Remember, your Literature Review should demonstrate your mastery of the literature:CHAPTER 2 REVIEW OF THE LITERATURE (IMPORTANT ELEMENTS *DRAFT*)Scholarly research is always a leap from the known to
LITERATURE REVIEW: INVESTIGATION AND THE IMPLEMENTATION OF ENTERPRISE RESOURCE PLANNING (ERP) SYSTEMS IN QANTAS AIRWAYS LIMITED COMPANY 25
Literature Review: Investigation and the Implementation of Enterprise Resource Planning (ERP)
Systems in Qantas Airways Limited Company
Literature review: Investigation and Implementation of Enterprise Resource Planning (ERP) Systems in Qantas Airways Limited Company
Introduction
Overview
With the high competition in the market today, organizations need to keep up with the changing business environment. One of the ways is through ensuring that there is an innovative technology that will help in improving the performance of the business. Business software has helped in supporting the functions and activities of the organizations. Therefore, it helps in improving productivity and the overall efficiency of the organization. Most companies are moving towards implementing software to acquire a competitive edge over their competitors. One of the business software that is efficient and effective is the use of an enterprise resource planning system. This has provided several benefits to organizations using them. An Enterprise resource planning system is a system that is involved with the internal management of main business processes such as planning, purchases and sales and management of products among others (Seethamraju, 2015).
Enterprise Resource Planning (ERP) systems are transforming organizations in many ways. It is transforming the IT section of organizations. This system helps in supporting the business activities and can be integrated into different sectors including; procurement, sale and distribution, finance, accounting, human resource, and manufacturing among others. For financial accounting, ERP system helps with the financial transactions and data. It is used in human resources in dealing with the information that is related to employees of the organization. For customer relationship management, it helps in capturing and managing the relationship with the customers and also facilitating their experience. This is done through the evaluation of the knowledge database. The fourth way that is used in an organization is in sales and distribution where it helps in placing orders, delivery, shipment, and invoice. The fifth way is that it helps an organization with logistics and warehouse management. It helps with the storage and shipment of products. The sixth way is through the management of manufacturing and material. ERP system helps with the production and its planning activities. It also helps with supply change management such that it helps with the movement of the products, storage, management and controlling of supplies. Lastly, it helps with business intelligence. This is because it analyzes data and also converts data to information.
Qantas is an Airline that is amongst the highest known in the world. It is the flag bearing commercial liner of the country of Australia and remains its largest airline in terms of its fleet size. This literature review will discuss the advantages and disadvantages of the ERP systems used by Qantas Company. It will also discuss the effect of the AIS system by implementing an enterprise resource plan and show the essential role they collectively play at the Qantas Company. Additionally, it will include the investigation of the ERP system on Qantas Airlines Company.
Over the decades, there are improvements in the ERP system. The first improvement of this system over the last five years is offering organizations the opportunity to move to the cloud. Therefore, organizations are now able to switch to the cloud. Switching to the cloud has offered several advantages. It has helped in improving security. This is because it makes it possible to test for any vulnerabilities frequently hence ensuring that data is backed up with disaster recovery in place (Seethamraju, 2015). Information can be easily accessed by partners and customers among others anywhere. Therefore, it helps in eradicating the need for purchasing any other server hardware or storage.
The second improvement is that there are increasing ERP Software options for smaller businesses. More small businesses are now able to adopt ERP systems. In the past, there was no ERP software option for small businesses. Now, small businesses have a lot of options to choose from. Additionally, they can customize their solution. Due to this, more small and medium businesses are considering the implementation of ERP software ((Seethamraju, 2015). The third improvement is shorter integration periods. Integration periods have been shortened hence reducing the setup costs and improving effectiveness. Additionally, it has reduced the integration time.
