Ask The Expert

Ask The Expert

Is CRM part of ERP or a separate business software category ?

Both. As a unique category, CRM normally consists of sales force automation, marketing automation and customer support. As part of ERP, CRM is one of the five ERP pillars, with the other four pillars being financial accounting, distribution or supply chain management, manufacturing and human resources/payroll.

CRM can be described as the development and implementation of a strategy for handling interactions with past, existing or future customers. It covers all customer-oriented activities from potential market identification through to customer loyalty retention. It is technology enabled and involves data capture and analysis, information generation and distribution, and customer-oriented activity. CRM has a central database and integrates with an ERP system and different channels of interaction. CRM involves different participants and has the ability to manage these participants.

Is eresource ERP useful for food industry?

eresource ERP for process industry provides all support for food industry. Client who would like to have detailed information on this subject can contact us with their specific requirements.

eresource ERP for process industry has been developed with various industries like Pharmaceuticals, chemicals, Food and Beverages etc. in mind. An effective ERP system should address every aspect of your business. eresource ERP for process industry helps to cut costs, enables quick market presence of the product, improve customer relation and comply with regulations.

It also important that process industry ERP must be equipped with a good quality control module integrated. eresource ERP has been designed in unique style and it helps Quality Control department with its integrated sophisticated Quality Control / Module which not only monitors quality by control plans in purchasing and production but also provides real-time process capability index for quick review.

In eresource process industry ERP system, factory floor is always on the focus, specifically on the operator/user who is the most intelligent agent in a process environment. With eresource ERP system implemented, automatic data capture provides real-time updates to your inventory, improving the speed, ease, and accuracy of data capture. Each operator/user is connected through the ERP system, to everyone else in the plant floor, and to all plant floors within the organization. This operations-centric process environment-where information is shared within and between plants and planning in real time – is truly the efficient supply chain.

Why should SMB's consider implementing an ERP system?

Globalization and IT sophistication are forcing even small businesses to automate processes and integrate applications to facilitate stronger communication, data collection and analysis. ERP software systems are integrated business solutions intended for the planning, managing, controlling, and accounting for all of a company’s resources.

It is the administrative and operational requirements, not the size of the company that determines if an ERP solution is required or not. Even small companies require most of the same basic ERP functions needed by larger companies.

eresource’s cost-effective, web-based ERP solution, combined with eresource’s flexible and affordable pricing structures, provides SMBs with a technology solution having all of the functionality and benefits of a “big company” ERP system – but with minimal investment and risk…

What is the ROI potential for eresource ERP system?

If your business is suffering due to customer complaints about poor service or finding difficulty in expanding the business due to your outdated information system it is time you must go for implementation of eresource ERP.

eresource ERP system will help deliver solid customer satisfaction by automating clerical tasks, improving on-time shipments, reducing inventory and providing information to make quick decisions.

eresource ERP offers the functionality, technology platform and implementation expertise to help you realize the full benefits of an ERP solution.

What is more exciting about eresource ERP is, it not only addresses all your day to day business challenges, you will also get a healthy return on your investment quickly and faster than you probably thought. eresource ERP can yield higher net profits by:

Streamlining your supply chain
Improving customer relationship
Reducing operational cost
Allowing real-time access to information
Providing foundation to growth

How effective are the security measures in eresource ERP ?

Organizations should not wait for an embarrassing and potentially devastating event to find out that security controls in their ERP systems are inadequate. To overcome this risk organizations need to implement an appropriate access strategy.

As businesses grow, information systems support whole communities of users like customers, suppliers, partners and employees, who all count on the secure exchange of a wide variety of information to place orders, pay bills and keep records up to date.

Customers, vendors, partners and employees all need access to the right ERP information at the right time and, increasingly, from anywhere. Yet these users work on many different systems and access data from multiple locations. All have different passwords and authorizations.

Organizations must not only manage the security issues of your own employees, but also increasingly those of customers, suppliers and other business partners.

eresource ERP addresses your security needs in authentication, access control and user management. An integrated solution identifies the user, determines what the user can do, determine the level of trust the user should receive, protects your data.

Our ERP security specialists have the expertise, tools and methodologies to make sure that your eresource ERP system includes a cost-effective security approach that dovetails with your firewall, virus scanner, spam control and tape backup systems.

How will Customer Relationship Management (CRM) help my business ?

The eresource ERP CRM module helps you know your customer better and includes many features such as activities, history, related contacts, addresses of your customers and their relations with your competitors. The flexible database structures enables you whatever information you would like to keep on your customer and maintains such information for your future reference.

The eresource ERP CRM module also facilitates control and organization of entire sales process, from offer to invoice. It empowers your sales staff by providing details such as inventory status, estimated costs and delivery time, risk status, habits and special demands, and previous trades during offer stage.

The eresource ERP CRM module offers an effective customer complaint management tool which also includes repairs processing and document management.

How will the eresource ERP Finance Module help improve auditing?

In our Finance Resource Management module, transactions require document attachments before posting. This would ensure that there are no backlogs for documentation. For the auditor, the documents wil be displayed on click of a button to review a transaction.

In addition, eresource ERP’s financial accounting provides company-wide integration that is essential to strategic decision making. The financial accounting module in eresource ERP gives you the ability to centrally track financial accounting data within a single framework, of multiple companies, multiple branches and chart of accounts..

Why ERP is considered to be the backbone of e-business ?

Business enterprises in India are in the process of a major transformation due to globalization and the deregulation of Indian economy, coupled with fundamental changes in the business models due to the emergence of Information Technology based business practices.

Most of the enterprises in developing countries, such as India, are in the process of implementing Enterprise Resource Planning (ERP) system in alignment with organizational transformation and process of re-engineering initiatives. ERP system promise benefits that range from increased efficiency to transformation of quality, productivity and profitability.

However, its implementation poses some unexpected organizational challenges and changes that can be structural as well as cultural in nature. ERP not only helps establish world-class best business practices and brings transparency to the organization but also demands for empowerment and flexibility in decision making process.

The most promising argument is that, to thrive in the e-commerce world companies need to transform their internal business process with the deployment of ERP system. Hence, ERP is considered to be the backbone of e-business..

Is classroom study key to successful ERP implementation ?

The introduction of Information Technology, especially enterprise systems such as enterprise resource planning (ERP) systems, is a common way of implementing organizational change today. Such enterprise system implementations frequently come with new software systems and business processes that substantially alter workflow and jobs.

While the annual investment of several millions of rupees in ERP systems is staggering, estimates indicate that there could be chances of failures in implemented systems and such failures have been observed even in highly successful organizations. Organizations that successfully implement ERP systems, including new software and business processes, have reported enormous benefits, such as greater efficiency and effectiveness at the individual employee and organizational levels.

