Analysis of Current Enterprise System of General Electric - Case Study Example

Student’s Name, Instructor, Course, Date of Submission Table of Contents Contents 1. Executive Summary…………………………………………………………………………………………………………………….3 2. Introduction and Definitions…………………………………………………………………………………….…….…………..4 3. Enterprise System and Vendor……………………………………………………………………………………………………6 4. Challenges in Portfolio Management……………………………………………………………………………………..…..7 5. Analysis of Current Enterprise System (The ERP)………………………………………………………………………10 6. Issues Encountered During Implementation……………………….………………………………………………..…..11 7. Approaches to Handling Problems with Legacy Systems…………………………………………………………..15 8. Project Portfolio Management Office……………………………………………………………………………………….17 9. The Enterprise Trends and Perspectives…………..……………………………………………………………………….18 10. Recommendations……………………………………………………………………………………………………………….…..19 11. Conclusion………………………………………………………………………………………………………………………….…….19 Works Cited 21 GE Report (Centre of Excellence) 1. Executive Summary GE is a well known organization in the United Arab Emirates. For a long time, the company has merited in several areas, especially in the fields of electricity, and electric merchandise. It is highly esteemed for the unique level of creativity and innovation that it displays in all its work. The level of operation of this company requires that it sets advanced technologies in place. Technology is inseparable from this firm. Information systems are some of the technologies that the company is perpetually working to upgrade. They have realized the mighty power that this chance could do to them. One of the major projects that have been implemented is the installation of the Enterprise Resource Planning, ERP, which is an enterprise information system. This paper will pay a lot of attention to this project. ERP is enterprise information system that integrates information across the whole company. The main system adopted by General Electric Company is a Monitoring and Evaluation. It is able to link both internal and external information of the company through a communication network. It brings together data from different departments of the organization. This program is useful to GE since it handles a wide base of information. The organization is broad, and needs an automated system that can be able to ease the flow of information for preparation of documents, enhanced customer service, and for purposes of effective management. This report will not only cover the implementation of this information system, but will also review GE’s information system portfolio, and give a deep analysis of GE’s I.T portfolio. 2. Introduction and Definitions a) Critical evaluation of company’s (organization’s) business Innovation is the main force behind the skyrocketing development that is witnessed in the world today [Eff08]. If people will stop innovating, then the world will simply stop growing. The future is bleak, if creativity dies. There is not a single day that ends before someone develops a new thing[Alb]. As the world advances, old problems are being solved, while new ones emerge. This means that the world will always have problems, and they will need people to solve them. GE recognizes that talent nurturing is one of the mail steps that should be taken to provide solutions that the world will need in the future [GE]. The company scouts for new talent and develops it [Yog11]. GE takes their members through several stages of training and skill acquisition so that they can be repaved to take up the task of changing the world, and making it a better place. b) Triggers that led the management to implement the enterprise system. The Monitoring and Evaluation ERP is a system that integrates different sets of information in the company [Eze11]. It is able to make work easier and accurate since it simply transmits data from one function to another. This is unlike human beings who are prone to mistakes of omission and commission. This system will help a company to interlink different departments like the finance department, human resource, administration and any other section of the company. GE is wide company. Apart from the normal finance, human resource and management departments, it also has talent development and well as departments that are concerned with identifying and recruiting new talent. The company handles a lot of logistics, and can easily mismatch data in the different departments. This can create a lot of undesired confusion in the company. In order to prevent such problems from occurring, the management proposed that the company should acquire a program that can store, backup, and integrate all the data in GE. After a critical scrutiny of different products in the market, it was concluded that the ERP was best suited for GE. Each section of this enterprise system has several modules that enable the user to perform multiple functions by the click of the button [Bra08]. In summary, the main reasons that resulted in the acquisition of this enterprise system were: Need to integrate company data Need to create remote backup for company data Security of company information Need for faster transaction speed c) Main terms related to the topic of this project. Information System- An information system is set of different components that collect, stores, processes data and transmits information [Bra08]. Enterprise Information System- Any type of information system that can improve and upgrade the elements of any venture through integration, and is useful in complex decision making and processing of large volumes of data at a high speed, is an enterprise information system[Alb]. Database- A database is simply a collection of data, which is structured, and amassed in a computer, and can be accessed through varied means. Portfolio- A portfolio is an assemblage of range of investments, financial assets, past work, or ongoing projects. 