BSA 310 1 BSA 310

Riordan Manufacturing, Inc. Systems Analysis and Proposal BSA/310 2013 University of Phoenix

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Riordan Manufacturing, Inc.

Systems Analysis and Proposal

Table of Contents
Company Overview ................................................................................... 3 Introduction to Problem ............................................................................ 3 Current Human Resources Information System (HRIS) .......................... 4 Recommended Improvements for HRIS ................................................... 5 Current Finance & Accounting System .................................................... 6 Recommended Improvements for Finance & Accounting System .......... 6 Sales and Marketing .................................................................................. 8 Recommended Improvements for Sales and Marketing ........................... 9 Integration among Business Systems and Subsystems ........................... 11 Enterprise Resource Planning (ERP) System Diagram ................. 11

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Flexibility and ConsolidationMove to Virtualization ......................... 12 Security Considerations ........................................................................... 13 Summary of Improvement Actions ......................................................... 13 Conclusion ............................................................................................... 15 References ............................................................................................... 17
Company Overview Riordan Manufacturing, Inc. (referred to as Riordan from this point forward) is a subsidiary to Riordan Industries. Riordan is a global plastics manufacturer with operations in the United States in Georgia, Michigan and California. In 2000, the company entered a joint venture and opened operations in Hangzhou, China. There are 250 employees in China and 300 in the United States for a total of 550 employees. The companys research & development is conducted at the corporate headquarters in San Jose. Riordan is an industry leader in the field of plastic injection molding creating innovative plastic designs. These products have earned the company international acclaim. Riordan has over 25 customers in the United States and all over the world. Riordans main source of revenue is from the sale of plastic bottles, fans in all sizes, heart valves, medical stents, and custom plastic parts. Riordans major customers include automotive parts manufacturers, aircraft manufacturers, beverage makers and bottlers, appliance manufacturers, health care, and the Department of Defense. Introduction to Problem Riordan Manufacturing has experienced some problems within the company. Senior leadership looked to the department managers to conduct an analysis of the companys existing processes within each department. This analysis has identified some areas for improvement that will alleviate the current climate of wasted time, money and resources. With the

BSA 310 4 BSA 310 recommendations from the departmental managers analysis, Riordan can look forward to improved business processes that will save time, money, operating costs, increase customer satisfaction and overall turn a higher profit for the company. First, the existing systems were analyzed looking for an opportunity to upgrade, redesign or merge them. The beginning of this report describes each system as-is to get a picture of what the company is currently working with. Next, the report will identify recommendations for improvement and upgrade. This includes possibilities for integrating some of the business systems. By doing this, the results for the company will alter the business methodology to take advantage of the use of integrated IT systems. The ultimate goal will be to alter Riordans business network to become an interorganizational operation looking toward changing the business direction of the company. The new direction may alter the companys products or services but it will result in Riordan becoming flexible so it can ensure the long-term growth and development of the company and maintain its internationally acclaimed reputation for plastic manufacturing. First is the description of the current systems. Current Human Resources Information System (HRIS) Many firms do not realize how much time and money they are wasting on manual human resource management (HRM) tasks until they sit down and inventory their time (Kleiman & Farah, 2006, p. 351). Currently, Riordans human resources department is in disrepair, to put it mildly. The current system was installed in 1992 and it only tracks a few key points of employee information. Changes to the information in the system require a written request submitted by the employees supervisor. The use of separate Excel spreadsheets is widespread. In addition to the overall lack of integration and user friendliness, a couple of specific problems have started to appear. Complaints are on the rise among employees and the