One of the primary causes of failure is the inability of managers to effectively manage the change process. Managers frequently fail to consider the organizational environment and culture relying, instead, on success stories of some organizations that used a big-bang strategy, an implementation strategy in which all modules of an ERP system are implemented simultaneously and in a short period time, to manage their own change. The result can be catastrophic for firms, with consequences up to and including going out of business as a result of a failed ERP implementation.

Given this backdrop, it is important to teach diverse aspects of ERP implementations to make today’s information systems and business management curricula relevant to organizational practice. Yet, the effective integration of ERP related knowledge into curricula continues to be a challenge with some suggesting that relevant knowledge should be imparted in a wide range of classes. Of the many areas related to ERP systems, the ability of students to understand that different strategies of ERP implementation may be necessary in different scenarios is an important one, especially for those who may go on to manage such implementations.

A “one-medicine-does-not-cure-all-ailments” argument goes well with when it comes to ERP implementation strategies. Yet, mistakes and failures continue. Sorely needed is a teaching approach that can open the eyes of managers, present and future, to the different strategies to ERP success, and when a particular strategy is appropriate. With a good teaching approach with minimum three cases of examples could help the student identify the areas where a failure is bound to happen and may rectify it. It is also a must that each student is assigned to read only one of the three cases, lessening the total workload, but the students understand the differences in approaches and successes of ERP implementations related to all three cases…

Being a student, I would like to know more about Benefits of ERP

Here is a quick look at the ERP Benefits

To say in short, ERP systems integrate all business management functions, including planning, inventory/materials management, engineering, order processing, manufacturing, purchasing, accounting and finance, human resources, and more.

ERP software programs are being developed and updated all the time. There are different types of ERP software brands available in the market, but companies must choose the right ERP system to suit their needs. India’s leading web-based ERP solution provider eresource ERP even offer mobile capabilities so that you can always have a finger on the pulse of your business activities.

The biggest advantage of an ERP system is with its real time capabilities and the ability to see what is going on with your company as it happens. It is handy when you deal with high volume of business process. With an ERP system, your company will never have inventory shortages or wasted time spent transferring files.

An ERP system provides the solid operational backbone. The system enables the Manufacturers and distributors to function promptly, which will able to improve the volume of production and fulfillment of orders while reducing costs. By optimizing manufacturing and distribution operations with ERP, the companies are also be able to focus on new business opportunities.

Here is a quick look at the benefits the ERP system has to offer:

Streamlining processes and workflows with a single integrated system.
Reduce redundant data entry and processes and in other hand it shares informartioin across the department.

Establish uniform processes that are based on recognized best business practices

  • Improved workflow and efficiency
  • Improved customer satisfaction based on improved on-time delivery, increased quality, shortened delivery times
  • Reduced inventory costs resulting from better planning, tracking and forecasting of requirements
  • Turn collections faster based on better visibility into accounts and fewer billing and/or delivery errors
  • Decrease in vendor pricing by taking better advantage of quantity breaks and tracking vendor performance
  • Track actual costs of activities and perform activity based costing
  • Provide a consolidated picture of sales, inventory and receivables…

Why Indian ERP system best suited for Indian industries?

Enterprise Resource Planning (ERP) Solution software should address all the needs of an enterprise within the social context of the country in which the enterprise operates. This would imply that the local accounting practices, locally applicable taxation laws are fully adhered to in implementing the various business processes.

Many imported ERP software systems must incorporate India specific features before implementation as per the specifications of its client, where as an Indian ERP solution has already been programmed to take care of the national industry’s interest.

Another feature of an India-made ERP like eresource ERP software system is its design. It has been designed to cater the need of the Indian users with fully knowing their working environment and requirements.

Industries also consider easy accessibility to their solution providers while choosing the right ERP for their enterprises. It also to be noted that eresource Infotech serves all our customers equally, unlike some overseas vendors who have a strategy to serve only large clients.

Cost factor also stands as one of the reasons why Indian ERP solution is best suited for Indian industries. Many a time the huge cost involved in it scares away industries from implementing ERP solution, depriving the benefits the system could offer. To overcome this precarious scenario, eresource ERP has introduced an affordable ERP, keeping in mind the Indian industries, specially the small and medium scale enterprises….

How long does it take to implement eresource ERP ?

We would like say on record that our implementation process is fastest in the world today. Our on-time implementation guarantees 100 percent go-live in just three months. We offer the services of experienced consulting and technical support teams, extensive implementation documentation, planning guides, customization services, and comprehensive training classes available on-line and on-site.

eresource offers webinar to new customers, which designed to give them a solid foundation for their implementation. It also gives an insight into the functionalities and implementation process of eresource ERP..

Why should I choose eresource for my ERP solution ?

The five main reasons to choose eresource ERP solution are:

OPERATIONAL EFFICIENCY:
Automates all business and functional processes thereby increasing overall operational efficiency.

CUSTOMER SATISFACTION:
eresource ERP solution help in enhancing internal business processes and enables organizations to improve customer satisfaction.

EASY ACCESS:
Our web-based ERP solution enables easy accessibility and availability of timely information, which results in better decision making and forecasting.

FLEXIBILITY:
eresource ERP packages have a flexible and scalable structure thereby enabling organizations to adapt and cater to future business expansions and requirements.

COST-EFFECTIVE:
eresource ERP for Small and Medium Enterprises is affordable, quick to implement thus enabling the SMEs to focus on growth and improvement of their business rather than worrying about software.

And over and above, eresource Infotech work with you jointly to deliver the most favorable ERP solution for your organization, to help you further maximize your return on the investment.

How quickly can our business benefit from eresource ERP ?

We are sure that the impact of implementation of eresource ERP would be visible in your business within a short period. One of our objectives is to provide the Indians SMEs with a home-grown ERP solution which they could afford and bring the desired benefit in their business quickly. eresource ERP software has been designed and developed accordingly.

The added feature of eresource ERP is its quick implementation process. It is race against time and money for many of Indian SMEs and by fully understanding this situation, eresource ERP has introduced our Guaranteed On-Time Implementation offer.

Eresource offers a full refund for any implementation fees where the agreed-upon ERP go live date is delayed, provided the customer meets all defined milestone deliverables on time. Eresource is the only ERP solution provider that has earned extremely high marks from all their existing customers for its customer support.

What is the difference between MRP software and MRP module of ERP ?

