Use Of ERP In BHP Limited And Billiton Plc Essay

Question:

Discuss about the Use of ERP In BHP Limited and Billiton Plc.

Answer:

Introduction

BHP Limited and Billiton Plc, both the companies have decided to unite and carry on their business operations overseas (Limpitlaw et al. 2015). A Board of management has been structured to look upon these company and they have set up their headquarter in Melbourne and the other divisions in Johannesburg and London.

The report will highlight BHP Billiton gaining profit taking up the accounting software. The report will show in details the advantages they can get by following the DLC structure. The sales procedure carried out by BHP Billiton has been depicted in details via a flowchart. This report will grandstand the current market size and the possible recommendations for BHP Billiton.

BHP Billiton Companies Structure

Both the companies have planned to share their resources and choose a Board of directors for administering the two enterprises. The shareholders of both BHP Limited and Billiton Plc decided to embellish their business operations (Billiton 2014). They also assure that the companies will share the profit earned from the revenues and they will enjoy the benefits from the shareholders.

BHP Billiton via configuring the DLC architecture can restructure their premises and the DLC structure offer- i. accumulating profitable metal resources that have a long sustaining life cycle ii. sharing goods and resources between the two enterprises.

ASX and LSE are the ones that give the edge to win over other competitors when dealing with international investors. The proposed DLC architecture will help to share resources among themselves.

Operational issues that BHP Billiton can face due to the mentioned structure

The DLC structure can give the companies the benefits so that they can earn a huge profit selling these goods and the assets. Due to the sharing of these resources and the shareholders embellish the resilience of the company and the company’s benefits.

Thus DLC architecture is too much expensive and the enterprises will have to bear extra cost and budget to install the DLC framework (Stone et al., 2014). It is quite difficult to configure and to cope up with the framework initially is not an easy task but BHP Billiton must consider the benefits and should adapt to the situation as it will help them in mere future.

The companies are located overseas so they can initially face problems to communicate each other, secondly comes to the currency problem, so initially, they can face loss and can face issues gaining the market share but it is hoped that they will come back in the future.

ERP method adopted by BHP Billiton

BHP Billiton proposed that they want to lift up their own procure-to-pay techniques via Quadrem's electronic system and this electronic system can definitely help them to carry on their business operations (Chugh, Sharma and Cabrera 2017). These operations are based on API PIDX rules, regulations and policies.

BHP Billiton via this ERP system can pay the bills, this software can help in monitoring the data expenditure and all the business deals. The engineers can also be benefitted from the software; this reduces the effort. Therefore, from this software, it can be concluded that BHP Billiton can gain a lot (Argent 2013). They can deliver the electronic mails instead of the ordinary mails due to this software.

Sales procedure flowchart for BHP Billiton

The sales procedure consists of eight steps that are initial contact, then comes the planning, after that comes the approach based on planning. After all the approaches have been accomplished, the activities are assessed and then, at last, the activities are well accumulated and presented. After accomplishing the positive outcome whether the objectives are properly met or not is checked (Chugh, Sharma and Cabrera 2017). Finally, the feedback is taken for the whole service and is checked whether company’s commitment has been fulfilled rightly or not.

Analysis of the control problems involved due to adoption of DLC architecture

The DLC structure is beneficial for sure, but it has some adverse effects associated with it, the adverse effect that can occur is that one company can get vanished or disappear and on the other side of the coin the company can get on to the top (Argent 2013). Besides all that, both the enterprises are located in two different countries, use two different kinds of currencies. For this reason, they can face issues to share the resources among themselves. If in future, the company faces any issues or any losses, the duo must take the initiatives to solve the issues and they must take the responsibility to get back the share (Salome and Chukwunwendu 2014).

In the prescribed DLC structure, it is required to deliver the dividends among the investors, in addition, they must research whether the dividends are tax effective. The other case that may incur is that the company which works best between the two may not get the dividends and it may happen if they receive the tax can be insufficient or inadequate for them (Lee 2017). Therefore, in the DLC structure, these issues must be taken into consideration.

The tax sectors should be carefully evaluated to get the tax results and all this as a whole can influence the companies at both the enterprise and stockholder level.

BHP Billiton adopting the accounting software packages

Saving precious time: If BHP Billiton chooses to use the accounting software it can benefit the employees of the enterprises, they need not have to worry about the records, they do not have to record all these things and calculate all these things by their own hand (Lee 2017).

Detail monitoring of finance: BHP Billiton and their employees do not have to operate on the data instead the software will do everything for the employees. The update of the BHP Billiton database is conducted by the software.

Manage monetary flow: BHP Billiton keep track of every payment details of the company, thus the company can keep track of the cash flow details of the company.

Lack of interest: the business owners of the small companies sometimes do not take the initiative to learn the use of software, do not take the initiative to adopt the changes because of the risks and the threats associated with the changes (Huang and Li 2014).

Few mistakes: With the usage of this new software it can be assured few mistakes will occur.

Digital copies: The accounting software helps to generate the soft copies or the digital copies of the invoices, so it offers the facility of digital invoice.

Easy transaction: The invoices generated manually are error-prone, whereas in case of digital invoice significantly there is less chance of data loss (Rahman et al. 2015). The software has the ability to store the data securely in the database in safe and secured location.

Mobile apps benefit: The accounting mobile apps can give the companies an edge to get the extra features like conduct of business activities outside the office at home.

The current market size

BHP Billiton is the international manufacturer of the metal and the metal resources industry. They are popular for providing excellent quality metal and metal resources like silver, diamond, aluminium and nickel (Huang and Li 2014). They work hard and the hard work pays off, their dream to become global leader has become successful.