BSA 310 5 BSA 310 training budget is out of control. Fresh new technology is needed in order to get a better handle on the problem. The number of employee complaints has risen drastically over the past year. All indications point to a breakdown in supervisory expertise as the root cause of the problem. Basically, employees are unsatisfied with the level at which supervision is operating. Initial approval has been granted for new technology to be integrated in order to address the current upheaval. Additionally, the training budget has spiraled out of control. Under constant pressure to improve results and stay competitive, contemporary companies must seek ways to become more efficient, productive, flexible, and innovative (Dreher & Dougherty, 2001, p. 3). This budget crisis is attributed directly to the need for emergency training in order to spin employees up on new systems. Travel to a specific site for training and related expenses have doomed the budget. In the most extreme examples of the issue, multiple trips from the continental United States to China have been required for training purposes. This type of expense makes it impossible to stay within budget. Distance learning solutions are currently being weighed. Options include online training and training via teleconferences, with teleconferencing seeming to be the preferred method by corporate. The initial expense for spinning up the requested new systems will spike considerably. Savings will be seen further down the road, as those are one-time expenses. As the demands placed on our existing systems increase, performance will lag. The Internet has become the network of choice for communications, and this has brought with it an entirely new set of problems and challenges for the technical people who are responsible for corporate networks (Shelly, Cashman & Serwatka, 2004, p.438). Combating performance issues requires all new,

BSA 310 6 BSA 310 upgraded systems. Funding will need to be set aside for this purpose because getting the new systems without upgrading the existing infrastructure is not advised and could lead to expensive corrective actions in the future. Recommended Improvements for HRIS First, there is need to simplify the web site Intranet for the Employee needing to contact human resources for any reason. At present, the number of pull-down tabs and information which pertains to management personnel need not be present at the employee level. Recorded online training in classroom settings is the most cost effective method to train employees across all time zones which can be incorporated into daily sessions. Funding for hardware upgrades to servers first, then the WLAN and Virtual Organization (VO) will set in place a long-term solution for many issues facing Riordan today. Current Finance & Accounting System Finance and accounting at Riordan is facing several challenges. The San Jose location is operating with a Windows based ERP manufacturing, distribution and financial management application. The Michigan site is supported by a software developed by a vendor that is out of business so has no technical support. Georgia purchased software developed by a different vendor from Michigan for their F & A and manufacturing process applications. The finance and accounting department at Riordan has not been able to achieve compatibility between entities so its biggest challenge is to integrate remotely all systems. Recommended Improvements for Finance & Accounting System The recommendation is to hire a software development company to analyze Riordans processes and to develop software that can meet current and future needs of the company. All departments and company locations, including the joint venture in China, need compatible

BSA 310 7 BSA 310 system applications as well as an operating system such as Windows, and web server to support remote communications and fast data transfer among locations. With the development of software that is compatible between all entities along with web servers in each entity, it will enable interconnection of all platforms to allow immediate data transfer. With the new interconnected finance and accounting system, the Michigan, Georgia, and China entities will be able to provide input of all finance and accounting data accurately to its Corporate in San Jose. Finance and accounting system processes from Michigan, Georgia, and China are consolidated at Corporate in San Jose but Riordan is also facing situations regarding the financial and accounting system outputs at the consolidated level. Integrating and properly aligning the new software system can provide the improvements on the system processes with ultimate performance and efficiency. The new finance and accounting application can provide solutions in the following areas to help with the current issues Riordan is having at its headquarters in San Jose: General Ledger- In the general ledger the various journal entries can be sorted into the organizations different accounts such as cash, accounts receivable, accounts payable equipment, sales, expenses, accumulated depreciation, and so on. Final accounts and financial statements can be prepared based on the general ledger. Income Statement- Riordans finance and accounting department at the Corporate office can access, view, or/and analyze revenues versus expenditures, as well as be provided with a summary of the organizations profit for a given period. An accurate income statement report with a summary of the organizations profit can be obtained instantly from the system.