Material Requirement Planning, popularly known as MRP, was developed during 1960s. This was a proactive manner of inventory management. This technique fundamentally explodes the end product demand obtained from the ‘Master Production Schedule’ (MPS) for a specified product structure (which is taken from Bill of Material) into a detailed schedule of purchase order or production orders, taking into account the inventory on hand.

MRP is a simple logic but the magnitude of data involved in a realistic situation makes it computationally cumbersome. If undertaken manually, the entire process is highly time consuming. It therefore becomes essential to use a computer to carry out the exercise.

MRP successfully demonstrated its effectiveness in reduction of inventory; production and delivery lead times by improving coordination and avoiding delays, thus making commitment more realistic. MRP proved to be a very good technique for managing inventory, but it did not take into account of other resources of an organization. Due to this shortcoming a modified MRP logic, popularly known as ‘closed loop MRP’ has been developed. A new module called Capacity Requirement Planning (CRP) has been incorporated in this. This module manages the capacity of the organization to produce a particular product. A feedback loop is provided from the CRP module to MPS if there is not enough capacity available to produce.

Later the need was felt to integrate the financial resource with the manufacturing activities. From this evolved an integrated manufacturing management system called Manufacturing Resources Planning (MRP II).

Transition from MRP II to ERP happened some time later because the basic MRP II system design was suffering from a few inherent drawbacks such as limited focus to manufacturing activities, assumption of the mass or repetitive production set ups, and poor budgetary and costing controls.

The shortcomings o MRP-II and the need to integrate these new techniques, led to the development of a total integrated solution called Enterprise Resource Planning (ERP), which attempts to integrate the transactions of suppliers and customers with the manufacturing and service environment of the organization to produce the best possible plan. Today there are further development in the ERP concept and evolution of Web-enabled ERP..

How BPR plays a critical role in ERP implementation ?

Processes, organization, structure and information technologies are the key components of BPR, which automates business processes across the enterprise and provides an organization with a well-designed and well-managed information system. While implementing ERP, the organizations have two options to consider.

Either the organization must reengineer business processes before implementing ERP or directly implement ERP and avoid reengineering.

In the first option of reengineering business processes, before implementing ERP, the organization needs to analyze current processes, identify non-value adding activities and redesign the process to create value for the customer, and then develop in-house applications or modify an ERP system package to suit the organizations requirements. In this case, employees will develop a good sense of process orientation and ownership.

This would also be a customized solution keeping with line of the organization’s structure, culture, existing IT resources, employee needs and disruption to routine work during the change programmer likely to be the least. It could have a high probability of implementation. The drawback of this option is that the reengineered process may not be the best in the class, as the organization may not have access to world-class release and best practices. Moreover, this may be the only chance to radically improve in the near future and most attention should be paid while choosing the right ERP. Also, developing an in-house application or implementing a modified ERP is not advisable.

The second option of implementing ERP package is to adopt ERP with minimum deviation from the standard settings. All the processes in a company should conform to the ERP model and the organization has to change its current work practices and switch over to what the ERP system offers. This approach of implementation offers a world-class efficient and effective process with built-in measures and controls, and is likely to be quickly installed.

But if the employees do not have good understanding of their internal customer needs or current processes, or if these processes are not well defined and documented, then it is quite possible that while selecting the standard process from the ERP package, employees may not be able to perceive the difficulties likely to be encountered during the implementation stage. Employees would lack process ownership and orientation. Other than technical issues, issues like organization structure, culture, lack of involvement of people etc. can lead to major implementation difficulties, and full benefits of standard ERP package may not be achieved. It may lead to a situation where the organization may have to again reengineer its processes. This could be a very costly mistake.

There is also a third option of reengineering business process during implementation of ERP. But it does not considered to be a practical option and is likely to cause maximum disruption to existing work. It should not be forgotten that during BPR and ERP initiatives, routine work is still to be carried out and customers need to be served.

What is the reason for ERP market growth in India ?

ERP market in India steadily growing for the last few years and the main reason for this enormous growth can be attributed to the inability of order system to manage the conversion to year 2000. There are also other factors such as industry best practices, easy and faster implementation and good cost predictions.

Another factor behind the growth is that already existing clients acquire more licences and modules. The number of employees using the ERP system is increasing and the ERP clients who have started with the basic modules are going for subsequent applications. There is also a trend to replace customized system with standard application packages, like an ERP system.

India is expected to present ERP suppliers an important marketplace as manufacturing companies are significantly investing in technology solutions to improve their manufacturing operations.

According to observation made by some experts in the field, the ERP market started showing solid organic growth since 2004 as IT spending improved.

The Indian ERP market experienced CAGR (compounded annual growth rate) of 25.2 during the period of 2004-2009. The market was $83 million in 2004, and is projected to be over $250 million in 2009, according to a research report.

The report further clarifies that manufacturers in India are increasingly implementing ERP solutions to ensure that decision makers have the required information visibility across the value chain.

Majority of Indian manufacturers are small by global standards, requiring easy-to-use ERP solutions to meet their specific process requirements, including localisation needs to address the continually evolving tax and statutory requirements. Small and medium enterprises across industry verticals and micro verticals, such as automotive, pharmaceuticals, and textiles, are leveraging ERP solutions to gain sustainable competitive advantages..

How ERP systems improve company's business performance ?

Enterprises Resource Planning (ERP) solution enables the task involved in performing a business process quickly and efficiently.

With ERP, when a customer service representative takes an order from a customer, he or she has all the necessary information to complete the order. Everyone else in the company sees the same computer screen and has access to the single database that holds the customer’s new order. As and when a department completes their work with the order, it is automatically routed via the ERP system to the next department for the next process.

The order can be tracked any time of point by any department by logging into the system. The order process moves so quickly through the organization, and customers get their orders faster and with fewer errors than before. ERP can extent that application to the other major business process, such as employees’ benefits or financial reporting.

The entire gamut of ERP activities are summarized below:

ERP facilitates a company-wide integrated Information Systems covering all functional areas such as manufacturing, sales and distribution, accounts, payables, receivables, inventory, human resources. Etc.

ERP integrates and automates most business processes and share information enterprise-wide in real-time, thereby improving customer service and the corporate image.

ERP provides complete integration of the system not only across departments but also across companies under the same management.
ERP bridges information gaps across a company and focuses on key issues such as productivity enhancement, customer service, cash management, inventory, quality control and prompt delivery. Etc.

ERP is the solution for better project management.

ERP provides business intelligence tools like decision support system, executive information system, reporting, data-mining, early-warning system, enabling people to make better decisions and improve business processes.

ERP not only addresses the current requirements of the company but also provides an opportunity for improvement and refinement in the business process on a continuous process…

Is the 'flexible' attitude of users hampering ERP success in India ?

