Strategic Information System

Executive summary:

The report deals with the attempt to illustrate the details of the processes of the selection of an Automatic Identification System or Enterprise Resource Planning. The report also describes the significance of having an AIS/ERP in making an informed decision for the investment in the system of information which can help in enhancing the business of the organization. The requirements, selection of the vendor, and software have also been discussed in brief. The evaluation and utilization of the technologies in improving the efficiency of the business and the risks regarding the potential security including the data breaches in the banking industry are described in the report. The guidelines and ways to mitigate the risks due to the AIS/ERP system in the banking industry are described.

Introduction:

The application of Enterprise Resource Planning software is apt for all kinds of organizations in all sectors of the economy which includes the banking industry. The wide applicability is widely possible as ERP offers significant flexibility for the customization of the software by customizing it to every need of any organization. As per Ali-Hassan, Nevo & Wade, Information Technology has been having a dominating effect on banking institutions due to which the banks are forced to make adjustments to match up with the advancement in technology by the application of the solutions that are based on information technology (Ali-Hassan, Nevo & Wade, 2015).

According to Bakar, Suhaimi & Hussin, the applications of these solutions have been effective in enhancing the operation of business along with increasing the overall productivity of the banking industry. Hence, to maximize the advantages of the information an integrated technology-based tool like Enterprise Resource Planning (ERP) needs to be implemented. The ERP systems in the banking industry are related to a broad range of software products that are supported and encompassed for the daily operations of business (Bakar, Suhaimi & Hussin, 2013, May).

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Business Process

Baker & Niederman said that the business process in ERP can be considered as an activity that happens in the banking industry during the operations of the bank. The business process in context to the ERP can be further described as the activity that occurs in the bank with an input and output. Output and input are defined concerning the banking industry. For instance, in the activity regarding the expense of the banks, the input to be considered is regarding the service that the bank avails and the outgo or output can be related to the cash amount or expenses that go out from the banks (Baker & Niederman, 2014).

As per Baporikar, the team that is involved in the preparation of the systems for the study of the report is accountable for recognizing and enlisting the processes of the business that occur in the banking industry. To ensure the business processes that take place in the bank are listed, an extensive chart is prepared that enlists all the processes of the business with an elaborate explanation. Every business process needs to be recorded data (Baporikar, 2017).

The data defines the process of the business in the banks and the instance of the process of the business. Most of the time, a single form of data entry can be utilized for recording data about many processes of businesses. This can be obtained by the data entry forms of optimization of the design. The processes of business that are made in the banking industry are the creation of a vendor account, customer account, creation of a bank account, general ledger account, enhancing the account charts, receiving cash or cheques from the customers, payments made to the vendors through cash or by raising cheques, and journal entries (Charki, Josserand & Boukef, 2016).

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Business Requirement

The business requirements in the context of ERP in the banking sector represent the planned changes and existing processes that are non-negotiable and are intended to obtain improvements in the future. According to Daniel, Ward & Franken, the business requirements in the context of ERP can be defined as the choosing, implementation, and post-implementation of the optimization. When these requirements are executed properly, these factors can lead to an enhanced ERP-enabled business for the banks. The financials and accounting are also included among the requirements for ERP. The strengths of the ERP system lie in the automation, analysis, and streamlining of the wide range of operations of accounting. The thorough accuracy and fast analysis of the ERP lead to the reduction in errors and facilitate the banks to measure the financial condition properly (Daniel, Ward & Franken, 2014).

As per Dery, et al, human capital management is also considered among the business requirements for the ERP as it has an exceptional capacity to analyze and manage human capital resources. The automated management of human capital is an effective solution that handles the data regarding hiring and regulates the productivity of individual employees in the bank. Task automation such as the calculation of the tasks and the benefits of the administration, ERP helps in minimizing the potential for any human error to a drastic extent (Dery, et al., 2013).

The requirement of ERP in the business of a bank is due to the ability of the system to handle the manufacturing process which saves money and time by optimizing the staff hours. The SRP system ensures accuracy, measures the productivity of the banks along identifies the weaknesses that lead to the automation of the supply chain. The distribution and manufacturing process management is very beneficial as it completes the tasks that include the analysis of the quality, control of the process, and scheduling of the distribution which takes most of the working hours most of the time (Elysee, 2014). The management of sales also needs the ERP system as it accurately analyzes the data of the sales, monitors the performance, and automates the transactions along with tracking the expenses. The credit of the customers of the bank is also managed effectively by the ERP system. This system uses the previous data to determine the prime inventory numbers and ideal price points which results in saving a huge amount of time as the need to perform profit or price calculation manually is removed.

