The Role of Reference, Imminent and Current Models in Enterprise Conceptual Modelling: A Case Study of a Namibian Freight Forwarder

The Role of Reference, Imminent and Current Models in Enterprise Conceptual Modelling: A Case Study of a Namibian Freight Forwarder

Thomas Schmidt (Flensburg University of Applied Sciences, Germany) and Stephan Hofmann (Flensburg University of Applied Sciences, Germany)
DOI: 10.4018/978-1-4666-8524-6.ch006
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Abstract

Enterprise Resource Planning (ERP) systems constitute a prerequisite for successfully managing business in many industries, including the logistics industry. Since today's standard ERP systems determine a company's business down to the smallest detail, effectively aligning a company's strategy and business processes with software-given processes is imperative for maintaining a competitive advantage. This calls for defining an Enterprise Conceptual Model based on a sound derivation of imminent processes, either directed towards current, reference or ideal processes. The case study exemplifies that an Enterprise Conceptual Model has actually helped to translate strategic goals and operational needs into business processes and, thereby, align imminent and software-given processes. The application of current, reference and ideal process models for definition imminent processes is shown. Insight is drawn from a one-case case study of a medium-sized Namibian freight forwarder and logistics service provider.
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Introduction

Key Focus

Today, Enterprise Resource Planning (ERP) systems play a major role in managing and operating businesses in many industries. Correctly implemented and well-maintained ERP systems allow organizations to tap into, share and integrate their data and information resources and to automate business activities. By doing so, organizations can increase operational and management performance and capacity as well as drive operational and management costs down. In turn, this can lead to higher value creation for the customer and higher capacity for customer orders. The organization should end up with increased revenues, decreased costs and preferably with higher profits. This simplified derivation of benefits may give the impression the only thing organizations need to do is select the right ERP system, implement it correctly and keep it running and well maintained. This is undoubtedly correct, but at the same time anything but easy as the most important step is the balancing between the company requirements and the functions of the software (Leon, 2012).

From a business perspective, a crucial point to bear in mind is that an ERP project is a far-reaching business reorganization project. It goes from strategic considerations prior to the ERP selection, through to strategic and operational considerations during the selection and implementation and ends after transition into smooth operation (Markus & Tanis, 2000). Consequently, translating the organization’s strategy into business processes and aligning business process with the ERP system’s processes is key to project success.

Objectives

This paper deals with the alignment of an organization’s strategy and business processes with an ERP system’s processes or “software-given” processes. It investigates existing approaches and addresses the research question whether and how current, reference and ideal process models in the framework of an Enterprise Conceptual Model can improve the translation of strategic and operational goals into imminent processes. Insight is drawn from a one-case study of an ERP selection and implementation project at a Namibian freight forwarder and logistics service provider.

Research Methodology

The research is based on a one-case case study method. The underlying unit of analysis (case) of this one-case case study is a Namibian freight forwarder and logistics service provider. The analysis of this single case, in contrast to a cross-case study, allowed for an in-depth and holistic study of the prevailing mechanisms of the strategy, business process and ERP system alignment in such a project, which could otherwise hardly be achieved within a cross-case study.

The information obtained was collected, first, via qualitative interviews with a sample size of twelve managers and, second, via personal observation. In order to avoid biases the information was crosschecked and quality-assured by experienced staff of the company. The information collection phase spanned from January to October 2012.

Contribution

First, this paper will look at the link between strategy, business processes and ERP systems and set out business process modelling approaches to achieve alignment between strategy, business processes and an ERP system’s processes.

Second, it will turn to the case of the Namibian freight forwarder and logistics service provider and explain how this company made use of the Enterprise Conceptual Model to achieve strategy, business process and ERP system alignment.

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