Evolutionary trend of information technology in business systems is growing, personal and enterprise systems are gradually becoming together as a corporate network. In concern, Building and corporation of flow in information system became a major demand in achieving of organization’s goals and to go smooth in daily work processes. Instant of using information system for transaction processing to support routine procedures like processing account transaction or keeping personal records, integrating functional systems to support integrated business process became a point to improve efficiency in the whole business. Moreover, the next extension of integration of information system is combining networks where not only systems but people to solve organization-wide problems. An engineering approach for combining people, processes and information technology requires methods and tools to ensure that the system are built in the quickest and effective way to meet the requirements of system and is acceptable to users.
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The purposes of this paper are to present methodologies and software system development concern about integration of information system functions in the organization. Especially, it emphasises on development of enterprise resource planning (ERP) system that combine people, work processes for internal and external resources management and information system in organization. Moreover, using waterfall methodology to develop ERP system includes as a prospective point of this paper.
1.1 Functions of ERP
Development of ERP system can brings number of direct and indirect of advantages to organizations. Integration of centralized and decentralized of enterprise-wide information system approaches the benefits of efficiency and available for users throughout the whole organization. In addition, it is effective helps for better analysis and planning capabilities in the organization for streamlined business processes in real-time.
However, from the opposite of view, Integration of system has to solve technically problems to cooperate information systems for heterogeneous networks that have computers built by different manufactures which developed on different platforms and different programming languages developed by different programmers than to integrate for homogeneous networks that all computer systems use the same software and equipments.
One major advantage function of ERP reveals the solution that lead enterprises to balance of supply and demand in the organization and ERP bring the ability to link customers and suppliers into complete supply chain. Those points of flexibility and cost effective make improvements for customer satisfaction and provide real time efficiency for business functions like of sales , marketing, new product development.
On the other hand, Most of ERP system based on advanced technology and includes a massive change of work processes and flow of information system. So, replacing from existing infrastructure to new infrastructure is a negative effect of developing ERP system. This demands the high risks for organization including additional investment, higher personal skills and even temporary shutdown of business.
One more reason of good ERP provide accessible for different level of users at different hierarchical and improvement management including better decision making.
There is a concern to give proper training to different people and it will be take a period to be familiar with new information system. Overall, developing an ERP system approaches a lot of advantages and disadvantages to organization. But it is worth to develop because of flexibility, better analysis and planning capabilities in business processes.
1.2 Applications of ERP
An ERP system includes a massive of different applications according to access different levels of people and different purposes for different systems of ERP. The applications part of this paper focus on variety of applications that demand upon on variety of systems.
Transaction Processing System (TPS) supports the basic processes and routines functions. TPS includes processing daily transactions from staffs or client end users and save all of daily information into database for giving responds to real time business transitions or using as input to next level of system. In this level of stage, ERP system can includes variety of different application to works for all functional areas from internal resources including production, manufacturing, sales and marking to outside stakeholders to connect. Some example applications for TPS are ATM machine, online registration form etc.
The purpose of applications that supports in Knowledge Work System (KWS) is to help technicians or professional employees for creating and improving their jobs by providing and sharing of information knowledge base. By supporting those with useful application can bring a lot of advantages like reducing redundant works and keeping knowledge to be useful for training to new employees or keeping going the work after one employee leaves the job.
Plenty of massive benefits are available for using applications at Management Information System (MIS). The major purpose of MIS’s applications is to provide information necessary to manage an organization effectively. Especially it is using as a tool to assist managers or decision makers in the assessment, review and documentation of quality of organization’s MIS-related internal controls, policies, practices and procedures. This application need to provide high volume of information to facilitate the function of organization effectively.
Applications approach at the system of Decision Support System (DSS) helps activities of company to increase organizational controls when it goes for analyzing and decision making is to expedite problem solving and reveal new approaching to improve organization at management level. One of obvious example of DSS is “Dashboard Technology developed by the In-House Solutions regarding its latest mobile business diagnostic solutions. The said technology implements a real-time dashboard monitoring system which reduces variable labor cost, increases in volume and cash flow by 7, 3 and 28 percent, respectively. Its initial system implementation costs 19,000 dollars which includes interfacing with general ledger, radiology imaging, and revenue management”.
(Controller’s Report, 2010)
The highest level of applications provide in Executive Support System(ESS) that helps executive senior managers to access information from all company levels for analyzing and decision making processes for the strategic goals of organization. The implementation of software system needs to input internal and external information for processing of system. The integration of system will be connected all of information to provide reporting and output capabilities of output system.
Any tools of ERP enables people to make better decision making and improving their business processes at different level to facilitate flow of information from different business functions.
The main factor of implementation ERP system is to meet requirements of organization and acceptable to users. So, Analysis of business and operational requirments are very important to build a successful ERP system. System analysis should be include all hierarchical of organization and it should do special care about what is really requirement of businesses to develop ERP system and why existing old information system cannot provide effectively to work processes. The next step to consider is project planning and analyzing functional requirements of system. Furthermore, choosing methodologies and tools to develop takes major respect in integration information system.
But an important point to bear in mind that ERP system is the most complex system that includes many applications that support many organizational processes. The degree of differentiation among the applications is high and the degree of difficulty to implement and maintain each one is different. So, we need to make sure about appropriate project planning and acceptable design to develop information system.
