A focus on enterprise systems, theory, practice and competitive advantage solutions
TOC o “1-3” h z u Contents PAGEREF _Toc530478127 h 1Introduction PAGEREF _Toc530478128 h 1Body PAGEREF _Toc530478129 h 2Conclusion PAGEREF _Toc530478130 h 8References PAGEREF _Toc530478131 h 9
IntroductionEnterprise Resource Planning is an information system that is designed to simplify the flow of data and information within a business. Furthermore, it could be used to coordinate all resources and activities. Some of the functions that ERD supports are: manufacturing, inventory, shipping, logistics, distribution, invoicing, and accounting.
The ERP solutions came around from applications that focused on materials requirements and resource planning and computer integrated manufacturing. The name came about when a group of people who specialised in software developing were searching for a name that would be appropriate for these boarder systems. (Anon, 2011)
BodyVendors of ERP
When it comes to the main ERP vendors, SAP and Oracle lead the way, but which is the better of the two? Both financial side of both vendors are amazing. Oracle edges the two as its better with risk management than SAP. Also, Oracle beats SAP in the budgeting department as SAP’s software has a basic budgeting (containing the abilities to execute general planning) unlike the Oracle vendor which has a tool called ‘Asset Lifestyle Management’. This allows you to realise the financial potential of your equipment and other facilities. When it comes to pricing, Oracle once again outscores the basic features that SAP contains. Although SAP does the job for businesses, Oracles can prove to be a bigger advantage to businesses. With human resources, Oracle is a good choice. On the other hand, SAP is the better choice of the two vendors as it manages a large amount of HR functions that allows its users to access critical information in one place. Both vendors have good customer relationship management software’s with both having their ups and downs. Oracle does well across the board but not excellent. However, SAP has some great features, but some that are satisfactory. When it comes to supply chain management, both vendors are great again, but in different aspects. Overall, I feel that both vendors are great, and both would be hugely beneficial to businesses, but Oracle is the better of the two as it outscored SAP slightly when it comes to putting in the extra effort where businesses require it most. (O’Shaughnessy, K, 2018)
Open source ERPs
Since ERP’s are largely beneficial to businesses, there are many open source ERP’s which most small-sized businesses use. Firstly, there’s ADempiere. This ERP software contains SCM and CRM and this helps businesses with managing sales, purchasing, inventory and accounting processes in once piece of software. Secondly there is Apache OFBiz. This benefits the accounting, manufacturing, HR, inventory management, CRM, and e-commerce of businesses. Thirdly, there is Dolibarr which provides end-to-end management for small and midsize businesses which allows them to keep track of invoices, contracts, inventory, orders, and payments to managing documents and supporting electronic point-of-sale system. Next there is a classic open source software called ERPNext which includes modules for accounting, managing inventory, sales, purchase, and project management of small and midsized businesses. Finally, Odoo contains modules for project management, billing, accounting, inventory management, manufacturing, and purchasing. These modules can communicate with each other and exchange information efficiently. (Opensource, 2018)
Features of ERP
There are many features that comes with ERP’s. One of them is it providing multi-platform, multi-facility, multi-mode manufacturing, and multi-currency and multi-lingual facilities. Another is that is supports strategic and business planning objectives. It covers all functional areas of businesses like manufacturing, selling and distribution, payables, receivables, inventory, accounts, human resources, purchases etc. It increases customer services and bridges information gap across the business. It provides complete integration and ultimately is a solution for better project management. Also, it offers smart business tools like decision support system, Executive information system, Data mining and easy working systems to enable better decisions. Finally, it eradicates business problems like material shortages, productivity enhancements, customer service, cash management, inventory problems, quality problems, prompt delivery etc. (Anon, 2018)
Businesses believe they must choose either an ERP or a customer relationship management (CRM) to manage their business best. However, both are required so that the business can be as economical as it can be. This is because without the data, ERP provides a CRM and a CRM holds large amounts of data with limited efficiency. (Shaffi, M, 2016) Businesses can integrate their ERP with CRM to boost productivity. Not handing customer information correctly would cost the business hugely as forecasting and decision making would be affected from this. Businesses use ERPs to avoid this from occurring. Businesses would also have a complete view of the customers they are handing with. This means you can track the customers buying habits and order history. Also, it can provide faster access to important information. Without an integrated system, employees become less efficient. On the other hand, with its employees have access to important information in real-time. Also, with an integrated system, it increases mobility by allowing managers to keep track of business operations and employees from different departments making it easier to collaborate. Finally, it improves order, inventory and quote management by turning a proposal generation that is created in the CRM to actual orders using one system. (Ismail, N, 2017)
Firstly, businesses can gain a competitive advantage from adopting enterprise systems as it improves business performance by integrating supply chain management, customer orders management, production planning and managing, shipping, accounting, human resource management, and other activities that modern businesses require. Mishra (Mishra. A, 2014) writes “some companies claim to have reduced their cycle time, improved their financial management, and obtained information faster through ERP software’s.” In an article on the Business News Daily website, Chad (Brooks, C, 2013) writes “One of the largest benefits is the picture it gives business owners of their operation” when reviewing the advantages and disadvantages of ERP’s. An advantage that the software provides to business is allowing them to get a better picture of strengths and weaknesses of the company by tying critical data from all parts of the business into a database that is easy to understand. Also, the software supports businesses by cutting back on duplication as well as saving time by better aligning each department inside the business. This improves the workflow of the business. ERP’s can support businesses by improving their financial reporting and regulation compliances. A drawback of implementing ERP software’s in the business is that it can be costly, however this would only be a problem depending on the size of the business. This is because it could cost millions to install and trains employees to use the system. This could result in the business lacking in productivity throughout. Finally, there are other expenditures like IT infrastructure upgrades. (Brooks, C. 2013) The business values of SCM systems includes: match to supply demand, reduce inventory levels, improve delivery services, speed product time market, use assets more efficiently and reduces supply chain costs. (Shaffi, M. 2014)
