Posted at 12.31.2018
The feasibility analysis is an research study, which helps to clarify the aim of the proposed systems development job and to better understand an enterprise problem. The feasibility study presented here decides whether the suggested upgradation of the prevailing ERP system at Velogic Airlines Limited, can effectively meet the specified business requirements of the company. That is, it gives a concept of if the system will be worthwhile. It consists of the evaluation of problems and issues those are being currently experienced at the organization by taking into account the technical, operational, social and financial feasibilities. In addition, it considers the costs of the project and the advantages that Velogic Airlines Small may enjoy once the upgradation is performed.
Before migrating to another level of the ERP (Business Resource Planning) execution, it's important to consider first whether it'll be worthwhile and also whether it'll really be considered a benefit to the company.
Organizations today confront new marketplaces, new competition and increasing customer expectations. The efficiency of any enterprise depends upon the quick movement of information across the complete supply chain. ERP (Venture Reference Planning) systems have been utilized by businesses today, in hopes of getting a competitive gain. Upgrading the prevailing ERP by including three more modules should gain Velogic Airlines Small significantly.
There a wide range of techniques an ERP system can help an organization. First, an organization's operating costs can be reduced. An ERP system integrates all parts of an organization. Hence it is possible to manage it effectively. Also, an ERP system increases the organization's time efficiency. Individuals have faster access to their information, which increases the time and resources for decision-making. For the present time, having an ERP system means increased information availability for the business which means that the business can gain access to information quickly and easily 26.
To have the ability to determine if the system can effectively meet business requirements of the company, a feasibility research has been completed and is presented here.
A feasibility study is an diagnosis of the suggested system to ascertain if the system can effectively meet specified business requirements of the company and whether a business option exists for producing such a system.
If feasible, the feasibility research leads to requirements features, which takes the decided business system option and develop it so as to add exact details of data, functions and events to be included in the future system.
It is a short-term research study, which helps to:
Clarify the aim of the suggested systems development project
Provide a much better understanding of a company problem
Assess or recommend what course of action are taken against the proposed solution
This part is already discussed in previous section.
a. The Complex feasibility
b. The Operational feasibility
c. The Friendly feasibility
d. The Economic feasibility
The main aspect at this stage is to examine if the ERP system being suggested is technically possible. This implies to evaluate if the system is with the capacity of being implemented using available hardware, software and other equipment.
The purpose is also to find out whether the level of technological advancement needed for the purpose is able to completely support the proposed application.
As Velogic Airlines Small has already implemented the ticketing, the administration and the client attention modules, its existing ORACLE centered application must be upgraded with the addition of the three additional modules namely:
Finance and accounting
Human Source of information and Payroll
To put into action the ERP system, Velogic Airlines Limited shall need to update its existing server as its capacity might not be as such powerful to support the three new modules for the expanding of the ERP system. Also, the actual Oracle 8i installed on the server shall be upgraded to Oracle 9i standard Model. Furthermore, appropriate network cablings should be put in place for the 60 users of the system since each team contains 20 employees.
The existing server will be improved to the following configurations:
The Sun Flame x4540 server:
SUN graphics card
Solaris Advertising Kit
Solaris 9 server license
Compared to the current system (referred to in earlier section), ERP tries to assimilate all departments and functions across Velogic Airlines Small onto a single computer system that can provide those different departments' particular needs. ERP can be an enterprise extensive system that combines major business applications, including all areas and degrees of an organization. All of the applications in an ERP suite talk about a common group of data that is stored in a central database. 26
In this way, various departments can easier discuss information and communicate with each other. This integrated strategy can have a tremendous payback if companies install the software correctly.
Therefore, on specialized grounds the job seems to be feasible as a reason of the benefits mentioned above. Additionally, Velogic Airlines Small will just have to buy the additional modules and up grade its existing server for the new system.
It is a key concern coping with human corporation. It concerns the way the organization does indeed business. It will involve a change in general management responsibilities, position, training and reorganization.
The aim of evaluating the operational feasibility of the suggested system is to learn whether the manpower will be able to cope with the ERP system as this means a move from the current system to the proposed system.
However, training would be needed to make the users adapt to the new system.
Employees need to be trained as ERP requires the business enterprise Process Reengineering (BPR). The reengineering aspect is very important. ERP offers a generic business design for the company to follow. Since the ERP software can only just be customized very much, Velogic Airlines Limited needs to try to fit the model of the ERP. To properly balance and align real-world business techniques with ERP operation, executives and ERP teams have to engage in an important process known as a "GAP Analysis. " Gap Research is critical not and then determine the entire ERP execution strategy, but also to identify the new requirements for the ERP system. Gap Analysis really helps to find the particular lacking links are in today's system and the ERP system.
When a company tries to match its total functionality requirements with the ERP Oracle request, it notices that some efficiency of the ERP request needs to be customized so that the ERP request satisfies the conditions of the business functionality.
Gap Examination will obviously identify those requirements that aren't fully met by Oracle ERP Applications and will reach changes to be contained in the system to cater fully to certain requirements.
