Precision Electronic Parts (PEP) Inc. decided to create a system that would ease operations and increase profits due to challenges brought about by increased invoices caused by the changing technological landscape in the industry. The changing landscape in the industry includes innovation by the company in the production of low voltage motors that significantly reduce the costs of energy and the introduction of more efficient versions of the same for use in precision equipment in another industry away from the healthcare industry which remains its largest client base. The resultant stress from increased orders and in different sectors of the industry has impacted both the departments of finance, Ordering, and Shipping as well as Inventory Management (Chandy & Schulte, 2009).
The system which has been agreed upon seeks to alleviate not only such strain from those departments but also make efficient the processes involving billing, invoices, and payments. Following the approval and financing of the system by the company, the way forward is given to show the implementation process as well as the necessary steps to be taken to ensure the system is not only compatible but also user friendly to the employees and can be understood. The created system seeks not to overhaul the entire processes of PEP but rather to increase efficiency in the processes as well as monitor the movement of inventory movement within the company (Chandy & Schulte, 2009). As such, the problem facing the Finance department regarding inventory control and turnover is addressed by the presented system in the input requirements. Therefore, the system has been designed with enhanced security requiring authorization to change data or input data concerning clients and inventory. This is because accurate and reliable data input is directly related to the output and as such, there are requirements for changing data and an electronic trail.
Detailed reports on the relevant information required for data input to generate important information when creating both the Accounts Receivable Report and Overdue Collection Reports are provided in the system design specifications. Correct input is related to proper output, and the system is designed to generate reports at the end of the month. This follows from the structure of PEP that requires a report at the end of every month concerning the performance of all departments as well as provides information on inventory turnover. Therefore, the system deals with the issue of reporting via generation of reports such as the monthly invoice report, the accounts receivable report and the overdue collection report (Chandy & Schulte, 2009). The overdue collection report, for the purposes of clarity and business dealings in the future of PEP, uses three criteria for report generation which include; Thirty days overdue, Sixty days, and more than Sixty days overdue. Therefore, the system deals with not only billing but also the payment process because records made by system users translate to updates in the database.
The system also protects PEP from late payments due to slow processing of their invoices as well as a poor billing process. This is done using tracking accounts receivables that have been delayed as well as the generation of overdue collection with stipulated timelines that shield PEP from the inherent risk of accumulating debts. Other than that, the system also initially streamlines the process of purchasing and paying for inventory through a single system. This is through the barcoding of inventory and the additional barcode reader in the system that tracks each item along the chain to the end customer. This output can be generated by most employees in the firm, and this makes the departments interdependent (Chandy & Schulte, 2009). Departments generate real-time reports concerning the firm and its products through the output, and this is analysed for future decisions regarding products.
The current performance of the industry requires that any organization be efficient in resource utilization for it to remain competitive. This justifies why the system is so timely asit will help the organization maintain its position in the industry. With relation to technical feasibility, the organization will outsource the services for building the system thus making it manageable within the required timeframe. The organization has an ICT department that will carry out assessment of the system once it has been implemented and fully operation. In terms of financial feasibility, the organization will set aside some resources to cater for the costs. The financial benefits through cost saving justifies the need to implement the system. The personnel in the finance department will be trained on how to properly use the system.
D. Time and cost estimates to implement the proposed system
PEP’s financial constraints will impede the progression of the organization. This is because the projects had not been included in the budget for the upgrade. “There are general constraints that might have a bearing on the required performance of a candidate system” (Jawahar, 2014). The invoicing department has been updating its records once a month. This is something that the company needs to address to process orders sooner and bill their clients in a timely fashion. The company management must be more receptive of change and embrace new technology when appropriate. Management reluctant to approve the technology needs to be informed on the risks the company faces by not having a better billing and payment system. The centralized payment system needs to be implemented and spearheaded by the management to ensure that it is a success in the long run. The management can be the biggest constraint to progress in the company after financial challenges. Management reluctance can be a major hindrance even when the money is made available. The constraints, therefore, include financial, technical, and organizational constraints. These are all constraints that can be overcome to keep up with the technology of the current times.
The finances of the company are handled in several departments, which unfortunately, can leave loopholes for losses or proper records not being kept. It is important that the financial affairs of the company are centralized. The current state of the financial department needs to be put together under one manager. The payments and the expenditures should be monitored in one department to ensure that when it is time to put together a financial report, it is compiled by one department altogether.
F. Requirements Checklist
The following are the output requirements.
Every output is a culmination of processed inputs. According to Labiak, et al. (2012), input requirements assist in modelling the main actors in a Universal Markup Language Use Case diagram. For the two systems (billing and inventory), the inputs will also differ. For the inventory system the following input requirements are required.
