Riordan Business Systems
Christina Cruel, Steven Keller, Mick Robey, James Simkins
BSA/310
November 4, 2013
Paula Billups
Table of Contents
Abstract……………………………………………………………………………………………3
Company Background…………………………………………………………………………….4
Business Systems Overview...…………………………………………………………………….4
Riordan Business Systems……………………………………..………………………………….5 Accounting and Finance……………………………………………………………….….5 Sales and Marketing…………………………………………………………….…………8 HR……..………………………………………………………………………….……….9 Legal……………………………………………………………………………………..11 Operations………………………………………………………………………………..12
IT Security……………………………………………………………………………………….13
Conclusion……………………………………………………………………………………….14
References………………………………………………………………………………………..15
Appendices: Service Requests…………………………………………………………………...16 Appendix A: Accounting and Finance...…………………………………………………16 Appendix B: Sales and Marketing……………………………………………………….17 Appendix C: Human Resources - HRIS…………………………………………………18 Appendix D: Human Resources – CM...……………………………………...…………19 Appendix E: Operations – CAD...……………………………………………………….20 Appendix F: Operation – ERP…..……………………………………………………….21 Appendix G: Operations - Legal…...…………………………………………………….22 Appendix H: IT Security…………...…………………………………………………….23
Abstract
This is a formal response to Service Request, SR-rm-012 Business Systems, which requests analysis and recommendation of Riordan Manufacturing’s current business systems. This paper evaluates the electronic and hard-copy information systems in each of Riordan’s departments. Each section contains a system overview and relationships with other systems. The descriptions include the system’s purpose, function, limitations, advantages, and security threats. This response includes recommendations, which promote system efficiencies, security, and data integrity.
Company Background Riordan Manufacturing is a global plastics manufacturer company with annualized earnings of $46 million per year. Riordan Industries, a Fortune 1000 enterprise with revenues in excess of $1 billion, owns Riordan Manufacturing (Riordan, 2013). Riordan has three manufacturing locations in Albany, Georgia, Pontiac, Michigan, and Hangzhou, China with a company headquarters in San Jose, California. Maintaining industry leadership in polymer materials and providing solutions to customer challenges defines Riordan’s core mission. Riordan promotes long-term relationships by maintaining rigorous quality controls, innovative solutions, and a responsive business attitude, at a reasonable and competitive price.
Business Systems Overview The components that make a business system changed with the introduction of information technology. Classical definitions identify a methodical procedure or process to provide a service to customers (WebFinance, Inc., 2013). Modern business systems include information technology as a critical component for any business system.
Riordan Business Systems Riordan Manufacturing uses multiple business systems across the Accounting and Finance, Human Resources, Sales and Marketing, Legal, and Operations departments. The systems include relational databases, software programs, electronic, and hard-copy files. The systems are not well connected or synchronized between departments. Riordan’s fragmented, decentralized filing, and outdated technology create system inefficiencies and data security problems. The following narrative describes Riordan’s current business systems, including general recommendations, which promote data integration and security.
Finance and Accounting Riordan’s accounting and finance systems needs upgrading. Currently Riordan has isolated systems at each of its four locations. There are 12 areas of concern in the Accounting and Finance department. The first and most important is the general ledger (GL). The GL is the spine of the accounting and finance systems. The GL links to other systems through the day-to-day transactions of the company. The GL houses the chart of accounts for the entire company. Currently each location is maintaining their own set of chart of accounts with the corporate staff consolidating them for monthly reporting. Another benefit to consolidating the general ledger is cash flow management. Most executives want to know how much cash is on hand at any time. When four locations are managing separate records the task becomes increasingly difficult. Expense statements, income statements, and balance sheets generate from the GL, which is the most important reason to consolidate it. The accounts payable department has some duplication of work issues because of independent systems. There are four separate sets of vendor master’s records with many duplications of the same vendor. This causes those vendors to receive multiple checks from Riordan. Consolidating the vendor masters and making payments from one location maintains cleaner accounting transactions. Duplicate payments are a high risk when processing payments to the same vendor. Consolidation will eliminate duplicate payments. Subcontractors must receive a 1099-MISC tax form for income received from services performed. (Government, 2013) These contractors want to receive one form from Riordan, not three or four. On the opposite side of the cash flow structure, is the accounts receivable function. Account receivable represents cash coming into Riordan. The executive team in San Jose consolidates the cash after individual management at each location. Payments made to Riordan Manufacturing must be applied to invoices incurred by those customers. These invoices are part of the order entry system. Consolidating the order entry system so that customers can call into one location is critical to maintaining a good customer service balance with customers. A key piece to the order entry system is maintaining a consolidated item master and current inventory levels of each product. This task is easier to accomplish with a consolidated order entry system. A subsystem of the order entry system is shipping. The logistics department can negotiate effectively full truckloads by scheduling shipping pickups at each of the locations. Procurement is the act of buying raw goods and supplies needed to produce the finished products they are selling. Making good decisions and getting good pricing is a key factor for profitability. By consolidating the procurement activities into one system, Riordan will be able leverage bigger discounts on major purchases and reduce costs. With every successful company, there must be growth in sales. The ability to track sales trends of Riordan’s customers would be a huge advantage. Products are assigned product categories, brand names, and possibly channel designations. Customers are assigned to regions and markets managed by specific sales staff. Sales history can show trending activities for certain products or categories. Should the system discover a negative trend, Riordan can take appropriate action by researching to see what is causing that downward trend. A consolidated sales history system provides critical data for these decisions. Riordan Manufacturing should consolidate the independent systems into one large ERP system. The San Jose location has developed a more a modern-day approach to business management and handles the current EDI process. EDI, or electronic data interchange, is an electronic or digital method of sending and receiving data from other companies. Invoices and other documentation can be sent and received using EDI. The ERP that San Jose is using this capability already, but requires expansion to incorporate the other locations. The San Jose location implemented bar code scanning. This helps manage inventory levels, and production ins and outs. It works hand-in-hand with order entry and forecasting so Riordan can take necessary actions to fulfill orders. The most important aspect of any financial package is information to make better company decisions. This consolidated ERP will include a powerful database and user-interface, which decision makers can use to grow the company.

