also be wrong in certain cases which is leading to so much of downfall. Hence office helper not only needs to install the modules like financial management, Materials Management- Inventory, Bills Of Materials, HR Point of sale, CRM and E-Business but also needs a robust and scalable Software that offers “Best Practices” for retailing developed over 100’s of man years of experience and at the same time is flexible enough to adapt to the prevailing “Best practices” so that it is perceived well by its more than 120 users.
SAP r/3 would be the ideal choice but since the budget of Office Helper is quite limited SAP Business One would be Ideal. SAP business one (SAP-B1)b was found to be sold on a per user basis business model in which all 14 modules are available to the clients at one go and the client is free to choose among them based upon the prevailing requirements.
Also unlike SAP R/3 which is a 3 tier architecture SAP B1has a two tier client server architecture with Fat clients and therefore does require costly server X86 requirements like SAP R/3. Also SAP r/3 comes bundled with a choice of ABAP4 or Oracle or SQL which are highly recommended databases for speedy processing and retrieval so that SAP workflows are at a high speed in real time. With SAP B1 each individual cost center or the retail outlet would be entwined together in a centralized whole for thorough analysis and reporting to the management in order to enable them to make timely effective and informed decisions 24x7X365. Also the SAP BI processes could easily be interlinked to the website and controlled dynamically in all the phases of the sales and procurement cycle.
The system could be easily implemented using Accelerated SAP methodology in less than a month with 2-3 days end user training requirement and the effects would be visible in less than 2 months time after go-live. However for implementing the system the top management has really got to be very determined motivated and willing involving the staffs at every stage right from system study to business blueprint to implementation to Go Live to training and support so that the entire transition period is smooth. Since humans are generally averse to change some initial dissension is bound to happen but the “dip” in the employee performance generally vanished as soon as the benefits of the software implementation are known. With SAP B-1 other aspects like Hardware, Networking and WAN can be easily taken care of at a minimal cost unlike the case with other software like Microsoft Navision 4.
0, SAP r/3, SAGE etc. Proposal for Software:Office Helper needs to be doing something immediately and has no time for experimentation and hit and trial as it is undergoing losses at the rate of USD 800,000 every year. Therefore high quality solutions from three high class vendors were selected and are the following:1) SAGE Pastel Partner Version 8- from a south African vendor having more than “180,000 implementations across the globe and thus having very large experience within the retailing vertical”( www.pastel.
zm). The solution although having a large client base did not have the multicurrency, Multilingual and drill down capabilities to monitor the operations at each of the company’s Point of Sale (POS) store outlets. The drawback was that it was not able to track the transactions occurring at the point of sale and present a consolidated report in real time for the financial managers to plan accordingly and also for the MRP managers to stock adequately. These departments could get the reports only when the entire transactions are sent through MS Excel and again imported to Pastel at the end of the day which could result into confusions as efficient supply chain was the most essential requirement Of Office Helper.
2) Microsoft Dynamics Navision 4.0 an ERP solution for Small and Medium Scale companies offering tight integration with packages like MS outlook, MS Office and projects. The solution could also be run on MS Access or SQL the solution offered detailed timely reports in real time to the top management and drilled down every activity to the nicest detail viewable from all angles. However it did not have a multilingual support especially in Chinese, German etc and since Office helper wanted to take its business online where it would have to produce orders from diverse languages speaking customers, it was unfeasible.
Although an add on language module was available but was though to be too costly and Time consuming.3) SAP Business One (SAPB1) for small and medium scale industries having turnover between USD 10M-50 Million. SAP BI today has more than 11,000 installations across the globe with a highly satisfied client base. The system seemed to be having all that company required for its efficient monitoring controlling and managing of the Financial, HR Supply chain, POS and CRM requirements integrated into one.
The system also came bundled with an integrated I-Planet module for creating an online store in minutes for Office helper once all the processes were in place. Also SAP B1 was multilingual, multicurrency and had the same tight integration with MS projects as Microsoft Navision4.0 itself and thus became the ideal choice. SAP also came with free 3 months post live support and minimal annual charges for yearly cover for updates, upgrades and patches.
SAP charged @ $ 1250 per user license instead of usual price of $ 2500 per user for all the abovementioned modules integrated into one since there was a requirement of around 200 work stations for all the stores combined. All the licenses came at a fee of USD 250000 including support for 1 year after due negotiations. Implementation, Training and data migration was however extra( www.Microsoft.
com)3) DBMS: SAP Business I came bundled with an option of ABAP4, Pervasive, Oracle or SQL at a negligible extra cost which was already included in SAP BI user license value. ABAP4 was the ideal choice as it had a tighter integration with the SAP B1 and is a SAP indigenous product having a very excellent workflow of tables and fields. 4) Proposal For Hardware: The existing 140 user requirement had to be kept over and above a dual core server having 2GBRAM/180GBHDD/Xeon Dual Core processor/21”TFT/101Key/Optical mouse with a graphic accelerator card to be dedicated as a server for administrative use at a cost of US$ 5000.The 200 nodes with “Fat client” configuration of P4/1 GB RAM/ 80GBHDD/17”TFT/101 Key/Optical Mouse to be used as the clients and for website maintenance accessibility and support.
