Implement a global SAP cloud solution for better accuracy and real-time inventory

reporting

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Introduction

The past ten years have been charactered by the rapid and massive technological

transition from analog to modern digital systems. The transition from conventional techniques to

modern digital systems has been fueled by the intense discovery and innovations in the

information technology sector. Currently, business organizations are adopting cloud data

processing and storage techniques. These trends have been fast-forwarded due to the

development of supportive systems by cloud giants such as Microsoft, Google, and Amazon,

among other tech giants (Portougal, & Sundaram, 2019). Governments, millions of users,

business organizations, individuals, and companies utilize computing power and cloud storage.

IT provides through the internet. Most data centres offer services ranging from data entry, web-

based email, and the organization of the entire IT infrastructure. In the world of business, the

market dynamics have exponentially changed with companies or organizations serving the global

market (Kappauf, et al. 2017). The introduction of IT systems has necessitated globalization,

allowing firms to sell their products from any part of the world.

Computing technology through Information Technology (IT) has transformed the scope

of operations in the business world where most if not all operations are conducted through digital

platforms, minimizing the cost of production while optimizing the return on investment.

However, even though the numerous advantages business organizations enjoy through

globalization it has raised the bar on the competition (Bingi et al. 2019). Customers are provided

with a comprehensive and extensive variety and options to choose from; therefore, for any

product to thrive, it has to compete with others in the market to precisely satisfy the exact needs

of the majority of clients. This has led to stiff competition in the global market. To survive in the

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global market, businesses have to adopt cutting-edge IT technologies in their products'

production, marketing, and sales.

Business entities have adopted different IT-driven techniques to achieve massive sales

and remain reliable and reasonably competitive in the crowded market. The optimal adoption of

the cloud infrastructure is necessary to help reduce the cost of production while maximizing

profit (Choi et al. 2018). Businesses apply the philosophy that a larger group of users would

efficiently utilize the computing power compared to how single users would use the same

magnitude of computing power, thus enhancing the throughput and minimizing idle time. It also

implies that organizations can efficiently scale up their resources and spend only on what they

deem necessary. For instance, giant organizations like Netflix can adapt to unlimited scaling

through a modular and flexible architecture (Kappauf, et al. 2017). A typical example is that

organizations can scale to several thousand multiple servers with fluctuating rates to conform to

market status.

The era of Digital Business

The technological revelation in business operations began in the early 20th century, where

prominent business organizations started to tap on the technological opportunities to innovate

and discover systems that would enhance production and improve other aspects involved in

running business operations. The progress has been gradual since the early 20th century to about

two decades ago when the discovery of portable gadgets such as mobile phones, computers, and

social media platforms became a massive breakthrough in IT (Rao et al. 2020), exposing

businesses to tremendous opportunities to facilitate their advancements and growth while

concurrently exposing the organization to cyber threats among other operational threats. For

instance, to highlight the impact of IT technologies through digital channels that have

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revolutionized business operations, over seventy per cent of air travellers book and purchase

travel tickets online. This is economical for airlines since they don't need to have a considerable

ticketing workforce or deal with overcrowding at the airport due to many clients seeking air

tickets.

Currently, almost all business operations that were initially done manually are digitized

through the use of advanced computer programs and software as well as through online

platforms. Managers are focused on minimizing the cost of operations and production as they

desire to maximize the output quality to meet the demands and needs of their clients.

Globalization has expanded the market base and made competition stiffer (Rao et al. 2020). The

distinguishing factor between organizations is the quality of services and products and how

advanced technologies are used in producing and providing services. On the other hand,

customers are more interested in the quality, reasonable cost of operations, timely services, and

timely delivery of goods; these things can only be provided through the use of software

applications, thanks to advancements in Information Technology and Computer Technology

(Bingi et al. 2019). Business organizations and vendors have adopted the use of software and

digital platforms to produce the exact value outcome customers are seeking in products and

services. Based on these points, as the company's executive, there are enough reasons to digitally

transform to the technologies and methods of the era to fit in the market.

The business entity's success is a collective responsibility of every stakeholder and

department, working in collaboration towards one central objective. As one of the stakeholders

and It manager in the organization, the department has noticed a decline or reduction in the

organization's productivity. Preliminary evaluations point to a lack of real-time information

systems in the production and operations systems. Transmission of the information is very

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critical in the manufacture and production of tires (Rao et al. 2020). Since mixing inputs is done

in different reaction chambers and the preceding chamber of the production unit depends on the

specifications from previous units, the production has to stall for a while when specifications are

transferred manually, resulting in a delay in production. Therefore, it is proper to integrate the

production system with real-time information transmission systems that automatically relay the

required information to preceding production units without delay to enhance the production cycle

and productivity.