Part of installation and configuration is putting measurement tools and integrating all parts of hardware, software and people to system. Basically, an ERP project includes a massive change of work processes and information flows. Naturally, introducing changes is a difficult political process that can trigger resistance from conservative organizational bodies and persons.
At the next level stage, it includes properly testing of the whole system in real time business. Furthermore, the procedure of development provides complete instruction for human involvements in new system. Each single activity of system is really important and need to proceed written and tested for various users and operators.
After acceptance testing and delivering ERP software, post implementation supports, maintaining and upgrades plan should be available in information software.
Moreover, “after ERP have been implemented globally in most of organization, many organizations are still struggling to derive benefits from the implemented ERP systems. Therefore, ensuring post-implementation success has become the focus of the current ERP research “(Yan Zhu, 2010).
2.Developing ERP system using waterfall methodology
There are different manufacturing organizations are using different kind of software development in their company and they gain different benefits from their information system applications related to ERP. Literately, an organization that uses well-defined and structured software methodology for developing ERP can reduce a lot of risks in the business processes and improve successful percentage of company goals and working processing in the organization will be much better than without not controlling flows of information system. And this paper is going to approach on the effect of using information system life cycle (The Waterfall Model) to implement the enterprise resource planning.( Niv Ahituh. et al, spring 2002)
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Waterfall model system development contains numbers of develop series and activities to process ERP system. In every phase, it takes one product as input to process and transforms another product as output. One of the function of waterfall model’s Verification and Validation represents as a testing activities to make sure the quality and accuracy of each product and customer’s requirements that make better quality of information system. The following diagram (Figure1) represents developing life cycle of waterfall methodology.
Figure 1-Developing Life Cycle of Waterfall methodology (Schach, 1999)
2. 1 Applying ERP system in development of waterfall methodology phases
The first initial requirement to develop ERP system is requirement analysis for system. The first phase of waterfall methodology includes collecting data from clients, employees, managers and uses rapid prototyping to analysis of functional requirements of system to identify real needs of clients. The out requirement speciation commonly uses as a contract between clients and developers. The feasibility study goes for the step of determining whether it is feasible to develop and how it should be done if justified. So, the first advantage using waterfall methodology for ERP development is analyzing effectively on problems and opportunities of design, construction and operation of system to the final successful termination of system.
The next stage of developing ERP approaches project planning and the phase of design specification transform requirement specification as input and design specification that how the system will implement necessary functionality as output. In design specification, there are numbers of stages includes to create design for system implementation gradually. This step can include methodologies that used to redesign existing applications like Business Process Re-engineering (BPR). BPR approaches the system to provide effectively and quickly to finish work processes successfully.
In installations and configurations of ERP system stage, it needs to convert design specification of system to implementation and most of design specification is complex and very large to implement. By using waterfall methodology, it provides to manage complexity of system by breaking every single pieces of activities into smaller tasks whenever each activity face invalidity occasion in developing of information system application. Moreover, this phase approaches Unit testing that mainly verifies if the modules/units meet their specifications to make quality system.
Integration each part modules of system plays major role in ERP system to reach complete system during Integration phase and tested to check if all pieces of activities coordinate between each other and the system as a whole behaves as per the specifications. So this phase helps more easy way to develop information system for complex infrastructure for heterogeneous environment. Moreover, systems that possess long life cycle will inevitably produce unstable requirements and the stage of system can give solutions for this problems. However highest and effective level of management need to organize to integrate a complete system because construction have to process on different tasks which include different hardware , software and people from different complex sub-system.
At Data conversion stage, it approaches training the personal operation and using the new system. Furthermore, Acceptance testing by the user processes to meet requirement specifications of system. Most of data conversion is associated with making changes from an old system to a new system. By applying this stage with the verification phase of waterfall model bring quickest and efficient way to produce qualified information system.
So waterfall methodology includes number of stages and each stage support to be efficient and qualify when developing ERP system. Moreover, Software development process can undergo the previous stages for changes and enhancements valid for multiple reapply actions in development processes. The process of verification and validation checks all products, services, system meets requirements and acceptable by the user that makes the system to be less flaws and lower risk.
Part of post implementation and maintaining the system after production in waterfall methodology provide changes in system like correcting errors, providing new functionality and adapting the system to new platform or technologies.
Each organization needs a system that supports all its business functions, which need to be integrated. Business processes and practices must be well defined, supported and enforced, and the organization’s ERP system is central to this enforcement. Moreover, to be a strong information system, it needs to reveal ensure well tested methodologies and waterfall method is comprised of a series of very definite phases and nearly 70% of software development organizations are still using the waterfall methodology. The main contribution of this paper is processes of ERP and the positive and negative effects that ERP reveals for business process for organizations especially implementing ERP system with waterfall methodology. ( VersionOne survey,2007)
In my opinion, integrating all of business sectors by developing ERP system brings plenty of advantages that let the originations to be more flexibility, better analysis and planning capabilities that meets use of latest technology and streamlined business processes. In the other hands, Organizations have to invest time, cost and human recourses to complete a successful information system and face a lot of difficulties on developing occasion. Moreover, Most of organizations pay concern only on developing processes and achievements of system. So, this assignment assumes that post implementation phase should include as important part as a strong and long term plan in developing information system.
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