ENTERPRISE RESOURCE PLANNING Enterprise resource planning (ERP) integrates internal and external management information across an entire organization, embracing finance/accounting, manufacturing, sales and service, etc. ERP systems automate this activity with an integrated software application. Its 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. ERP systems can run on a variety of hardware and network configurations, typically employing a database to store data. ERP systems typically include the following characteristics: 1.An integrated system that operates in real time (or next to real time), without relying on periodic updates. 2.A common database, which supports all applications. 3.A consistent look and feel throughout each module. 4.Installation of the system without elaborate application/data integration by the Information Technology (IT) department. #Functional areas: 1.Finance/Accounting 2.General ledger, payables, cash management, fixed assets, receivables, budgeting, consolidation 3.Human resources 4.payroll, training, benefits, 401K, recruiting, diversity management 5.Manufacturing Engineering, bill of materials, work orders, scheduling, capacity, workflow management, quality control, cost management, manufacturing process, manufacturing projects, manufacturing flow, activity based costing, Product lifecycle management 6.Supply chain management 7.Order to cash, inventory, order entry, purchasing, product configurator, supply chain planning, supplier scheduling, inspection of goods, claim processing, commissions 7.Project management Costing, billing, time and expense, performance units, activity management 8.Customer relationship management Sales and marketing, commissions, service, customer contact, call center support Data services Various "self–service" interfaces for customers, suppliers and/or employees 9.Access control Management of user privileges for various processes Components Transactional database Management portal/dashboard 10.Business intelligence system Customizable reporting External access via technology such as web services Messaging/chat/wiki #CONSULTANTS: Many organizations do not have sufficient internal skills to implement ERP. Typically, an outside consulting team is responsible for the ERP implementation including selecting the vendor, planning, training, configuring/customizing, testing, implementation, delivery.Examples of other services include writing process triggers and custom workflows; specialist advice to improve how the ERP is used in the business; system optimization; custom reports; complex data extracts or implementing Business Intelligence. Unlike most single–purpose applications, ERP packages typically include source code and a vendor–supported development environment for customizing and extending the delivered code. The fundamental advantage of ERP is that integrating the myriad processes by which businesses operate saves time and expense. Decisions can be made more quickly and with fewer errors. Data becomes visible across the organization. #USES OF ERP: 1.Sales forecasting, which allows inventory optimization 2.Order tracking, from acceptance through fulfillment 3.Revenue tracking, from invoice through cash receipt 4.Matching purchase orders (what was ordered), inventory receipts (what arrived), and costing (what the vendor invoiced) #ADVANTAGES OF ERP: 1.ERP systems centralize business data, bringing the following benefits: 2.They eliminate the need to synchronize changes between multiple systems— consolidation of finance, marketing and sales, human resource, and manufacturing applications 3.They enable standard product naming/coding. 4.They provide a comprehensive enterprise view (no "islands of information"). They make real–time information available to management anywhere, anytime to make proper decisions. 5.They protect sensitive data by consolidating multiple security systems into a single structure #DISADVANTAGES OF ERP: 1.Customization is problematic. 2.Re–engineering business processes to fit the ERP system may damage competitiveness and/or divert focus from other critical activities 3.ERP can cost more than less integrated and/or less comprehensive solutions. 4.High switching costs increase vendor negotiating power vis a vis support, maintenance and upgrade expenses. 5.Overcoming resistance to sharing sensitive information between departments can divert management attention. 6.Integration of truly independent businesses can create unnecessary dependencies. 7.Extensive training requirements take resources from daily operations. #ERP EVALUATION: ERP evaluation refers to the systematic procedures followed to estimate the performance of ERP in a company. This is not a one step process and it should be a part of the organizational study and as well as be done from time to time. The first thing in ERP evaluation is ROI. ERP is a very costly investment and it becomes very important to check if the returns are satisfactory or justified for the costs involved. ERP evaluation is dependent on several factors. As a matter of fact implementation of ERP will eat up a large chunk of the organizations profits in many cases. The reason is that ERP calls for change management and before the employees tune in to the new atmosphere the company might have to lose several regular businesses. This will certainly prove to be useful if only ERP satisfies the requirements of the company and is able to compensate on this loss. Similarly lot of money is spent on implementing ERP and training the workforce to use it. Apart from all this it has to be studies if ERP has facilitated smooth transaction of business than ever. This is one of the most important parameter in assessment which decides if ERP should be a part of the organization or if it should be given a go by. #ROLES AND RESPONSIBILITIES OF ERP VENDORS First and foremost, the vendor should supply the product and its documentation as soon as the contract is signed. Only after the software is delivered, can