Sales and Marketing The goal for Sales and Marketing Information Systems is to consolidate customer information to deliver better value to the customer. The firm has historical records in several databases and hard-copy files. Riordan has a system to track historical sales. In the past, recording of sales data used paper and pencil. In the last few years, the firm managed the information electronically. The recommendation is to consolidate the information into a CRM system to make the information secure and accessible. Information includes the following: • Dates - order, delivery, and payment dates

• Unit and dollar volume of each product, including plastic bottles, fans, heart valves, medical stents, and custom plastic parts

• Sales by customer to include price paid, cost, margin, and discount given

One CRM system will house this information. This will ensure historical and current information is in one location and backed to a remote server. No information will be lost and can be accessed in one location. The company has 15 to 20 major customers, including a government contract for fans, and 12 minor customers. Each member of the sales force maintains his or her own set of customer records using a variety of tools. Some sales team members use paper and pencil, others sales management software, such as Act, and others a hybrid. In an effort to anticipate customer needs and protect customer information, employees shall maintain his or her set of electronic customer records. The firm has historical and current annual budget allocations for marketing communications and marketing research. The Marketing Information System includes a CRM and a remote server. Marketing Research expenditures include market size and opportunity studies, customer focus groups, and brand development research.
Marketing Communications activities include the following: • Sales force promotions

• Price/volume discounts to key accounts

• Public relations

• Brand development

• Tradeshows, events, and sponsorships

• Customer user group underwriting

• Literature and other collateral material

Human Resources Riordan’s formal human resources information system (HRIS) is an extension of the Finance system. The HR section contains personal employee data such as name, hire date, and pay rate (Riordan, 2013). However, there are several other electronic and paper-based systems, pertinent to HR. The major systems include compensation and benefits, employee records, employee relations, recruiting, training, development, and claims management. This direction resulted in fragmented, decentralized, and insecure systems

The compensation manager maintains information about salary surveys, job analysis, and compensation decisions. These records are kept in an Excel spreadsheet, inaccessible to other managers. The policy and procedures manual is available on Riordan’s intranet. Individual managers handle Family and Medical Leave Act (FMLA) requests and Americans with Disabilities Act (ADA) accommodations issues (Riordan, 2013). With the exception of the policy manual, compensation forms, requests, and other records remain unorganized throughout the company.

