How new IT trends are being accepted in P / OM?
Marcelo Tsuguio Okano
Centro Estadual de Educação Tecnológica Paula Souza/ Master Program in Management and
Technology in Productive Systems, São Paulo, Brazil
Marcelo Eloy Fernandes
Paulista University, PPGEP, São Paulo, Brazil
Centro Estadual de Educação Tecnológica Paula Souza, São Paulo, Brazil
Nove de Julho University, São Paulo, Brazil
Paulista University, PPGEP, São Paulo, Brazil
Osmildo Sobral dos Santos
Potiguar University, Natal, Brazil
New technologies of information are changing corporate environments in order to break the paradigms of
physical barriers; an example is the cloud computing where the software and hardware are virtual. This
article presents a survey of 30 companies and what are the new trends and how to adapt them.
Keywords: IT, Cloud computing, ERP3
The business environment has undergone numerous transformations and changes due to factors
such as globalization, new technologies, innovations, economics, market and supply chain.
Enterprises are looking to adapt to this scenario focusing on performance, seeking to improve
the level of service and reduce costs in an attempt to differentiate and increase the perceived value
of their customers (BANDEIRA and MAÇADA, 2008).
Organizations adopt numerous business improvement methodologies to improve the business
performance. Researchers, Manufacturers advocates the manufacturing strategies like Quality
Circles, Just in Time, Concurrent Engineering, Business Process Reengineering, Total Quality
Management, and Six Sigma etc. according to the need of industry or the trend prevailing at the
time for business performance improvement. These strategies surfaces and loose the shine in no
time, but Supply chain management stands tall against all the odds and has become an integral part
of corporate strategies (SRIDHARAN et al., 2008).
A strong partner to achieve these goals is the Information Technology (IT). IT has an important
role in the performance of companies, provides a flow of information that makes the supply chain
is more robust and resilient, without compromising efficiency.
Thus, the use of technology in open and reusable patterns becomes increasingly a reality to be
achieved by system developers. In a time where the computational and human resources are
increasingly scarce, organizations can not simply dismiss the applications they already have and
which have already been tested and marketed to the detriment of adventures in the global computer
On the other hand, new technologies bring innovations that can completely change the
infrastructure and how to operate the systems as Cloud Computing, SaaS and Cloud ERP.
Most of companies are more and more applying IT systems, especially in Supply Chain
Management (Supply Chain Management - SCM) to enhance their performance in competitive
global markets (MING-LANG et al., 2002).
This article presents a survey of 30 companies and what are the new trends and how to adapt
Dias et al. (2003) list the following benefits achieved by the use of IT: (i) sharing instant
information, (ii) sharing programs that increase operational efficiency, (iii) real-time monitoring
of the consumer load, (iv) development global sales channels (v) reduction of inventories, and (vi)
These benefits can be obtained as the level of installation and use of IT systems, which directly
affects the performance of the supply chain.
Evolution of Enterprise Management Systems
The emergence of Business Management Systems took from the development of the MRP
(Material Requirements Planning), in the 60s, designed by Joseph Orlicky, which had as main
objective the computational implementation of planning activity material requirements and control
production. Authors (CORREA and GIANESI,2002; HABIRO and FILHO,2006; STARK,2005),
claim that the first goal of MRP was a planning and organization of all materials (BOM), in this
study the terms structure of products and BOM (Bill Of Materials are used interchangeably) to
meet a demand of production and purchase orders, considering all existing variables in the process,
such as inventory levels, lead time (considered as time spent in production) delivery of inputs, lots
of replacement and manufacture of products, etc.
The MRP catered to specific departments, not running an integration between the various
departments. Therefore, it was perceived the need for development of wider modules, which
received the name of MRP II. These include, in addition to calculating the need for materials,
functions as sales planning, the calculation of the need for capacity at various levels and the shop
floor control (CORREA and GIANESI,2002)(HABIRO and FILHO,2006).
MRP II system (Manufacturing Resources Planning, free translation: manufacturing resource
planning) has emerged in the 80's being the natural evolution of the MRP system logic, with the
extension of the concept of calculating the planning needs of other manufacturing resources and
not only of material resources.
MRP II is an infinite planning system, i.e., does not consider resource capacity constraints and
lead times (stock of spare time) items are given to the system input and considered fixed for
programming effect (CORREA and GIANESI, 2002).
With the new information requirements of several of the company's business areas, became
necessary the creation and integration of new controller modules, financial management,
purchasing, sales support activities and human management. These new integrated systems came
to be called ERP systems (STARK, 2005).
According exemplifies the authors (HABIRO and FILHO, 2006; JANSEN and KRAUSE,
1996; OMOKAWA, 1999), the chronological evolution of the ERP system, in Figure 1, shows that
the new technologies improve, over time, trade relations companies.
Figure 1: Evolution of ERP value chains
Analyzing the figure 1 above, the evolution of the value chain of an ERP system becomes
interesting because the business management tools followed, over the years, administrative
developments that each period needed by updating the managers of essential information for
The current rapid move toward cloud services is having a profound impact, creating an
environment in which specialized suppliers balance innovation with quick responses to market
demands and resulting in an efficient system for service production and distribution. In this new
environment, the in-house development of IT services is losing ground to the use of service supply
chains created by external providers. Managing a hybrid portfolio that includes both internally
developed and externally acquired services is enterprise IT’s new challenge (ERBES et al., 2012).
