It is known that ERP systems are very expensive these days so small and medium business may be not able to purchase it. Nevertheless, other alternative ERP systems can be delivered through internet technology Cloud computing is a model where customers can connect into the “cloud” on Internet to access applications, data and IT resources so it replaces the company data server performing the same function. As services can be individually provided, customers pay only for the resources needed (Burford, D. 2010).
Consequently, companies can increase flexibility and react to changes on demand quickly. In this model customers do not have to install it in their computers as the responsibility of hardware acquisition and maintenance is assumed by the cloud providers. However, as you data is in someone else’s server, there are many concerns related to security. An Application Service Provision is a business that provides software services to multiple customers, using a secure centrally located server to host and manage the service.
It is becoming very popular and valuable for small and medium organisations which are not able to purchase the software license or do not have the infrastructural resources to manage it. In addition, companies using ASP model do not have worry about software upgrades which is a great advantage due to the high prices and complexity of it. For example, for a company where there is a important amount of computers, software upgrades can cost a fortune. Downsides of ASP are related to high costs of customization and hardware compliance (Brain, M. 2011)
A Software as a Service (SaaS) can be defined as an application which is hosted by a service provider and is made available to multiple customers through the internet at the same time. Businesses using SaaS have the advantage of being able to order additional components and features without any licensing or technical barriers. In addition, this model provides a powerful communication features such as voices calls (VOIP) or instant messaging (CHAT). In contrast to ASP, SaaS has low customization cost as provider possess an entire domain knowledge over the service.
However, SaaS has some limitations such as security and confidentiality as the data is stored in third party servers, risk of data loss (if the vendor is gone out of business) and dependence of high speed internet (can be a big issue in developing countries) (Exforsys Inc 2009). Nowadays, another model that comes into reality is open source phenomenon (OSS). It can be defined as a combination of delivery and development (Johansson 2010:169). The main characteristic of this model is that the software is delivered on internet and users can use, change, improve the functionality and redistribute the software totally free.
Nevertheless, availability problems can emerge as it may be difficult to find the appropriate software for the business (Sen et al. 2008). Within the development of alternative ERP methods focussed on SMEs, many open source ERPs software have been created, for instance OpenBravo, Compiere, WebERP and TinyERP (Johansson 2010:169) Benefits and drawback of web-based ERP It is known that Internet technology has contributed to ERP Systems by giving way to much different forms of business services and applications available to meet the requirements of small and medium sized business.
In the past, businesses needed to purchase very expensive and standardized software. Consequently, businesses had to adapt their strategy. Nowadays, companies can select the appropriate software or individual application which allows them to optimize processes at lower costs. When a web-base ERP is selected, the software resides in the provider’s host server so companies can decrease their IT expenses in both hardware and personal. In addition, most of the Web-based ERP application supply professional upgrades and support which one again reduce company costs.
Further benefits and drawback of web-based ERP systems are shown in Table 3 The individual roles and responsibilities were organized between the group members equally to ensure a well-organized participation of each member. As it is shown in table 4, one member was assigned for sales and market reports, one for inventory management, one for pricing adjustment and the last one for marketing expenses. However, the market and sales reports were followed for all team members. Hence, the group is totally aware of the market situation and able to react quickly to the changes
In order to discuss and assure the more appropriate strategy for next round, our group get together before and after of each quarter . Information generated for the ERP system allows us to be aware of the market situation,(better selling product, overall market price etc.. ) react quickly to the changing environment and change strategy if it is necessary. Also, alternative plans are discussed in order to be ready to react to the changing environment in the market. Our overall strategy in the first three rounds of the game (Quarters 1, 2, 3) was based in pricing in order to increase turnover and profits.
We focused on the best-selling products and we increased the price considerably. As there was a high demand in the market at that point, it was still selling very well so we kept pushing the price up. By doing so, we were able to maximise not only the sales but our profit as well. Regarding marketing, our team used a rapid skimming strategy combining high prices with high promotions in order to increase our sales and market share. We concentrated the marketing expenses in one specific area where the sales were lower but still targeting the other two regions as well with less marketing activities.
