Because of the multitude of shoe retailers, operators in the shoe retailing business must create sustainable competitive advantage that will differentiate their business thus maintaining customer loyalty, attracting new customers and consequently maximising profits to stay in business. This can be achieved by implementing an Enterprise Resource Planning (ERP) information system covering areas such as Human Resource, Inventory, Sales & Marketing, Customer Relationship Management and Finance & Accounting.
Such an implementation can provide the needed advantage as it empowers organisations gain insight into all areas of their operations thus facilitating comprehensive assessment of their companys’ financial positions on an on-going basis (Patalas-Maliszewska & Krebs, 2014). There is also evidence that an ERP implementation can provide the impetus for significant operational improvement through the institution of best practice processes; however this is not without the initial period of instability associated with systems implementations (Cotteleer & Bendoly, 2006).
Implementing an inventory module as part of a retailers ERP rollout can help reduce inventory buffers thus providing additional working capital to the business (Cotteleer & Bendoly, 2006). Furthermore, an ERP implementation can lead to increased profitability two years after its implementation, improvement in the non-payment of invoices as well as a reduction in the number of overdue invoices (Matolcsya, Booth, & Wieder, 2005).
Furthermore, adding a Customer Relationship Management (CRM) Solution as part of the ERP implementation can provide improvements in business processes, customer loyalty, reduced operating cost and the alignment of Human Resources with Corporate Strategy (Agapitou, Bersimis, & Georgakellos, 2018).
In adopting an ERP solution, the shoe retailer should however note that implementing an ERP solution does in itself guarantee success and the realisation of the benefits mentioned above since factors such as vendor capability, role of organisation’s leadership, business environment, effective project management, organisational culture among numerous variables have an impact on the outcome (Almahamid & Awsi, 2015). This is demonstrated in the case of American Lafrance that filed for bankruptcy in January, 2008 blaming IBM for the botched ERP implementation (Reuters, 2008).
References
Agapitou, C., Bersimis, S., & Georgakellos, D. (2018, February 01). Appraisal of CRM implementation as business strategy option in times of recession: The role of perceived value and benefits. International Journal of Business Science and Applied Management, 12(2), 18-31.
Almahamid, S., & Awsi, O. (2015). Perceived Organizational ERP Benefits for SMEs: Middle Eastern Perspective. Interdisciplinary Journal of Information, Knowledge, and Management, 10, 145-172.
Cotteleer, M. J., & Bendoly, E. (2006, September). Order Lead-Time Improvement Following Enterprise Information Technology Implementation: An Empirical Study. MIS Quarterly, 30(3), 643-660.
Matolcsya, Z. P., Booth, P., & Wieder, B. (2005, November). Economic benefits of enterprise resource planning systems: some empirical evidence. Accounting and Finance, 45(3), 439-456.
Patalas-Maliszewska, J., & Krebs, I. (2014, June). THE IMPACT OF ENTERPRISES SYSTEMS ON SALES PERFORMANCE: A STUDY OF ERP SYSTEM IMPLEMENTATIONS IN POLISH SMES. Management and Production Engineering Review, 5(2), 54–59. doi:DOI: 10.2478/mper-2014-0017.
Reuters. (2008, January 28). Firetruck maker files for bankruptcy, blames IBM. Retrieved from Reuters: https://www.reuters.com/article/us-americanlafrance-bankruptcy/firetruck-maker-files-for-bankruptcy-blames-ibm-idUSN2848407720080128
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