The fourth improvement of the ERP system is that it has enhanced security. The most concern for many organizations is security. This is due to an increase in the percentage of the data breach. However, ERP has been updated and can offer high data protection with highly advanced permission protocols and encryption among others. The fifth improvement is the improvement of interconnectedness. ERP systems have been merged with the software as a service applications and cloud positions. This has reduced the need for organizations to use different systems and has also enhanced interconnectedness. It has also enhanced communication, response time and quicker operations. Therefore, it helps in increasing the production and revenue of organizations. The last improvement is the maximization of big data information. There have been improvements in the integration of big data into ERP software. Big data can improve the density of information, quicker decision-making processes, and enhancing greater predictive analytics among others (Seethamraju, 2015). In addition to that, it helps the organization in effectively tracking whether its production data is incredible. Therefore, incorporation of big data into software has helped with the enhancement of processes, productivity and overall quality of an organization.
ERP system impacts organizations in several ways. Organizations can be able to track production more easily. Additionally, it has eradicated communication barriers and the cost of resources. The first advantage of an ERP system is that it improves the performance of the organization and helps save time. It has also helped with better business processes, provision of reliable information, eradicating unnecessary operations and data, and reducing litigation time and cost among others (Leyh, Bley & Forstenh, 2017). The disadvantages include; it is costly to install the ERP system, it can be difficult to use, and its effectiveness may reduce in case there is resistance in sharing information between departments among others.
ERP has increased in popularity and demand due to its ability to handle hard tasks. Therefore, this project will investigate ERP implementation in Qantas Company. It will identify the benefits and weaknesses of the ERP system in Qantas Company. Qantas Airways Limited utilizes the use of ERP systems to improve their performance.
Overview of the research question
This project will be guided by some research questions. They include:
Explore how Enterprise Resource Planning systems will be implemented in the management of resources and operation of the organization's activities
investigating the impacts of the Enterprise Resource Planning system within Qantas Airways Limited Company
How effective is the ERP system in the automation of the business process
How does ERP ensure effective risk management plan
The first research question will provide how the ERP system can be implemented in the management of resources and operation of the organization's activities. It will provide several perceived challenges in an organization.
The second question will be about the impact of an ERP system within the Qantas Airways Limited Company. It will include the benefits that procured after adopting the ERP system and a complete overview of ERP implementations Qantas Airways Limited has undergone.
The third question will discuss the effectiveness of the ERP system and how it impacts the business process. Therefore, it will provide its effectiveness towards improving business processes.
The fourth question will provide the effectiveness of the ERP system in ensuring an effective risk management plan.
Overview of literature
This literature review will discuss the implementation of ERP systems in Qantas Airways Limited Company. It will also discuss the growth and demand of the ERP system. From different research, it is evident that ERP has been adopted by many organizations and hence the literature review will include the reasons for the demand and popularity (Gunasekaran, 2007). It will also discuss its effects on the overall performance of the organization. It will discuss its effectiveness in improving business performance. How it helps in improving business processes, its efficiency and the overall performance of the organization. Therefore, it will present a broader perspective of the impact of ERP systems on organizations, what has led to its high level of adoption and how Qantas Airways Limited Company can benefit from the implementation of ERP systems.
1.1 Overview of literature
History
There are historical articles that describe the ERP system. ERP system was introduced in the late 1980s and early 1990s. At first, it targeted large business organizations only. According to Rashid, Hossain & Patrick (2002), in the 1960s, most other organizations designed, developed and implemented their central computing systems through the use of inventory control packages. Such systems were based on programming languages like COBOL. In the late 1980s and early 1990s, the ERP system was introduced. It had the capability of enterprise-wide inter-functional coordination and integration. Additionally, in the 1990s, other features such as add-ons were added hence an introduction of the extended ERPs. Certain advancements were made. Some included; advanced planning and scheduling and e-business solutions among others. Therefore, the evolution can be dated back to the 1960s where there was an introduction of inventory control packages, in the 1970s Material Requirements Planning, in 1980s Manufacturing Resources Planning, in the 1990s, Enterprise Resource Planning and 2000s extended Enterprise Resource Planning. Therefore, this research provides the evolution of ERP systems.