Currently, the company uses the MES and ERP systems in the information relay system

in the productions units. Though these computer technologies are elemental in production, they

are behind the tire information technology sector trends. To improve the company's production

units, there is a need to use modern IT solutions with the capability to provide the real-time

information system required in the production process (Portougal, & Sundaram, 2019). The

Information Technology (IT) department has been working on a project to solve the current

problem affecting its productivity. The department proposes replacing the MES and ERP

systems with the global cloud-based SAP software system to boost the shipping and receiving

time in inter-company communication with better integration between receiving and shipping

plants (Rao et al. 2020).

Cloud-based SAP solutions also seek to provide a more transparent view of the fabric

production units that act as the primary provider of raw materials required to manufacture tires.

All these culminate in improving the company's productivity, thus optimizing the profits. This

project will replace the current proprietary ERP and MES system that a small company manages

with a Global SAP TEMPO cloud-based platform to unify this facility with others in the

corporation. Improving production time at tire plants as this new system allows the fabric plant

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to deliver what is needed by the tire plants based on real-time inventory reporting (Bingi et al.

2019).

2.0 Need Analysis

The world is fast accelerating towards digitization and automation of processes. This

dramatic acceleration in the development and adoption of modern digital systems is the recent

decades of increased discovery and innovation on IT and technologies (Rao et al. 2020). Experts

have projected that the innovations of new IT systems are likely to accelerate further in the next

decade or so, and the advancements driven by the exponential nature of technology like the use

of microchips, a unique technology whose impact on production has nearly doubled the gains

made in the past two centuries, the convergence of new technologies into new combinations, the

cumulative trend of technological changes as well as the emergence of the online digital

platforms (Choi et al. 2018). Several frontiers have proved the adoption and use of new

technologies in production and manufacturing, citing the potential of achieving the Sustainable

Development Goals by 2050 (Bingi et al. 2019).

In the transformation era, companies need to migrate from paper-based communication

and transaction to the modern era of AI and IT technologies to digitize and ease the flow of

information from one department, production unit to another or coordinate the communication

between distant branches. Because of globalization, business organizations need to adopt

methods and strategies that confirm the global market dynamics in terms of productivity and

quality of the product to fit in the new market. Over the past five years, Skylark Tyre Company

has expanded its market base, now serving the big automotive companies with tires of varied

types and sizes in Europe, Asia, America, and Africa (Kappauf, et al. 2017). With such kind of

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market, the production and shipping departments are critical in ensuring that the orders are

placed in time, and the deliveries are dispatched in time.

However, in the past five months, there has been a decrease in the company's

productivity. The sluggish trend has been established to be caused by a lack of real-time

communication and information systems in the manufacturing and production units. The

company's mission is to serve clients diligently with timely delivery and be the best among the

rest. Therefore, in order to live up to this objective, it has to adopt advanced information

transmission systems (cloud SAP) for real-time information systems (Choi et al. 2018). Adoption

of cloud SAP systems will change the way of communication and implementation of

technological innovations in the production system, thus signifying growth in the company's

transactions and sharpening the company's performance through IT applications in the supply

chain management and supply chain network.

Problem and Causes

In today's operations, the company's information systems are designed and implemented

based on the needs and operational requirements for the realization of production objectives. For

example, transaction systems utilize IT concepts to provide large information systems designed

to process large amounts of data and routing transactions. Business-oriented organizations major

in the output volume. If they are an itch in the information transmission systems, the operations

are likely to stall, thus lowering the over productivity (Rao et al. 2020). The tire production in the

plant faces many challenges in achieving desired productivity and satisfaction. The trends in

logistics and transportation have rapidly increased throughout the world due to the necessity. In

the era of computerization, companies have tried to adopt computerized systems in their

operations. However, integrating these systems to coincide with the desired productivity has

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been challenging (Bingi et al. 2019). Companies have resorted to upgrading measures in the

production assets. Still, the problem has been with the implementation of information systems,

and lack of proper and effective communication between stakeholders leads to the creation of

defects in productivity.

