HI5019 Use of ERP Software in Cogstate Limited Assessment 2 Answer
system analysis and selection
The ERP software is a planning software used by companies to improve their functions and to surpass the needs of the customers with coherent decisions. Cogstate Ltd is an Australia based biotechnology company whose main activities include clinical trials, cognitive assessment of patients and research and development in the neural diseases. The report begins with proper description of the company and the reasons for which it is intending to adopt the ERP software. Later in the report, an explicit discussion of the features of ERP and their history is done. In the last part, a comparison between the ERP software and their vendors is shown to identify the best ERP software for the client company to manage the weaknesses in the internal controls effectively.
Nowadays, organizations have become extremely concerned about the management of the firm with utmost integrity and clarity. The reason of this concern is the increasing competition in the market that drives the organizations. If organizations fail to become competent in the dynamic market, their sustainability is endangered (Erkut, 2018). Therefore, most of the organizations have inclined towards the use of the ERP software for and integrated and centralized system. Different type of organizations use this ERP system to manage the staff, inventories, customers and the other organizational needs. In this report, the use of the ERP software has been suggested to the client company known by the name Cogstate Limited. It is a healthcare organization in Australia and have identified the need of the ERP software for various reasons discussed later in the report. The report identifies the best ERP software for the company by comparing and contrasting between various ERP software delivered by different vendors. At the end of the report, a suitable software has been suggested to be used by the company to strengthen the weaknesses identified in the internal control of the organization.
Overview of the organization
Cogstate Ltd is a biotechnology company whose primary focus is in the development of the medicines by effective research. The company established in the year 1999 with the help of the angel investors. The basic idea to initiate the computer based testing was that cultural and linguistic cognition were providing only limited information in the assessment of the patient. The company conduct highly sensitive and reliable tests and assessment of the neurological diseases in the patients. The company provides effective support in the clinical trials of the medicines and therapies in most of the neural diseases such as schizophrenia, depression, bipolar disorder, etc.
The most important activity of the company is to ensure the safety of the patients and volunteers undergoing the trials. It synthesizes the tools that are effective in detection of the impairment among the patients. It uses technology for better assessment of the patients. The research and department of the company invest in identification of the new technologies and therapies and it is growing concern of this organization to ensure that best treatment reaches to people. The company assist support to the research studies at international level thus a lot of revenue of the company is used up. Apart from it, the major activity of the company is computerized assessment of the cognition and the delivery of the technology to healthcare organizations for the effective measurement of the cognition.
Internal control weaknesses and risk associated
Internal controls in the company as identified from the annual report, 2019 is that the financial loss of the company in the last year was more as compared to the previous year. The trials of the major compounds of the company has failed in the previous year due to which high loss incurred. Along with finances, the raw resources has also been wasted. The company even failed to pay any dividends in the year 2017. Another major resource lost was identified because the cash outflow in the operating activities has increased in the year 2018 due to research activities but the conducted research failed remarkably. This shows that the company has various internal control in the organization. The management of the patients and their testing is not very well in the company. The resources are managed inadequately (Hamdani and Albar, 2019). These internal control weaknesses set limitation in the growth of the organization. Therefore, it is important to use enterprise resource planning so that better decisions by the company can be taken. It was identified that the company is not conducting internal auditing which can give rise to the fraudulent and deceiving activities. Another weakness is the security management of the patients. The patients provide their personal information to the company therefore, it is its responsibility to safeguard the data from breaching. The risks associated with these weaknesses of the internal control is the breach of the patient data (Gronwald, 2020). Trust issues arise in the patients and the reputation of the company comprises. Apart from this, a great loss of resources and time incurs if proper technologies and manpower is not available in the company. If the company prevent the loss of the financial resources, which is possible with implementation of the ERP resources, then it can invest in high throughput and innovative technology and cold storage machines for the tests.
Controlled techniques to reduce risks
Organizational risks are the integrated part of the companies. However, to give neck to neck competition to the rivals, the companies have to invest in the resource planning software. These software help in proper accommodation of the resources and prevent wastage of the inventories by acknowledging storage capacities. Apart from it, the software systems help in the prevention of the personal information of the patients from any sort of breaches. Therefore, use of the computer-based resources is a widely used technique to prevent or reduce the risks associated with Cogstate Ltd. Additionally, the company can also manage the employee number and the research and development to assure better trails of the drugs and the safety of the volunteers undergoing therapeutic trials.