Success of ERP performance is directly proportional to the adherence to standard operating procedures. However, we find that very common complaint against ERP is its rigid structure and disciplined standard operating procedures. Often there are ridiculous demands and expectations from users, which are conflicting with standard operating procedures. Hence ERP is either blamed or made to fail. When the user says he wants flexibility in ERP, actually he wants the official allowance to deviate from standards set for value generation. The repercussions of such flexibility are tremendous, including the loss of value.

For example, here goes a typical style of customer negotiations. The sales people of a manufacturing company arbitrarily fixed unit price and raised sales orders against customers. After physical material dispatches, suddenly the customer started negotiating with sales and the rates were changed. The sales person then wanted to pass these entries in ERP. No good system will support such incongruous requirements. Here, the user wants flexibility in addressing these issues from ERP and also expected that everything should happen automatically. To settle and account for such changes, one has to pass a number of reverse entries in ERP.

Unfortunately, some consulting companies charge extra from clients for automating such absurd provisions. The same thing happened with the above company also and they landed up with ‘auto reverse entry module’ supporting the existing system. More ironically, this feature of ERP soon became so popular that the company asked a similar module for purchase transactions. The ultimate chaos is always observed in finance and costing modules where multiple figures of profits, inventory values, sales income, taxes, etc. linked to the same transaction are found. Nobody could really gather any meaningful information from such sets of data over a period of time. At the end the user gets flexibility and the organization gets punishment.

There are also some cases where flexibility going to the extent of unethical business practices and in such cases illegal transactions can also be carried out.

Here is one peculiar requirement that once observed from a user. He asked for various options of selecting report sizes (A3 or A4) to use with different printers for printing the same reports. ERP was expected to be flexible enough to accommodate multiple report sizes based on printer selection. The same user never used in his earlier tenure any computerized output and did not even know how to load paper into printer.

The major flexibility expected by Indian ERP users can be summarized as “I want to do transactions any way, later on it should get corrected.” Hence we find demand of provisional entries, temporary databases, notional requirements, etc. The fundamental principle of ERP is doing right things right at first time is not understood and deviations are expected to be regularized. We find many of such cases, ultimately making ERP as unused ornament lying in the bank locker..

How accurate are sales forecasts ?

ONE should understand that the sales forecast is not exact but should be as accurate as one could reasonably expect for the business he/she is in and that, through measurement and correction of errors, the sales forecast accuracy is improving on a product by product basis.

It is mainly the job of planning, purchasing and production departments to be able to meet the sales forecast given this expected level of accuracy. However, it is not necessary to have an accurate forecast to plan and control your business; you do need everyone to work to an agreed forecast that is updated regularly with any significant changes.

Forecast accuracy also will depend on the historical business background you are in. If you are in a mature and stable business you should expect a reasonably accurate forecast. If the business is new and growing, the forecast will be less accurate. In either case the way to determine what your forecast accuracy should be is to start with the accuracy you have achieved in the past. This is the minimum starting point for forecast accuracy. If you do not have a formal forecasting process at the moment, you should start now.

Forecast accuracy should be measured in units of production not value unless there is no sensible unit of production (a company selling a service for instance). An important reason to measure forecast accuracy is to be better able to plan the future supply chain and value adds in factors such as selling price and even exchange rates into the forecast accuracy which do not affect the supply chain. Average selling price and exchange rate should be forecast as a separate exercise for financial planning.

Once you are measuring sales forecast accuracy, the next stage is to improve it. This is achieved by investigating any forecast errors outside the historical accuracy of the forecast.

Finally, the sales plan should be the date and quantity of shipments you expect your customer may require. If your customer requests products in line with the plan, but you are unable to ship that product, it is still a hit as far as plan accuracy is concerned. On the other hand, if your customer requests shipments on a different date from the plan it is a miss even if you could have shipped it according to the forecast plan…

What are the tangible and intangible benefits of ERP system ?

Tangible benefits are those measured in monetary terms and intangible benefits cannot be measured in monetary terms but they do have a very significant business impact.

Tangible benefits:
Improves the productivity of process and personnel
Lowering the cost of products and services purchased
Paper and postage cost reductions
Inventory reduction
Lead time reduction
Reduced stock obsolescence
Faster product / service look-up and ordering saving time and money
Automated ordering and payment, lowering payment processing and paper costs

Intangible benefits:
Increases organizational transparency and responsibility
Accurate and faster access to data for timely decisions
Can reach more vendors, producing more competitive bids ;
Improved customer response
Saves enormous time and effort in data entry ;
More controls thereby lowering the risk of mis-utilization of resources
Facilitates strategic planning
Uniform reporting according to global standards…

What does the term 'Best Practice' mean in ERP context ?

The best practice in ERP can be defined as the utilization of fundamental set-ups to the maximum possible to produce the desired performance in terms of ‘customer focus, zero waste of all the resources and value creation’. Tangibly, it leads to increase in quality and service, and reduction of cost and response time.

ERP enjoys having a strong skeleton based on these best practices. All the workflows in ERP are so thoughtfully maintained that it ensures that the user automatically follows the best practice. It won’t allow the user to bypass or modify the predetermined course of action that may create ‘non-value added activity’..

Should ERP implementation be carried out module wise or all the modules at one go ?

The answers to these questions are case specific. It will be difficult for to generalize the theory for it. Mostly decision on this depends on the readiness audit result, available strength of consulting human power – both internal and external – relevance of ERP at various units, timeframe, and the budget.

Therefore it is advisable to go for the key modules such as sales order processing, material planning including purchasing and factory management at the first stage. Modules such as human resources, document management, maintenance and even financials can be implemented later. If there is more than one business unit involved it is best to implement in a relatively easy but not untypical unit first then roll out the implementation to the other units..

Why it is not advisable to have an in-house developed ERP ?

We must understand that development of ERP is not like other software development projects, which are normally carried out focusing on automation. We find such serious mistakes being committed by some big and small companies in India. The EDP department in most of the cases is responsible for such in-house development work. Though they do consult with outside consultants, the basic theme of ERP is completely found missing in these types of products.

Looking at the efforts and approaches, it is very difficult to believe that the EDP department will come up with such international standard ERP product. Though we do not rule out the possibility of someone must have succeeded it in up to some extent, but it’s not advisable to do. The reason being that is, we should leverage when we have strengths and, instead of building up a new strengths, co-opt a partner for the missing strength.

Today, when quality ERP products are well within the reach of most of the companies, one should not opt for costly in-house development. This ERP is not at all ERP except integration. The essence of ERP is the free BRP, which is absolutely not happening with these products. If we describe this in-house development correctly, then we can say that such approach is typically observed in software development company where only the ‘specification gathering and automation’ takes place…

What is Vendor-Managed Inventory (VMI) ?