3. Enterprise System and Vendor a. Hardware- The ERP cannot operate in a vacuum, it needs to be hosted and operated from somewhere. It required computers in order to function. Since information is simply integrated across departments, the following computer hardware are required: b. People- People are required to operate the system. The system is in built in the organization, and connected to departments. All information that these departments key in their computers is stored in a central database. It is from this central place that the EPR is able to extract information whenever necessary. Everyone who works on computers that are connected to this system makes a part of it [Yog11]. Technicians, who repair and maintain the systems, are the other group that up this system. c. Processes- Enterprise information systems are used to improve the performance of an enterprise. They help eliminate problems like fragmentation, which is common in organizations that have multiple information systems. It is self-transactional, and is able to operate independently, relying on data from the central database. d. Database- All the data is stored in a central place. The ERP does not extract data from different department when it is in use. This means that all the departments have been linked to a central data store, which is also connected to the ERP system. 4. Challenges in the context of IT project / portfolio management Most IT projects are usually complex [Ani05]. It hence common to encounter some challenges whenever one is managing or running an IT projects. The challenges always vary depending on the complexity of the project at hand. The project manager always faces several hurdles from the birth of the idea [Joa09]. The following are the major challenges that showed up during the implementation of the ERP enterprise information system in GE. a. Targets Targets are usually set in every project to ensure that it runs as planned. However, being at par with targets is not an easy task. During the implementation of this project, it was clear that beating the set deadlines was always a hard task. The project was heavy, and had to be implemented in different phases. Each phase had been assigned a particular time within which it had to be complete. Just like any other IT project, it was necessary to ensure that each section of the project was fully complete, and functional, before moving to the next step. The IT team would hence conduct a pre-study of the task ahead of them before starting to work on it. They would make a model that would guide them in the main project. After finishing each part of the project, they conducted tests to confirm that whatever they had worked on was in good order. This required a lot time and concentration. The IT department was straining so much. During this time, they would even work overtime, just to make sure that they deliver a complete project within the set time limit. Although it was not easy, they managed to keep up with time in most phases. There were only a few sections of the implementation that still had to go past the deadline, even after being allocated so much time. One major cause of the delays that were experienced was the time taken to deliver material from outside vendors. In most cases, the project manager ordered for software and hardware material from external vendors. In some instances, they had to get resources from the company that provided this solution. Some of these orders would often take longer than expected to be delivered. Sometimes they would be delivered with some faults. In such cases, they had to be returned to the vendor and exchanged with functioning products. Such would take too much time, and hence cause delays in the implementation process. b. Budget Keeping up with the preset budget is another common problem that all IT portfolio managers always face. The budget is always determined before the project starts. This is necessary to make sure that the company sets aside enough resources to run the project. Once the budget is set, it is usually very hard for the company to adjust it, especially if the portfolio managers need an increase of the money allocated. This means that they have to find a way of working within the financial boundaries that are already set. On the other hand, they should not change the project because of budgetary issues, they should only work on the project that has already been approved by the board of the company, and deliver quality work, just as they promised. IT managers always include a huge amount of money in the miscellaneous section of their budget. This covers any other costs that may occur, which were not foreseen during the planning stage. If they fail to do so, they may realize, when it is too late, that they did allocate enough resources to finish up the project. This may compromise with final quality of their work. c. Sourcing for Material There are very many companies that can provide the different materials that may be required during the implementation of IT projects. Sometime, the portfolio manager needs to hire people from an external body to help in the whole process. It is not an easy task to know which company, to contract, or who to assign some tasks. Everyone will