BSA 310 8 BSA 310 Balance Sheet- A calculation of the organizations total liabilities plus the equity can be done automatically in the system providing the total assets. This report can be obtained in real-time resolving labor intensity as well as preventing delays for financial reports to be generated. Audit- The new development of the finance and accounting application can simplify the audit process. The required monthly audit can be analyzed in depth by the accounting department to ensure that all necessary accounts are present and maintained accurately. The integration of the systems can help this department to receive all transaction documents and processes used to prepare financial statements in a timely manner. This solution considerably will reduce the costs and labor on audit processes. Government Reporting Compliance- The new accounting systems can also help the finance and accounting department to make it simpler when complying with state and local financial accountabilities. This includes simplifying in an accurate manner the final adjustment to comply with related tax responsibilities on the fiscal year. Integrating all entities at Riordan in a global scale as well as aligning the necessary enterprise systems at its Corporate is the main focus. Finance and accounting systems can be implemented to provide a well-designed enterprise system for best performance. Combining knowledge of system functionality with an understanding of best practices can help accounting and finance departments become more efficient (Sonde, 2008, A Treasure Trove of Opportunities section, para. 4). Nevertheless, the integration process should address the following areas:

Appropriate training for the finance and accounting department and intended staff to use enterprise systems

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Implementation of policies and security measures to protect enterprise systems against threats

IT and software vendor support

Sales and Marketing Riordan currently has a database that records all historical sales and is used to predict the outcome of possible decisions before a final decision is made. Time series analysis breaks past time series into four components (trend, cycle, seasonal, and erratic) and projects them into the future and results from this analysis projects to the next sales by combining an average of past sales and the most recent sales, giving more weight to the latter (Kotler & Keller, 2006, p. 134). Also the unit and dollar volume for all products manufactured at Riordan are kept within this database. Employees can easily search the available data and research that has already been done on specific topics pertaining to their products. This saves the employees time that can be used to focus on other areas. This also prevents past mistakes from being repeated, resulting in a number of negative results that could have been prevented if that past knowledge was present and available at the convenience of a few mouse clicks. The sales database at Riordan includes the 20-25 major customers that the company currently has including government contracts. Riordan has 12 minor customers for which they provide services. Within the sales database each member of the sales department is responsible for maintaining their own portion of the database and because of this there is inconsistency in the method of record-keeping by the various employees. The marketing activities at Riordan could use an overhaul as well. The companys past marketing plans and results from past market research studies are stored in a file cabinet in the

BSA 310 10 BSA 310 marketing department. The company has many of the sales and marketing data in disparate databases, paper files and microfiche. All of these files are available and could provide valuable information when analyzed to implement a customer relationship management (CRM) system. Recommended Improvements for Sales and Marketing Management should create a policy on specific format for entering information into the database. If the sales and marketing systems were integrated with other core business systems, the data would prove valuable to decision-makers not only in sales and marketing but in other departments and at the management level as well. Also management should develop standard operating procedures for data input. Currently some data is input electronically and some is updated using pen and paper. With the company moving towards an enterprise system, the data needs to be entered into the electronic database. Records such as production records and profit and loss statements are generated from the finance and accounting department. These reports are useful in other departments such as sales and marketing so the push to implement an enterprise system will benefit all departments. From the security mind-set, there needs to be set privileges for company employees so entering, updating, and modifying the data in the system is controlled and tracked. The network administrator and the department managers will determine employees access rights. All of the systems that Riordan utilizes are effective for future growth of the company. However, there is a need for a customer relationship management (CRM) system to ensure the growth of the efficiency of the company. One of the key benefits from this type of one-stop-shop system is departments will be able to communicate with each other. This will lighten the workload for employees because needed customer behavior data can be mined in the database to generate the needed reports, information, and analysis. This will allow employees to increase

