tag:blogger.com,1999:blog-87328367829305934052024-03-08T11:28:02.268-08:00ERP Software DevelopmentAnil Bhathttp://www.blogger.com/profile/00468848493905794459noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-8732836782930593405.post-37290571269910194302010-06-24T23:05:00.002-07:002018-12-13T02:15:33.079-08:00ERP Application Development Software<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="color: #660000; font-weight: bold;">Enterprise Resource Planning:</span><br />
<span style="font-weight: bold;"><span style="color: #660000;"> </span>ERP is a platform that facilitates the database control in a company. The working mechanism of ERP is simple and easy to understand. ERP aims to unite the data processed in various departments and division of a company. The central unit referred as the platform controls the entire system. It aims at providing connectivity in order to access the information from all faculties. The benefit of ERP is largely felt nowadays when operations are becoming global in the true sense. </span><br />
<span style="font-weight: bold;"><br />With the intervention of ERP it becomes equally easy for the other departments of the company to check the information regarding the order. Similarly it is not necessary for departments to keep working on it all through to know their chance or in other words discharging their respective area of work in the whole process. On the contrary ERP intimates them as soon as it is their chance. ERP software solution is the one step answer. Implementing ERP in an organization depends upon that whether it could yield necessary benefits rather than the troublemaker.</span><br />
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<span style="color: #660000; font-weight: bold;">Enterprise resource planning (ERP) </span><br />
<span style="font-weight: bold;">is an integrated computer-based system used to manage internal and external resources including tangible assets, financial resources, materials, and human resources. It is a software architecture whose purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. Built on a centralized database and normally utilizing a common computing platform, ERP systems consolidate all business operations into a uniform and enterprise wide system environment.</span><br />
<span style="font-weight: bold;"><br />An ERP system can either reside on a centralized server or be distributed across modular hardware and software units that provide "services" and communicate on a local area network. The distributed design allows a business to assemble modules from different vendors without the need for the placement of multiple copies of complex, expensive computer systems in areas which will not use their full capacity.</span><br />
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<span style="color: #660000; font-weight: bold;">Origin of the term</span><br />
<span style="font-weight: bold;">The initialism ERP was first employed by research and analysis firm Gartner Group in 1990 as an extension of MRP (Material Requirements Planning; later manufacturing resource planning) and CIM (Computer Integrated Manufacturing), and while not supplanting these terms, it has come to represent a larger whole. It came into use as makers of MRP software started to develop software applications beyond the manufacturing arena. ERP systems now attempt to cover all core functions of an enterprise, regardless of the organization's business or charter. These systems can now be found in non-manufacturing businesses, non-profit organizations and governments.</span><br />
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<span style="font-weight: bold;">To be considered an ERP system, a software package should have the following traits: </span><br />
<span style="font-weight: bold;">• It should be integrated and operate in real-time with no periodic batch updates.</span><br />
<span style="font-weight: bold;">• All applications should access one database to prevent redundant data and multiple data definitions. </span><br />
<span style="font-weight: bold;">• All modules should have the same look and feel. </span><br />
<span style="font-weight: bold;">• Users should be able to access any information in the system without needed integration work on the part of the IS department</span><br />
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<span style="color: #660000; font-weight: bold;">ERP Components</span><br />
<span style="font-weight: bold;">Transactional Backbone</span><br />
<span style="font-weight: bold;">• Financials </span><br />
<span style="font-weight: bold;">• Distribution </span><br />
<span style="font-weight: bold;">• Human Resources </span><br />
<span style="font-weight: bold;">• Product lifecycle management </span><br />
<span style="font-weight: bold;">Advanced Applications</span><br />
<span style="font-weight: bold;">• Customer Relationship Management (CRM) </span><br />
<span style="font-weight: bold;">• Supply chain management </span><br />
<span style="font-weight: bold;">o Purchasing </span><br />
<span style="font-weight: bold;">o Manufacturing </span><br />
<span style="font-weight: bold;">o Distribution </span><br />
<span style="font-weight: bold;">• Warehouse Management System </span><br />
<span style="font-weight: bold;">Management Portal/Dashboard</span><br />
<span style="font-weight: bold;">• Decision Support System </span><br />
<span style="font-weight: bold;">These modules can exist in a complete system or utilized in an ad-hoc fashion.</span><br />
