The Building Blocks of ERP

Enterprise Resource Planning is commonly used to improve the integration within companies and organizations, and instead of focusing on individual parts, the operations of the company are viewed as a whole. Software infrastructure plays an important role in this process. In addition to this, software infrastructure plays an important role in the external processes of the organization.

Enterprise Resource Planning will focus on business processes, and they must be modular. In addition to this, the business processes must also be integrated. When companies deal with ERP, many of them make the mistake of focusing on the company.

Enterprise Resource Planning is a concept that extends beyond the company. An organization that wants to use it successfully must also look at the impact on the customers, partners, and suppliers. The ERP software will be responsible for dealing with a number of the company's business functions. There are five important issues that an ERP system must be capable of addressing. A business process will be responsible for dealing with multiple functions within a company. For instance, most companies have an accounting department, which they may also call the payroll. Even though individual functions will deal with business processes, the functions may not be based on a process.

The term "business process" is used to mean something that is much broader. Many people have wandered if modular applications are truly different from the stand-alone tools that exist today. Enterprise Resource Planning is much different than these tools. Because stand-alone tools are limited in their capability, companies are limited in what they can do with them. In contrast, Enterprise Resource Planning will allow a company to become more efficient because the various processes of the organization will be integrated. Without ERP, it will be very difficult to make the processes within your company seamless.

Modularity becomes an issue when a company is getting ready to purchase and utilize an ERP system. Some companies may not need to use all the applications at one time, or they may simply wish to use applications at specific times. Some ERP systems may be able to fit their applications together like Lego blocks. Some companies have analyzed the importance of having an integrated system, and many have wandered how such a system could help their companies become more productive. While stand-alone applications have their benefits, there are a number of limitations to them. A company that does not have an ERP system will spend a great deal of time repeating the same tasks over and over again.

They will place the same information in different applications, and the process can be tedious and time consuming. As you would expect, there are a number of problems with this approach. The most obvious problem is that entering the same information into a system is a waste of time. In addition to this, there is a much higher chance that the information will not be processed correctly when it is entered into the system many times over. Many companies have found that the data will not look the same on different applications once it has been entered into the system. This can cause a great deal of confusion, and this confusion will ultimately lead to a loss of productivity and profits.

Perhaps one of the biggest problems with stand-alone programs is that the information is not consistent. When employees get ready to analyze the information, they will often run into difficulties, and some will become confused. When an ERP system is used, the information and processes will be comprised in a "single version." The data only needs to be placed in the system once, and everyone who views the data will be able to see the same thing. This dramatically reduces the chances of errors and other problems. Most importantly, the data will be presented in a real time format. It is important for companies to make sure their ERP systems extend beyond their internal processes. If a company wants to succeed, they must be able to maintain their purchase of goods, and they must also be capable of maintaining strong relationships with their business partners. As you can see, these are issues that are external to the organization, and they must be taken into consideration.

Source: www.exforsys.com

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Risks to your ERP-SAP implementation

Inadequate “as is” documentation

Consider that you are the implementation Project Manager for a consulting firm and you have a client who has selected an ERP system. The project manager and the team started gathering requirements from end users through focus groups, workshops, sessions with SMEs, etc. After obtaining all the details from end users you can easily conclude that you have all the necessary information and requirements to successfully implement the “to be” software system erroneously. During UAT (User’s Acceptance Testing) you can find out that the system does not meet all the end user’s expectations as well as the participants of UAT are unable to authorize your implemented solution previously.

Requirements not scrubbed

Instead of focusing on what the requirement should process, it should focus only on the function that the system will perform. Government organizations implementing an ERP solution document requirements are maintained frequently in web of spreadsheets that makes it difficult to: 1. Track a requirement, 2. Modify the requirement while communicating the changes to the affected parties, 3. assigning requirement ownership, 4. Create an RTM and 5. Manage the lifecycle of the requirement. The ERP implementation partner is also tasked with interpreting the requirements from spreadsheets and it discerns how these requirements will be implemented during realization and verifies that the requirements have been met during testing process. Moreover, the implementation partner of ERP for the sake of meeting deadlines rushes through the blueprint phase does not scour the requirement and makes blind attempt for executing the requirement even when the requirement is not feasible, necessary or consistent with the functionality of the ERP application.