Currently, the company uses the ERP systems as the central information system in the

manufacture and production of automobile tires. The decline in the production units is attributed

to the problems or challenges affiliated with applying Enterprise Resource Planning (ERP) and

MES systems in production. These IT systems lack the capability to relay a real-time information

framework essential in the continuity and efficient workflow in the production cycle (Kappauf, et

al. 2017). First, implementing ERP and MES systems requires working out to override the

existing systems. The process itself leads to impending workflow in the production, thus posing a

problem in the different competing divisions. EPR systems have inadequate flexibility; therefore,

production systems that depend on ERP systems have to adopt other auxiliary mechanisms to

enhance production flexibility, and the process is quite time-consuming.

Implementing ERP systems is a complex process, and it leads to a paradigm shift in the

working mechanism that affects the entire organizational operations. The adoption and

implementation of ERP systems are time-consuming; for example, the ERP systems'

performance is done step by step through initiation, analysis, configuration, validation,

deployment, and the optimization of the production process (Rao et al. 2020). Another problem

with ERP is that the systems come in standard forms, designed for specific operations and

processes thus inflexible for other functions. Its implementation of EPR and MES systems is

considerably expensive compared to the could SAP systems (Choi et al. 2018). The current

systems used in the production (ERP and MES) systems involve multiple phases such as design,

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discovery and planning, development, data migration deployment, testing, and post-launch stages

make it a tedious process.

Impact on Stakeholder

One of the main goals of any business is to serve and meet the customers' desires, wants,

and expectations to boost its business operations. The manufacturing of tires is broad, and

therefore several stakeholders are involved in the production either directly or indirectly. The

relationship between these stakeholders is symbiotic. Success from one department results or aid

the success of the other stakeholder or department, same as failure in one sector transfers adverse

implications on the different sectors (Kappauf, et al. 2017). Project personal and project

management often compound the idea of automation of the information systems within the

production units. The groups, individuals, and organizations who are interested in the production

and manufacturing of tires are quite a number. These individuals and groups forms are the

stakeholders in the manufacture of tires (Bingi et al. 2019). For instance, stakeholders include the

management, staff, employees, shareholders, federal and local governments, investors, local

communities, retailers, and suppliers. The decline in productivity in the company affects and

impact these stakeholders in different magnitude and capacity. the impact of reduced

productivity in the company affects these stakeholders individually as expounded below;

Management; Management involves the top officials such as executive managers, board

of directors, departmental heads, and team leaders. These people are responsible for formulating

management policies and management principles to define the production process within the

company (Bingi et al. 2019). For instance, productivity relates the ratio of output in comparison

to the input resources. Hence the company is considered productive when the result is higher

than the input. Just as they pride themselves on the business's success, they also shoulder failure's

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blame and consequences. Therefore, pressure from other stakeholders like investors and

stakeholders is directly channeled towards management (Portougal, & Sundaram, 2019).

Implementing the System Application and Product in data processing will enable efficient

communication and monitoring of the production process, providing the regime with real-time

production status. This will allow the company to execute proactive measures to improve

productivity whenever the systems indicate a productivity decline.

Shareholders and investors; Technically, shareholders and investors are the company's

owners through trade in the company's shares on the stock market. Shareholders purchase shares

in bulk to trade with them when the price of shares increases in the stock market. The cost of

claims in the market fluctuates depending on the company's productivity, and therefore, implies

that companies with declined productivity often have lower pricing on their shares (Choi et al.

2018). In the past few months, shareholders and investors have shared their frustrations and

discontent with how the company is fairing based on its productivity scale. The lack of

information systems based on real-time communication has been the major reason for the

reduced productivity in the company. With the proposed cloud SAP system, the company intends

to upgrade its information and communication systems to allow real-time communication

between stakeholders and production departments to ensure that production is back to where it

ought to be (Rao et al. 2020).

Government; Both local and national/federal governments are critical stakeholders in the

manufacturing and production sector as they, directly and indirectly, influence the industry's

operations. The government has the responsibility to constitute laws, standards, and regulations

that govern and guide manufacturing processes in the interest of the public, company owners,

customers, and investors (Rao et al. 2020). It also plays a critical role in market control by

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protecting the upcoming entities from exploitation and unfair competition from established firms.

In return, the government also enjoys plenty of benefits from the production and manufacturing

industries through revenue collection and employment opportunities. Industries are the largest

employer in most countries, absorbing the majority of the population, thus advancing people's

living standards and infrastructural developments (Kappauf, et al. 2017). When companies

experience challenges in productivity, it implies that the revenue from these sources decreases,

employees are laid off, thus affecting the citizens. The proposed SAP solution aims to improve

productivity, hence getting things back to normal so that the government can continue benefiting

from the industry.

