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Designing a tier 3 ERP solution using integrated mathematical models and algorithms to optimise cash conversion cycles for small businesse
Author(s)
Jacobs, Donovan Martin
Date Issued
2025
Type
Thesis
Publisher
Cape Peninsula University of Technology
Abstract
This study investigated the challenges faced by SMEs in South Africa, particularly in optimising
the Cash Conversion Cycle CCC and enhancing competitiveness through customised (ERP)
solutions. Despite their critical role in economic development, SMEs encounter barriers such
as limited resources and restricted access to technology, impacting their operational efficiency
and sustainability. Existing ERP solutions often fall short, especially within Tier 3 systems,
where advanced performance metrics, such as the CBSI, an additive mathematical formula
designed to quantify business success, are rarely integrated.
The aim of this research was to design and develop a Tier 3 ERP workflow system that incor porates mathematical models and the CBSI to optimise CCC and support SME competitive ness. Specific objectives included adapting ERP features for SMEs, developing mathematical
models for workflow optimisation, conceptualising a Tier 3 ERP model with CBSI integration,
and evaluating the effectiveness of this model through empirical testing.
The study employs a DSR methodology, rooted in a pragmatic philosophical approach, with
Gestalt configuration theory as a theoretical foundation. Gestalt principles enhance the con ceptual coherence of the ERP system, while Telles' workflow formula, along with other math ematical models and algorithms, serves to ensure workflow accuracy. These components,
combined with DSR, form the basis of the study’s methodological contribution.
Empirical analysis, conducted using data from SMEs, JSE-listed companies, African indices,
and expert interviews, validates the model’s effectiveness in enhancing CCC and competitive ness. Results indicated that the designed ERP workflow system effectively reduces CCC and
improves operational efficiency for SMEs, addressing a significant gap in both academic liter ature and practical ERP applications. This study contributes a tailored ERP model that is
uniquely suited to the needs of SMEs, filling a gap in existing ERP solutions and providing a
practical solution with implications for financial performance and competitive positioning.
The research presents a scalable ERP framework capable of addressing operational chal lenges specific to SMEs in South Africa. Future studies may extend this work by refining the
CBSI model, focusing on establishing consistent industry standards for metrics like return on
assets (ROA) or inventory turnover, as CBSI currently relies on sector-specific variations. This
highlights the need for further research into universally applicable performance metrics. Addi tionally, broader applications of the ERP system across diverse economic sectors should be
explored to assess its adaptability and predictive strength.
Finally, this study presents a novel Tier 3 ERP solution aimed at enhancing SME operational
efficiency and financial resilience. Empirical testing on data from SMEs, JSE-listed companies,
and African indices confirms the system’s capacity to reduce CCC and optimise core pro cesses through integrated mathematical formulas and algorithms. These findings contribute
noteworthy insights to ERP research and underscore the potential of tailored ERP solutions in
addressing the unique challenges faced by SMEs.
the Cash Conversion Cycle CCC and enhancing competitiveness through customised (ERP)
solutions. Despite their critical role in economic development, SMEs encounter barriers such
as limited resources and restricted access to technology, impacting their operational efficiency
and sustainability. Existing ERP solutions often fall short, especially within Tier 3 systems,
where advanced performance metrics, such as the CBSI, an additive mathematical formula
designed to quantify business success, are rarely integrated.
The aim of this research was to design and develop a Tier 3 ERP workflow system that incor porates mathematical models and the CBSI to optimise CCC and support SME competitive ness. Specific objectives included adapting ERP features for SMEs, developing mathematical
models for workflow optimisation, conceptualising a Tier 3 ERP model with CBSI integration,
and evaluating the effectiveness of this model through empirical testing.
The study employs a DSR methodology, rooted in a pragmatic philosophical approach, with
Gestalt configuration theory as a theoretical foundation. Gestalt principles enhance the con ceptual coherence of the ERP system, while Telles' workflow formula, along with other math ematical models and algorithms, serves to ensure workflow accuracy. These components,
combined with DSR, form the basis of the study’s methodological contribution.
Empirical analysis, conducted using data from SMEs, JSE-listed companies, African indices,
and expert interviews, validates the model’s effectiveness in enhancing CCC and competitive ness. Results indicated that the designed ERP workflow system effectively reduces CCC and
improves operational efficiency for SMEs, addressing a significant gap in both academic liter ature and practical ERP applications. This study contributes a tailored ERP model that is
uniquely suited to the needs of SMEs, filling a gap in existing ERP solutions and providing a
practical solution with implications for financial performance and competitive positioning.
The research presents a scalable ERP framework capable of addressing operational chal lenges specific to SMEs in South Africa. Future studies may extend this work by refining the
CBSI model, focusing on establishing consistent industry standards for metrics like return on
assets (ROA) or inventory turnover, as CBSI currently relies on sector-specific variations. This
highlights the need for further research into universally applicable performance metrics. Addi tionally, broader applications of the ERP system across diverse economic sectors should be
explored to assess its adaptability and predictive strength.
Finally, this study presents a novel Tier 3 ERP solution aimed at enhancing SME operational
efficiency and financial resilience. Empirical testing on data from SMEs, JSE-listed companies,
and African indices confirms the system’s capacity to reduce CCC and optimise core pro cesses through integrated mathematical formulas and algorithms. These findings contribute
noteworthy insights to ERP research and underscore the potential of tailored ERP solutions in
addressing the unique challenges faced by SMEs.
Additional information
Thesis (DPhil (Informatics))--Cape Peninsula University of Technology, 2025
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