According to Gunasekaran (2007), some advancements have been done in ERP systems. This has been made possible with the advancement of technology. ERP systems were designed as a system of record. They tracked what had happened. Technology has evolved and hence machine learning and AI among others have paved way for a different experience. Social collaboration tools inclusiveness to ERP has helped organizations change the way they interact with financial data, be more collaborative in their financial processes and financial processes, and has changed how organizations are leveraging their financial and operational data. Additionally, Gunasekaran (2007) discusses how organizations are moving their information to the cloud and relying on a mobile device to do things. Cloud accounting and cloud financial management are also gaining popularity. Therefore, cloud-based ERP software applications are helping organizations in managing connecting information from important areas. This is done to improve the way decisions are made as well as ensuring efficient accounting and other operational tasks that are related. Therefore, an advanced ERP system has helped the organization with accounting and other management processes. This has flexibility and effective financial management.
Sousa, Giardino & Trezza (2011) organizations in the past had to decide how to undertake their business first before choosing a software package. The software chosen would report on their proprietary processes. It has also discussed how the ERP system is a standard software package and how it targets the anonymous market. However, this satisfaction has been associated with a low satisfaction level. Different studies have however helped with the identification and classification of an ERP implementation success and failure factors. Sousa, Giardino & Trezza (2011) has reviewed literature between 1999 and 2001. It has been able to provide some of the implementation success factors. Some include; top management support, user training and education, management expectations, business process reengineering, and project management among others. It has also discussed how designing and implementing ERP may affect the outsourcing decision. The decision may be influenced by several factors. They include; transaction costs, financial slack, strategic dependence on the supplier, contract profile orientation, and internal production costs versus market acquisition costs comparison among others. Therefore, the evolution of ERP systems has led to higher utilization of the system by many organizations.
The contextual view of history helps in understanding the topic under research. It helps in providing more information and facts about the topic. Additionally, it can be used in supporting the topic being researched. Gunasekaran (2007) discusses the social context and how it impacts the implementation of the ERP system. ERP systems tend to need changes in social dimensions and coordination. The implementation of the system needs changes in the structure of the organization and how work is undertaken. Adopting the use of specific IT needs aspects such as social context, individual characteristics, and attitudes. This information can be used by other research in the provision of recommendations on how organizations can ensure that they deal with social situations effectively for effective implementation of the ERP system.
Organizations adopting ERP tend to face cultural barriers that lead to resistance. Some of the factors that may impact the attitude of employees towards adopting the ERP system include; social influence, innovativeness, computer anxiety, and computer self-efficacy among others (Escobar-Rodríguez & Bartual-Sopena, 2015). Escobar-Rodríguez & Bartual-Sopena (2015) also states that the cultural factors that may impact the adoption f ERP include; perceived ease of use which has an effect f the perceived usefulness, perceived ease of use which has a significant effect on the attitude toward using ERP and perceived usefulness which has a significant effect on the attitude toward using ERP.
Politics and environment are also factors that impact the adoption of an ERP system. The environmental aspects that may impact the adoption of ERP systems include; hardware, government, innovation, software, and employees among others (Vakilifard, Meinagh & Reza Khataee, 2014). Therefore, these past research have helped in understanding the factors that may impact the adoption and implementation of ERP systems. This research will be able to provide a conclusion and a recommendation based on the already stated facts and research.
According to Vakilifard, Meinagh & Reza Khataee (2014), an ERP system is a technology that takes strategic advantages in the competitive market. It also discusses the five dimensions that can be used in evaluating the benefits of an ERP system. They include; operational benefits, managerial benefits, strategic benefits, IT infrastructure benefits, and organizational benefits. The first benefit is the operational benefits. This system helps with improving the productivity of an organization, improves customer service, and reduces costs among others. The managerial benefit is involved with effective decision making and improved performance in business operations. The strategic benefit is involved with the provision of IT-based competitive advantage as it helps in improving relationships with customers as well as promoting the organization’s growth, innovation, and differentiation (Vakilifard, Meinagh & Reza Khataee, 2014). IT infrastructure benefits are involved with the creation of an infrastructure that helps an organization in adopting any future changes, reduces IT costs and increases the implementation capabilities of other applications. The last organizational benefits are involved with improving work patterns, organizational learning, and effective communication among people.
