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Enterprise System is a large-scale, integrated application-software package that uses the computational, data storage, and data transmission.
The Enterprise System is the focus of this report. The report does express how the Enterprise system supports the business strategy of the case under study. It also states the barriers to the successful implementation of Enterprise system and suggests how to overcome the same.
The approach of the researcher was in the form of the case study, collecting data from the internet, books and journals.
The researcher has chosen General Motors as a case for the study in this report.
This task provides background information of the case under examination, its products, its business strategy and the way an Enterprise System support the business strategy of the company as well as states the barriers to its successful implementation.
General motors was founded by William "Bill" Durant on September 16, 1908.Durant had become a leading manufacturer of horse - drawn vehicles in flint before making his foray into the automobile industry. At its inception GM held only Buick Motor Company, but in a matter of years would acquire more than 20 Companies including Oldsmobile, Cadillac and Oakland, today known as Pontiac.
At the time of 20th Century there were fewer than 8,000 Automobile in America, many of them powered steam or electricity, other had gasoline engines. An expected timeout at the first New York Auto show in 1900 showed the magnitude of the public's fascination with automobile, over the next few years, hundreds of fledgling companies would try to meet the demand of a growing market.
In German a Company named Opel begins by manufacturing dependable sewing machines. Opel become a brand recognized worldwide after adding bicycles to their product arsenal.
In 1899 Opel entered growing automobile market with the Opel patent- motor wagon system and become a part of General Motors thirty years later.
The company wishes to further-increase revenue as well as profit performance.
The company does have an understanding on ES and its benefits.
The demand of the confectionery products is ever-increasing.
The company is facing difficulties in its own management and its market.
RATIONALE ON THE HYPOTHESES:
The company revenue and profit performance
For the last few years the company has well-performed in terms of financial performance and it is the time to ensure the success is sustained even though the company is facing some difficult challenges so as to remain one of the leading in the Motor industry but meeting the new and increasing demand and the current economic downturn our world is facing but overall demand for Motor products is expected to continue to rise. The company needs to win the challenges and reach the organization's vision of becoming the biggest and best company in the world as far as Motor industry is concerned, and be the first choice for each customer.
To achieve this, the company use a combination of market development strategies and innovation to attain the objective for the long-term for improvement of local market position, forming a high focus on customer satisfaction and by doing that subsequently increase its revenue as well as profit.
The company understanding on ES and its benefits.
The company which operates in over 157 countries, with the staff around 45,000 people is obvious it is a huge company which can not operate without automation of its activities.
The innovation which the company does is an indication of the company's recognition of the importance to invest into new technologies.
Innovation is fundamental to company growth. The ability to create more profit by introducing new products to the market, redesigning production processes, or reconfiguring company's practices is critical to competitive advantage and growth.
The demand of the Motor products.
The supply in the Motors market is relatively less than the demand. Therefore GM has to modernize its processes so as to boost the supply in the market.
The supply in the Automobile market is relatively less than the demand. Therefore General Motors has to modernize its processes so as to boost the supply in the market.
The company difficulties in management and market.
The company is expecting to achieve its revenue growth ambition through the increasing investment in marketing and Sales and also the market for Automobile products has been growing..
That situation calls for the responsive plan to further bridging the gap which is growing as far as the size of the market is concerned.
But the challenge for this increase of market size is that, managing the big company which operates in big market might be difficult, hence the company management should start thinking about how to deal with size of the company and market. That will help the management not to undermanage the two.
The company needs an injection of funds so as to facilitate management of the company and its market. One way of obtaining the funds is through the sell of company's shares.
Since there was a problem in growth resulted from less spending on marketing, innovation and capital expenditure compared to other companies in the industry, management decided to revitalize the company by using a revenue-growth model which can deliver financial benefits provided is well-managed.
The company management was too good in strategic management than in operational management. Because of that, the loss of faith in managerial plans by Investors to the company's management, gave rise to the reluctance to invest in the company even after the good financial performance of the company.
About General Motors
General Motors, one of the world's largest automakers, traces its roots back to 1908. With its global headquarters in Detroit, GM employs 205,000 people in every major region of the world and does business in some 157 countries. GM and its strategic partners produce cars and trucks in 31 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, FAW, GMC, Daewoo, Holden, Jiefang, Opel, Vauxhall and Wuling. GM's largest national market is China, followed by the United States, Brazil, Germany, the United Kingdom, Canada, and Italy. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors acquired operations from General Motors Corporation on July 10, 2009, and references to prior periods in this and other press materials refer to operations of the old General Motors Corporation. More information on the new General Motors can be found at www.gm.com.