Employees; Human resource is the critical engine behind business success; when these

resources are adequately tapped, the organizations experience tremendous growth and progress

in terms of productivity. Employees are the ones that directly interact with the factors of

production and utilize the available machines, equipment, and tools to convert these inputs to the

desired output product. To fully tap on the potential within the human resource, the systems of

production must be practical and up to date. For instance, the reduced productivity at the

company as established is due to the use of ERP and MES information systems that seems not to

be adequate to supply the market demands (Bingi et al. 2019). Therefore, implementing an SAP

cloud solution will enhance and improve the communication systems among employees from

different departments, thus promoting corporation, teamwork, and collaboration, critical features

of enhanced productivity. Additionally, the SAP cloud solution will provide a real-time

information system across all departments, thus providing timely responses and actions to

salvage the current production status.

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 Suppliers and Customers; Customers are the VIPs of the business as the productions are

aligned with their demands and expectations. For example, automobile and vehicle companies

and owners are the primary customers in tire manufacture. Thus, the output of tires has to

conform with their demands, desires, and expectations. As discussed earlier, productivity

measures the output versus input, and for instance, a company can produce surplus goods yet not

fit for the market; such organizations are considered unproductive. Suppliers are the intermediary

between producers and customers (Bingi et al. 2019). Thus, effective communication channel is

necessary to link the two parties. The slow and ineffective communication channel can

jeopardize production operations and merchandise flow; with the SAP solutions, the

communication intends to improve and provide suppliers, consumers, and producers with real-

time information and communication systems.

Solution alignment

System application and products SAP in data processing systems provides extensive

software that can integrate a series of business operations such as supply chain, manufacturing

applications, human resources, finance, budgeting, sales, and customer services. The advantage

of SAP systems is that it offers complete integration with manufacturing operations, minimize

data entry volumes, portability to other auxiliary services, upgrade to new forms of technology

discoveries, and adaptability to various operational environments. Successful implementation of

these systems results in the benefits of enhanced productivity, among other competitive

advantages (Choi et al. 2018). As a proposed solution to the current problem in the company's

productivity, the system's implementation requires the upgrade and installation of SAP cloud

systems and manufacturing and production processes, and other social dimensions and

condonation among stakeholders (Bingi et al. 2019). Implementing the SAP cloud systems into

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the company's production unit will be accompanied by structural changes and modes of

operations. It, therefore, implies that the company has to modify its information technology and

management practices

Based on the current challenge in the company that has led to a decline in productivity,

several proposals were suggested for the solution to the impending problem. These systems were

considered part of the solution based on their contribution to operational management, including

office automation systems, transactional processing systems, handling data, and the employees to

streamline their daily operations (Kappauf, et al. 2017). Another tactical management strategic

consideration is to handle semi-structured data and management information systems. The

department suggested six possible solutions to the impending problem at the company. Each of

the six proposed information technology systems can assist in managing specific business

operations (Portougal, & Sundaram, 2019). Since the business environment is quite dynamic, it

requires a wide range of data processing and intelligence technology systems to assist

departments in organizing and managing all of the processing data to enable every department to

meet its specific objectives.

The suggested solutions include; Transaction Processing Systems (TPS), an information

technology system that encompasses all transactions, sales and purchases of products, and

periodic transactional reports. TPS system ensures that all transactional, contractual, and

customer relations data are promptly stored in safe points and easily accessible to management

when the need arises (Kappauf, et al. 2017). TPS offers organizations with a high level of

accuracy and reliability in its customer data management with minimal human error. Office

Automation System (OAS) is a network of several technologies, tools, and organizations to

conduct managerial and clerical tasks. It is often integrated with office service systems such as

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email services to ensure that all communications are delivered to the intended recipient within a

reasonable time. Knowledge Management System (KMS) was also proposed to replace ERP and

MES systems that the company uses. Management, customers, and employees use KMS systems

among other stakeholders involved in the company. It provides technical abilities integrated

throughout the company to give staff a sense of their process data (Bingi et al. 2019).

Management Information Systems (MIS) is Information software systems that utilize

different transactional data derived from TPS systems to aid middle management, optimizing

decision making and planning. It does not operate independently, and there must be a TPS

system for this IT system to work. Decision Support Systems (DSS) is also a processing data

system used to assist management in crucial decision-making processes (Rao et al. 2020). It

gathers and stores information needed for the administration to make informed actions at any

given time. The advantage of the DSS system is that it is an interactive system where

stakeholders can easily introduce or erase data that are deemed irrelevant from the systems;

however, the systems could not apply in the company since it is only recommended for small and

medium-size organizations (Choi et al. 2018).