Employee records consist of personal identification data, change forms, performance management reviews, and non-exempt employee vacation tracking. The HR section of the Finance systems store personal identification data, but managers send changes to the payroll clerk, which is slow and insecure. Individual managers conduct employee reviews and store hard-copy forms in his or her respective office. Except for personal data, employee records are in hard-copy form and stored by managers. This file system practice is inefficient and insecure.

Employee relations specialists track and resolve employee grievances and complaints. Employees fill out hard-copy complaint forms, and submit them to employee relations. Locked filing cabinets store complaint and grievance files. No scanned or digital files exist in the HR system. This file system is inefficient and vulnerable to a security breach.

Riordan advertises open positions online at Monster.com, in the newspaper, at engineering conferences, and through employee referrals. A central storage location houses received paper-based resumes with no security. Individual recruiters maintain Excel files to track applicant status. The recruiting process is up-to-date but limited. Decentralized applicant tracking makes it difficult to review quickly the current applicant pool.

Riordan conducts employee training for new hires and managers. The training and development specialist maintains employee training records in an Excel file. Riordan is planning to implement a distance training solution through live and recorded video on demand (Riordan, 2013). Distance training is a cost-effective solution to reduce travel costs. The Excel records limit access and pose a security risk if not backed up.

A third-party provider manages Riordan’s Worker’s Compensation claims through a separate claims management (CM) system. After employees complete the claim forms, managers forward them to the third-party provider. Riordan has no access to the CM system or the claim’s status making it difficult for HR to follow-up with employees. Because there is no data link or remote access to the CM system, it does not meet Riordan’s needs.

Fragmented, decentralized, and insecure provide an adequate description of the Riordan’s HRIS and sub-systems. The current systems represent data security and inefficiency issues. The recommendation is to replace the current HRIS to provide a manageable, secure, and coordinated environment. In addition, the claims management system should move under Riordan’s control. New solutions include hosted and on-premise systems, which offer better features and security. Linked systems provide better security, data coordination, and access, which reduce risk, and over time, save money.

Legal Riordan’s legal department does not directly integrate information technology into the existing operations. The legal group concentrates on Riordan’s patent applications and uses external council for other key functions. The expansion of Riordan will increase the legal workload. The increase in workload could result in missed information or failure to respond to legal requests. The implementation of an Enterprise Legal management system, e.g., CounselLink, provides a system for tracking legal responsibilities (LexisNexis, 2013). A key feature is the ability to track legal holds. The introduction of information technology into the workplace has included an explosion of the amount of data retained and therefore discoverable.
Operations
Riordan operations group provides an end-to-end production line. The group takes raw materials and turns them into products or sub-products. Frequently, the combination of sub-products produces final sale products. The production of products relies on the design of new products. The current Computer Aided Drawing (CAD) program cannot meet the needs of the design group’s new concepts. The profitability of Riordan demands new products and the handicapping of production by the CAD program is not tolerable. The purchase of a CAD suite, e.g., Autodesk Product Design Suite, provides the capability of robust design tools to further advanced design concepts (AutoDesk, 2013). The suite also provides the ability to simulate the operation of the product to identify concerns early in the process. The operations group inventory system requires manual entry of data at several steps along a products production cycle. The manual entry includes raw material receiving, sub-assemblies, product, and shipped product. The Operations department also uses a customer shipping and billing system. This system also requires manual entry of sales orders and fulfillment status. The implementation of an Enterprise Resource Planning (ERP) system would meet the requirements of operations and provide efficiencies. An ERP system incorporates a lifecycle approach to the manufacturing process. Tracking of materials includes receiving the raw material, use, and ordering replacement material. Tracking the product includes creation, warehousing, shipping, returns, and inventory control. ERP system provides direct integration with CAD applications facilitating the receiving design measurements directly (NetSuite, 2013). This allows the ERP system to schedule machines and facilitate the raw material delivery to the machine. The ERP system injects the use of bar coding into the production and inventory processes. Riordan already incorporates bar code scanning into the shipping processing, therefore an understanding of the technology is understood. Integration of bar scanning technology with partners would provide the dynamic ability to receive products from partner and avoid manual keying of data. The use of the scanning would continue throughout the production and inventory process to eliminate data entry in the processes. There are several key integration points that would further enhance the ERP’s return on investment for Riordan. The integrations points include sales, marketing, human resources, finance, and accounting. The integration further removes the necessity of manually entering data from one system to another. Riordan’s processing solution includes current bar code scanning technology to reduce manual labor. The system is effective and performs the required functions efficiently. The deployment of an ERP system would include integration with the existing processing system. The integration provides an additional ease of flow of the fulfillment process.