Fostering Global Partnerships and Consumer Relationships
GM is the majority shareholder in GM Daewoo Auto & Technology Co. of South Korea, and has product, power train and purchasing collaborations with Suzuki Motor Corp. and Isuzu Motors Ltd. of Japan. GM also has advanced technology collaborations with Chrysler LLC, Daimler AG, BMW AG and Toyota Motor Corp. and vehicle manufacturing ventures with several automakers around the world, including Toyota, Suzuki, Shanghai Automotive Industry Corp. of China, AVTOVAZ of Russia and Renault SA of France.
The Global Reach of GM Parts and Accessories
Genuine GM Parts and accessories are sold under the GM, GM Performance Parts, GM Goodwrench and ACDelco brands through GM Service and Parts Operations, which supplies GM dealerships and distributors worldwide. GM engines and transmissions are marketed through GM Powertrain.
Research and Development
GM R&D was the world's first automotive research center. It was organized in 1920 by inventor Charles F. Kettering. Headquartered in Warren, Michigan, the GM Research Lab is a network of laboratories, science offices and collaborative relationships in over twelve countries including working relationships with universities, government groups, suppliers and other partners from across the globe.
In 2003, GM R&D began an expansion of its global research network. The goal? To transform the GM Research Labs into a world benchmark research organization acting as one organic, agile and efficient business unit. The motivation for this was a desire to gain access to diverse scientific skills and expertise globally, and to leverage global research resources to move quickly into new technical areas. This network expands GM's technical capabilities and reach and speeds development of strategic technologies.
Research activities include improving environmental performance of GM's vehicles, diversifying energy sources, and providing gasoline-saving solutions around the world like active fuel management, variable valve timing and six-speed transmissions, developing advanced diesel engines, fuel cell and hybrid vehicles, electronics and controls and researching new materials.
General Motors Business Strategy
Business Strategy is defined as a process, that is, a set of activities which determine the most appropriate areas of business as far as the company is concerned.
Business strategy is a long term plan of the business which identifies the most appropriate areas known as Critical Success Factors. In business strategy, there are business objectives as well as Critical Success Factors.
Critical Success Factors should be determined only when the business objectives have been identified. The main objective of Business Strategy is to identify Critical Success Factors
A sound business strategy is necessary for the sustenance of an organization in the long run. Strategic analysis is about how changes in the wider environment affect the business proposition
The company business strategy is to provide fewer, faster, bigger and better services or products.
The company believes in improving its revenue and profit performance and in order to achieve the same, the company has developed the Vision into Action Plan (VIA) which is a 4-year plan for 2008 to 2011.
The business strategy and the Enterprise System which is the Information system (IS) can be aligned (supported or connected or related or overlapped) each other through the use of various techniques Driver analysis, Balanced scorecard and Critical Success Factors (CSFs).
For the sake of this study, Critical Success Factors technique has been selected.
Initially, Critical Success Factors are defined as areas of activity that should receive constant and careful attention from management.
If the company wants to achieve its setted goals, Enterprise System (ES) has to be taken as part of the overall system of business. Implementation of Enterprise System will support the business strategy of the company in following ways:
The most important support of Enterprise System is on accounting applications. It can integrate cost, revenue and profit information and present them in a granular (integrated) way.
Enterprise system can also change on how the product has to be produced, there is a dating structure which can be setted up which can permit the company to have information on when the product(s) should be updated, that assist the management to keep track of their products by ensuring higher level of quality.
Order tracking is made easier by Enterprise Systems. Particularly if a company receives orders, the ability to track the same can permit the company to have detailed information on their customers.
Since the company wants to be efficient ,Enterprise System has a tendency of connecting various software packages which exists ,therefore, in creating an interface between the softwares, Enterprise System can support the same
There are number of processes that the company may wish to integrate, one of those is design engineering. If the company decides to design a product, the process of actual designing, it is just as crucial as the end result. Enterprise System can be useful in assisting a company to find its best design process.
Enterprise System can also help management on the area of security. That is to say, it can protect the company against crimes such as industrial espionage and embezzlement.
Enterprise System serves as the backbone of the company's information needs. It offers necessary information needed for business processes in real-time manner. Informations on
Supply and demand can be perfectly coordinated. It assists Managers to know each stage of company operations and performance with just a click of the mouse.
Enterprise Systems are different from other Softwares, they not only change the view of the screen on the Manager's Computer, but they re-invent the way a company and its entire workforce operate. In other words, a change in the Information System (example a decision to use ES) also will force the company to change its business operations.
Since Enterprise System is various types, ERP HCM (that is, Human Capital Management).It can be supportive in a way of management of Human Resource whereby, ERP HCM can be used to attract the right type of people, develop them, leverage their talents and align their efforts with corporate objectives and finally retain the top performers.