Vendor-managed inventory (VMI) is a process where the manufacturer generates orders for the distributor based on demand information sent by the distributor using Enterprise Resource Planning (ERP) system . During this process, the manufacturer is guided by mutually agreed objectives for inventory levels, fill rates and transaction costs.

VMI is a planning and management system that is not directly tied to inventory ownership. Under VMI instead of the distributor monitoring sales and inventory for the purpose of triggering replenishment orders, the vendor assumes responsibility for these activities.

In the past, many manufacturers operated vendor-stocking programmes where a representative visited a distributor a few times a month and restocked their suppliers up to an agreed level. VMI replaces these visits with information gathered from cash registers and transmitted directly to a manufacturer’s computer system via ERP. Now, manufacturers can monitor sales of their products and decide when to initiate the replenishing procedure.

To understand VMI, let us look at to business models:

The Conventional Business Model: When a distributor needs a product, they place an order against a manufacturer. The distributor is in total control of the timing and size of the order being placed. Under this model, the distributor maintains their inventory plan.

Vendor Managed Inventory Model: The manufacturer receives electronic data that informs it about the distributor’s sales and stock levels. The manufacturer can view every item that the distributor stocks as well as the true point of sale data. The manufacturer is responsible for creating and maintaining the inventory plan. Under VMI, the manufacturer generates the order, not the distributor….

There is a feeling that ERP may lead to unemployment. Is it right ?

As you are aware that with a successful ERP in place, information will be freely available and any casual user can very easily generate any ad hoc queries or reports. The system will automatically check for the compliance for most of the standard rules. As such, a number of routine work will disappear. However, with the information system in place, many of the middle level managers can be empowered to perform far more interesting analysis, develop insights and suggest innovative schemes for improvement.

Often these are the real benefits of ERP. If an organization is not imaginative enough to empower people to perform such analysis, obviously ERP can be discredited with creating unemployment.

Take a look at the Indian Railway’s Computerized Reservation System. With the networked computer terminals, one can manage the issuing of the tickets with fewer staff. However, there are more reservation staff today than ten years back. The average counter hours across the country have increased from 6 hours a day to 12 hours per day. Now a person can make reservations from any place to any place from any one of the terminals, significantly improving service quality.

In a way Railway Reservation System may have taken away a few jobs involving certain categories but created many more jobs. In all such cases looking at the head count may be an incorrect way to approach the problem. The goal must be to provide better quality service and better quality of jobs….

Any particular industry has a greater benefit from an ERP implementation ?

Any company that builds a product; designs, sources keeps inventory, markets, and distributes needs an ERP system. It is difficult to pinpoint a business that doesn’t need ERP.

For any business that has accounting, operations, and customer-facing applications, ERP has applicability across the board. What’s going to be more subjective is the depth of the solution. That’s going to be a function of what you can afford.

Even having a cash register and cheque book can be referred as an ERP, if you want. Well, yes, but most companies are going to need something that’s more complex than that…

What is Supply Chain Management (SCM) software ?

Supply Chain Management (SCM) software is designed to enhance communication, collaboration, and coordination with vendors and suppliers, transportation and shipping companies, intermediaries, and other partners by enabling faster bi-directional information sharing.

With a supply chain management software in place, a business can manage its entire network more effectively by overseeing all activities across all suppliers, production plants, and storage and distribution facilities.

It becomes easy to streamline and centralize their distribution strategy, and eliminate the logistical errors and lack of coordination that can lead to delays.

SCM increases visibility and enhance collaboration across the entire supply chain by sharing valuable information such as demand trend reports, forecasts, inventory levels, and transportation plans with suppliers and other partners.

It can also minimize storage costs and improve cash flow by better managing inventory levels and it also helps improve logistics tracking, corrects break-downs, inefficiencies, or problems in the supply chain before they become unmanageable.

What makes eresource's web-based ERP solution different from other ERP software ?

Eresource’s web based ERP solution that combines all business operations into a unified database system, in real time and online, including sales, service, operations and finance.

Eresource ERP system gives regular instructions to staff from any part of the world and also gets reports from them from any part of the world. Staff will be able to interact with other staff and keep record of their work sharing and reporting – to speed up jobs. Allow customers login and know the status of their job and send communications about orders.

Eresource ERP Solution helps you in automating the enterprise and speeds up transactions across the organization. Eresource ERP is the leading web-based ERP solution provider in India..

What is ERP enabled Business Process Reengineering (BPR) ?

Business Process Reengineering (BPR) is the fundamental rethinking and radical redesign of business processes of an organization to achieve dramatic improvement in critical contemporary measures of performance such as cost, quality, service and speed. In simple terms, the process of examining current processes and redesigning those processes to increase the efficiency and effectiveness of an organization is called BPR.

More precisely, BPR means the rapid and radical redesign of strategic, value-added business processes and system, policies and organizational structure that support them to optimize workflow and productivity in an organization.

BPR concurrently pursued breakthrough improvements in quality, speed, service and cost by leveraging the potential of information technology while addressing the issues of organizational strategies and vision for change. Breakthrough improvement means quantum gains of 5 to 10 times compared to incremental improvements of 20-30 per cent. These improvements are generally characterized in terms of improvement of product and service quality at low cost and less time lag between product designs to marketing…

What is the basic structure of a good ERP solution ?

ERP is the part of the interlinked processes that make up the total business and financial impact. Almost all the typical application systems are nothing but the data manipulation tools. They store data, process them, and present them in the appropriate form whenever requested by the user. In this process the only problem is that there is no link between the application systems being used by different departments.

An ERP system also does the same thing, but in a different manner. There are hundreds of such data tables which store data generated as a result of diverse transactions. These rather integrated for the speedy and accurate results required by multiple users, for multiple purposes, for multiple sites, and at multiple times.

Therefore, ERP solution implies that it be:

Flexible: An ERP system has to have modular application architecture. This means that various functionalities are logically clubbed into different business process and structured into a module which can be interfaced or detached whenever required without affecting the other modules. Comprehensive: It should be able to support variety of organizational functions and must be suitable for a wide range of business organizations.

Web-enabled capability: It should not be confined to the organizational boundaries; rather, it should support the on-line connectivity to the other business entities of the organization.

Best business practice: It must have a collection of the best business processes applicable worldwide…

How can we keep our ERP database protected at all times ?

With advanced administration techniques and redundant server set-ups, you can ensure that your ERP database is available and readily accessible at all times. By monitoring performance around-the-clock, system administrators can immediately identify and troubleshoot problems, to prevent productivity slow-downs caused by down time. Additionally, mirroring your ERP database using redundant servers can provide a much-needed backup that can be utilized in the event of a major system failure.