BSA 310 11 BSA 310 their production without sacrificing quality. Instead of physically searching and inputting information into the database a person could simply use the system to gather all necessary information for whatever project they are currently working on. If the marketing activities in the company were digitized, it would enable data mining to implement and effective CRM system. This system would add value to the customer and to the company. The historical marketing data could be digitized and going forward, the future data relating to marketing activities could be input into a CRM system. According to Kotler and Keller (2006), Customer relationship management enables companies to provide excellent real time customer service through the effective use of individual account information. Based on what they know about each valued customer, companies can customize market offerings, services, programs, messages, and media (pp. 152-153). This system would increase the value to the customer and to Riordan and would entice the companys longest tenured customers to stay with the company such as aircraft and automotive parts manufactures, beverage makers and bottlers and the Department of Defense. The CRM system may also draw new customers if it was implemented and marketed correctly. Integration among Business Systems and Subsystems Currently Riordan is experiencing problems with data management due to the complexity of having multiple systems that are not integrated. Data management becomes more difficult with an increased amount of applications and databases. Riordan would

BSA 310 12 BSA 310 benefit from integrating and centralizing their information systems. This can be achieved through an Enterprise Resource Planning System (ERP) and establishing a Virtual Organization. An ERP is a system that allows multiple business processes to be integrated into a single software platform and common central database. Through the use of an ERP, Riordans Human resources, Finance and Accounting, and Sales and Marketing systems may be integrated into one platform. This will allow information to flow easily from one business process to another and data would no longer need to be entered into multiple systems, which will reduce data entry errors and costs (Summer, 2005). Riordan has several sites where it conducts business operations. The sites need to be integrated into the rest of the system. This can be done though creating a Virtual Organization (VO). A VO is an IT strategy that uses networks to link together systems, people, and other various assets. By establishing a VO, Riordan will integrate all of their business processes into one single integrated network, allowing for connectivity among sites in the United States as well as their plant in China (Pearlson & Saunders, 2010). Flexibility and ConsolidationMove to Virtualization There is clear evidence from the details of the report so far that Riordan could benefit immensely from a Virtual Organization (VO). As finance and accounting systems are at the heart of every transaction within the company, the initial phase of Riordans VO centers around the finance and accounting department and all the above recommendations. In an article named Understanding Virtual Organizations from the website ISACA.org, Les Pang wrote The acceptance of VOs depends on willingness of society, organizations and people to understand this concept and transition to this effective approach to management (Pang, 2001, Preparing for the future section, para. 2). He also points out how Virtual Organizations still face many

BSA 310 13 BSA 310 obstacles, even with a good working knowledge of the system. Pang (2001) concluded One must examine the people and relationship issues as well--work practices, management oversight, organizational culture and strategic alliances (Preparing for the future section, para. 2). The recommendation is to use satellite and T-1 link technology to tie together a worldwide Enterprise to China and back. Currently, in use is an Intranet to handle all communications. Riordan would be well served to use their patented Pyramid designed bottle as the flagship logo icon for their virtual network and any website connections with their domain name. Security Considerations Riordan Manufacturing needs to only implement a multi-layered defense for the security program. This will include both hardware and software upgrades, with specific interest in the upgraded firewall PaloAltoNetworks will be installing. This advanced intrusion protection will be supplemented by Kaspersky, who will provide the anti-virus protection on every work station and server within the company. This should allow a complete set of troubleshooting tools on every computer with virtual support available. A complete seamless system will be served by this solution, with budget allowances being set aside for a security program. Along with these technical solutions, Riordan will be paying for employees to attend short classes in the near future for training in this security set up. Summary of Improvement Actions

Inventory and Manufacturing processes need an upgrade Computer System Utilization Business Requirements definition for system upgrades/improvement

BSA 310 14 BSA 310 An evaluation for the development of an MRP system to track and manage raw materials and a finished product inventory across all plants Reduce raw materials and finished goods inventory costs Create a business requirements definition for the development or acquisition of an MRP system to support the objective of this request Setup of a Virtual Organization (VO) for employees, management, vendors, and customers worldwide. All Internet/Intranet traffic, including Virtual Private Networks (VPN) would be utilized through the VO We would like to achieve integration of information currently residing in a number of different computer systems. We would like to take advantage of: A more sophisticated, state-of-the art, information systems technology in our Human Resources department Define the business requirements for the development of an HR system to support the objective of this request