Software features required by the organization
The computer-based software are effective for the organizations irrespective of the niche they operate in. There are number of features exhibited by the software, therefore, most of the organizations prefer the use of the software. The underlying benefit of using the software is that these software help in forming better and logical decisions on which the company can rely for making profits and to improve the performance. The features of the software to be required by the Cogstate Ltd to sustain itself in the dynamicity of the market are discussed below:
- Reduced operating cost: the cost of the operations in Cogstate are high because the raw material for the synthesis of the compounds is very costly. Therefore, their procurement can leave the company to use ineffective materials that can be harmful to the company. Absence of internal audit pose risks on the client therefore, the software can be used to reduce the cost that increase the financial burden on the company.
- Patient safety: the patients undergoing any trials or tests are always under some kid of threat. Use of computing software can ensure patient safety by effective communication. Therefore, Cogstate Ltd can use this feature to enhance the patient safety because it conduct various trials that can cause various issues that might be fatal to them.
- Electronic storage of information of the patient’s health: the use of the ERP software is effective because they maintain the confidentiality and the protection of the information of health of the patient. Without use of such software, the patient’s personal information is compromised that is not profitable for the reputation of the company.
- Strategic planning: the efficiency of the operations are identified by these software and they help in formation of prompt yet strategic decisions for the growth of the company. Cogstate Ltd has seen itself making loss due to increased financial burdens. Therefore, the software should be used by the company to make better decisions.
- Streamlining the processes: the company lacks a proper internal audit system that can be a reason for the fraudulent activities. However, the use of the software can prevent these issues as the software will monitor the procedures and the policies of the institution. The software will upgrade the information timely and the management can have a real time view of the organizational activities. Thus these above discussed features of the software would be effective for the company in question.
History of ERP
ERP or Enterprise resource planning is a software tool on which the organizations rely to ensure that complex undertakings are functioning with accuracy. The use of ERP has been made in the manufacturing companies since early 1960s. The ERP software are costlier to be used but they are very effective and beneficial for the companies as they help in taking strategic decisions and has been used for large-scale operations. The growing technology and computer innovation has improved the features of the ERP software. Initially, it was developed in 1960 as MRP1 and then upgraded to many improved forms (Sudhaman and Thangavel, 2015). The evolution of this software has solely dependent on the use of the technology and earlier, it was a tool of luxury therefore, few manufacturing industries could use it. Early ERP software are very simple as compared to the contemporary ERP software. Moreover, it was a tool to be used by the manufacturing firms for effective supply chain management, CRM, resource allocation, employee management and more but in the current time, the ERP software have been used by all the organizations regardless of the fact that they are manufacturing firm or not.
MRP1: it was the first form of the ERP when initially the software was developed. The business operations were managed by using the computational technology. Integration of technology with the operations showed that the profits surpassed the normal revenue and helped them to achieve the competitional advantage (Wong, Veneziano and Mahmud, 2016). The software even helped the companies to meet the day-to-day needs of the organizations by automated scheduling the operations and their procurement. However, it was used by few firms as it was the first to be developed using the computer technology. The technology upgradation helped to invent new features of the software.
MRP2: this was the upgraded form of the software that appeared with new features as the technology advanced as compared to 1960s. It software provided effective optimization of the manufacturing operations (Olson, Johansson and De Carvalho, 2018). The requirement of the raw material was integrated with the production schedules therefore, a lot of waste of the resources was prevented. The software also started emphasizing on the integration of the departments of the organization for the operations.
ERP: after pre-ERP or MRP2, ERP was developed by the informational technology firms basically because more advancements were seen in computer technology after 1990s. The organizations started integrating all the processes together in single database for the development of the products and the management of the inventories. It was comparatively more agile than the MRP1 & 2. All the organizational departments like finance, HR, marketing into a single digital ecosystem. Therefore, the procurement of the real time information become more appropriate and the organizational success was also seen.
ERP2: the vendors of the software looked into the improving factors of the software and incorporated the interaction of the consumers in the application. This improved the CRM that is imperative in developing the products and services (Jridi, Jaziri-Bouagina and Triki, 2017). It was also possible to integrate the new upgraded software to be integrated with other software.