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<span style="color: #660000; font-weight: bold;">Commercial Applications</span><br />
<span style="font-weight: bold;">Manufacturing </span><br />
<span style="font-weight: bold;">Engineering, bills of material, scheduling, capacity, workflow management, quality control, cost management, manufacturing process, manufacturing projects, manufacturing flow </span><br />
<span style="font-weight: bold;">Supply chain management </span><br />
<span style="font-weight: bold;">Order to cash, inventory, order entry, purchasing, product configurator, supply chain planning, supplier scheduling, inspection of goods, claim processing, commission calculation </span><br />
<span style="font-weight: bold;">Financials </span><br />
<span style="font-weight: bold;">General ledger, cash management, accounts payable, accounts receivable, fixed assets </span><br />
<span style="font-weight: bold;">Project management </span><br />
<span style="font-weight: bold;">Costing, billing, time and expense, performance units, activity management </span><br />
<span style="font-weight: bold;">Human resources </span><br />
<span style="font-weight: bold;">Human resources, payroll, training, time and attendance, rostering, benefits </span><br />
<span style="font-weight: bold;">Customer relationship management </span><br />
<span style="font-weight: bold;">Sales and marketing, commissions, service, customer contact and call center support </span><br />
<span style="font-weight: bold;">Data services </span><br />
<span style="font-weight: bold;">Various "self-service" interfaces for customers, suppliers, and/or employees </span><br />
<span style="font-weight: bold;">Access control </span><br />
<span style="font-weight: bold;">Management of user privileges for various processes </span><br />
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<span style="color: #660000; font-weight: bold;">Implementation</span><br />
<span style="font-weight: bold;">Businesses have a wide scope of applications and processes throughout their functional units; producing ERP software systems that are typically complex and usually impose significant changes on staff work practices. Implementing ERP software is typically too complex for "in-house" skill, so it is desirable and highly advised to hire outside consultants who are professionally trained to implement these systems. This is typically the most cost effective way. There are three types of services that may be employed for - Consulting, Customization, Support. The length of time to implement an ERP system depends on the size of the business, the number of modules, the extent of customization, the scope of the change and the willingness of the customer to take ownership for the project. ERP systems are modular, so they don't all need be implemented at once. It can be divided into various stages, or phase-ins. The typical project is about 14 months and requires around 150 consultants. A small project (e.g., a company of less than 100 staff) can be planned and delivered within 3–9 months; however, a large, multi-site or multi-country implementation can take years. The length of the implementations is closely tied to the amount of customization desired. </span><br />
<span style="font-weight: bold;"><br />To implement ERP systems, companies often seek the help of an ERP vendor or of third-party consulting companies. These firms typically provide three areas of professional services: consulting; customization; and support. The client organization can also employ independent program management, business analysis, change management, and UAT specialists to ensure their business requirements remain a priority during implementation.</span><br />
<span style="font-weight: bold;"><br />Data migration is one of the most important activities in determining the success of an ERP implementation. Since many decisions must be made before migration, a significant amount of planning must occur. Unfortunately, data migration is the last activity before the production phase of an ERP implementation, and therefore receives minimal attention due to time constraints. The following are steps of a data migration strategy that can help with the success of an ERP implementation</span><br />
<span style="font-weight: bold;"><br />1. Identifying the data to be migrated </span><br />
<span style="font-weight: bold;">2. Determining the timing of data migration </span><br />
<span style="font-weight: bold;">3. Generating the data templates </span><br />
<span style="font-weight: bold;">4. Freezing the tools for data migration </span><br />
<span style="font-weight: bold;">5. Deciding on migration related setups </span><br />
<span style="font-weight: bold;">6. Deciding on data archiving </span><br />
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<span style="color: #660000; font-weight: bold;">Process preparation</span><br />
<span style="font-weight: bold;">ERP vendors have designed their systems around standard business processes, based upon best business practices. Different vendor(s) have different types of processes but they are all of a standard, modular nature. Firms that want to implement ERP systems are consequently forced to adapt their organizations to standardized processes as opposed to adapting the ERP package to the existing processes neglecting to map current business processes prior to starting ERP implementation is a main reason for failure of ERP projects. It is therefore crucial that organizations perform a thorough business process analysis before selecting an ERP vendor and setting off on the implementation track. This analysis should map out all present operational processes, enabling selection of an ERP vendor whose standard modules are most closely aligned with the established organization. Redesign can then be implemented to achieve further process congruence. Research indicates that the risk of business process mismatch is decreased by:</span><br />