Implementation of ERP
It is a difficult decision choosing between the two implementations of ERP (custom and vanilla). Some of the pros of custom is that: it offers big help with unique challenges and manufacturing operations, provides business solutions, design can be modified, provides an advantage over competition by outperforming them. On the other hand, some of the cons are: it is time consuming (implementation process), costly, chance of system failure and finally fixing problems can be time consuming. Some of the pros of Vanilla is: it has a simple design, easy to use, allows you to redefine business processes, cheaper than custom, ensures smoother upgrades and finally easy to maintain. On the other hand, some of the cons are: rigid and difficult to modify, could fail to meet business requirements, leaves you with limited options and finally it may be incompatible with existing operation systems. (Batchmaster India. 2018)
ERP in cloud
Since the early 1990s, businesses have struggled to balance ERP system’s costs and complexity. However, in recent times there have been a third model that has arrived which allows ERP systems to distribute from the cloud. This allows users/businesses to access this through the web browsers. This brings about large benefits, but what are these benefits?
Figure 1: ERP systems deployment model
(Dan Holland at al. 2013, p.6)
Firstly, and most importantly, the cost is one of the benefits of cloud-based ERPs. This is because they are paid through subscription model which includes hosting and support costs as well the software. Secondly, cloud-based ERPs contains basic configuration with a certain amount of range options that is created to meet the requirements of the business. On the other hand, on-premises and hosted ERP systems has vendors and systems that needs to be customised to match a business needs. Finally, one more benefit is the scalability. Dan Holland at al. (2013, p.7) writes “Vendors have been developing new ways for companies to acquire additional software and functions without going through the usual cumbersome software delivery process.” This makes cloud-based systems more appropriate for businesses that are evolving to meet new changing competitive environment. Examples of vendors who do this are SAP and Salesforce.
(Elragal, A. 2015)
One of the positives integrating ERP with Big Data is that it allows businesses to forecast the sales. The businesses would be able to get information about demands of a certain product or customer. It would also improve scheduling of businesses as integrating the two allows businesses to manage projects, maintain large amounts of information and schedule better. (Saxena, K. 2016) Integrating ERP with Big Data allows business to have a better wide-in-scope best practices. Integrating the two also means that ERP system becomes a hub which breaks the barrier of internet data only. (Elragal, A. 2015)
In 2016, Sven Denecken claimed that the future of ERP’s is in the cloud. He claims that this would be best suited to support businesses in this transition. (SAP Technology 2016) Since businesses are evolving, enterprise systems are also evolving. In the future, ERP’s will evolve more to meet more business needs. Based on the current trends, these will be inter-organisational and global. (Faridi, S. et al. N, d.) A future trend of ERP is making is more user-friendly. This would be done by creating attractive dashboards and easy-to-use ERP features and mobility. Adopting Internet of Things along with ERP is another future trend which would open possibilities which makes ERP solutions more intelligent, real-time and flexible. Finally having seamless integration across several applications and platforms is another emerging trend in the ERP market growth. (Anon. N, d.)
Advantages of ERP
Businesses are purchasing and implementing information technologies like ERP systems. This suggests that the ERP software provides them with a competitive advantage over their competitions. Firstly, ERP software’s benefit a business’s supply chain network. This is done by the ERP providing a complete visibility across the network. As a result of this, businesses can keep track of all suppliers, storage, and all the members of the supply chain. This makes an effective way of ordering, manufacturing and shipping of goods for a business. Secondly, it provides a better relationship with customers due to the lack of delays in shipments. Many supply chain businesses without the ERP software’s have suffered from poor business relationships. Thirdly, ERP allows businesses to have control over suppliers and distributors. This means businesses to keep track of what they are always doing. ERP bridges the gap between supply chain partners. This results in a supply chain process to run flawless. Finally, ERP can help businesses reduce costs in many ways. One of them is by improving inventory management as well as enabling a more effective demand planning so production levels can be set to address customer needs. (Dinesh Mangaladurai and Seyed Ali Nemati, 2013)
Figure 3: Dashboard Concept
(Adam Kwiatkowski, P. 2013)
Dashboards provides businesses access to data, allowing businesses to see an overview of the business in one glance. This allows businesses to avoid the process of gathering reports saving the business a lot of time. Having this could also mean that businesses can make better decisions as dashboards offers an unbiased view of the business’s performance overall. Ashley (McKown, A. 2018) writes “rather than providing static information, you and your users can filter data, interact with charts to see changes over time and even allow for an ad-hoc component for on-the-fly. That means you can get as much or as little detail on specific metrics as you want.” Finally, Dashboards can provide businesses with information like where they are going wrong and what they can improve on to improve the business performance. (McKown, A. 2018)
A good conclusion WILL:
be crisp and conclusive in feel, the goal of the whole essay
A good conclusion MAY:
return to something mentioned in the first paragraph
evaluate what has gone before
hint at something you might have followed up had the scope of the question allowed it
Give your opinion. A discursive essay should feel as if you have weighed up the arguments and come to a conclusion at the end.