Information Technology Security Riordan Manufacturing is a global company with multiple, mission-critical business systems. Securing the IT infrastructure and communications is critical to Riordan’s success. To protect the company’s research, communications, and internal system data, Riordan should employ strong security measures. The Riordan network diagrams indicate firewalls at each site but only the headquarters and China sites list encrypted communication (Riordan, 2013). Table 1: IT Security lists suggested methods to protect data and secure communications. Table 1: IT Security

|Category |Method/Purpose |Department |
|Encrypted communication |Secure VPN and HTTPS Secures data transmission between sites |All |
| |and the Internet | |
|Encrypted files |Protects file data against unauthorized access |All |
|System protection |Anti-virus, anti-malware, Firewall |IT – company-wide |
|Monitoring software |Firewall, security logs |IT |
|Secure Login ID |Provides additional security for network access |IT |
|Multi-factor authentication | | |
|Disaster recovery |Server/workstation backup plan to recover from data or hardware|IT, All |
| |loss | |
|Data back-ups |Programs and media to backup data. Used for disaster recovery |IT – company-wide |
|File auditing |Provides a record, including user name, date, and time stamp of|IT – company-wide |
| |file access and modification | |
|User education |Provides user training about safe computing practices |All |

Conclusion Riordan Manufacturing’s created a strong market presence with annualized earnings of $46 million (Riordan, 2013). Obsolete business systems are reducing the effectiveness of Riordan. The continuation of success requires an evaluation of each business system identifying improvements or replacement. Riordan must implement a plan to address the improvements or replacement in relation to profitability. This method provides a priority on action to maintain and increase revenues.
References
AutoDesk. (2013). Product Design Suite. Retrieved from http://www.autodesk.com/suites/product-design-suite/features
LexisNexis. (2013). CounselLink Overview. Retrieved from http://www.lexisnexis.com/counsellink/overview/ NetSuite. (2013). NetSuite. Retrieved from http://www.netsuite.com/portal/products/netsuite/main.shtml
Riordan Manufacturing (2013). HRIS. Retrieved from

https://ecampus.phoenix.edu/secure/aapd/cist/vop/Business/Riordan/HR/HRIS.asp

Riordan Manufacturing (2013). Intranet. Retrieved from University of Phoenix: https://ecampus.phoenix.edu/secure/aapd/cist/vop/Business/Riordan/index.asp
Riordan Manufacturing (2013). Sales and Marketing. Retrieved from https://ecampus.phoenix.edu/secure/aapd/cist/vop/Business/Riordan/Marketing/MIS.asp
U.S. Government, (2013). www.irs.gov. Retrieved from http://www.irs.gov/uac/Form-1099-MISC,-Miscellaneous-Income
WebFinance, Inc. (2013). Business system. Retrieved from http://www.businessdictionary.com/definition/business-system.html

Appendix A: Accounting and Finance
Service Request: SR-rm-012 Business Systems
Organization: Riordan Manufacturing
Locations: All Plant Locations
Requester: CEO
Description of Request: Consolidate the Accounting & Finance system so all locations can access the same set of data.
Background of Request: Accounting staff from each of the 4 locations process all accounting functions independent of one another. Outline a way to consolidate this process.
Expected Results/Impact when completed: Implement network-based accounting system at each location, to enable centralized data collection.
Appendix B: Sales and Marketing

Service Request SR-rm-012 Business Systems

Organization: Riordan Manufacturing
Locations: All Plant Locations
Requester: CEO

Description of Request: Expand the implementation of the CRM system to all facilities. Integrating the CRM with the other departments will ensure all information is stored in one location.