During the game, the market environment suffered different changes, for example, competitors were selling under price or customers do not pay high prices. In order to react to the changing environment and try to meet customers’ demand, our team had to adapt the marketing strategy and reduced prices in some products in all regions. Our inventory strategy worked very well. We focused our plan on keeping the stock at minimum level (200-300 units) in order to reduce company’s costs. We used a fixed order process where the order was placed once the minimum stock was reached.
In addition, we usually ordered at the end of the quarter to ensure enough stock for the next round. The main goal of our strategy is to maintain enough stock to be able to serve customers and meet their demand. The ERPsim game is very helpful to acquire knowledge about how an ERP works, how to create a marketing plan in a business using an ERP and how all the company departments are integrated in order to access to real time information, improve decision making and ensure flexibility to meet customers’ demand.
In a world driven by high competitive business environment companies need to collect large amount of information in order to react dynamically. As businesses try to get competitive advantage over each other, new techniques are used such us business intelligence and data mining (Sychevskiy, M. et al. 2007) Business intelligence can be defined as the information related to the overall function of an enterprise such as client list, shareholders registers ,electronic copies of agreement with suppliers and customers, procedure documents, financials etc.
It helps to analyse information about the past performance of the company that is used to predict the future as well as to bring out some emerging trends from which the business may get profit. Data mining tool allows companies to carry out a focused search for required data by sifting through the huge amount of information located in data warehouses. Hence, business intelligence data mining is the most adequate and efficient process to find and extract specific information quickly (Chaterjee, J. 2008)
Data mining can be described as the process of discovering patterns and correlations in data which can be extracted and interpreted to develop information (Palace, 2006) All enterprises collect vast amount of data daily but the crucial things is how to use it If companies temp to analyse data manually to determinate opportunities and emerging trends it may be very expensive and time consuming. Then is when innovative business can gain competitive advantage Data mining can be applied to any size of businesses.
It is known that a small company does not need to use the same expensive services that are needed by large business. “Data mining applications are often structured around the specific needs of an industry sector or even tailored and built for a single organization (Martin, 2011). Applications of data mining Many companies have successfully set up data mining’s applications. While innovators of this technology have been found in information industries, data mining is now having an important role in businesses focussed in improving their customer relationship such as financial, marketing, communications or retail businesses.
Two important factors must be taken into consideration for success with implementation of data mining: well-integrated data warehouse and good understanding of the businesses process where data mining is applied (Chaterjee, J. 2008) Some successful industries using data mining can be named as: The banking industry Data mining can be used to identify unusual and fraudulent transactions on a credit card. Banks can use data mining to classify customer segments so they are able to set up more effective retention programs. In addition, data mining helps banking industry by predicting customer’s lifetime value
The retail industry Data mining can be utilized to identify customers’ preferences to better market and manufacture the products in the future. Data mining can also help retails improve stoking, promotions and store layout strategies. Also, by using data mining retailers can examine time-based patents which allow them to run the business more effectively. Manufacturing industry Data mining can be used in manufacturing industry to improve products and find defects through comparisons and trend recognition as well as to predict which features must be taken into consideration to meet customer demand
The telecommunications industry Due to the high competition around the world that the telecommunication industry is facing these days, companies need to focus in retaining customers and getting new ones. By using data mining, businesses are able to determine customers with the same patterns and develop special pricing strategies and attractive promotion. Also, manufacturers can use data mining to determine customers’ loyalty (Rygielski, C et al. 2006). All these industries have something in common . Data mining brings a lot of benefits to these industries which can be used to gain competitive advantage.
They use data mining in order to focus on reducing costs and improving customers’ relationship. They can focus on the most profitable customers and design specific strategies to reach them. However, data mining has some disadvantages such as privacy issues, security issues and misuse of information. Due to that internet is recently booming with forums, social networks, e-commerce, blogs etc… people’s concerns are about their personal information to be used in unethical way. Information collected by businesses may be sold to others or lost.
Hence, personal privacy is a big concern. Security is another important issue to take into consideration. Although businesses have this personal information about us available on internet, it is difficult for them to protect that information. For instance, the data base of Ford Motor Credit Company was accessed by hackers who stole valuable personal information of the customers. In addition information collected though data mining for marketing or ethical purposes may be misused. Information can be used against vulnerable or discriminated people.