Additionally,
it may be noted that to be
considered an ERP system,
a software package generally
would only need to provide
functionality in a single
package that would normally
be covered by two or more
systems. Technically, a software
package that provides both
Payroll and Accounting functions
(such as QuickBooks) would
be considered an ERP software
package.
However, the term is typically
reserved for larger, more
broadly based applications.
The introduction of an ERP
system to replace two or more
independent applications eliminates
the need for external interfaces
previously required between
systems, and provides additional
benefits that range from standardization
and lower maintenance (one
system instead of two or more)
to easier and/or greater reporting
capabilities (as all data
is typically kept in one database).
Some organizations choose
to only implement portions
of an ERP system and develop
an external interface to other
ERP or stand-alone systems
for their other application
needs. For instance, the PeopleSoft
HRMS and Financials systems
are generally considered better
than SAP's HRMS solution.
And SAP's manufacturing and
CRM systems are generally
considered better than PeopleSoft's
equivalents. So an organization
large enough to justify the
purchase of an ERP system,
may choose to purchase the
PeopleSoft HRMS and Financials
modules from Oracle, and their
remaining applications from
SAP.
ERPs are cross-functional
and enterprise wide. All functional
departments that are involved
in operations or production
are integrated in one system.
In addition to manufacturing,
warehousing, logistics, and
Information Technology, this
would include accounting,
human resources, marketing,
and strategic management.
Implementation
To implement ERP systems,
companies often seek the help
of an ERP vendor or of third-party
consulting companies. Consulting
in ERP involves three levels,
namely top level systems architecture,
business process consulting
(primarily re-engineering)
and technical consulting (primarily
programming and tool configuration
activity). A systems architect
designs the overall dataflow
for the enterprise including
the future dataflow plan.
A business consultant studies
an organization's current
business processes and matches
them to the corresponding
processes in the ERP system,
thus 'configuring' the ERP
system to the organization's
needs. Technical consulting
often involves programming.
Most ERP vendors allow modification
of their software to suit
the business needs of their
customer.
Customizing an ERP package
can be very expensive and
complicated, because many
ERP packages are not designed
to support customization,
so most businesses implement
the best practices embedded
in the acquired ERP system.
Some ERP packages are very
generic in their reports and
inquiries, such that customization
is expected in every implementation.
It is important to recognize
that for these packages it
often makes sense to buy third
party plug-ins that interface
well with your ERP software
rather than reinventing the
wheel.
Today there are also web-based
ERP systems. Companies would
deploy web-based ERP because
it requires no client side
installation, and is cross-platform
and maintained centrally.
As long as you have an Internet
connection, or a network connection
to a system installed on the
LAN, you can access web-based
ERPs through typical web browsers.
How
can ERP improve a company's
business performance?
ERP’s best hope for
demonstrating value is as
a sort of battering ram for
improving the way your company
takes a customer order and
processes that into an invoice
and revenue—otherwise
known as the order fulfillment
process. That is why ERP is
often referred to as back-office
software. It doesn’t
handle the up-front selling
process (although most ERP
vendors have recently developed
CRM software to do this);
rather, ERP takes a customer
order and provides a software
road map for automating the
different steps along the
path to fulfilling the order.
When a customer service representative
enters a customer order into
an ERP system, he has all
the information necessary
to complete the order (the
customer’s credit rating
and order history from the
finance module, the company’s
inventory levels from the
warehouse module and the shipping
dock’s trucking schedule
from the logistics module,
for example).
People in these different
departments all see the same
information and can update
it. When one department finishes
with the order it is automatically
routed via the ERP system
to the next department. To
find out where the order is
at any point, you need only
log in to the ERP system to
track it down. With luck,
the order process moves like
a bolt of lightning through
the organization, and customers
get their orders faster and
with fewer errors than before.
ERP can apply that same magic
to the other major business
processes, such as employee
benefits or financial reporting.
That, at least, is the dream
of ERP. The reality is not
so rosy.
Vendors
(some of the BIG guys)
- SAP
- Oracle Applications
- Microsoft Dynamics (Formerly
Microsoft Business Division)
- The Sage Group
- Lawson Software
- Visma
- Industrial and Financial
Systems
- Exact Software
|