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System Requirement

As per Fielt, et al, the ERP is the software that facilitates the management of the business and integrates the applications which collect, manage, collect, store and interpret the data from the manufacturing, planning, delivery of the service, sales, marketing of the products and services of the banking industry (Fielt, et al., 2013). The common requirements of a common ERP in the banking industry would include an integrated system that is operating near or in real-time without many dependencies on periodic updates. An ERP system also includes a common database that supports all the applications along with a feel of all the modules and a consistent look. The installation of the system with descriptive application of the integration by the IT department of the bank is also required.

Software and Vendor Selection

The factors that are supposed to be considered when installing ERP systems are the changes that the organizations have undergone in recent times. It also includes the recent products that were used by the vendors in the past along with the probable products that the vendor is planning to issue in the upcoming years. The criteria regarding the age of the bank in the industry and how well the bank understands the industry are to be taken into consideration while selecting the vendor (Gleasure, 2015). The specialized experience of the vendor regarding the provision of ERP solutions to banks of similar type and size is to be considered during the selection. the direction in which the bank is heading regarding its business and the probability of the bank to continue maintaining the current form during the lifetime of using the ERP platform has to be analysed before selection. For the selection of the ERP system for the banks, it was required to assess the needs of the business, and the formation of the selection committee is necessary (Hoefnagel, Oerlemans & Goedee, 2014). The key requirements should be outlined to identify the functional areas that the ERP is supposed to cover which would result in the reduction of the number of listed vendors. Making an extensive and clear requirement list before initiating the search for the vendors is necessary. Karoui, Dudezert & Leidner said that the scope of the business operations and the requirements of the systems need to be specified while selecting the software. Evaluation of the technically fit technology has to be done to understand the potential software solution that would be provided by the ERP to the bank which would be aligned with the current banking sector (Karoui, Dudezert & Leidner, 2015).

The total cost of the ownership has to be kept in mind by uncovering the hidden costs that are associated with ERP software that is expected to be installed in the banking organization. A realistic plan and its duration should be estimated to develop a comprehensive plan of the project in the banking organization which would include the plan to ensure the testing, functionality, and acceptance of the ERP system by the end-users.

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Three ways to improve business efficiency

Generally, the banking industries use many systems or technologies that will help them in carrying out the processes without any delay. In that context, it is seen that they try to manage the wide access to business knowledge. In addition to that, the implementation of these systems will enable the minimization of duplication within the organization. Specifically for the banking industries avoiding the duplication of various processes is quite necessary. This is only possible through the implementation of enterprise solutions (Loebbecke, van Fenema & Powell, 2016).

The implementation of the enterprise system will make the business reduce the cost of the information technology as well as the manual processing of input of data. Thereafter the implementation of the enterprise systems will provide particular benefits as a result of the teamwork concerning the marketplace.

Thus three types of enterprise systems will help in improving business efficiency. In return, the process will result in increased work quality as well as greater employee collaboration within the employees of the organization. Therefore the processes that will help the improvisation of business in the banking industries are the ERP system, Customer Relationship Management, and Supply Chain Management (Loebbecke, van Fenema & Powell, 2016).

ERP:

This ERP or Enterprise Resource Planning is the process that provides the banking sector with the basic software applications that enable the efficiency of their business processes. It is just because the process engrosses the integrated business processes through the collaboration of human resources, inventory management, finance, and purchasing (Mochoge, 2014). Thus by choosing ERP as the mode of technology for the business, the banking industries will be successful through the enhancement of sales, accounts receivable, communication, shared data, and quality management. Specifically, the banking sector makes use of ERP applications in carrying out operational as well as administrative tasks.

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Customer Relationship Management:

It is again one of the important processes that will improve business efficiency in the banking industry. It enhances communication within the sales department in banks. The reason behind this is the CRM functions the bank learns about the customer needs and behavior to enhance sales. It also successfully carries out the improvisation of employee productivity to continue the workflow.

Supply Chain Management:

The process of supply chain management is one of the vital processes during the management processes in the banking industry. This is because the supply chain is the process that indicates the collection of various tasks, equipment, data, people, and many other resources to carry out the business (Morgan & Finnegan, 2014). Thus by using supply chain management the banking industries successfully carry out the physical flow of the transport, manufacturing, and storage of goods as well as materials.