pose as if they are the best, and it takes so much mental strength and great wit, to single out the best from the whole herd that will apply for the job. d. Understanding the Project at Hand Research shows that the bulk of IT portfolio managers have little or no background of computer science [Eff08]. They do not have any important training in information technology. In fact, most of them are trained in business, and business administration. They also have fundamental skills in project management, which may not be necessarily I.T projects. This means that they always have to seek a lot of expert advice before making a final decision to implement a particular project [Ani05]. GE has a very good portfolio manager with good management and administration skills. He is not very well versed with I.T skills, but has some important basics in the field of information technology. When the idea of this project was aired, he had to seek advice from renowned I.T companies in the United Arab Emirates, as well as to hear what his I.T department has to say (GE Reports). It took him a little long to get a grasp of the whole project, but he finally got to understand the different logistics of the task ahead of him. 5. Analysis of ERP Technology is good, yet it can be useless, if an organization does not take time to identify what is good for them. The ERP, however, is an appropriate enterprise system for GE. Since the inception of this system, the organization has witnessed more efficiency and effectiveness at work. The following are the core pros and cons of the current enterprise system in the organization. Pros Cost of Operation- Every organization that exists in this world runs on a cost. The cost of operation is not an income, but an expense to the firm. All try as much as they can to reduce these expenses. This system has brought down the cost of running the institution by a significant value. It is expected that the cost will further reduce, in future, once the old system is done away with completely. Speed of Execution- The new system is sustained by a strong network. It has helped to increase the speed of execution in GE. It is now easy to extract information and process documents, which would usually take a long time to work on. For example, it has been installed along with accounting templates. When you need to prepare an accounting statement, there is no need to start filling forms, you simply select the name of the document that you want to prepare, and instruct it to do so. It simply extracts information from the database and in less than five seconds, you have your document ready. This is the case with all other departments that have been attached to this system. Efficiency in Management- Data is now stored in a central place. The management is now able to know the performance of the different departments, just by a simple click of a button. They can also monitor their targets and all ongoing projects from the comfort of their computer. This has reduced the hustle of their management task. Cons Cost of Maintenance- The system has reduced the cost of operation by a significant value. However, the annual cost of maintenance is almost two times that of the old system. The cost of repair, in case there is a problem is also high. Some of the hardware used, like the fiber data cables is expensive. This means that the company will incur a huge cost if it will ever want to replace them. Complexity- The system is a complex to use and operate. Even after heavy sessions of training, staff members are still having difficulty in using the system. It has been designed for people with a good I.T background. This means that the company may have to spend much in training until their employees are able to use the ERP comfortably. 6. Issues encountered during the implementation GE did not develop this system. They simply bought it, and asked their IT experts to work on the system so that it would fit the requirements of the company. This was a challenging task since many things had to be modified so that the system can be in line with the needs of the company. In some cases, the IT department had to contact the developers of the program so that they could help in the modification process. The following are the main issues that arose during implementation: a. Selection of Software This process mainly identifies the technologies that will help the company to achieve its set goals and objectives. The technological requirements of the company are identified, before going further to find good programs that will be able to cater for these needs. This stage starts with the decision of whether the company should come up with in-house software, or acquire it from external vendors. Developing in-house software would mean that I.T experts have to be hired and briefed about the company’s technological needs. They will then provide suggestions, and develop a model that needs to be approved before starting to work on the main project. Acquiring a program from a vendor involves shopping for products that are in line with the technological requirements of the firm. A cost benefit analysis is hence conducted so to establish how much it will cost the company. A strong proposal should be written to convince the management to support the project financially. In some cases, adjustments may be made so that the product can deliver the desired results. b. Management of Project It takes a long time to implement such a heavy information system [Alb]. During this time, the project manager, as well as the people working on the project will be faced with