the company develop the training and testing environment for the implementation team. The vendors are responsible for fixing any problems in the software that the implementation team encounters. So the vendor should have a liaison officer who should constantly interact with the implementation team. Another role the vendor has to play is that of the trainer - to provide the initial training for the company's key users, people who will play lead roles in the implementation of the system. These key users are the one who will define, together with the consultants, how the software is to serve the company. In other words, it is these in-house functional experts who will decide how the functionalities are to be implemented, as well as how to use or adapt the product to suit the company's unique requirements. So it is very critical that these key users are given a thorough training on the features of the package. Vendor's training should achieve the goal of showing the key users how the package works, what are the major components, how the data and information flows across the system, what is flexible and what is not, what can be configured and what cannot, what can be customized and what should not, what are the limitations, what are the strengths and weaknesses and so on. The role of the vendor does not end with the training. The vendor also plays an important project support function and must exercise quality control with respect to how the product is implemented. It is the vendors who understand the finer details and functions of the product and can make valuable suggestions and improvements that could improve the performance of the system. #IMPLEMENTATION OF ERP: ERP's scope usually implies significant changes to staff work practicesGenerally, three types of services are available to help implement such changes—consulting, customization, and support.Implementation time depends on business size, number of modules, customization, the scope of process changes, and the readiness of the customer to take ownership for the project. Modular ERP systems and can be implemented in stages. The typical project for a large enterprise consumes about 14 months and requires around 150 consultants.Small projects can require months; multinational and other large implementations can take years.Customization can substantially increase implementation times. Implementing ERP software can overwhelm inexperienced technicians. As a result, hiring professionally trained consultants to implement these systems is common. Consulting 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. Process preparation Implementing ERP typically requires changing existing business processes.Poor understanding of needed process changes prior to starting implementation is a main reason for project failure. It is therefore crucial that organizations thoroughly analyze business processes before implementation. This analysis can identify opportunities for process modernization. It also enables an assessment of the alignment of current processes with those provided by the ERP system. Research indicates that the risk of business process mismatch is decreased by: 1.linking current processes to the organization's strategy; 2.analyzing the effectiveness of each process; 3.understanding exising automated solutions.ERP implementation is considerably more difficult (and politically charged) in decentralized organizations, because they often have different processes, business rules, data semantics, authorization hierarchies and decision centers.This may require migrating some business units before others, delaying implementation to work through the necessary changes for each unit, possibly reducing integration (e.g. linking via Master data management) or customizing the system to meet specific needs. A potential disadvantage is that adopting "standard" processes can lead to a loss of competitive advantage. While this has happened, losses in one area often offset by gains in other areas, increasing overall competitive advantage. CONFIGURATION Configuring an ERP system is largely a matter of balancing the way the customer wants the system to work with the way it was designed to work. ERP systems typically build many changeable parameters that modify system operation. For example, an organization can select the type of inventory accounting—FIFO or LIFO—to employ, whether to recognize revenue by geographical unit, product line, or distribution channel and whether to pay for shipping costs when a customer returns a purchase CUSTOMIZATION When the system doesn't offer a particular feature, the customer can rewrite part of the code, or interface to an existing system. Both options add time and cost to the implementation process and can dilute system benefits. Customization inhibits seamless communication between suppliers and customers who use the same ERP system uncustomized. Key differences between customization and configuration include: 1.Customization is always optional, whereas the software must always be configured before use (e.g., setting up cost/profit center structures, organisational trees, purchase approval rules, etc.) 2.The software was designed to handle various configurations, and behaves predictably any allowed configuration. 3.The effect of configuration changes on system behavior and performance is predictable and is the responsibility of the ERP vendor. The effect of customization is less predictable, is the customer's responsibility and increases testing activities. 4.Configuration changes survive upgrades to new software versions. Some customizations (e.g. code that uses pre–defined "hooks" that are called before/after displaying data screens) survive upgrades, though they require retesting. Other customizations (e.g. those involving changes to fundamental data structures) are overwritten during upgrades and must be reimplemented. 