Requirements for ERP:
This part has already been discussed in earlier sections
Hence, the job should be operationally possible as the employees of Velogic Airlines Small will be interested with such a new system as therefore they would be provided with training in order to use the system properly.
It examines the sociable impact of the machine on its users.
The switch from the existing system to the ERP system introduces new ways of considering and working. Since people have a tendency to resist changes, they may be resistant to the development and implementation of the ERP system as this calls for redrawing of job technical specs. That is the employees will continue to work in a different way from that of the current system. The new system will generate new roles within the business. However, Velogic Airlines Small staff should be aware of the improvements and benefits they will get once they are used to it. They should have the expected skill requirements to use the new system and because of this training shall be provided.
In the present system, the three departments Funding and accounting, Human being Reference and payroll, Inventory runs on three distinct and separate directories resulting many times conflicting, elements in every three systems. Financing and accounting section use sunlight Accounting System, Inventory and HR team use Ms Access and Ms Excel to do their work. Therefore, there is no coordination between Velogic Airlines Limited's business procedures in the existing system.
ERP will incorporate the three departments all together into an individual, integrated software program that operates off an individual database. So, set alongside the present system, different departments can easier promote information and talk to each other. Subsequently, the employees working in these departments will face changes in the manner they work.
Velogic Airlines Small may become more versatile and productive by coordinating its business operations more directly and integrating these processes so that it focuses more on useful management of resources and customer service. For this, a powerful type of organization change should be brought forward - the business enterprise process reengineering (BPR) also known as Business Process Improvement (BPI) or business process redesign. Make reference to section 4, 'business Process Reengineering at Velogic Airlines Small'.
After undertaking the interpersonal feasibility study, it seems that the project is feasible because of the fact that the employees shall behave positively to the ERP system since training would get to them so that they could find the skills needed to use the system.
This concerns the comes back from the investment with respect to ERP implementation. Which means that the project must be "a good investment" that is whether it is worthwhile to get profit the implementation.
For example the equipment and software costs, the skills costs and working out costs of the ERP system shall be evaluated. These figures are shown below.
This section considers the expenses for the upgrading of the ERP system as well as its advantages to Velogic Airlines Small.
Equipment and software costs
It includes the price tag on putting the system into place. It comprises mainly of the price of computer peripherals, hardware and software infrastructure. Although the company has already been computerized, there will be some equipment cost for the ERP system.
The server, which already is available at Velogic Airlines Limited, shall be improved to support the other three modules. Furthermore, there should be necessary network infrastructure such as cabling. It also consists of the price tag on operating the system once it includes started.
The costs that will be incurred after the system is in procedure are:
To execute the new ERP modules, Velogic Airlines Small will choose once more Oracle as ERP supplier as it was the same for the previous ERP modules already carried out.
Since the price tag on the Human reference and Payroll component is $ 90, it is the same as Rs 2700. ($ 1 = Rs 30)
As Velogic Airlines Limited has 2691 employees, the licensing cost for this module will be Rs 7 265 700. (2700*2691)
The cost for the Financing and Accounting and Inventory modules is $ 4000, which is equivalent to Rs 120 000.
As there are 20 employees in each office, it makes a complete of 40 users.
Therefore, the licensing cost for these modules will be Rs 4 800 000. (120000*40)
The total licensing cost will be Rs 12 065 700.
The support cost will be 20% of the licensing cost and the maintenance cost will be 15% of the licensing cost.
Upgrade Server 500 000
Networking cabling 10 000
Support costs 2 413 140
Licensing costs 12 065 700
Maintenance costs 1 809 855
The total equipment and software cost is about Rs 16 798 695
They include costs of calculating and analyzing the existing system and costs of looking at the new system. They include software/consultancy work, hardware and software gadgets for development, Integration and examining costs and Data alteration costs.
The cost of consultancy is very high as a consultant approximately charges Rs 100 000 to enough time of one month.
Data change also costs money to move corporate and business information, such as customer and dealer records, from the old systems to new ERP homes.
It is assumed that the execution of the machine will consume half a year and this one consultant and one system administrator will be required. They will be paid Rs 100 000 each per month.
Therefore, for half a year, the salary of the specialist will be Rs 600 000. For the system administrator, he'll take five a few months for the customization, testing and data alteration and a month for training. So, his salary for the five calendar months will be Rs 500 000.
1 Consultant 600 000
1 System administrator for customization,
Testing and data alteration 500 000
The total expertise cost is approximately Rs 1 100 000.
These costs will include staff training. Training bills are high because staff almost invariably have to learn a fresh set of operations, not only a new software program. With ERP, fund people will be using the same software as people working in the Inventory office and they'll both be coming into information that influences the other. To do this accurately, they should have a broader understanding of how others in the company do their careers than they performed before ERP came along.
As the machine administrator will give training to the 60 users of the ERP system within a month, his salary will be Rs 100 000.
Staff training 100 000
The training cost is around Rs 100 000.
60 data points
2 413 140
12 065 700
1 809 855
System Administrator for customization, screening and data conversion
100 000Below is a stand showing all the expenses of the ERP system.