For many decades, IT was largely shielded inside an enterprise. Enterprises used traditional
ways to map their internal business needs to the IT processes and systems that they built, operated,
and maintained in-house. Although IT vendors still cater to this closed ecosystem, new trends—
cloud services, mobile consumer devices, and increased cross-enterprise collaboration—challenge
the fundamental assumption of shielded IT in a closed enterprise (ERBES et al., 2012).
There may be an analogue of today's cloud computing in the emergence of the national
electrical grid a century ago—a time when companies stopped generating their own power and
plugged into the grid for all their electricity needs (DU and CONG, 2010).
Today, cloud-computing providers encourage companies to plug into the cloud to satisfy their
computing needs rather than leaving companies to manage these functions by them-selves. As a
result, small companies may no longer need their IT departments, as everything they need can be
obtained from the cloud, while large companies are expected to continue to maintain their IT
responsibility in the areas such as Internet connections, firewall protection, local area networks,
and workstations. The pricing method in cloud computing is similar to that of utility services where
users pay for the usage with a fixed portion, a variable portion, or both. For these reasons, cloud
computing is sometimes referred to as "utility computing" (DU and CONG, 2010).
Two Tier ERP
According to Gill (2011), a new trend is evolving in enterprise resource planning (ERP). It's
the concept of two-tier ERP and it has become a growing area of discussion in corporate finance
and information technology (IT) departments. Done well, it promises to finally attain the global
visibility, standardization, and efficiency we all imagined large-scale ERP would bring back before
those systems proved too complex, costly, and slow to deploy (Gill, 2011).
Two-tier ERP means running one ERP system for corporate, such as SAP or Oracle, and
adopting another ERP solution for everywhere else that is lighter weight and easier to deploy and
customize. The two-tier strategy should provide a standard, templatable deployment for
subsidiaries while reducing the overall number and variety of distinct systems throughout the
organization, By using a two-tier approach, an enterprise ideally should be able to whittle down
its distinct ERP solutions to two or three vendors. For CFOs and controllers, this means a
dramatically simpler financial consolidation process: fewer individual feeds, fewer systems to
track, and more effective financial and management reporting overall (Gill, 2011).
To Cloud or Not to Cloud
Are all ERP solutions equal when it comes to a two-tier strategy? One critical difference is
whether the ERP offering is cloud or on premise. Although it's possible to standardize on another
on premise package for two-tier deployment, in the numerous locations where it will be used, most
of the cost, time, risk, and agility problems will remain. Worse still, the systems will age, not track
with change, and potentially pose the same challenges to corporate finance as the applications they
replaced. In terms of speed, cloud ERP enables businesses to get a standard systems infrastructure
in place across multiple subsidiaries in multiple countries in a matter of weeks, not months or years
Some Unique Benefits
In addition to solving some of the big ERP deployment problems, cloud ERP can deliver some
additional unique benefits: Browser-based access makes it much easier for a corporate
headquarters to get instant visibility into subsidiary performance than when the desired data is
locked away on servers in a remote office. With a cloud ERP sys-tem, rather than phoning the
local CFO, the corporate finance team can simply log in if it wants to see current performance
metrics or check on the status of the close (GILL, 2011).
In order to achieve the objective of this research a survey was carried out along with companies
that use ERP in several regions of the state of Sao Paulo. To gather the information required by
the analysis an exploratory research of qualitative nature was adopted (Okano, et al., 2014).
For Gil (2002), the exploratory research aims to provide closer familiarity with the problem in
order to make it more explicit. Zikmund (2000) believes that exploratory studies are conducted to
clarify ambiguous issues; research is needed to better understand the dimensions of the problems
(Okano, et al., 2014).
The research can be categorized as "survey" since it redirects the question directly to the
interviewed members of a significant sample of the universe that were studied and whose behavior
we wish to know, because their results can lead to conclusions relevant to the data that were
collected (Gil, 2002; Okano, et al., 2014).
The research instrument of this work consists of a roadmap of semi-structured interviews with
open questions. Some of the answers were directed by the interviewer in the form of performance
notes aimed at detecting the degree of importance, according to the perception of intensity to that
regard. We interviewed 30 Small or Mediums Companies.
ANALYSIS OF RESULTS
The ERP was considered implemented in all companies as Chart 1.
Chart 1 – ERPs implemented Companies
Most managers (70%) considered that the software could meet at least 75% of the
Chart 2 – ERP companies needs
The ERP meets the company´s needs
50% 75% 85% 100%
Small and medium enterprises use is small or medium sized companies ERP solutions
(80%) and only 20% use business solutions such as SAP and Oracle.
Chart 3 – Suppliers Size
Most companies use ERP for more than two years, Chart 4
Chart 4 – Production time
Size of ERPs Suppliers
On-going Production time
up to 2 yr
2 to 5 yrs
5 to 10yrs
Most of the teams are outsourced, except the management, chart 5.
Chart 5 – Teams
Questioned respondents about the possibility of adopting the ERP solution in the clouds, the
majority (80%) consider the possibility for the near future.
IT Support Development Management
We asked to rank in order of importance, the possible concerns with the ERP solution in the cloud,
security item is what worries most managers, since the fact outsource the staff did not care, because
this mode is widely used.
Chart 6 – Managers Worries about cloud
The study achieved its objectives, despite the implementation of ERPs have occurred in most
large companies in the late 20th century and at the beginning of this century, it is still new for
small and medium enterprises, as we proved in the research, there are few companies that have the
ERP installed by more a decade.
Another factor contributing to the delay implementations in small and medium businesses is
that suppliers are small businesses or Medes and may not have the complete solution to its
With the great difficulties faced by small and medium for deployment of traditional ERP,
Cloud ERP is still a project for the future, as there are several concerns for managers as security,
legal issues etc.
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