Comparing ERP software packages600
There are many vendors of the ERP software that practices to provide the best ERP software with advanced technology amendments. The vendors such as Oracle, SAP and Microsoft are some of the most widely known and their products are widely used by the organizations. These vendors however, not very different from each other but show slight variations. A comparison between the ERP software is discussed hereunder:
SAP is a leading vendor in providing ERP software from a functional and technological standpoint. It has innovated the software continuously therefore, it has become a choice of the organizations. The company provides various ERP tools such as SAP business ByDesign, SAP Business One, SAP S/4HANA and many more (Angolia and Pagliari, 2018). All these software are used by the organizations around the globe due the features it deliver for proper management of the business activities. SAP Business ByDesign is an imperative software used by the companies to enhance and boost the productivity. The net growth of the organization has seen an increment after application of the software. It is available to be used for SaaS subscription for monthly basis (Seethamraju, 2015). The cost of the software is based on the number of users and the type of users. The key benefits of the software are:
- It is a solution for all the problems in the organization
- It is built to leverage configurable and dynamic solutions to scale up the success and efficiency of the firms.
- It shows real time financial resources of the company and provides ideal suggestions for improvements.
- The CRM is managed along with the sales, marketing and customer engagement.
- It is useful in managing and streamlining the human resource processes like workforce administration and organization management.
- Project management: the software organize the projects and manage them regardless of the size and the complexity of the project. It integrate the project in all the departments for assistance and transparency.
However, the SAP Business ByDesign is a widely used software of ERP but there are some of the disadvantages due to which companies choose other vendors for their products.
- The social CRM provided by the company is effective but there are some areas where the CRM is not managed properly by the software.
- Customer services for high volume centers is not very effective currently. However, the process may be better in the future (Lohmann, 2017).
- The platform on which the software is designed is uncertain therefore, it is not confirm whether the software will be available in the future or not.
Oracle is another important and sophisticated software vendor that is mostly chosen by the companies. The ERP software provided by the company is not dependent on the size and structure of the organization. Therefore, it can be used by any type of companies. The imperative features of the software include effective CRM, resource planning and financial management. Oracle E-Business Suite is an effective software of ERP and the advantages of the ERP software provided by Oracle are (Gholami et al, 2018):
- The software is managed with the help of single site that reduce the complexity of the software use.
- The application of the software include effective CRM and SCM that would be beneficial for Cogstate Ltd.
- The financial management of the software tend to look into various matters such as payables, receivables, property management, general ledger, cash management and so on.
- The tool is better as compared to the SAP software in the management of the human resource operations.
However, there are several disadvantages of the oracle ERP software:
- The troubleshooting of the ERP software is complex
- Pinpointing of the major problem is difficult because wage issues are often shows in the error.
- The software provide the consolidated reporting.
The vendor has been providing ERP software around the world. The software provided by the company includes Dynamic 365 and Joesoftware are some of the most commonly used ERP software (Bellu, 2018). The advantages of the Dynamic 365 are as follows :-
- It is an effective all in one software that integrate the processes and organizational data as a single entity so that it can be viewed at one place.
- Sharing of the data among the decision maker is easy and it also gives access for accessing and evaluating the business intelligence (Luszczak, 2019).
The disadvantages of the ERP Software of Microsoft are as follows (Patel and Ali, 2018):
- The software is not very user friendly and it is very difficult to understand the software.
- The layout of the software is not very effective.
- It is not cost effective.
- The integration of the mass information is difficult.
- The software freezes more often causing data to suffer.
Most suitable ERP software for the client
After comparing three different ERP vendors and the software provided by them, it can be inferred that Oracle would be the suitable vendor for the client company. Cogstate Ltd has been facing several issues including the financial burden and the confidentiality of the personal information of the patients. These issues can affect the company’s sustainability and success. Therefore, Oracle E-Business Suite is beneficial to be used. The software is considered as effective because it helps the organizations to manage their financial resources, CRM and other factors to strengthen the weaknesses existing in the internal controls.
It can be concluded from the report that the ERP software are the need of the hour and they are used most commonly in the organizations to develop a better competitive head in the market. The report emphasized on the ERP software provided by different vendors. Out of various software, the Oracle E-Business Suite is concluded to be an effective software for ERP because it helps in managing the financial burden and the CRM. This is effective to manage the relations with the customers. It can also be concluded that the importance of the software is in bringing a competitive advantage for the organization.