<span style="font-weight: bold;"><br />• linking each current organizational process to the organization's strategy; </span><br />
<span style="font-weight: bold;">• analyzing the effectiveness of each process in light of its current related business capability; </span><br />
<span style="font-weight: bold;">• understanding the automated solutions currently implemented. </span><br />
<span style="font-weight: bold;"><br />ERP implementation is considerably more difficult (and politically charged) in organizations structured into nearly independent business units, each responsible for their own profit and loss, because they will each have different processes, business rules, data semantics, authorization hierarchies and decision centers. Solutions include requirements coordination negotiated by local change management professionals or, if this is not possible, federated implementation using loosely integrated instances (e.g. linked via Master Data Management) specifically configured and/or customized to meet local needs.]</span><br />
<span style="font-weight: bold;"><br />A disadvantage usually attributed to ERP is that business process redesign to fit the standardized ERP modules can lead to a loss of competitive advantage. While documented cases exist where this has indeed materialized, other cases show that following thorough process preparation ERP systems can actually increase sustainable competitive advantage. </span><br />
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<span style="color: #660000; font-weight: bold;">Configuration</span><br />
<span style="font-weight: bold;">Configuring an ERP system is largely a matter of balancing the way you want the system to work with the way the system lets you work. Begin by deciding which modules to install, then adjust the system using configuration tables to achieve the best possible fit in working with your company’s processes</span><br />
<span style="font-weight: bold;"><br /><span style="color: #660000;">Modules</span> — Most systems are modular simply for the flexibility of implementing some functions but not others. Some common modules, such as finance and accounting are adopted by nearly all companies implementing enterprise systems; others however such as human resource management are not needed by some companies and therefore not adopted. A service company for example will not likely need a module for manufacturing. Other times companies will not adopt a module because they already have their own proprietary system they believe to be superior. Generally speaking the greater number of modules selected, the greater the integration benefits, but also the increase in costs, risks and changes involved</span><br />
<span style="font-weight: bold;"><br /><span style="color: #660000;">Configuration Tables</span> – A configuration table enables a company to tailor a particular aspect of the system to the way it chooses to do business. For example, an organization can select the type of inventory accounting – FIFO or LIFO – it will employ or whether it wants to recognize revenue by geographical unit, product line, or distribution channel.</span><br />
<span style="font-weight: bold;"><br />So what happens when the options the system allows just aren't good enough? At this point a company has two choices, both of which are not ideal. It can re-write some of the enterprise system’s code, or it can continue to use an existing system and build interfaces between it and the new enterprise system. Both options will add time and cost to the implementation process. Additionally they can dilute the system’s integration benefits. The more customized the system becomes the less possible seamless communication between suppliers and customers</span><br />
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<span style="font-weight: bold;"> <span style="color: #660000;">Consulting services</span></span><br />
<span style="font-weight: bold;">Many organizations do not have sufficient internal skills to implement an ERP project. This results in many organizations offering consulting services for ERP implementation. Typically, a consulting team is responsible for the entire ERP implementation including</span><br />
<span style="font-weight: bold;">1. selecting </span><br />
<span style="font-weight: bold;">2. planning </span><br />
<span style="font-weight: bold;">3. training </span><br />
<span style="font-weight: bold;">4. testing </span><br />
<span style="font-weight: bold;">5. implementation </span><br />
<span style="font-weight: bold;">6. delivery </span><br />
<span style="font-weight: bold;">of any customized modules. Examples of customization includes creating processes and reports for compliance, additional product training; creation of process triggers and workflow; specialist advice to improve how the ERP is used in the business; system optimization; and assistance writing reports, complex data extracts or implementing Business Intelligence</span><br />
