LS Group Case
(a) For LS Group, what specific reasons were presented to justify the ERP implementation project? Did these reasons warrant an ERP implementation project?
1) LSG currently uses an information system, which is outdated and slow. Furthermore, it is not compatible which makes communication impossible. Hence, transmitting data is time consuming and required a lot of manpower as the staff was required to reenter data into each separate system. This resulted in much higher cost and processing time.
2) The current legacy system did not just cause inefficiency in daily operations, it also could not support the group's expansion and supply chain management initiatives.
3) Lastly, the business environment the company operates in is very competitive. A less than optimal business decision would mean instant loss in the competitive position they obtained in the market place. Business decisions however were based on the analysis of their financial data and market information.
With the current information system, LSG was not able to make the best decisions.
4) With the implementation of and ERP system, LSG hopes to achieve the world class information technology level and maintain its competitive edge in the marketplace.
To warrant the implementation of the project, we can see benefits of an ERP system include:
1) Ability to quickly produce financial statements which otherwise would take more than a month.
2) Communication and flow of information between different divisions, departments, and subsidiaries.
3) Easier decision making with more accurate and up to date information.
To sum up, the implementation of the ERP system will tackle the existing problems by offering the above-mentioned benefits. An investment into an ERP system would be worth and help the company to reduce cost, operate more efficient, and lastly make better business decisions.
(b) From the organizational readiness assessment exercise,