Security measures

There are many steps that can be taken to improve the security and protection of your ERP database. For example, role-based IDs and passwords will ensure that users can access only the data they are authorized to view, based on their job function or position within the company. By making users change their passwords on a regular basis, you can add an additional layer of security. And, data encryption, firewalls, and other measures can help you keep hackers, cyber-criminals, and other outsiders far away from your ERP database.

Disaster recovery

Without a solid, well-designed back-up plan in place, natural disasters such as flood and fire can bring permanent loss of the mission-critical information contained in your ERP database. We always advice our customers to have a mirror-server located in a different location to avoid such a drastic situation.

Apart from this, ERP database should be backed up at least once a week, although daily back ups are recommended and offer the most protection, to an off-site location. ERP systems such as eresource ERP is also equipped with auto recovery system.

So, the most important thing to remember when putting measures in place to protect your ERP environment is to not only safeguard the ERP database and related systems, but to secure all other systems that share information with it…

How important is ERP training and education ?

All users of the ERP system should be trained properly in using the system to its fullest. Different groups of people in the company will have different training needs. Managers need more focus on the decision-making and analysis features of the system while the clerical staff need more focus on how to perform their jobs. But all the users must be trained in the ERP basics, overview of the system and its working, how an action by an employee triggers a host of events throughout the organization, how automation will help, what processes are changed and so on.

Educate everyone so that they understand what is going to be achieved with the new system. Additional education should include total quality management and change management strategies. Also the training sessions should be used to gain acceptance for the ERP system by dispelling the myths about ERP. When the employees do not understand what the new system is and what is supposed to do and how to operate it, they will not use it or use it incorrectly. This can lead to failure of the system. Best option is to train department managers in how to use the system and have them train the users….

Can organizations succeed without ERP system ?

If an organization is very small in size, caters to the niche market and has very limited scope, then it can sometimes succeed without ERP. But today’s organizations are becoming large and the products are becoming more and more complex in size, sophistication and technologies used. Also, a single group does not necessarily build the different components of a product.

This is the era of multi-site, distributed production, where different groups situated in different parts of the world develop the components of a system. In such a scenario, managing the activities of an organization is a very complex task. If proper control mechanisms and procedures are not in place, very soon the operations can get out of control and products and organizations can fail.

What is data mining ?

Powerful systems for collecting data and managing it in large databases are already in place in most large and medium-scale companies. However, the bottleneck of turning this data into your success is the difficulty of extracting knowledge about the system that you study from the collected data.

Below are all the questions that can probably be answered if information hidden among megabytes of data in your database can be found explicitly and utilized.

 

  1. What goods should be promoted to this customer?
  2. What is the probability that a certain customer will respond to a planned promotion?
  3. Can one predict the most profitable securities to buy/sell during the next trading session?
  4. Will this customer default on a loan or payback on schedule?
  5. What medical diagnosis should be assigned to a particular patient?
  6. How large are the peak loads of a telephone or energy network going to be?
  7. Why does the facility suddenly start to produce defective goods?

Modeling the investigated system and discovering relations that connect variables in a database are the subjects of data mining.

Modern data mining system self learn from the previous history of the investigated system, formulating and testing hypotheses about the rules, which this system obeys. When concise and valuable knowledge about the system of interest had been discovered, it can and should be incorporated into some decision support system, which helps the manager to make wise and informed business decisions.

What is ERP Implementation Life Cycle ?

The process of ERP implementation is referred as “ERP Implementation Life Cycle”The following are the steps involved in completing the lifecycle.

 

  1. Shortlist on the basis of observation
  2. Assessing the chosen packages
  3. Preparing for the venture
  4. Gap Analysis
  5. Business process reengineering
  6. Designing the System
  7. In-house Guidance
  8. Checking
  9. Preparing the employees to use ERP
  10. Post Implementation process
  11. Rectifying errors in ERP implementation

What are the reasons for ERP system failure ?

ERP solutions are designed for a large audience of companies looking to achieve success by following a template of best business practices. However, the system often fails to achieve its promise because people who are supposed to be the main users of the systems reluctant to change their attitudes.

This leads to costly program modifications to replicate those processes. This, in turn, can result in unnecessary manual tasks and issues of software maintenance, which neutralize the original benefits of the software.

When making an ERP software selection, examine the processes encoded in the software. If you can agree to model your company’s best practices based on those processes, you’re choosing the right solution. If you can’t, continue looking.

Once the ERP system is chosen, it’s not uncommon for management to turn the project over to a subordinate to manage the implementation. The problem is that the subordinate, who is usually chosen from the end-user base or IT department, typically isn’t given the authority to implement necessary business process changes.

Project management is a discipline, which requires the ability to delve into detail while keeping a perspective on the original business objectives. The project manager needs to have the ability to overcome impasses through a judicious combination of political guile and management direction.

The most successful ERP projects are led by a member of the management team who has actively participated in both the software selection and implementation efforts. When selecting your project manager, choose the one who has the most to gain from the ERP system.

What is the connection between ERP and e-business ?

E-business stands for ‘electronic business’, which involves communications and doing business electronically through the Internet. E-business is defined as the use of electronically enabled communication networks that allow business enterprises to transmit and receive information.

It can significantly improve business performance by strengthening the linkages in the value chain between businesses (B2B) and consumers (B2C). Besides increasing efficiency in selling, marketing and purchasing, e-Business achieves effectiveness through improved customer service, reduced costs and streamlined business processes. Furthermore, e-Business creates a strategic, customer-focused business environment for shared business improvements, mutual benefits and joint rewards.

Companies use the Internet to implement customer relationship management (CRM) and supply chain management (SCM) capabilities, which enabled them to link their operations seamlessly with customers and suppliers.

For example, a beverage manufacturer with 40% growth and Rs. 700 crore in annual sales revenue sells its products through 150 distributors nationwide as well as general stores and cafes in the country. By using ERP system and e-Business platform, the salespersons can track sales and promotions through the Internet and are provided assistance and suggestions to enhance their performance. The sales persons and distributors have access to commission reports and they can track and adjust sales orders. Through consolidating its financial, compensation, sales and depletion data into a single report, the organization prevents out-of-stock and partial shipments. The increased need for more labour force to handle customer service issues in the past was also eradicated by integrating ERP system with e-Business.