different issues. These issues need to be handled with great level of understanding so that they will not affect the project. There is also a lot of pressure in this work, as the team strains to beat the deadlines. Team work skills are highly desired so that the project can be completed well. c. Timing Identifying the best time to implement each phase of the project was not easy. The company could not stop working because a new system was being put in place. The team had to look for a good time that would not disrupt the flow of work in the company. They also required enough time to finish each of these stages in one flow. In some cases, they had to work at night, when everyone else had left work, so that they would get ample time to do a good job. d. Data Entry The system will not be useful if it does not have the correct information. Data entry was one of the most challenging tasks during the project implementation. The team had to make sure that if inserts all the correct data into the new system. A simple mistake would easily change everything, since the whole system was integrated. There were4 a few situations where wrong data was keyed in, and the team had to start the whole process again, right from scratch. After feeding the data into the new system, they also had to take time to review the data and compare it with the source. This was necessary to confirm that all the data that had been fed into the new system was right, and nothing had been omitted or included by mistake. e. Staff Training Staff training can be a daunting task, especially in circumstances where the system will used by most of the staff in the company. The ERP will be used by many people in GE since it covers almost all departments. In this case, the project management team had to undergo a heavy task of training employees, some of which are not well versed with IT skills. It takes a lot of time, patience and effort to train staff in such way that each of them will be able to handle the system independently, without any problems. All st5aff must be trained, starting from the management to the lowest staff, who will handle the new system. They must learn to operate, sense faults, and correct minor faults that may occur during their work with the system. f. Communication Throughout the implementation process communication was very vital. Different departments had to be informed about the new system and its benefits. They also required knowing when the systems will be implemented in their departments, and what they were required to do during that time. The management also required to be briefed on the progress of the whole process, so that they would keep updated with whatever is going on in the company. It was also important to let visitors know that there may be some little interference with normal service due to the project that is going on. Every stakeholder should know when the project is expected to end. There is a lot of communication that took place within the time that the project was being implemented. At first, information would either be distorted along the way, or simply fail to reach the destination. It was hence necessary to set up a communication section in the team that was responsible for the implementation. This team was mainly tasked with all the communication work that would arise in the course of this project. g. Technical Assistance In the initial stages of the project implementation, users have very many questions. Most of them have never handled such systems. This means that they may be a little nervous at first, and will keep require a lot of support, especially technical one. This does not mean that training was not part of the process. A rigorous training syllabus was designed, to help staff members understand how to use the system. However, it needs more practice to get familiar with it, so as they are using the system, they encounter a few problems which need a technical person. In the long run, as they get used to the system, these questions will slowly vanish. h. Security Throughout the implementation process, it is vital that the system be kept under tight security. A security breach could easily result into hacking and all forms of malpractices. Because of this, all the work of keeping the system secure had to be allocated to one single person, who would be held responsible for any security problems that could occur. After implementation, the I.T department has to make sure that passwords are with the right people. 7. Discuss the approach they adopted in tackling the problem of the legacy systems. Legacy systems have always been a problem whenever companies are upgrading to new systems. GE was not an exception this section will cover the major problems that were encountered, and the approaches that have been taken to tackle them. System Conversion Most of the employees in the company are not able to handle the old systems. This is because the people who used to run them are no longer with the company, and the new employees have trained to handle modern systems. This was a major problem, especially during the implementation process, since the old system had to be used while the new one was being installed. It was also not easy to transfer data from the old system to the one that was being implemented since they were not compatible with each other. To solve this problem, the company had to maintain some of the old employees who were conversant with the old system. Personnel Training Most of the new employees in GE were not familiar with the old system. They had to be trained by the older staff that had been retained by the company, as well as attend special courses on the same. This was a cost to the company, but it was necessary since work had to continue in the company. Apart from the cost of training the new employees, the companies had to incur an additional cost to train the old employees in handling the new systems that were being implemented. This is because they could not be dismissed after the introduction of the new systems. However, in the long run, training was a great step since it equipped employees with skills to handle both the new and old systems. System Replacement It was necessary to replace all systems that were completely outdated. Temporary systems were developed to store data, and handle the information in the old system as the new system was being installed. 