<span style="font-weight: bold;"><br />For most mid-sized companies, the cost of the implementation will range from around the list price of the ERP user licenses to up to twice this amount (depending on the level of customization required). Large companies, and especially those with multiple sites or countries, will often spend considerably more on the implementation than the cost of the user licenses—three to five times more is not uncommon for a multi-site implementation</span><br />
<span style="font-weight: bold;"><br />Unlike most single-purpose applications, ERP packages have historically included full source code and shipped with vendor-supported team IDEs for customizing and extending the delivered code. During the early years of ERP the guarantee of mature tools and support for extensive customization was an important sales argument when a potential customer was considering developing their own unique solution in-house, or assembling a cross-functional solution by integrating multiple "best of breed" applications</span><br />
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<span style="color: #660000; font-weight: bold;">"Core system" customization vs configuration</span><br />
<span style="font-weight: bold;">Increasingly, ERP vendors have tried to reduce the need for customization by providing built-in "configuration" tools to address most customers' needs for changing how the out-of-the-box core system works. Key differences between customization and configuration include</span><br />
<span style="font-weight: bold;"><br />• Customization is always optional, whereas some degree of configuration (e.g., setting up cost/profit centre structures, organisational trees, purchase approval rules, etc.) may be needed before the software will work at all. </span><br />
<span style="font-weight: bold;">• Configuration is available to all customers, whereas customization allows individual customer to implement proprietary "market-beating" processes. </span><br />
<span style="font-weight: bold;">• Configuration changes tend to be recorded as entries in vendor-supplied data tables, whereas customization usually requires some element of programming and/or changes to table structures or views. </span><br />
<span style="font-weight: bold;">• The effect of configuration changes on the performance of the system is relatively predictable and is largely the responsibility of the ERP vendor. The effect of customization is unpredictable and may require time-consuming stress testing by the implementation team. </span><br />
<span style="font-weight: bold;">• Configuration changes are almost always guaranteed to survive upgrades to new software versions. Some customizations (e.g. code that uses pre-defined "hooks" that are called before/after displaying data screens) will survive upgrades, though they will still need to be re-tested. More extensive customizations (e.g. those involving changes to fundamental data structures) will be overwritten during upgrades and must be re-implemented manually. </span><br />
<span style="font-weight: bold;"><br />By this analysis, customizing an ERP package can be unexpectedly expensive and complicated, and tends to delay delivery of the obvious benefits of an integrated system. Nevertheless, customizing an ERP suite gives the scope to implement secret recipes for excellence in specific areas while ensuring that industry best practices are achieved in less sensitive areas.</span><br />
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<span style="color: #660000; font-weight: bold;">Extensions</span><br />
<span style="font-weight: bold;">In this context, "Extensions" refers to ways that an ERP environment can be "extended" (supplemented) with third-party programs. It is technically easy to expose most ERP transactions to outside programs that do other things, e.g:</span><br />
<span style="font-weight: bold;"><br />• archiving, reporting and republishing (these are easiest to achieve, because they mainly address static data); </span><br />
<span style="font-weight: bold;">• performing transactional data captures, e.g. using scanners, tills or RFIDs (also relatively easy because they touch existing data); </span><br />
<span style="font-weight: bold;"><br />However, because ERP applications typically contain sophisticated rules that control how data can be created or changed, some such functions can be very difficult to implement.</span><br />
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<span style="color: #660000; font-weight: bold;">Advantages</span><br />
<span style="font-weight: bold;">In the absence of an ERP system, a large manufacturer may find itself with many software applications that cannot communicate or interface effectively with one another. Tasks that need to interface with one another may involve.</span><br />
<span style="font-weight: bold;"><br />• ERP systems connect the necessary software in order for accurate forecasting to be done. This allows inventory levels to be kept at maximum efficiency and the company to be more profitable. </span><br />
<span style="font-weight: bold;">• Integration among different functional areas to ensure proper communication, productivity and efficiency </span><br />
<span style="font-weight: bold;">• Design engineering (how to best make the product) </span><br />
<span style="font-weight: bold;">• Order tracking, from acceptance through fulfillment </span><br />
<span style="font-weight: bold;">• The revenue cycle, from invoice through cash receipt </span><br />