As it stands, the company needs a reliable and robust information system to optimize and

manage its business operations and secure its valuable (important) data. Therefore, the company

plans to adopt cloud System Application and Product (SAP) information software and system to

aid in their tyre production and business transactions and cater to its data processing needs. The

cloud SAP information technology system is an intensified and worthwhile investment that will

surely produce results and boost business performance and overall productivity (Rao et al. 2020).

The proposed SAP solution comprises modules that enhance and support business operations

such as production, sales distribution, finance and human resource coordination. It allows the

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integration of all functional units and departments involved in production or operations into a

single IT system. System application and product technology also provide a common database

and communicate the needed actions to every functional unit and communicate with suppliers,

vendors, and customers involved in the supply chain, thus easing the flow of real-time

information and enhancing overall productivity (Rao et al. 2020).

Cost Analysis

The System Application and Product (SAP) system has transformed into an indispensable

software for organizational operations since it caters to almost all production needs and

functions. The application of SAP solutions scales out across different processes from sales to

manufacturing, accounting to trading, custom relations to human relations, among other crucial

business operations. The systems are the current darling of operations in both large- and small-

scale businesses, thus making it a worthy and valuable software in the industry (Bingi et al.

2019). Due to its high demand, installing and maintaining the software and system is quite costly

and, if not properly planned for, can lead to high traffics in the business operations.

The SAP software solutions vary significantly from accounting software to inventory

software such that it enables functionality across all organizational operations. Though the

software installation and implementation is an on-time cost, the running of the systems to meet

its intended actions attract other budgeting. For instance, since it is a new software being

introduced into the company, there needs to be training on the staff and personnel on its

operations, cost of transferring data from old systems to the new system and the cost of setting

up and establishing the server environment as well as system configuration for specialized

operation needs (Bingi et al. 2019). It is estimated that running and maintenance costs often

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range between a hundred to two hundred per cent. The cost of implementation and the value vary

depending on the implementation strategies.

Itemized Costs

The proposed SAP solution's budget can be broken down into phases and items based on

the size and nature of the operation that needs to be organized and controlled. For instance, the

project segments the costs like training, data migration, installation and configuration, and

customization and maintenance costs. Training costs make up the elephant share of the

implementation cost. The training cost is estimated based mostly on staff, though other factors

might influence the training process that impacts the overall cost (Rao et al. 2020). For instance,

conducting training sessions for a more significant number of employees concurrently would

require more time and effort; therefore, how fast and quick the training could depend on the staff

familiar with the introduced IT solution. To minimize the training cost, the company has

prepared a training schedule for all its employees in cohorts, where an affiliate constitutes a

considerable number of employees.

In implementing the new IT system, the old data has to be transferred from old systems to

the newly introduced system. The transfer process is termed data migration and moves data from

existing servers into the freshly introduced SAP cloud systems. The critical data migration

considerations lie on outstanding AR and AP balances, vendors information, pricing information,

opening entries, exceptional balances, active inventories and general ledger balances (Rao et al.

2020). Though the data migration might appear straightforward for individuals with expertise,

even the experienced often face several challenges; therefore, the process should be executed

with utmost care and professionalism. Installation and configuration costs are one-time expenses

incurred once and are set by the software providers. There are several licensed SAP system

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software providers in the market; the company reached out to several software developers and

inquired on the installation fees. The most cost-effective vendor was selected to be the service

provider in upgrading and implementing the cloud SAP information solutions.

Cost Justification

The budget, as it appears, was made in consideration of several factors, such as the total

running cost, maintenance cost, and reliability of the systems. The objective is to improve the

company’s productivity by ensuring that the operations are up and running effectively with fast

and reliable real-time information communication systems within the production departments

and units. The budget is within the threshold limits, thus affordable to the company (Rao et al.

2020). Most of the team proposed that the hardware units required for the installation,

configuration and implementation of the SAP solutions be sourced locally to avoid the extra

expenses of shipping fees on exported items. The budgeting committee reached out to several

SAP and cloud storage providers. It used the different costing given to settle on the one with a

reasonable and practical quotation, thus selecting the most cost-effective software provider for

the project.

Risk Assessment

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 Software implementation projects are quite sensitive and often face risks that might

jeopardize the entire implementation operations if not adequately addressed. Risk assessment is

essential to identify, analyze and prioritize risks associated with the project. The section outlines

the unique assessment process of the possible risks that might affect the project implementation.

Several software risk factors affect the software configuration, development, installation and

implementation processes (Bingi et al. 2019); however, finding the correlation between project

outcome and risk factors is the main focus of this analysis.

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