Enterprise Resource Planning - Overview

7/27/2019 Enterprise Resource Planning - Overview

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Enterprise Resource Planning

(ERP) : An Overview

MBA(Tech), Trim XII. Enterprise Planning System (EPS)


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ERP - Concept

ERP defines the concept of enterprise application,meaning implementation involves coordinating acrossmultiple functions and departments in the organization.

ERP purchase and implementation therefore requiresrepresentatives from different departments to worktogether in order to ensure that every part of thecompany benefits from the ERP system.

This coordination takes place on a technical level, tocreate consistent and centrally managed data, and on aprocess level, to ensure that functional departmentsoperate efficiently.


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Integrated Management of Information

The three fundamental characteristics of information areaccuracy, relevancy, and timeliness.

To survive, the organization must always be on its toes,

gathering and analyzing the databoth internal andexternal. Any mechanism that will automate theinformation gathering and analysis process will enhancethe chances of the organization to beat the competition.

What is needed is a system that treats the organization asa single entity and caters to the information needs of thewhole organization.


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Integrated Management of Information

If this is possible, and if the information that is generated

is accurate, timely and relevant, then these systems willgo a long way in helping the organization to realize itsgoals.

Integrated management information provides thedecision makers with accurate, relevant, timely, and up-to-the minute information so that they can make betterand informed decisions much faster.

Integrated management information will enable theorganization to become more competitive, agile andrespond quickly to the changes in the businessenvironment, customer interests and trends.


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Integrated Data Model

The most critical step in the ERP implementation is thecreation of an integrated data model as all the employeesfrom the different departments get access to theintegrated data and this will help in better decision-making.

With the implementation of ERP systems all the data willbe from the integrated database.

Maintaining and managing the integrated dataconstantly updated and up-to-date is one of the biggestchallenges of ERP implementation and operation.


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Integrated Data Model

The integrated database will reduce data redundancy andgive all employees access to the updated and up-to-theminute information about the entire organization.

When designing the data model for the ERP system, themost important thing that should be kept in mind is theinformation integration and the process/ procedureautomation.

The data model should reflect the entire organizationand should successfully depict and integrate the datastructures of the entire organization.

Enterprise Resource Planning (Second Edition). Copyright 2008, Alexis Leon. All rights reserved.


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ERP Components

The term ERP is a bit nebulous, and the specific modulescontained in a system vary quite a bit.

Today, the following types of software as components ofan ERP system:

Financial Management

Human Capital Management (HCM)

Project Management

Manufacturing

Service Operations Management (SOM)

Supply Chain Management (SCM)

Customer Relationship Management (CRM)


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Trend 1 : Impact of Recession on ERP

Companies prioritized IT budgets to focus on faster time-to-

value and for projects that had a high potential to increaserevenue and margin.

For enterprises that already had an ERP system, this changemeant that companies often moved IT budgets to :

Industry-vertical solutions (such as merchandising for retail)

Add on customer-facing functionality (such as CRM

Adding social solutions to existing CRM systems),

Key ERP modules (such as financial modules for globalconsolidations or business analytics to support executivedecision making).


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For mid-market companies (at least for companieslacking a complete and integrated ERP system), theinvestment that was most critical seems to have beeninvesting in a full-featured, integrated system


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Trend 2 : Cloud computing, SaaS and licensing

For licensing, software generally falls into two categories,perpetual license and subscription license.

Perpetual licensing is, in effect, buying the software:The title changes hands and the expenditure is treated asa capital investment (CAPEX).

Subscription licensing is leasing: The software and theexpenditure are treated as operating funds (OPEX).

The payment model for subscription varies quite a bitand ranges from a monthly payment to three-plus yearspayment up front (often exchanging the longercommitment period for more favorable pricing).


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Trend 2 : Cloud computing, SaaS and licensing

Deployment models offer enterprise buyers a great dealof flexibility and choice. Traditionally, software was mostoften deployed on a companys premises, in a companydata center and on company-owned and company-maintained hardware, databases, middleware and so

forth.

In the past decade or so, hosting software (or deployingsoftware on demand) has gained some popularity.


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Trend 2 : Cloud computing, SaaS and licensing..

For hosted/on-demand software, the company deploysthe software on rented infrastructure, generally from athird-party hosting provider (although some softwarevendors also offer this option in their own data centers).

This model is sometimes confused with SaaS, but the keydifference is that the software transaction and theinfrastructure transaction are separate- although theymay be bundled together by the vendor, and the licensing

model can be either subscription or perpetual for thesoftware.


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Trend 3 : Impact of Mobile devices and SocialComputing on ERP

Three other significant trends are creating change in theERP software market and generating new features, aswell as additional new software solutions that expand thereach of ERP.

Those trends enterprise mobility, the need to addsocial Web capabilities to the enterprise, and the desirefor deeper understanding of business informationthrough Business Intelligence (BI) are increasingly

important in our hyper-connected global businessenvironment.


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Trend 3 : Impact of Mobile devices and SocialComputing on ERP..

Employees are demanding mobile access to more andmore ERP resources as smart phones proliferate throughthe work force and traditional work patterns are

disrupted.

The social Web has created new ways of interacting,collaborating, and creating and using information in the

post-industrial, information economy.


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Trend 3 : Impact of Mobile devices and SocialComputing on ERP..

Employees, suppliers, partners and customers areexpecting businesses to interact in these new ways, ascontent and community through the social Web becomebusiness tools.

ERP systems will have to offer and support socialcollaboration, to provide new ways of generating value,to focus on networks over organizations, and to offer newways of engaging customers and new ways of innovating

around products and services.

Documents

Enterprise Resource Planning - Overview