Enterprise System also can be supportive in the management of assets through Preventive and predictive maintenance of assets, maintenance cost budgeting as well as work-clearance management.
So management needs to identify these Critical Success Factors (CSFs) only after business objectives are in place.
CSFs can be affected by the following factors:
Nature of the industry: It is normal for companies in the same industry to have common Critical Success Factors.
Competitive or industrial position: large companies may determine the Critical Success Factors of small companies
Environment: the economy, legislature and politics
Managerial position: Critical Success Factors will vary with the level of the hierarchy of the managers.
The Critical Success Factors for General Motors are:
The strength of the Motor brands and their market positions
The increased investment made in innovation, marketing and sales
Strong demand for Motor products.
Once the system(in this case Enterprise System is in place, it has to be measured on how much Critical Success Factors it can produce. a good system is the one which can produce enough Critical Success Factors.
So the Information System (IS), in this case Enterprise System, needs to be measured in that contest, whether it can produce reasonable Critical Success Factors.
When Critical Success Factors are sufficient it implies the following about the system (Enterprise System):
the system(Enterprise System) can help in planning process
ES helps in performance measurement(objectives vs. achievements)
Information system ( Enterprise System) can easily be accessed
Enterprise system has a top management involvement
Enterprise system has facilitated communication inside and outside the company
BARRIERS TO SUCCESSFUL IMPLEMENTATION
The barriers for the company are:
Modification requirements of the Enterprise System to the business needs:
One of the biggest challenges with Enterprise System is that of customization. Very few companies can use Enterprise System as it was supplied by the Vendor or manufacturer. It must be modified to suit the company needs and this process is normally both expensive and tedious.
As part of the evolution process, companies can not avoid customization totally but they should minimize the same. Before management decide to change the Enterprise System, they should have a complete understanding of the business drivers, that is, driving forces behind the customization and costs associated with such a move. Only after Cost-benefit analysis has been done then management can determine if the modifications are justified. Customization exercise can be a simple modification of some few system parameters to an extensive and complex reengineering of the software. Before customization, the company needs to examine and define clearly the driving force behind such investment.
Management should make sure that the decision to change the software is well aligned with the long-term business objectives. Management need to minimize customizations and continue with the exercise only when there is a real business need to do so.
Management should ensure that Enterprise System (ES) vendors have a product which has "built-in configuration" tools which more room for further customization of the Enterprise System (ES) product. Rather than buying a new ES.
When a company decides to change the way it operates most of Enterprise System has limitations or may become unusable.
The company should ensure that Enterprise System which is planned to be procured has features which support the long-term business goals of the company, so that any changes in operations can be accommodated by the software.
Changes in a system may demand customizing an ERP package, which can be unexpectedly expensive and complicated and also tends to delay delivery of the obvious benefits of an integrated system
Vendor reluctance to Enterprise System changes
Most of the vendor will not permit the structure of their software to be changed
Management should make sure that any changes in terms of structural alterations to the Enterprise System, is done by the Vendor himself so as to make sure that Vendor continue to provide support for the product
Confidentiality of Business Information
The management may find itself in a situation where it has to provide important information to Enterprise System technical support provider.
When Management enters into contract with the Vendor, there should be Confidentiality
Clause whereby the Vendor will be bound to it. Since many companies do not have enough
Internal skills to execute an ES project, this result in many companies providing consulting
Services for ERP execution. Typically, a consultant is responsible for entire ERP project
Which will include the following stages: Installation, Training, Testing, and Implementation?
Therefore, engagement of a consultant in ES project can not be avoided.
General Motors is Motor Vehicle Company. The company management (uses or wish to use) Enterprise System to make sure that the company retains its competitive role in the Motor market. To retain its position in the market, the company substantially increased investment in Innovation, Marketing and Sales.
Enterprise Systems or Enterprise Resource Planning (ERP) Systems are often known as "back-office systems" meaning that customers and general public are not directly involved.
This is quite opposite from "front-office systems" example, customer relationship management (CRM) systems whereby there is a direct involvement with the customers. Examples of other front-office systems are the eBusiness systems such as Supplier relationship management (SRM) system, eGovernment, eCommerce, eFinance, and eTelecom
Introduction of enterprise systems is not that simple and straightforward process which guarantees an increase in efficiency. In fact, companies are facing numerous problems during installation of enterprise systems which can result into a nightmare.
Some of the blame for failures of enterprise system primarily falls with the technical challenges of implementation.
These systems are complex and costly; they do require huge investment of money, time and expertise for installation. However, the main reason for failure of enterprise systems is business related in the sense that companies are failing to reconcile the technological imperatives of the enterprise systems, with the business need of the enterprise (company) itself.