The level of efficiency of the technology implementation

The above section provided the basic knowledge of the valuable techniques that will enhance business productivity as well as employee productivity. In that case out of all the processes or techniques that are mentioned the ERP system is the most efficient system that can be used in the banking industries to enhance their production processes (Naidoo, 2016). It can be said that the use of the ERP process helps in building the business along with its products and services unique in nature. However, the implementation of ERP systems in the banking industries will result in the growth of the business. It is then very well described by the clear understanding of the level of efficiency of the ERP technology. Thus the benefits that will provide the level of efficiency of the ERP system are mentioned below.

Improvised Work Flow:

The system makes the employees of the baking industries aware of every possible process by acquiring relevant information which leads to an increase in productivity. It also enables the process to be simplified through various user-friendly interfaces.

Streamlining of the Processes:

The use of ERP in the banking industry makes it efficient concerning the completion of all the business processes. In that context, the use of ERP in the banking industry makes the process quite easier with the integration of the various functions into a unified platform (Rajendran, 2015). Thus this will help in enabling the success of the business model incorporated within the banking industries.

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Efficient Business Automation:

This parameter is better judged by the evaluation of the fulfillment of future goals. In that process, the installation of the ERP within the business process will help in the automation of the business process which allows the employees to make the sharing of data along with the maintenance records as well as the metrics (Spagnoletti, Resca & Sæbø, 2015).

Elimination of the Redundancies:

The implementation of the ERP in the processes results in the proper process of the management system. This will stop the repetition of the data which will result in the correction of the incorrectness and inconsistencies.

Excellent Customer Satisfaction:

The implementation of ERP provides an advantage to the customers because it helps in providing up-to-date information to the customers regarding the products. In that case, there will be the presence of the customer representative who will deal with the customer efficiently.

Transparency throughout the Organization:

The implementation of the ERP services keeps the data quite secure which will help them to access the data. The implementation of ERP can also be quite helpful in handling strategic information. More specifically the implementation of the Role-based system will add to the efficiency of the ERP systems which makes them secure (Shollo, Constantiou & Kreiner, 2015).

A clear insight into operational, financial, and strategic processes:

The implementation of the ERP in the banking industries will facilitate the real-time updating of the data which will eventually help the customers in accessing the accurate data and dealing with the customers efficiently.

PESTLE Analysis

Potential security risks, data breaches

The above portion mentioned how the implementation of the ERP can provide an advantage to the banking industries and help the customers evaluate the processes more efficiently. But apart from that the data security processes or the attacks on the data are one of the important processes which generally a matter of concern (Silvius & Stoop, 2013). The enhancement of the technology in return has brought the threat to online marketing specifically along with social media networks, email, mobile, and personal banking. Thus it can be said that the critical data are facing the issue of security breaches and risk (Spagnoletti, Resca & Sæbø, 2015).

The topmost place for any kind of security risk is the viruses. Most of the time there are 72% of the emails that are received from the company are infected with the worms of viruses like Trojan Horse. Thereafter the threat report provides knowledge regarding the malignancy of the internet.
Like the viruses, the aftereffects of those viruses are quite dangerous. The reason behind this is that back door viruses generally leave the door by waking. By this, it becomes clear that they are removed but they remain exposed.
Hacking is another security breach that becomes a risk to the security of the data. The banking industries also face this issue through the process of buffer overflows.
Another kind is phishing or identity theft which is the most common risk as well as the security breach faced in the bank. It makes the exposure of confidential information unawares.
Blended attacks are some of the security breaches and the risks that are quite alarming. It can be cleaned through the combination of the system with piecemeal security.

Guidelines to mitigated The Risks

The implementation of the ERP system no doubt provides many advantages but it also has many risks as mentioned in the earlier condition. It therefore is possible by its discretionary nature It provides many processes that will help in making the data go live. Thus many processes enable the mitigation successfully without any hindrance. Thu the managers generally carry out the testing of the process before implementing it so that they do not suffer from time constraints (Sood, 2013).

The security risk can be mitigated with the help of the reduction of the costs related to the redesigning process. Thus it will make the internal and external auditors carry out their duties successfully. Again the data management risks of the programs are very thoroughly tested to assess the data risk Moreover the technical risks in the banking industries can be mitigated by the process of customization (Spagnoletti, Resca & Sæbø, 2015). The customization process should be aligned along with the development of the life cycle to counteract the risk.

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Conclusion

The paper provides key insights into the process of implementation of ERP within the banking industry. The ERP system also helps in the decision-making process of the business. The ERP provides service in various platforms in its integrated approach which helps in the automation of most of the operations from the management of the supply chain, relationship management, human resources, cost and financial accounting, and control of the inventory. The above-described scenario of the banking industries will enable the success of the banking industries through the implementation of the ERP.