Abstract
This study aims to determine whether the Enterprise Resource Planning (ERP) system can improve the Balance Scorecard (BSC) reporting to enable senior management to take informed decisions that advance the company’s strategy. The case study focuses on a metallurgical mining company that produces calcium fluoride (CaF2) in the Mpumalanga province.
BSC is a method used to track both quantitative and qualitative measurements of efficiency. The method consists of four perspectives namely customers, finance, growth and learning, and internal business process. The BSC method is mostly perceived as a driver and communicator of the company’s strategy. Through the BSC a mine can specify its strategic goals and objectives, and create KPIs through these four perspectives to assess progress made in accomplishing those set strategic goals and objectives. ERP system on the other hand is a software application used to manage and monitor process data. The system facilitates communication and cooperation across existing core operational functions to optimise organizational efficiency. This allows for the creative development of data processing and analysis within core operations functions, enhancing resource allocation, productivity, and essential long-term growth prospects.
Consolidation, analysis, and reporting of this data need to be done through the right mechanism such as the BSC. By feeding the BSC with relevant process data accessed through the ERP system operational performance of a mine is accurately reported to senior management. This imparts management with the relevant knowledge of where the company is and what decisions need to be taken to steer it towards its strategic goals and objectives. To realise and manage a mining operations’ strategy and achieve its purpose, there has to be cooperation between the ERP and BSC systems. Integration and synergies between the two systems enhance quality management controls. It is on these bases that this study argues along the narrative that ERP can significantly improve BSC reporting despite some integration difficulties. The research question intends to find out if the ERP system can enhance BSC reporting.
This study follows a quantitative research approach by measuring and analysing data from each core operational function of the mining company to obtain findings. The four BSC perspectives are utilized to select relevant KPIs to measure and evaluate. The outcome of the results is then discussed and a model is developed to enhance system thinking, impart senior management with an assessment framework, and assist in the selectivity and systematic identification of key measurements going forward. The research study found that indeed ERP system can improve BSC reporting. And that both ERP and BSC integration resulted in the enhancement of company operations, optimization of costs, efficiency, and bridging communication across the company.