Do you feel the advantages of using this system outweigh the disadvantages? Strategic planning, management and operational control can be successful with the implementation of the appropriate ERP solution for a company. The ERP solution to be implemented by Siemens in this case is Click2procure, a procurement platform which involves connecting buyers and suppliers using web-based technology. Siemens stands to benefit from the use of this system through reduced operational and administrative costs while increasing efficiency.
Click2procure will also aid in the improvement of daily management activities such as demand planning and forecasting and there will be greater accessibility of data for managers to make better informed decisions. In addition, improved handling of larger volumes through aggregating purchase orders will allow for Siemens to negotiate better pricing and payment terms with its suppliers while reducing inventory and improving order fulfillment rates.
Though the cost of implementing this system is significant, Siemens plans to market Click2procure to other outside businesses which will in turn offset these associated expenses and generate future revenue. This expansion effort will inevitably create new jobs and opportunities for employees in areas of the business that may face staff cutbacks during the transition.
On the other hand the disadvantages associated with the implementation of Click2procure include its possible rejection by employees as they adapt new procedures; possible loss of jobs as processes improve; information accessibility and security issues; and the general inflexibility of the system to accommodate customized orders. To a large extent, the success of the new system will depend on the training of staff and utilization of the system by employees. It is therefore imperative for the management of Siemens to effectively communicate its business plan and strategy with its employees.
To be successful, Siemens must ensure that it’s IS and organizational strategies complement its business strategy (Pearlson, et. al. 2010, pg. 23). If Siemens fails to implement this new system and maintains the current status quo of decentralized purchasing they will inevitably lose out on all the significant benefits listed above, thus making them less efficient and less competitive over the mid to long term. It is more difficult for Siemens to recover lost market share than it is for them to maintain what they currently have, so it is in the best of Siemens for management to be roactive and take the steps necessary to secure their market share before it becomes eroded by competition. Based on this analysis, I believe that Siemens has more to gain than to lose from the implementation of Click2procure and where disadvantages exist there are feasible alternatives to successfully challenge and overcome them. If you were the manager of one of the Siemens business units being asked to adapt/ use the system, what can be done to encourage you to use the system in your business unit?
As the manager of a business unit within Siemens, I would be encouraged to use the system if Siemens agrees to draw on the experience of key members of my unit and have them involved in the testing and development of the new system to ensure that the systems processes improve or at least align with current departmental processes and procedures. Department staff is best able to tell how current processes can be best incorporated in the new system. Siemens must further insist on the training of staff prior to implementation and encourage continuous periodic training as the system is upgraded.
The company should also seek out avenues for utilizing employees in the event of job loss and where less work is generated in the departments once the new system is up and running. Siemens must incorporate in their plan, a process for displaced workers. Siemens needs to implement a system that is flexible and upgradable and they should ensure that the new system is configured to allow for customized orders and include more local suppliers. As part of being a good corporate citizen, Siemens must ensure that it serves the communities that it is located. What type of strategic advantages do you feel this system would give your unit?
Business strategy is a function of competition, positioning and capabilities (Pearlson, et. al. 2010, pg. 37). By spearheading the implementation of Click2procure, Siemens is positioning itself to stand ahead of its competitors. Siemens has the resources and capability to implement but there is a risk of being the first to take this step. This risk becomes a necessity for companies that want to be leaders in their industry. Siemens has taken on a cost leadership strategy and therefore they must strive to provide the lowest cost to customers in order to stay in business.
This is where their strategic advantage lies and it is dependent on the efficiency of each and every unit within Siemens. My unit would benefit from the system by having more information on workflow and processes throughout the different departments which will translate to greater efficiencies. The greatest success to be derived from the implementation of ERP software can be determined by the extent of its usage by operations staff, middle management and top management. The more usage of the system by staff at all levels of the company hierarchy, the more competitive advantage will be gained by the company.
Which two new technologies/ applications/ issues you learned about on the discussion board did you find most useful/ interesting? From the topics discussed on the discussion board, I found the topic on “Outsourcing” and “Text Messaging”, most interesting. From the discussions on “Outsourcing” I realized that even though there are many benefits to be derived from outsourcing, it may not always prove a viable solution for all situations and businesses should be careful that other benefits outweigh savings in labor cost alone.
Outsourcing is particularly beneficial where the nature of work being done is somewhat repetitive. Functions that require customer interaction and specialized knowledge are not suitable for outsourcing techniques. I was further astounded to discover how many of our well known American brands like Levi’s, Converse and Craftsman are outsourced and have not been made in America in over a decade.
I also found the article on “Text Messaging” very interesting and somewhat controversial as many seem to have become so comfortable with using company time to conduct their own personal affairs. This personal use of workplace technology has often proved to be an added task for employers who already struggle to keep employees engaged with doing company business on company time. Many companies have hired IT personnel whose main responsibilities include reporting websites visited on company PC’s and block the use of instant messaging websites like Yahoo, Hotmail, etc.
Pearlson, Keri E. , Saunders, Carol S. (2010). Managing and Using Information Systems: A Strategic Approach (4th ed. ). John Wiley & Sons. Hoboken, NJ.