Chapter 3 : Strategic Initiatives for Implementing Competitive Advantage

Enterprise Resource Planning

INTRODUCTION OF ERP

• Cross-functional enterprise system
• With an integrated suite of software modules - integrate all departments & functions through an organization into single IT system.
• That support the basic internal business processes of a company.
• Integrating and improving their back-office systems.
• Results in major improvements in customer service,production, and distribution efficiency.

THE IMPORTANCE OF ERP

• Business integration and Improved Data Accuracy:
• ERP system is composed of various modules/ sub modules where a module represents a particular business component. If data is entered in one module such as receiving, it automatically updates other related modules such as accounts payable and inventory. This updating occurs at real time. For example at the time a transaction occurs. Since, data needs to be entered only once at the origin of transaction, the need of multiple entries of the same data is eliminated. Likelihood of duplicate/ erroneous data is, therefore, minimized. The centralized structure of the data base also enable better administration and security provisions, which minimizes loss of sensitive data.
• Planning and MIS: 
• The various decision support tools like planning engines and simulations functions, form integral part of an ERP system which helps in proper utilization of resources like materials, human resources and tools. Constrained based planning help in drawing appropriate production schedules, thereby improving operation of plant and equipment. As a part of MIS, an ERP system, contains many inbuilt standard reports and also a report writer which produce ad hoc reports, as and when needed.

• Improved Efficiency and Productivity:
• In addition to provision of improved planning, ERP system provides a tremendous boost to the efficiency of day to day and routine transactions such as order fulfilment  on time shipment, vendor performance, quality management, invoice reconciliation, sales realization, and cash management. Cycle time is reduced for sales to cash and procurement to pay sequences.
• Establishment of Standardized Procedures: 
• ERP system is based on processes of international best practices, which are adopted by the organizations during implementation. Department silos are purged and maverick practices are done away with. Because of top down view available to management, chances of theft, fraud and obsolescence are minimized.
• Flexibility and Technology:
• Due to globalization environment, where production units, distribution centres and corporate offices reside in different countries, organizations need multi currency, multi language and multi accounting modes, in an integrated manner. These provisions are available in most of the ERP systems, particularly in products offered by tier 1 and tier 2 vendors. ERP vendors are also quick to adopt latest technologies, from mainframe to client server to internet. Unlike a bespoke system, Upgrading to latest technology for a running ERP system is uncomplicated, involving mostly adoption of service packs and patches. 

“Charge It” with your cell phone

Chapter 2: Identifying Competitive Advantage

 

 

Questions :

1. Do you view this technology as a potential threat to traditional telephone companies? If so, what counterstrategies could traditional telephone companies adopt to prepare for this technology ?

2. Using Porter's Five Forces describe the barriers to entry for this new technology ?

3. Which of Porter's three generic strategic is the technology following ?

4. Describe the value chain of the business of using cell phones as a payment method.

5. What types of regulatory issues might occur due to this type of technology ?

Answers :

1. Yes,this new technology will harm traditional telephone companies. This new technology can   attracts even more customers to the cell phone market, the traditional telephone companies stand to lose additional market share and revenues. For this reason, this type of technology is a definite threat to the traditional telephone companies. The traditional telephone companies will have to find new ways to entice customers. The strategies to adopt this new technology are to implement the ability for the home phone owner, who is also an ISP customer, to purchase on-line retail goods and have the charge applied to their home telephone bills. Traditional telephone companies must competitive with a good information,design with attractive the telephone with the current surrounding and make sure the telephone is suitable for the all generation that used. Next, make traditional telephone more appealing to people and possibly cheaper packages then what they already have.

2. The entry barrier, because the product or service feature that customers have come to expect from organisation's in a particular industry and must be offered by an entering organisation to compete and survive.Cell phone company must offer customer an array of services that this new technology will provide. Next is a Switching Costs, are costs that can make customers reluctant to switch to another product or service. For example, firstly, Cell phone companies can monitor what customers buy, secondly, after many times of visiting sites they can tailor  products to what the customer likes, thirdly, if they shop else where, there will be a switching cost since the new shopping site  does not have a profile of the past’s purchases the customers made.  

3. Focused strategy, because can target a niche market. The companies must targeting the growing market of cell phone users and purchasing products and services from the cell phone

4. The value chain increase the infrastructure of phone companies and improve technology development. Next, the payment method can receive or store information from the consumers purchases and send that to the phone company. Lastly,more people will engage in this type of payment method.  

5. The people will be sceptical with putting personal information out there not knowing what kind of security protection the company has and people will find a way to hack into cell phones.