The billing system will require the following information
Processing is the conversion of input data into output information. It is essentially critical in situations where the nature of outputs is sensitive. For purposes of the Precision Electronic Parts systems, processing requirements will demand that the input be accurate and specific. The processing requirements will be as follows;
The system will be developed to operate independently of the underlying operating system. However, the major operating system that shall be compatible with the system as a bare minimum shall be the Microsoft’s Windows environment, given that Microsoft Access had previously been used. This will ensure that the system does not completely change over the approach taken by the client. The systems developed for billing and accounting also need to support barcode systems, for entry of barcode information and reading of barcode scans. The system shall also be compatible with Near Field Communication tags, where such tags are desired and immensely used. The Systems shall also include locally hosted APIs. It would also suffice that they include mobile support for smart phones as well.
The non-functional requirements shall also extend to the usage and the protection of the system as well. The system shall allow no more than one login for a user at any particular time. It will also include automatic logouts for inactive users. The system will require that there be an adequate password policy, of no less than eight characters, of differing case and numbers to constitute a password. This will add on to the security features guaranteed in the development of the system.
The system is expected to have no downtimes. At all time, the system is expected to be fully operational at all time, as the server shall never be offline. Development will also ensure that the system is on a dedicated server that will not easily be accessible by unauthorized users. The system will include active monitoring of the activities within the Point of Sales as well as other terminals to guarantee that all transactions are within the scope of the organization’s requirements.
System control is necessary to the success of the developed system. In order to guarantee control, certain metrics shall be anticipated. First, the system shall be tested using validation rules to ensure that it rejects certain types of input and allows other input, the system shall also be designed to effectively respond to time stamps and record these time stamps on server logs. The systems shall also be fed with incorrect data concerning certain figures and values to ensure that it is able to note faulty transactions.
|Stock Reorder Levels|
|Stock Coding and Identification|
G. Data Models (Stage 2 assignment: Requirements Specification)
H. Process Models (Stage 2 assignment: Requirements Specification
Structured English code for the billing and inventory management system shall be as follows;
IF item has an ItemCode THEN
IF item has an Item description THEN
Record item into inventory
Update Database Record
APPROVE SALE TRANSACTION
IF item has an ItemCode THEN
IF item has an Item description THEN
IF item has an Item Price
Approve Sale transaction
Update Database Record
PEP is structured and designed to work on a schedule that enables it to make a report at every end of the month. The reports comprise of the performance and the progress of all the departments. However, the main interest is to keep track of how the invoices are managed and recorded. This will also ensure that the collection of the payments from the clients is monitored. The new system will bring functional requirements that precisely describe the key functionality of the systems towards solving of the problem. The system will focus on information received, the information input to the system, and the overall procedure of how the information will be processed.
For accurate and reliable output, valid entry and particular entry of the data will be adhered just to ensure all the critical information is fed into the system. This will make sure that all the critical reports are availed on time to the ITSC and other departments that are authorized to access the information. The input layout will put more emphasis on an accurate entry of data as any mistake can affect the outcome of the whole process.
The organization will use cloud servers to host its system. Use of cloud servers is effective in breaking down the barrier related to costs and scalability. It offers easy access to accurate information and easing the communication process. With the high-speed connectivity, cloud servers will bring the ability to handle the traditionally complex services. The flexibility of the cloud servers is a great advantage that the organization will seek to achieve.
J. Recommended Acquisition Strategy – Respond to each of the following and provide brief explanations of your choices.
The organization will seek to utilize outsourced services in building the system. This will be effective in ensuring that the organization concentrates on its core business of producing and selling of low voltage motors. The outsourcing will also imply that the organization will acquire the best services and at the lowest bid provided. The contracted firm will develop a customized system which will be useful in ensuring that the specific needs of the organization are well addressed. The organization will also hold the copyrights to the systems and will thereby be at liberty of making improvements and adjustments as may be deemed.
K. Implementation Plan
The organization requires the collaboration of all departments from the organization. In essence, the financial department and the ICT will be at the centre of the implementation process. The financial department will be using the system to do the invoicing, billing, and producing reports. This ICT personnel will be very effective in ensuring seamless implementation of the system. They ensure that the technical components of the system are effective.
IV. Financial Information
The Estimated Implementation Cost
The costs of the current system are not easy to determine because of the expansive financial department. There are many ways of evaluating the cost of the current system. The easiest one would be to evaluate the cost of the equipment being used in the current system, which will facilitate the determination of the evaluation process. This can only be done by the staff members of the billing and payment systems.