Create a detailed project plan that provides a list of all the tasks, resources, schedule and budget required to complete the project

Upgraded security practices and anti-virus software The project should be completed in approximately six months, so the new system can be

utilized in the second quarter of next year. Develop a database plan to be used in a Business-toBusiness (B2B) web site that will allow Riordan to order materials via the web from its vendors. The plan should include the following: 1. An overall description of the database plan

BSA 310 15 BSA 310 2. Discussion of the purpose of the database and the businesses that will be using the database 3. A project place E-R diagrams 4. A description of the normalization of the database UML diagrams 5. A database administration plan, which includes a database recovery plan 6. A comprehensive database plan to allow Riordan to order materials from its vendors via the web 7. Recommend what Windows operating system should be selected for an upgrade 8. Implement an enterprise resource planning system to integrate core business systems and give the entire company access to the same information no matter the geographical location Conclusion Riordan has some problems with their core business systems. The human resources information system, the finance and accounting system and the sales and marketing system are the three systems identified as have significant problems affecting the companys profitability. As a result of the department managers analysis of each of the three core systems, the managers were able to identify the most significant problems and recommend solutions to fix them. After submitting this to senior-level management, senior-level management decided to take advantage of complex IT and ISs to fix the problems. Senior-level management decided to transition the companys core business systems into an Enterprise System. This is also known as enterprise resource planning (ERP) systems. This system integrates the core business systems into a single software system. Furthermore, with the geographic separation of the company, the concept of a virtual organization will benefit the employees. Virtualization increases the flexibility of IT

BSA 310 16 BSA 310 assets, allowing companies to consolidate IT infrastructure, reduce maintenance and administration costs, and prepare for strategic initiatives (Turban & Volonino, p. 47). This decision by senior-level management will impact the company by allowing it to grow and adapt to changing market circumstances. By moving the company in this direction, management and employees will be able to ensure the company stays the industry leaders in using polymer materials to provide solutions to the companys customers challenges. It will also ensure the research and development department remains the industry leader in identifying industry trends.

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References Dreher & Dougherty. (2001). Human resource strategy, a behavioral perspective for the general manager. Retrieved from the University of Phoenix eBook Collection database. Ionescu, I., Ionescu, B., Mihai, F., and Cojocaru, S. (2005). Financial and Accounting Systems Interoperability. Retrieved from: http://oeconomica.uab.ro/upload/lucrari/1120091/35.pdf Kleiman, L.S., & Farah, B.N. (2006). Encyclopedia of Management (5th ed.). Detroit, MI: Thomson Gale. Kotler, P. & Keller, K.L. (2006). Marketing management (12th ed.). Retrieved from the University of Phoenix eBook Collection database. Pang, L. (2001). Understanding Virtual Organizations. Retrieved from http://www.isaca.org/Journal/Past-Issues/2001/Volume-6/Pages/Understanding-VirtualOrganizations.aspx. Pearlson, K. E., & Saunders, C. S. (2010). Managing and Using Information Systems, A strategic approach. (4th ed.). Hoboken, NJ: John Wiley & Sons, Inc. Shelly, G. B., Cashman, T. J., & Serwatka, J. A. (2004). Business data communications, introductory concepts and techniques (4th ed.). Retrieved from the University of Phoenix eBook Collection Database. Sonde, T. (2008, March). Accounting and finance systems, unlocking the hidden value. The CPA Journal, LXXVIII(3). Retrieved from http://www.nysscpa.org/cpajournal/2008/308/essentials/p70.htm. Summer, M. (2005). Enterprise Resource Planning. Upper Saddle River, NJ: Prentice Hall, Inc.

BSA 310 18 BSA 310 Retrieved from the University of Phoenix eBook Collection database. Turban, E. & Volonino, L. (2011). Improving strategic and operational performance (8th ed.). Hoboken, NJ: John Wiley & Sons, Inc.