Each computer came at $ 800 amounting to US$ 160,000 with Preinstalled windows XP professionalProposal for Networking: The following was the cost of cabling and networking: For Installing Local area Network (LAN) at the company’s premises. ParticularsRate(USD)QtyAmountCAT 6 twisted [email protected] .6 cents per meter4000240048 Port Hubs( Dink)50042000Routers(at each store)25041000Installation Charges2004800WAN(ISDN 2MBPS per sec relay speed10,000 per year-10,000Total: 16300 The WAN system also had multitude of choices like the lease line, circuit switching, packet switching and cell relay. The cell relay was found to be the best as it had the ability of simultaneous use of voice and data (www.
wikipedia.com).Proposal for website: Since SAP came with an integrated planet module a multilingual website was easily developed once the software was set up. The cost of building the website with the attractive multimedia contents and other attributes costed an additional $20,000.
The customers and the other interest groups could shop online and get all the information about the inventory, schemes, Trade promotion discounts and Promotional campaigns, special offers and shipping details. Also the integrated CRM capability enabled the web portal to convey every information such as the stock status, special offers etc as discussed. The website was also used by managers and staff to use the CRM features for sales automation, lead opportunity analysis, quotation, sales order and invoice generation till final receipting using the copy control, Product determination profile procedures, MPCM(Marketing and Campaign Management) and Win client features. Each user was given a unique workspace with the required administrative rights to perform the “Activities and Tasks” in real time and to collaborate with other departments for timely effective and efficient decision making.
The figure in the appendix shows how the CRM and the website developed integrated with the business partners from the main store of Office Helper.Cost Benefit Analysis: The total cost of software hardware, networking and WAN comes out to USD 461300 which is fairly below the total budget of USD 750, 000, the limit. The remaining was kept in buffer for implementation training and other contingencies like project delays etc. The installations were forecasted to be bringing about an immediate change in profitability and saving as explained in detail in Appendix1.
Appendix 1As Office helper is a medium scale company it was not required to implement all the 14 modules of SAP B1 due to feasibility reasons. The modules installed helped Office helper in the following wayFinancial Module: This was the basic module providing information to the financial department to track the cash flow to the minutest detail for efficient budgeting and formatting. Due to SAP B1 tight integration with MS excel the financial planning for the month became very easy. The last month expenses were first exported to MS Excel, changes were made wherever necessary and then the amended sheet was again imported to SAP B1 as a budget for the next month.
This brought about a greater efficiency in the financial decision making resulting in 5% increase in the profits (Expected)Inventory, BOM: To track the status of the stock items using reorder quantity, MRP and Just in time, LIFO and FIFO methodologies. Each item was given a unique bar code which made it possible to track each and every item from start till finish and also used effectively for the warranty, repairing and replacement decisions in case of any returns. Also this helped to minimize the pilferages and was expected to save approximately 8% of the cost.Point of Sale: This brought efficient and speedy management at the point of sale with hot keys for high use items.
Also the SAP B1 point of sale module interfaced well with bar code scanners and printers which were installed at some extra cost at all the four stores)r resulting in overall better customer satisfaction resulting in 8% increase in the turnover. HR: This gave a holistic view of who was doing what at any point of time and also found very useful in assigning specific employees the specific tasks at the given time. It also helped to have a homogenous recruitment, development compensation integration and maintenance strategies for the whole organization at the centralized level. Also the legal frameworks and taxation policies at all the four areas where the stores were operating were not exactly the same hence HR module played a very important role in the over all management.
The benefits were in fact many most of them not easily traceable in numeric terms.Purchasing: This helped in short listing the right supplier for each individual product based upon the past history, terms and conditions, geographical locations of the suppliers etc and went a long way developing efficient Supplier Relationship Management(SRM) Expected result in the over all savings was more than 5%.CRM: This helped to show one picture to the client of the whole organization and automated critical money generating functions of the organization totally unsought of before as explained. If the system was used properly the benefits in fact would be so huge that they would not be quantified in terms of money alone.
Website: Website portal developed using I- planet functionality was expected to be increasing the sales by 7%. Appendix2The figure depicts the how the Integrated CRM module interfaced with the other modules and the company’s Web PortalCourtesy: Siemens IDESReferences 1. http://www.iaik.
http://www.microsoft.com/malaysia/licensing/5) Siemens IDES
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