According to BHP Billiton, they are going to rule the market and this consensus investment prediction made by BHP Billiton in April 2017 have highlighted the fact.

The Earnings History also estimates the fact that BHP Billiton earned 0.654 for each and every share in this year and in case of revenue, they earned revenues of 19.31 bn in this year (Bishop 2017).

BHP Billiton: The dominant leader in the market and the reasons behind holding the supremacy for long

BHP Billiton is the market leader of metal and metal resources are based in Australia. They are popular for providing quality products at a reasonable price (Sampaio and Bernardino 2016). The resources with which they basically sell or basically deal with are manganese, diamond, coal, iron-ore products and besides all that there are also other natural resources and natural gas.

BHP Billiton is known to supply the core iron products they also trade coking coal and they are the leading exporter in the section. They export coking coals across US, Europe and Asia markets. BHP Billiton also carries out the gas and oil business across the countries –The UK, Algeria, Tobago, Trinidad and Australia. They are also the sixth leading producer of the core aluminium. They are also the third leading producer of nickel and copper.

BHP Billiton is also the predominant manufacturer of the zinc as well as lead (Svobodova and Cerna 2016). All the parameters depicted over here clearly state that they are the international leader in the current market and because of these factors they can beat their competitors easily.

Customers facing the following issues while using the accounting software of BHP Billiton

The challenges faced by the users or the customers while utilising the accounting software are-

Requirements: The accounting software is meeting the requirements or not must be checked before utilising the software for the business needs. BHP Billiton must ensure that the accounting software they are going to adopt must comply the companies’ requirements.

The configuration of the accounting software: BHP Billiton via the assistance of the professionals or technicians must perform the installation of the software in their system (Kim et al. 2015). Again, the employees of the enterprises can face several issues initially as they are not used to this software, so they should take the initiative and should learn how to use the software from those professionals.

Support and help: The accounting software needs upgrades on a frequent basis to keep the system free from virus and malware attacks and also to save the database and the system from the intruders’ attacks (Bai 2015). Thus BHP Billiton will have to pay the extra amount to assure the security of the software. They need to stay updated all the time to keep up with their customers.

Costing: The accounting software will certainly reduce the paper work. However, the accounting software will increase the budget of the enterprise. BHP Billiton will have to pay for the updates monthly or annually to recharge the accounting software and this amount is really high compared to the paper-based work system (Amiri and Salari 2013). BHP Billiton is well aware of that and is definitely a big challenge for them.

Recommendation: BHP Limited and Billiton Plc take up the DLC architecture model and this approach has significantly benefitted them, it is hoped that they can prosper in future, however, they should maintain this DLC structure for further benefits. Secondly, they should install and configure the accounting software package at their premises, however, they have to rethink about the budget for the software, have to think about the updates and upgrades prices structure. The accounting software can bring good to their enterprise and the advantages they are well aware of. The employees of the company are not fully accustomed to the software usage, so they should take help of the professionals who can teach them and educate them about the software so that they can use it so that they can get agile effective service.

Conclusion

It can be concluded from the above discourse that BHP Billiton can gain a lot of facilities by taking up the proposed the DLC architecture. The advantages they can get has been highlighted well within this report and also it has been stated that why they are the global leader. The use of ERP method has been discussed in this report. The sales procedures have been elaborated within the flowchart. The taking up of the accounting software can enhance the business activities of the enterprise and the benefits, as well as the challenges that the enterprise can face, has been elaborated in details.

References

Amiri, A. and Salari, H., 2013. Effect of Accounting Information System (AIS) on Software Qualitative. International Journal of Business and Management Invention, 2(4), pp.6-11.

Argent, N., 2013. Reinterpreting core and periphery in Australia's mineral and energy resources boom: an Innisian perspective on the Pilbara. Australian Geographer, 44(3), pp.323-340.

Bai, Y., 2015. Analysis of dual-listed companies in mainland and Hong Kong(Doctoral dissertation, The Hong Kong Polytechnic University).

Billiton, B.H.P., 2014. BHP Billiton commits to residential workforce for Ravensthorpe Nickel Project.

Bishop, W.A., 2017. Addressing The Challenge Of Strategic Alignment Faced By Small And Medium-Sized Entities During The Selection Of Accounting Software Packages. The International Business & Economics Research Journal (Online), 16(1), p.31.

Chugh, R., Sharma, S.C. and Cabrera, A., 2017. Lessons Learned from Enterprise Resource Planning (ERP) Implementations in an Australian Company. International Journal of Enterprise Information Systems (IJEIS), 13(3), pp.23-35.

Huang, G.P. and Li, S., 2014. The Impact of Firm Characteristics and Manager Holdings on Hedging Decisions by Australian Mining Companies.

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Lee, K.H., 2017. Does size matter? Evaluating corporate environmental disclosure in the Australian mining and metal industry: A combined approach of quantity and quality measurement. Business Strategy and the Environment, 26(2), pp.209-223.

Limpitlaw, D., Aken, M., Lodewijks, H., Viljoen, J. and Billiton, B.H.P., 2015, July. Post-mining rehabilitation, land-use and pollution at collieries in South Africa. In Colloquium: Sustainable Development in the Life of Coal Mining, South African Institute of Mining and Metallurgy, Boksburg (Vol. 13).

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Rahman, M.M., Ahammed, M., Uddin, M., Rouf, M. and Uddin, M.M., 2015. Obstacles and implementation of accounting software system in Small Medium Enterprises (SMEs): Case of South Asian perspective.

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