Vakilifard, Meinagh & Reza Khataee (2014) also discusses that the development of an ERP system and adoption by organizations is due to technical and business reasons. The organizations that are characterized by technologically-led motivation have an improved service time in accounting tasks. Therefore, it promotes internal efficiency, better customer service, and financial benefits which ensure that there are improved efficiencies in the organization. For effective implementation of the ERP system, management accountants should be involved in the implementation process. A successful implementation will increase the quality of data and quality of decision making. Therefore, for management accountants, they need to understand the business and the business process, have leadership skills, planning skills, analytical skills, technical skills, planning skills, significant interpersonal skills, and decision-making skills among others.
Vakilifard, Meinagh & Reza Khataee (2014) have also discussed other impacts of ERP systems. This study is relevant as it has provided detailed information on how ERP systems have helped organizations in growing and the challenges involved. Banaeianjahromi et al (2016) there are several challenges discussed that are faced when integrating the ERP system. They include; environmental challenges, technical challenges, managerial challenges, and organizational challenges. Environmental challenges are involved with organizational culture and external environments such as conflicts, poor management, and underperformance. Technical challenges are involved with issues on the selection and comparison of different ERP products, lack of ERP system’s quality, problems in integrating ERP system to other systems and conversion of data between systems, and issues with specifications definition and changes and system configuration among others (Banaeianjahromi, et al 2016). Managerial challenges are involved with setting up business goals and justification of ERP acquisition financially, issues with the involvement of the top-level management, issues with the scope, responsibilities, and resources, issues with structure and composition and skills of employees, and issues with measuring performance and accepting the system.
Organizational challenges are involved with issues with business process re-engineering, training and education, and issues with knowledge management and communication style among others. According to Banaeianjahromi et al, (2016) integration of the ERP system should be regarded as a systematic and well-planned activity. It should involve multiple systems and stakeholders. Additionally, organizations should ensure that the integration of the system is managed from different levels.
Areas of analysis
The main aim of this project is to explore how ERP systems will be implemented in the management of resources and operation f the organization. However, several problems are faced by Qantas Airline Company. The first perceived challenge is the poor decision-making process. As discussed above, the successful implementation of the ERP system needs better decision making. For the case of Qantas Airline Company, it has a serious problem with decision making. It uses traditional ways such as meetings in making decisions. This will lead to a slow process hence affecting the decision making process. ERP system will help in solving this problem through the provision of a data-driven decision-making process (White, 2018). Additionally, the system undertakes data analytics which is used in informing the management for the right steps or decisions.
The second challenge is a low-level collaboration between the management and employees. Qantas Company is experiencing a low-level collaboration between the management and employees due to poor communication. If the employees are not well informed on the directions and tasks that are expected to do at a given time, then the execution of business processes will be impacted. ERP systems help in solving this problem as they can help with the provision of effective and timely communication between the top management and the employees. The third problem is the low savings. This is impacted by the inability to control processes and allocate resources. Qantas Airline Company is experiencing low savings. This has resulted from the mismanagement of resources. Every organization needs to utilize its resources as waste may lead to improper distribution which may result in loss and fewer savings. However, the ERP system helps in solving this issue as it offers efficient allocation and management of the resources of the organization.
The fourth problem is low productivity. This is due to ineffective management and manual process. Most of the activities in Qantas Airline Company are manually done. This has resulted in reduced productivity due to ineffective resource management. ERP system helps in automating the business processes and hence results in improved productivity and also saves on time. The last challenge is difficulty in compliance and ineffective risk management (White, 2018). As discussed above, Qantas Airline Company does almost all of its activity manually. This process results in complex compliance and ineffective risk management. However, the ERP system offers risk management tools. Qantas Airline Company may use tools such as disaster recovery plans among others to ensure that it has an effective risk management plan.
Several areas need to be analyzed. The first area is the organizational structure and business process. Organizational structure is essential as it helps in improving the decision making process while the business process helps in reducing costs and increasing the productivity of an organization. Qantas Airline Company has a decentralized organizational structure. It majorly focuses on power, responsibilities, and roles to effectively coordinate the organization. The top management is tasked with the daily operations and the decision making responsibilities (White, 2018). Therefore, the top management focuses more on making major decisions. Qantas Airline Company also tasks the management audit with the responsibility of implementation f the objectives and policies and communicating with effectiveness, goals, values and any coming changes.