The project is likely to take a year to fully implement. In one year, clients will have placed orders severally and the client records can be evaluated, as a fiscal year will have been closed as well. This is sufficient time to monitor the performance of the company and notice the changes after the system is implemented. The estimated cost can be calculated from the size of assets that the company has. From this, the company can be advised by the IT department to see which equipment will be used to implement the upgrade and will cost. This will then be inspected by the management who will determine if the amount is worth the benefits of the new system. The first six months of the system upgrade will be used to implement and the additional six will be used for monitoring system performance.
Estimated Operating Cost and Estimated Useful Life
The implementation costs for the organization will be estimated to about $ 700,000. This cost will mainly be used to cater for external human resources. The estimated costs will be apportioned to cover for database management system costs, infrastructure costs, software costs and human resources costs. The human resources costs will be apportioned 55% of the estimated human resources costs. The system will be have a useful life of 10 years in which major and minor upgrades will be undertaken to ensure that the system is up to the task.
Tangible and Intangible Benefits
The system upgrade is expected to benefit the company with better sales recorded. “No doubts that implementing the up-to-date billing system into your business will help improve relationships with your customers and leave your major competitors behind the scene. Sales will increase, and orders will be processed timely while simultaneously reducing order cancellations. The system will also ensure that the bad debt cases are reduced gradually. The records are imperative in enabling the company to know which clients are likely to default on payments and the financial department will effectively manage each case. Expanding the client base is also important and viable by upgrading the billing and payment systems. The company will benefit from this changes by ensuring the company accounts always close with a profit. The quantifiable changes are noted in the profits and general client feedback on services offered. Client feedback could come in form of client referrals and this translates to more sales. The tangible benefits, therefore, include Profits, less bad debt cases, and an upsurge in client traffic indicated by an increase in orders by new clients.
The intangible/tangible benefits such as work productivity and positive client feedback are a result of a better functioning work environment. Employees will have more time to focus on their clients and their needs. The records of the production, sales, and payments are better kept. The employees will ultimately have a positive work environment free from the general exhaustion of manual invoices and payment processing sheets. As a result, the intangible benefits include better work conditions, satisfied customers, and ultimately good company reviews by clients.
With the installation of the new system, the organization will be bound to reap the benefits of improved efficiency. Other benefits include audit trail, accountability, centralization of resources and time saving.
Following the funding of the system as well as its approval by PEP, the implementation process begins with a major emphasis on the processes involving billing and payment. This stems from the realization that the operations of the business require billing to a large extent and that this is also the sector affected the most by the new changes in the business. As such, the infrastructure required to get the system up and running will need to be installed in the first phase (Khosrow-Pour, 2004).
The infrastructure needs to meet the basic requirements for processing as outlined in the processing requirements which include 100Mbps network speeds, 4 GB RAM memory as well as a powerful processor, and preferably Corei3 with 4 CPUs. This sets the basis for the running of the system at PEP and hence is the first step in solving the payment and billing process (Khosrow-Pour, 2004). Because the company has no budgetary allocation for IT, the system is designed to be compatible with the environment of Microsoft Windows. This is attributable to the previous use of Microsoft Access in consumer billing as well as payments. Therefore, the employees are conversant with the environment of Windows which enables them to transition swiftly to the new system.
After the infrastructure is in place, the system shall be included in the operations of the business through integrating the billing and payment systems first and rolling out training to all employees to familiarise themselves with the new system. This will undoubtedly be connected to the inventory control as well, but since it is the initial stages of implementation, the data entry will be manual. Training the departments of Finance as well as the Inventory Management is key in ensuring the proper utilisation of the system in the operations of PEP. Therefore, the customer base creation going forward will be done through the system to enable it to create reports and records of both sales and invoices of both existing and new clients (Shen et al., 2012). Other than the clients, the system’s database will have to be created with the employees and their various positions as well as their permissions within the system for data entry. This will also be followed by inventory recording and documentation in the system to capture the volume of goods present and moving within stipulated periods.
As previously mentioned, clients, both old and new, will be registered in the customer database with their purchase records to assist in the generation of billings and invoices. The orders will also have to be processed through the system for accountability and transparency once the system is in place. The full rollout of the system is expected in a year, with the system designed to run concurrently with the existing model until all processes and operations are moved to the system designed to ease the work load.
Chandy, K., & Schulte, W. (2009). Event processing: designing IT systems for agile companies. Retrieved from. https://www.researchgate.net/publication/228743313_Quality_of_service_in_event-based_systems
Khosrow-Pour, M. (2004). Innovations through information technology. Idea Group Publishing.
Shen, P. D., Center, T. E., de Sousa, J. E. Q. A., Varajão, M. M. C. C., &Trigo, A. (2012). Organizational Integration of Enterprise Systems and Resources.
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