Vendor software problems

The process of testing or maintaining the SAP software will give you errors, and so the needed enhancements, or bugs within your software cannot be addressed with your existing project team and so these errors, bugs, and needed enhancements do not instigate from having customized or implemented SAP erroneously but are rather triggered due to a deficiency with the vendor software. Impact occurred to your business could be manifested in different manners such as client/end user dissatisfaction, inability to roll out specific planned system functionality, financial losses, and unstable system based upon the severity of the problem. These vendor software problems can also get unresolved for prolonged periods. Furthermore, lack of controls, participation from the SAP client as well as audit trails can cause the software vendor problems to erroneously become closed when in fact they were never resolved.

No Scope Verification

Controversial relationships between the client and implementation partner stem from the fact that the client feels that the implemented ERP solution does not cater to their business needs depending on the documented scope, and the end users cannot perform all these tasks that were implemented within the legacy systems without difficulty. And when the client report defects, short comings and bugs against the ERP system were not a part of the scope or documented via a requirement and so the problem is compounded. When the ERP integration partner labels the end user’s reported defects and problems as enhancements mutually rather than problems with the implemented ERP solution the relationship between the implementation partner and the client takes revolve for the worse.

Author: Ron Victor

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Understanding How ERP Vendors Operate

In order for a ERP system to succeed, it must be capable of successfully integrating manufacturing with the other processes of a company. To do this, a number of vendors are adding a wide variety of tools to their products, and example of this would be the integration of sales automation with supply chain maintenance.

This have become some of the most important areas of development. When PeopleSoft was firsts created in the late 1980s, it became a leader in ERP software that dealt with human resources. However, the company wanted to expand, and by the early 1990s, it moved into software programs that dealt with finance.

The company continued to maintain a high level of dominance in this market. In order for a vendor to become successful, they must offer tools in a number of different areas. While it is possible to specialize in certain things, tailoring your products towards multiple industries can allow you to gain a great deal of success. A number of ERP suppliers will offer their products in two basic types, and these are business solutions and industry solutions. The industry products are designed for people who are working in specific industries. An example of this could be finance, communications, education, or healthcare.

The business solutions are designed for companies that work in a wide variety of different areas. For instance, while industry solutions are specific to certain industries, business solutions will be much more diverse. They will combine a large number of different elements into a single unit. A number of ERP vendors have offered what are called "suites." These suites will often be comprised of modules that a client can purchase in groups or a single unit. Three of the most important ERP tools available today are manufacturing, human resources, and finance. There are a number of reasons why these products are so powerful.

The finance tools will allow companies to successfully maintain their financial information. An example of this data would be assets, accounts, budgets, and cash. It can assist a company in managing internal as well as external factors. A company that uses ERP financial products can save a great deal of money over the long term, and the reason for this is because the productivity of the organization will be improved. Enterprise Resource Planning is instrumental in getting rid of time consuming things such as paper management. In addition to this, the company will also be able to improve its ability to make important decisions.

If a company is to succeed in the global market of today, they must be able to properly measure their performance. While this was a great challenge in the past, Enterprise Resource Planning has made things easier. A company is now able to study their processes, earnings, and performance by merging their operational information with their financial information. Once this information is connected together, a company can become more competitive and productive. Synergy is an important part of ERP solutions. The concept of combining multiple processes into a single whole will allow the company to become successful in the long term.

In addition to finance and business processes, it is also important to look at materials maintenance. Enterprise Resource Planning will allow a company successfully automate the process of buying materials and maintaining them. There modules that will track the supplies that are purchased, and it will also make calculations about how these materials should be distributed. It is possible for a company to predict the demand of the market based on history, economic statistics, and data from their employees. They can decide when a product should be producted, and they can do this based on the raw material that is available.

Based on the information revealed in this article, it should be easy to see why ERP is such an important tool. It should also be clear what steps are necessary for a ERP vendor who wants to remain competitive in the market. Through real time planning, it is possible for a company to decrease their inventory and improve the processes of their goods and supplies. Another powerful aspect of Enterprise Resource Planning is that it will give companies a high level of accuracy. They orders and shipments will have a much higher level of precision.

Source: www.exforsys.com

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