ERP by lonyoo

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 By: The class 
What is ERP?
   ERP stands for: Enterprise Resource Planning systems
   This is what it does: attempts to integrate all data
    and processes of an organization into a unified
    system. A typical ERP system will use multiple
    components of computer software and hardware to
    achieve the integration. A key ingredient of most
    ERP systems is the use of a unified database to
    store data for the various system modules.
   Some organizations - typically those with sufficient
    in-house IT skills to integrate multiple software
    products - 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.
   This is very common in the retail sector, where even
    a mid-sized retailer will have a discrete Point-of-
    Sale (POS) product and financials application, then
    a series of specialised applications to handle
    business requirements such as warehouse
    management, staff rostering, merchandising and
   Ideally, ERP delivers a single database that contains all
    data for the software modules, which would include:
   Manufacturing: Engineering, Bills of Material,
    Scheduling, Capacity, Workflow Management, Quality
    Control, Cost Management, Manufacturing Process,
    Manufacturing Projects, Manufacturing Flow
   Supply Chain Management: Inventory, Order Entry,
    Purchasing, Product Configurator, Supply Chain
    Planning, Supplier Scheduling, Inspection of goods,
    Claim Processing, Commission Calculation
   Data Warehouse: and various Self-Service interfaces
    for Customers, Suppliers, and Employees
   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.
   ERP delivers a single database that contains all
    data for the software modules across an entire
    company. People in different departments all see
    the same information and can update it.

   Computer security is included within an ERP system
    to protect against both outsider and insider crime
    ERP systems tie together varied processes using
    data from across the company. For instance, a
    typical ERP system manages functions and activities
    as different as the bills of materials, order entry,
    purchasing, accounts payable, human resources, and
    inventory control, to name just a few of the modules.
   ERP software combined the data of formerly
    separate applications. This made the worry of
    keeping information in synchronization across
    multiple systems disappear. It standardized and
    reduced the number of software specialties
    previously required.
   ERP systems allow companies to replace multiple
    complex computer applications with a single
    integrated system.
   ERP systems replace two or more independent
    applications and eliminate the need for external
    interfaces previously required between systems and
    provide additional benefits that range from
    standardization and lower maintenance to make
    reporting capabilities easier.
   There are several disadvantages to enterprise resource
   Cost
     Implementing ERP is very expensive, price can range from
      $30,000 - $500,000, depending on the size of the
     ERP vendors can charge a license renewal fee annually
      which can also be costly for any business.
     Consultants may need to be used for installation or to
      maintain the ERP.
     Employees may need to be trained in ERP so they can fully
      utilize the system. Training times takes away from work time
      and can also cost additional funds.
   Expertise
     Success of ERP depends on the skill level and experience of
      the company’s work force.
     Enterprises view cutting training funds as a way to cut costs.
     Smaller companies may even need to underfund training this
      means their ERP system is often operated by personnel with
      inadequate education in ERP and the ERP vendor package
      being used.
     Proper training of the workforce is dependent to success
      with ERP.
     New employees must be trained before they can properly
      start working because of the ERP system
   Flexibility
     ERP’s can be very rigid and may not fit the business
      flow of the company trying to use it.
     Company’s may need to customize their ERP package
      which isn’t allowed by most ERP vendors.
   Change
     Employees    may be needed to change the way they
      work to become more efficient. They maye feel
      resistant to change which can be a negative.

   Bugs!
   When Designing an ERP system, knowledge of the
    application takes an extremely important role. The
    ERP system is meant to allow a business to run its
    operations swiftly, this cannot be achieved if a
    company cannot perform a task a certain way,
    because the programmer only allowed for it to be
    done a certain way because he lacked proper
    knowledge of the application. This would in effect
    make running the business more complex thereby
    defeating the purpose of ERP.
   It is difficult and expensive to tailor an ERP system to
    the way a specific company does business.

   Part of the challenge of building an ERP system for a
    company is training. The ERP system is going to
    drastically change the way many employees perform
    their jobs. This means they must be trained to use the
    software efficiently and this will not occur overnight.
    This means that either the software company or less
    commonly the business will have to train their
   The machines that are sold are indeed reliable.

   However, many companies like to “Set it and Forget it.”

   80% of companies that request IT service list there
    problem as severe with corruption and data loss

   Abacus Data Systems suggests that companies should
    have a more proactive attitude when it comes to system
   Open Source Software is making a large splash in the
    world of ERP because it allows for easy customization.
    The source code is easily available so the company can
    employ a team of developers to customize the software
    to their needs. IF the company ever may need a new
    feature, all they need to do is code it and it could be
    implimented within hours! The double edged sword to
    this method is that the technical responsibilites are in the
    company's own hands. On one side they do not need to
    pay the company that wrote the software for service,
    on the other side they are the only one's responsbile for
    repairing the system.

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