Understanding data migration process

Data migration is the process of moving required volume of data from existing systems to new systems. Existing systems can be anything from custom-built IT infrastructures to spreadsheets and standalone databases. Data migration encompasses all the necessary steps to cleanse, correct and move data into a new system. Technological changes, change in providers, software updates or data warehousing/data mining projects make such delicate and critical operations necessary.

 

A good data migration should allow one to:

 

  1. Reduce risk: Data being an organization’s most critical business asset, it is essential that any manipulation be carried out without any disruption.
  2. Lower operational expenses: Data migration is a one-off activity triggered by certain circumstances. The data migration tool or solution reinforces the organization’s resources which can remain focused on its ongoing continuous core activities. Improve data quality: The cleansing and correction solutions ensure perfect data integrity after it has been migrated. From a user and development perspective, the migrated data results are completely optimized.

From a user perspective, the data migration solutions should make sure that a strategy is put in place to achieve maximum flexibility and quality.

What is the difference between ERP and accounting software ?

Accounting package handles only individual business functions of accounts whereas Enterprise Resource Planning (ERP) package handles the entire range of business functions of an organization.

ERP system is a fully integrated business management system covering functional areas of an enterprise like Finance, Human Resources, Production, Sales and Logistics etc. It organizes and integrates operation processes and information flows to make optimum use of resources such as men, material, money and machine. ERP is a tightly integrated closed loop business solution package.

ERP system enhances a manufacturer ability to accurately schedule production, fully utilize capacity, reduce inventory, and meet promised shipping dates.

Is it difficult to manage ERP implementation projects ?

An Enterprise Resource Planning (ERP) implementation project is complex in nature, involves a lot of people, require the coordinated effort of a number of groups. It also needs substantial investment and has a long completion period. To successfully implement an ERP system is a very difficult task and requires huge efforts from all the stakeholders.

ERP systems have fundamentally changed the work of IT organizations. The sheer size and complexity of ERP implementation makes managing these projects difficult. There are really two basic sides to ERP management, people and technology. An ERP packages touches the entire organization and can affect nearly every employee. In some cases, an ERP project manager may not be able to know who will be affected, which can lead to some nasty surprises. One mismanaged ERP implementation can lead to huge loss of time and money.

The project manager must cope with many tasks. Whether you are implementing one module or multiple modules, you must ensure consistently and full integration across the various sub-projects, which is an enormous effort even for an experienced system architect.

Is it advisable to go with less well known company for ERP implementation ?

The members of the implementing team that are going to be dedicated for your company during the implementation are a key success factor to consider. Rather than concentrating on having a big name behind your implementation, we would suggest you get more details of this less well known company.

If this small company has good capabilities among them and seem to be up to their promises in the contract, then this would be satisfying.

Sometimes big named companies would issue a sub contract to smaller implementing companies, but usually and for some reasons such implementations fail.

Again, you might get excited during the discussions held, but nothing is going to be guaranteed if not documented in the contract.

What is mean by flexible reporting and analysis ?

Operational reports from the ERP system show recent events, but they do not satisfy managers’ requirements for planned versus actual monitoring, forecasting and exception analysis. Without business intelligence, managers must compile these reports manually from standard reports.

By allowing flexible reporting and analysis, a business intelligence system can unlock the value of the data in ERP reports. The information in the ERP daily orders report, for example, can provide information that will help in better decision-making and can be of use to the decision-makers in more than one department. For example,

 

  1. Which product shipments are not in schedule?
  2. What products are selling best? Which are the ones that are not moving?
  3. Which customers are most profitable?
  4. Which customers are placing repeat orders?
  5. Which customers have made purchases to get the maximum discount?
  6. Did any customers purchase a product that requires another product?

Business intelligence system provide on-line analytical processing (OLAP) and data mining tools that managers can use from the desktops to answer the types of questions above and to discover significant trends and patterns. For example, analysts can drill-down to obtain progressively more detailed information about retain sales, change metrics, view graphs and charts, re-use reports, create ‘what if’ analysis and generate best-case and worst-case scenarios. Valuable in its own right, ERP information becomes even more valuable when it is combined with information from other sources.

How data mining and data warehousing are related to ERP ?

Modeling the investigated system and discovering relations that connect variables in a database are the subjects of data mining. Modern data mining system self learn from the previous history of the investigated system, formulating and testing hypotheses about the rules, which this system obeys.

When concise and valuable knowledge about the system of interest had been discovered, it can and should be incorporated into some decision support system, which helps the manager to make wise and informed business decisions.

Below are all the questions that can probably be answered if information hidden among megabytes of data in your database can be found explicitly and utilized.

What goods should be promoted to this customer?
What is the probability that a certain customer will respond to a planned promotion?
Can one predict the most profitable securities to buy/sell during the next trading session?
Will this customer default on a loan or payback on schedule?
What medical diagnosis should be assigned to a particular patient?
How large are the peak loads of a telephone or energy network going to be?
Why does the facility suddenly start to produce defective goods?

Data warehousing

Implementing a data warehouse provides significant benefits – some tangible, some intangible. The benefits include the following:

 

  • More cost-effective decision-making:
    A data warehouse allows reduction of staff and computer resources required to support queries and reports against operational and production databases. This typically offers significant savings. Having a data warehouse also eliminates the resource drain on production systems when executing long running, complex queries and reports.
  • Better enterprise intelligence:
    Increased quality and flexibility of enterprise analysis arises the multi-tiered data structures of a data warehouse that support data ranging from detailed transactional level to high-level summary information. Guaranteed data accuracy and reliability result from ensuring that a data warehouse contained only “trusted” data.
  • Enhanced customer service:
    An enterprise can maintain better customer relationships by correlating all customer data via a single, data warehouse architecture.
  • Business engineering:
    Allowing unlimited analysis of enterprise information often provides an insight into enterprise processes that may yield breakthrough ideas for reengineering those processes. Just defining the requirements for data warehouse could results in better enterprise goals and measures. Knowing what information is important to an enterprise will provide direction and priority for reengineering efforts.
  • Information system reengineering:
    A data warehouse that is based upon enterprise-wide data requirements provides a cost-effective means of establishing both data standardization and operational system inter-operability. Data warehouse development can be an effective first step in reengineering the enterprise’s legacy system.

What are the benefits of Supply Chain Management (SCM) ?

SCM can help you transform a traditional linear supply chain into an adaptive network with the following benefits.