The total cost involved in the ERP implementation will be roughly Rs 18 000 000
Elimination of Costly, Inflexible Legacy Systems
Prior to the selection of an ERP system, Velogic Airlines Limited may be operating many separate old systems. Elimination of those costly to keep systems and employing one single integrated and kept up to date system for the organization can be very cost effective.
Upgrade of IT Infrastructure
The complete IT infrastructure gets a facelift. ERP systems will demand a new configuration of hardware and software. The old and multiple hardware and software configurations usually reinforced by many suppliers are now taken away. Fewer technologies and sellers create a more conducive infrastructure environment as pertains to maintenance, support, and training costs.
A new ERP system contains many new and improved upon "best of practice" business procedures. Vendors do industry-wide research to define the best business techniques. The study information then becomes part with their ERP system. Customers are then guaranteed of effective and reliable workflow functions when utilizing their ERP system.
Increase in Usage of Data for Business Decision Making
Data from every area of the business integrate into one complete databases shared by all members of the business. An ERP system eliminates the many databases members have to gain access to to obtain necessary business decision information.
Reduced Paper Documents
Paper documents are reduced, as there are online formats for data going into and retrieving.
Unified Customer Database
Customer information is stored and looked after in one repository. This enables all sites to utilize the same customer information. Redundant record keeping is reduced or taken out.
Web Centered Applications
ERP systems have more and more been made to effectively make use of the internet to apply many of the ERP system alternatives. Web interfaces offer quick access to a wide range of information.
Information is Received on a far more Timely Basis
Information is refined daily with real-time which allows for immediate usage of timely information resulting in better and more responsive decision-making.
Data is got into once, which eliminates the human error effect in a multiple system environment. Deals within an ERP system can be maintained at a high level of detail, excellent for reporting and auditor satisfaction.
Increase in Customer Response Time
The customer support at Velogic Airlines Small could respond more quickly to customers since information would already been collected and prepared.
Improved Monitoring and Quicker Resolution of Queries
Data can be accessed quickly and questions and answers regarding businesses can be address quickly.
Improved Information Gain access to and Management throughout the Organization
An ERP system accumulates aspect information in a data warehouse by which management can gain access to from any location in the world. Standard and/or customized reporting can select necessary information to aid business decisions.
Provides Functionality to Interact with other Modules
Since the key heart of any ERP system is to combine the entire businesses of an organization, it was created to communicate seamlessly with all modules.
Finally, I might say that the task should be feasible towards an upgrading of the existing ERP system at Velogic Airlines Small. Even though the costs of Rs 18 million can happen to be heavy, the ERP system would certainly bring much gain to the business.
Here are some examples of companies that contain benefited from the ERP implementation:
Data Exchange Corp. , a company of high-tech repair services in Camarillo, Calif, carried out Oracle's suite of manufacturing, HR, and financial applications.
Since beginning to use Oracle significantly less than a year ago, the business has been able to cut 10% to 15% from its total cost constructions to improved techniques, reduced problem rates, and increased customer service. For example, if a customer has a defective copier and needs a substitution part, Data Exchange can satisfy that request the very next day 98% of that time period. That's because the software has a get better at scheduling module that lets the business anticipate failing rates in the field and better manage inventory by having the right alternative parts on the right shelves at the right.
Pitney Bowes Inc. , a $4 billion machine of fax machines, copiers, and mailing systems in Stamford, Conn has seen several tangible advancements since it started out using ERP. The company says it offers slashed the expense of its overall businesses by 28%, leading to an annual personal savings of $3. 4 million. Sales efficiency has soared because sales repetitions can configure and price a product right in front of a customer in less than 15 minutes, as opposed to the hours it used to adopt. Sales reps are averaging a 3. 8% upsurge in overall sales, and order accuracy and reliability has jumped 41%, which means the right products will the right customers more regularly. Because of this, Pitney Bowes no longer has to waste money handling earnings from customers 28.
A proper execution of the machine could provide benefits, predicated on the business integrating the machine with its own functions to make it unique, and the price and time put in should be offset by the great things about the system mentioned above. The first rung on the ladder in an effective implementation project would be a proper and satisfactory training leading to an entire and solid understanding of ERP systems and benefits with regards to the company's own business anticipations 26.
Velogic Airlines Limited will profit greatly from the ERP system, as with the current system it would be difficult for the business to take the strain of the work in the foreseeable future. For instance, with the development of new flights towards new areas, increase in the number of customers and aircrafts, information will be prepared at real-time which will enable immediate usage of timely information resulting in better and more responsive decision-making. ERP will break down barriers between departments within the business. Eliminating the stand alone systems and applying one single built-in and modified system will be very helpful to Velogic Airlines Limited as the several departments will all get access to the up-to-date information that is needed to operate well in the company. All information will be entered only once in to the database, that will allow for better accuracy and will eliminate redundancy of information. In this manner, the ventures can be taken care of at a higher level of depth, excellent for reporting and auditor satisfaction. Since data can be reached quickly, time will be kept and so Velogic Airlines Small can offer a much better quality service to customers. Therefore, it will attract more and more customers and hence maximize earnings.
By upgrading the existing ERP, many changes will need place at Velogic Airlines Small however the rewards can be huge if an adequately designed plan is adopted through from the beginning to the finish.