<span style="font-weight: bold;">• Managing inter-dependencies of complex processes bill of materials </span><br />
<span style="font-weight: bold;">• Tracking the three-way match between purchase orders (what was ordered), inventory receipts (what arrived), and costing (what the vendor invoiced) </span><br />
<span style="font-weight: bold;">• The accounting for all of these tasks: tracking the revenue, cost and profit at a granular level. </span><br />
<span style="font-weight: bold;"><br />ERP Systems centralize the data in one place. Benefits of this include:</span><br />
<span style="font-weight: bold;"><br />• Eliminates the problem of synchronizing changes between multiple systems - consolidation of finance, marketing and sales, human resource, and manufacturing applications </span><br />
<span style="font-weight: bold;">• Permits control of business processes that cross functional boundaries </span><br />
<span style="font-weight: bold;">• Provides top-down view of the enterprise (no "islands of information"), real time information is available to management anywhere, anytime to make proper decisions. </span><br />
<span style="font-weight: bold;">• Reduces the risk of loss of sensitive data by consolidating multiple permissions and security models into a single structure. </span><br />
<span style="font-weight: bold;">• Shorten production leadtime and delivery time </span><br />
<span style="font-weight: bold;">• Facilitating business learning, empowering, and building common visions </span><br />
<span style="font-weight: bold;"><br />Some security features are included within an ERP system to protect against both outsider crime, such as industrial espionage, and insider crime, such as embezzlement. A data-tampering scenario, for example, might involve a disgruntled employee intentionally modifying prices to below-the-breakeven point in order to attempt to interfere with the company's profit or other sabotage. ERP systems typically provide functionality for implementing internal controls to prevent actions of this kind. ERP vendors are also moving toward better integration with other kinds of information security tools. </span><br />
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<span style="color: #660000; font-weight: bold;">Disadvantages</span><br />
<span style="font-weight: bold;">Problems with ERP systems are mainly due to inadequate investment in ongoing training for the involved IT personnel - including those implementing and testing changes - as well as a lack of corporate policy protecting the integrity of the data in the ERP systems and the ways in which it is used.</span><br />
<span style="font-weight: bold;"><br />Disadvantages</span><br />
<span style="font-weight: bold;">• Customization of the ERP software is limited. </span><br />
<span style="font-weight: bold;">• Re-engineering of business processes to fit the "industry standard" prescribed by the ERP system may lead to a loss of competitive advantage. </span><br />
<span style="font-weight: bold;">• ERP systems can be very expensive (This has led to a new category of "ERP light" solutions) </span><br />
<span style="font-weight: bold;">• ERPs are often seen as too rigid and too difficult to adapt to the specific workflow and business process of some companies—this is cited as one of the main causes of their failure. </span><br />
<span style="font-weight: bold;">• Many of the integrated links need high accuracy in other applications to work effectively. A company can achieve minimum standards, then over time "dirty data" will reduce the reliability of some applications. </span><br />
<span style="font-weight: bold;">• Once a system is established, switching costs are very high for any one of the partners (reducing flexibility and strategic control at the corporate level). </span><br />
<span style="font-weight: bold;">• The blurring of company boundaries can cause problems in accountability, lines of responsibility, and employee morale. </span><br />
<span style="font-weight: bold;">• Resistance in sharing sensitive internal information between departments can reduce the effectiveness of the software. </span><br />
<span style="font-weight: bold;">• Some large organizations may have multiple departments with separate, independent resources, missions, chains-of-command, etc, and consolidation into a single enterprise may yield limited benefits. </span><span class="Apple-style-span" style="border-collapse: separate; color: black; font-family: "times new roman"; font-size: medium; font-style: normal; font-variant: normal; font-weight: normal; letter-spacing: normal; line-height: normal; text-indent: 0px; text-transform: none; white-space: normal; word-spacing: 0px;"><span class="Apple-style-span" style="font-family: "trebuchet ms" , "verdana" , "arial" , sans-serif; font-size: 13px; line-height: 18px; text-align: justify;"><span style="color: #990000; font-weight: bold;"><span style="color: #660000;"></span></span></span></span><br />
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<span class="apple-style-span"><span style="color: #003366; font-family: "georgia";">For more information please contact :-</span></span><span class="apple-converted-space"><span style="color: #003366; font-family: "georgia";"> </span></span><span style="color: #003366; font-family: "georgia";"><br />Anil Bhat</span></div>
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Anil Bhathttp://www.blogger.com/profile/00468848493905794459noreply@blogger.com23