A poor conclusion will simply restate or summarise points made earlier or be a few sentences stuck on at the end.
ReferencesAdam Kwiatkowski, P. (2013). Dashboard. Image Available at: https://dribbble.com/shots/1185356-Dashboard Accessed 16 Nov. 2018.
Anonymous. (N, d.) ERP Emerging Trends. Online Available at: https://www.deskera.com/erp-emerging-trends/ Accessed 18 Nov. 2018
Anonymous. (2011). What Is ERP and Why Do I Need It. ebook p.2. Available at: http://www.fitrix.com/wp-content/uploads/Whitepaper_What_Is_ERP.pdf Accessed 13 Nov. 2018.
Anonymous. (2018). An Overview of Enterprise Resource Planning. ebook pp.253-254. Available at: https://www.wirc-icai.org/material/7-An-Overview-Enterprise-Resource-Planning%20_ERP_.pdf Accessed 15 Nov. 2018.
Batchmaster Indaia. (2018) Custom vs Vanilla ERP Solutions: Pros ; Cons. Online Available at: https://www.batchmaster.co.in/blog/custom-vs-vanilla-erp-solutions-pros-cons/ Accessed 19 Nov. 2018
Brooks, C. (2013). What is ERP? Business News Daily. online Available at: https://www.businessnewsdaily.com/5010-erp-enterprise-resource-planning.html Accessed 16 Nov. 2018.
Dinesh Mangaladurai and Seyed Ali Nemati. (2013). Impact of Enterprise Resource Planning in Supply Chain Management. ebook Borås, pp.13-14. Available at: http://bada.hb.se/bitstream/2320/13316/1/Nemati%20Durai.pdf Accessed 14 Nov. 2018.
Elragal, A. (2015). ERP and Big Data: The Inept Couple. ebook Lulea: Ahmed Elragal, p.245. Available at: https://www.researchgate.net/publication/268157581_ERP_and_Big_Data_The_Inept_Couple Accessed 19 Nov. 2018.
Faridi, S., Shaikh, H. and Chohan, V. (n, d.). Future of ERP.
Holland, B., Horvath, M. and Manohar, M. (2013). ERP in the cloud. ebook Booz ; Company, pp.4-7. Available at: https://www.strategyand.pwc.com/media/file/Strategyand_ERP-in-the-Cloud.pdf Accessed 18 Nov. 2018.
Ismail, N. (2017) 6 key advantages of ERP and CRM software integration. Online Available at: https://www.information-age.com/6-key-advantages-erp-crm-software-integration-123465846/ Accessed 18 Nov. 2018
McKown, A. (2018) what is The Purpose of a Dashboard? Online Available at: https://www.idashboards.com/blog/2016/09/26/what-is-the-purpose-of-a-dashboard-2/ Accessed 16 Nov. 2018
Mishra, A. (2014). Enterprise systems for management. ebook Ankara, pp.78-79. Available at: https://www.researchgate.net/publication/259486796_Achieving_Business_Benefits_from_ERP_Systems Accessed 13 Nov. 2018.
Opensource.com. (2018) Top 9 open source ERP systems to consider. Online Available at: https://opensource.com/tools/enterprise-resource-planning Accessed 15 Nov. 2018
O’Shaughnessy, K. (2018) SAP vs Oracle. Online Available at: https://selecthub.com/enterprise-resource-planning/oracle-erp-vs-sap-erp/ Accessed 15. Nov 2018
SAP Technology (2016). The Future of ERP is in the Cloud. video Available at: https://www.youtube.com/watch?v=RLa7P-TObzg Accessed 16 Nov. 2018.
Saxena, K. (2016). THE FUTURE OF ERP WITH BIG DATA. 3rd ed. ebook Uttar Pradesh, pp.26-27. Available at: http://www.iraj.in/journal/journal_file/journal_pdf/12-298-147711683825-27.pdf Accessed 19 Nov. 2018.
Shaffi, M. (2014). Achieving Operational Excellence and Customer Intimacy: Enterprise Applications.
Shaffi, M. (2016) ERP/CRM – ERP and CRM Integration – provides a competitive advantage. Online Available at: https://moodle.bradfordcollege.ac.uk/mod/page/view.php?id=263094 Accessed 20 Nov. 2018