Background of Request: The goal for Sales and Marketing Information Systems is to consolidate customer information to deliver better value to the customer. The firm has historical records in many different databases, as well as in paper files. In order to make the information secure but accessible it is in the firm’s best interest to consolidate the information into a CRM system.

Expected Results/Impact when completed: The CRM system replaces manual actions by employees. The removal of the manual processes saves time and money. The efficiency gain can provide an increase in production.
Appendix C: Human Resources - HRIS

Service Request SR-rm-012 Business Systems

Organization: Riordan Manufacturing
Locations: Headquarters, San Jose, CA
Requester: CEO
Description of Request: Replace the current HRIS to provide a manageable, secure, and coordinated environment.
Background of Request: Riordan’s HRIS and sub-systems are fragmented, decentralized, and insecure. The current systems represent data security and inefficiency issues.
Expected Results/Impact when completed: Linked systems provide better security, data coordination, and access, which reduce risk, and over time, save money.

Appendix D: Human Resources - CM

Service Request SR-rm-012 Business Systems

Organization: Riordan Manufacturing
Locations: Headquarters, San Jose, CA
Requester: CEO
Description of Request: Move claims management system into Riordan’s network. Purchase and install stand-alone CM system at Headquarters. Connect branch offices through secure VPN.
Background of Request: Claims management process is contracted to third-party vendor. Riordan management does not have access to claims status, which is inefficient. Hard-copy claims forms present security risks during transfer.
Expected Results/Impact when completed: Use in-house CM system to provide better security, data coordination, and access, to reduce risk, save money by eliminating third-party contract.

Appendix E: Operations - CAD

Service Request SR-rm-012 Business Systems

Organization: Riordan Manufacturing
Locations: All Plant Locations
Requester: CEO
Description of Request: Purchase and install updated Computer Aided Drawing (CAD) system.
Background of Request: The current CAD system is no longer supported by the vendor. The product lacks the capability to meet the demands of new complex designs.
Expected Results/Impact when completed: The new CAD system provides the capabilities to support future designs. The CAD system provides an integration point with the Enterprise Resource Planning (ERM) system to provide an efficiency gain when moving to production.
Appendix F: Operations - ERP

Service Request SR-rm-012 Business Systems
Organization: Riordan Manufacturing

Locations: All Plant Locations
Requester: CEO
Description of Request: Expand the implementation of the current Enterprise Resource Planning (ERM) system to all facilities. Integrate the ERP with the other departments.
Background of Request: The operations group performs several manual processes in day-to-day operations. These manual processes inject possible error points within the operation of Riordan.
Expected Results/Impact when completed: The Enterprise Resource Planning (ERM) system replaces manual actions by employees. The removal of the manual processes saves time and money. The efficiency gain can provide an increase in production. RRP and Computer Aided Drawing (CAD) system integration provides a reduction in time to production.

Appendix G: Legal

Service Request SR-rm-012 Business Systems

Organization: Riordan Manufacturing
Locations: All Plant Locations
Requester: CEO
Description of Request: Purchase and install an enterprise legal management system to manage legal operations within Riordan.
Background of Request: The legal group does not have an efficient system to track existing and new legal activities.
Expected Results/Impact when completed: The management system provides a combined location of record for internal and external legal activities. This provides the legal group with the information regarding legal activities. A key feature of the program provides the ability to track legal hold information for litigation.

Appendix H: IT Security

Service Request SR-rm-012 Business Systems

Organization: Riordan Manufacturing
Locations: All Plant Locations
Requester: CEO
Description of Request: Implement security measures to secure its data, e-communications, and recover from data or system loss. Educate users about safe computing practices.
Background of Request: Systems should be secure to guard against unauthorized access, system, and file corruption. Current systems vulnerabilities pose financial risks.
Expected Results/Impact when completed: Formal security measures ensuring encrypted communication and system monitoring to prevent unauthorized access. Provide user education to minimize internal and external threats. Disaster recovery planning will ensure high system availability.