8. Project/Portfolio Management Office (PMO) GE has a diversified its I.T portfolio to make sure that the company is able to meet all its technology needs. Just like the financial world has investment portfolio to help them diversify their investment needs, GE also has a well planned portfolio of information technology. There are mainly four goals that led the company into their current I.T portfolio. Each of these objectives is aimed at achieving a particular goal, and has its own risk return ratio. The company always reviews their I.T portfolio to ensure that it is balanced. Balance is required so that they can be able to meet their set goals and objectives. The following are the main four objectives that guide GE in their I.T portfolio management: i. Gain of competitive edge ii. Availability of management information iii. Reduction of transaction costs iv. Integration of company systems and information Each project that the company’s I.T department undertakes must fit in any of the above categories. Before any project is undertaken by the company, they have to consider its financial demands and the effect that the project will have on the overall performance of GE. Research indicates that there is a great relationship between the general performance of firms around the world, and their I.T portfolios. GE is aware of the impact of a good I.T portfolio, and that is why they have tried to ensure that their information system office is always up to date, and is in line with the prevailing trends of I.T. At the moment, the following I.T projects are underway, or in plan for the future: a) HR Information System b) Upgrading of the Local Area Network and Intranet within the organization c) Hardware Upgrading-This will involve purchase of modern computers and other modern hardware. d) Security Systems Upgrading At the moment, the organization has done a lot in creating a strong I.T portfolio, and making sure that they are at par with the technological advancements that are taking place in the world. They do not have major problems in the area of information systems since the I.T department is always fast to move with the world. They are only upgrading their systems so that they can continually make sure that they have the best information systems, and that their service delivery standards are top notch. 9. The Enterprise Trend and Perspectives Integration- GE is developing a tendency towards integration. The institution is moving toward systems that are interconnected within various departments. This is necessary for efficient management, Automation- The organization is working on automation to increase the level of efficiency and effectiveness. Customization- Customization is the new trend in GE. Whenever they acquire a new information system, they always customize it to the company’s needs, so that it will serve its full purpose. Speed- This is a world that values speed. People like places where they are given quality, yet fast service. GE values time, and is continually working towards faster systems and processes. 10. Recommendation Information systems are becoming popular each passing day. This is because of their effect on companies that are using them. Firms sometimes get carried away by the flashy advertisements that some of these information system companies conduct. GE should always make sure that it does not just buy any system impulsively. They should also try as much as possible to get systems that will not only reduce their cost of operation, but systems that are also sold at a reasonable price. This does not mean that they should compromise on the quality of their work. Quality is not negotiable. The I.T manager should also travel to different companies that are implementing similar systems, so that he the y can exchange ideas that can help them build each other in this area of information systems. 11. Conclusion What could you do, if you were given one chance to change anything in the world? This question may not be very easy, but the management of GE decided to focus on developing the information system sector in the company. So far it is clear that they have witnessed great success, and are still on the right track. The modern world of business is complex, and only the companies that will innovate will survive. Information systems should hence be adopted by any company that seeks to gain competitive edge over their competitors. Works Cited Eff08: , (Oz 123), Alb: , (Tan and Theodorou 79), GE: , (GE website), Yog11: , (Dwivedi 221), Eze11: , (Ariwa and El-Qawasmeh 112), Bra08: , (Phillips 7), Bra08: , (Phillips 8), Alb: , (Tan and Theodorou 84), Yog11: , (Dwivedi 26), Ani05: , (Cassidy 44), Joa09: , (Filipe and Cordeiro 84), Eff08: , (Oz 131), Ani05: , (Cassidy 48), Alb: , (Tan and Theodorou 77), Read More