Employees are tasked with the responsibility to work efficiently and to develop an exponential rate. Additionally, they are required in working towards achieving the company’s goals and objectives. In some cases, it may apply either a centralized or decentralized series of structures. The top management is tasked with the responsibility of deciding the domestic and international subsidiaries. Employees are also required to comply with the applicable laws and regulations as well as conducting business with high-level ethics and integrity (White, 2018).
Qantas Airline Company uses a matrix structure and different departments tend to work in their company’s operation. Some of the departments include functional management and project management among others. The top management has the responsibility to handle diversity in the company and ensure rational decision-making processes.
Qantas organizational structure
|
|
| CEO
| |||||
| Human Resources | Marketing | General Counsel | Government and Corporate Affairs |
Strategy & Technology  CFO | |||
Qantas
International
Qantas
Domestic
Jetstar Group
Qantas Frequent Flyer
Freight
Qantas
Operations
Individual Separate Business Units
The second area is the vertical processes within an organizational structure. Situational awareness is a critical factor that is considered in the decision-making process in an organization’s management. Situational awareness helps an organization understand and control its business daily (Galbraith, 2002). This helps the team in understanding how the actions and decisions made can affect the performance of the organization. Additionally, with a well-developed situational awareness, the organization will be able to gain insight into what happened in the past, what is happening currently and what might be happening next. Employees can then acquire the information that they need to undertake their jobs more effectively. Qantas Airline Company needs to assess its perception of a new element in the business environment. Below is the vertical process of Qantas Airline Company.
Level 1
Perception of new Element in Business Environment
Level 2
Comprehension of the prevailing Situation
Level 3
Projection of the Future Status
The third area is the horizontal processes within the organization structure. A horizontal process is involved with few to no levels of middle management between the employees and the top management (DuBrin, 2011). It also models the way services should be undertaken and accomplished. A client in Qantas Airline Company has to book an airline ticket first, and then pay for the ticket online, wait for the ticket which contains the flight information and then ends with taking a flight. Therefore, there are no middle processes that may require a client to undertake interviews or surveys.
Booking airline ticket
Paying for the ticket (online)
Waiting for the ticket
Taking a flight
The fourth area is the way processes are learned. The formal method should be used in undertaking processes in the organization. The methods should be however documented in the whole system. Depending on the user's understanding level, it is important to learn the methods of operations (Boshuizen, Bromme & Gruber, 2006). There are no areas that need assessments through interviews or surveys.
The last area is IT systems. Enterprise Resource Planning System is essential as it helps in supporting the vertical and horizontal processes of an organization, decision-making processes, and product or service accomplishment. Therefore, this is an indication that data analytics and visualization from the ERP provides tools that can be used in vertical-decision making and situational awareness, horizontal and vertical process and service or product accomplishment (Samara, T. (2015). Horizontal and vertical processes are areas that require assessment in advance through surveys and interviews.
1.1 Conclusion
Qantas Airline Company is faced with several challenges that can be solved by the use of the ERP system. Some of the challenges identified in the above discussion include; poor decision-making process, low level of collaboration between the management and the employees, low savings due to ineffective control of processes and the allocation of resources, low productivity that results from the ineffectiveness of resource management and manual process, and complexity in compliance and ineffective risk management. After an analysis of these challenges, it is evident that the ERP system may help in solving these problems and hence increasing the performance of the company. ERP system contains packages that can help Qantas Airline Company in meeting its needs and running the business effectively and efficiently.
The utilization of the ERP system will help Qantas Airline Company in decreasing the time that it spends in getting its services paid for. Therefore, it will help in increasing cash flow. Additionally, integrating the ERP system architecture will help in eradicating the need for having multiple, different systems which can be used in the company. The ERP system also helps in eradicating the requirement for each location to extract data to and from the central data storage site.
The utilization of an ERP system by Qantas Airline Company will help in increasing productivity. This will be made possible through the integration of data and processes across departments and locations. This will help Qantas Airline Company in processing the orders quickly. It is also accurate and relevant. However, some challenges may be involved during the implementation of this system. Qantas Airline Company needs to deal with the challenges effectively to successfully implement and utilize the ERP system.
References
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