5.Customization can be expensive and complicated, and can delay implementation. Nevertheless, customization offers the potential to obtain competitive advantage vis a vis companies using only standard features. Extensions ERP systems can be extended with third–party software. ERP vendors typically provide access to data and functionality through published interfaces. Extensions offer features such as: 1.archiving, reporting and republishing; 2.capturing transactional data, e.g. using scanners, tills or RFID 3.access to specialized data/capabilities, such as syndicated marketing data and associated trend analytics. Data migration Data migration is the process of moving/copying and restructuring data from an existing system to the ERP system. Migration is critical to implementation success and requires significant planning. Unfortunately, since migration is one of the final activities before the production phase, it often receives insufficient attention. The following steps can structure migration planning: 1.Identify the data to be migrated 2.Determine migration timing 3.Generate the data templates 4.Freeze the toolset 5.Decide on migration-related setups 6.Define data archiving policies and procedures Effective ERP requires that integrated management processes extend horizontally across the company, including product development, sales, marketing, manufacturing, and finance. It must extend vertically throughout the company's supply chain to include the acquisition of raw materials, suppliers, customers, and consumers. The fundamental purpose of ERP is to establish a process that links projected demand plans to supply plans, so that the resources of manufacturers, their suppliers, and especially their customers are utilized in the most efficient and cost effective way. To do so requires a process for anticipating demand and planning and scheduling resources in a manner that supports a company's strategic and financial goals. There are five major elements in this: An integrated business operating process that links strategic plans and business plans to sales plans and operations plans. A people-driven process that is supported by a computer system. A formal resource planning process that involves all functions within a company. Defined responsibilities and performance measurements for all functions in a company. Communications among all functions in a company as well as communications among all divisions and sister companies. Strategies must be tied to tactics, supply is resolved with demand, the financial system is tied to the operating system, aggregate planning is translated into detailed planning, and planning and execution are linked together via a two-way flow of information and a spirit of cooperation among all functions. ERP is a people process supported by the computer, rather than the other way around. People -- and their behavior and discipline in utilizing the ERP process -- is vital. When people understand how to utilize the ERP process, tools, and techniques, the data and information will be highly accurate, and they will make sound decisions. MARKETING OF ERP INTRODUCTION During the company existence a lot of information is accumulated and its volume exponentially increases. Business processes’ dynamics sets to the managers more and more shorter time for decision making. In these terms using of ERP-system is not just desirable. The availability of suitable information system is a crucial factor for the future company progress. The requirements to the ERP-system modules are growing up as well. The system has to make business processes “transparent” to the governing body and the information form to allow a quick orientation in the main trends of the business. The implementation of the marketing analysis module at a trade-oriented company is of the great importance. Its main functionality has to include: • Processing in Real-time – obtaining the “shot” of the relationships between the company and the market at the present time; • Generation of detailed information about the Sales History for any period of time; • Stock items analysis – total information about sales, turnover and profit, “top”- items, sales trends; • Stock groups analysis –total information about sales generalized at stock group level; • Clients analysis – total information about sales at a particular client level or sales of the group of clients, trends in client’s behavior; • Suppliers analysis – total information about sales of goods, provided from suppliers; • Regions analysis – total information about sales in geographic remote stores of the company; • Remote access to the system – remote operation with the integrated data base; • Protection and Security – determine and control of different access levels to the marketing information. MARKETING ANALYSIS MODULE Registry_M One of the most concerned ERP-system users are companies dealing with automobile spare parts import and trade. On one hand their contractors abroad set the necessity of a perfect organization. On the other hand the operation with a multitude of clients, a huge nomenclature and the set of geographic remote stores necessitate the implementation of a powerful information system. The presenting module Registry_M is a part of such ERP-system, which generates in real-time the necessary marketing analysis. CONCLUSIONS Nowadays, the existence and the progress of a trade-oriented company is impossible without ERP-system and its marketing analysis module. The effective use of this software allows to be taken in time strategic and tactic control decisions with respect of: • What to be supplied, who should be the supplier and when the orders to be generated; • In which region what to be sold, its price and when; • Where there is a need the advertisement to be strengthened, goods from what store to be transferred; • Whish are the strategic clients and what is the amount of discount to be proposed to the different clients. • Which are the most important goods for the business, which are those that generate the biggest profits and the sale of which items must be stopped.