 

  • With the increased visibility into the supply chain and adaptive supply chain network, you can be more responsive. You can sense and respond quickly to changes and quickly capitalize on new opportunities.
  • By offering a common information framework that supports communication and collaboration, SCM enables you to better adapt to and meet customer demands.
  • You can track and monitor compliance in areas as environment, health and safety.
  • Information transparency and real-time business intelligence can lead to shorter cash-to-cash cycle times. Reduced inventory levels and increased inventory turns across the network can lower overall costs.
  • With SCM, you can lower operational expenses with timelier planning for procurement, manufacturing and transportation. Better order, product and execution tracking can lead to improvements in performance and quality – and lower costs. You can also improve margins through better coordination with business partners.
  • Tight connection with trading partners keep your supply chain aligned with current business strategies and priorities, improving your organization’s overall performance and achievement of goals.

What are the common goals of ERP and TQM ?

Both Enterprise Resource Planning (ERP) and Total Quality Management (TQM) share similar goals – customer satisfaction, productivity improvement, increased competitiveness, waste reduction, effort duplication and so on. ERP system will help in achieving these goals when used in conjunction with TQM.

Here ERP has the role of an enabler of the TQM principles and philosophies. ERP is also benefited by the implementation of TQM. Effective use of TQM creates better performing ERP systems. TQM brings problem solving techniques and continuous improvement opportunities for all ERP systems. The effective use of TQM helps companies obtain the maximum return on investment from expensive investments.

Therefore, the organizations applying or targeting TQM in their businesses, ERP software has become an essential necessity.

What are the significance and advantages of S&OP

The Sales Operations Planning (S&OP) is management’s statement of intention and is the master scheduler’s authority to organize the use of the capacity and the supply of material to meet the plan. It also provides the means of comparing resources available against those required and this check is carried out by using resource requirements planning – an interactive what-if module.

The plan takes into account the fact that forecasts and plans can vary and, therefore, a provision is made for adjustments. This, difference is taken into account by storing the well-determined level of extra finished goods.

The significance benefits achieved through effective S&OP are:

 

  • Increased forecast accuracy
  • Reduced inventories
  • Improved lead times
  • Increased constraint visibility

S&OP is a proven process to bridge the gap between manufacturing and sales. In fact, S&OP is likely to reduce the quantity of communication, but substantially increase the quality of communication between manufacturing and sales regarding demand and supply.

A real benefit of implementing an S&OP effectively is that an adversarial relationship moves to co-existence and ultimately to real teamwork.

Taking into account its features, S&OP in a way helps in driving the ERP strategy. Today’s business demands close contact with the customers and working with lesser inventory, S&OP helps in both. It is called a “People Process’, and thus is significant for people across departments in the organization.

What is bolt-on ?

Bolt-on is an artificially intelligent, comprehensive execution system providing very specific functionality or technology to complement ERP systems. Bolt-ons employ client-specific business rules to meet unique needs. There are many useful applications of this type. The usual means of connection to other organizations with ERP systems is through software components.

Most software has historically been delivered as inflexible code focusing on its originally intended application. A much easier approach is the idea of components where separate, encapsulated software code is written that is easier to manage, upgrade and connect to host systems. Open systems can easily accept modifications, additions or linkages to external software. Components make open systems possible.

Since the underlying philosophy in early ERP systems was internal integration, there was initially little apparent value in developing open systems. However, the ERP user market soon identified the benefits of best-of-breed selection of modules, sometimes across vendors. Vendors then realized the need to offer applications components. The focus shifted from internal design coherence to the ability to communicate with external software. Service-based architectures were created enabling business transactions and data transfer from outside the core applications.

Some examples where bolt-on software is used are product data management, product life cycle management, customer relations, e-procurement, order tracking, warehouse management, data mining systems, etc.

What are the points to be remembered while choosing an ERP package ?

Points to remember:

 

  1. Choose an ERP package that is industry-standards based
  2. Look closely at maintenance costs
  3. Evaluate your processes and decide if changing them to fit a particular ERP suite would be beneficial.
  4. Discuss a vendor’s stability with the vendor representatives and outside experts
  5. Find out how much customization assistance the vendor will offer
  6. Be efficient in contract negotiations
  7. And finally you must remember that you can’t get everything you want.
  8. Do accept that there is always going to be a functionality gap. Usually, you have to let 10% go.
  9. If the gap is more than that then you must look further.

What is the role of BI (Business Intelligence) in an ERP package ?

One of the newer components of most modern midmarket ERP packages, BI (Business Intelligence) shines a bright light into the heart of a company’s performance. In general, an ERP suite’s analytics or BI tools allow users to share and analyze the data that the ERP applications collect from across the enterprise from a unified repository.

The end result is more informed decision making by everyone from executives to line managers to human-resources professionals to accountants. A variety of automated reporting and analysis tools can help streamline operations, as well as improve an organization’s business performance. With greater control and visibility of data across the enterprise, business leaders can better align the company’s operations with its overarching strategic goals.

BI solution could be a combination of Data-warehouse, dashboards, ad-hoc reporting etc. In the simplest terms, BI is just a facilitator for reporting and hence it is the decision making solution for Businesses so that they can cut costs and hence increase profits.

What are the necessary skills, knowledge and attitude an ERP manager should have ?

An ERP Manager must have the ability to exercise overall day-to-day control of project leaders and the resources of the program, balancing the needs for program success with the skills and capabilities of the staff. He should also be a good communicator and must interact regularly and comfortably across various departments — from individual to the ERP Management Team level in order to negotiate solutions that foster strong relationships and continued success of the project.

The ERP Manager is responsible for the development of an effective planning process, for the creation of an integrated project schedule that encompasses all aspects for the ERP Program and for the actual execution in conformance to plans and the continuing update and adjustment of plans and execution to fit changing circumstances.

Implement and lead an effective project change management process that pro-actively identifies project changes and incorporates an appropriate impact analysis and approval for such changes across the ERP program team. He is responsible for creating and maintaining a monthly financial management process that incorporates actual financial performance to forecasted performance and justifies all variances; accurately forecasts expenditures in alignment with the project budget and supports the budgeting process throughout the project lifecycle. He also must follow the company’s financial processes and policies.

Actively directs the development and maintenance of plans, practices and assignments to identify, quantify and contain the occurrence and potential impact of risks and risk events on the execution of a program and its likelihood of success.

An ERP Manager is responsible for making timely, effective decision at the project level and communicating those decisions both up and down the program structure, while approaching needed decisions in a logical and thoughtful manner and weighing conflicting information.

Leadership quality including the ability to motivate, inspire, counsel and facilitate individuals and teams to take responsibility and accountability for the goals will be an added advantage.

What is the importance of ERP maintenance phase ?

The ERP system needs regular maintenance in order to function properly. The ERP plan needs revision and updating as per the changing situations in the organization. We have already seen that the ERP system should be reviewed regularly.

The review comments and suggestions should be incorporated into the system. Also the ERP system needs fine-turning as the employees become familiar with it. Once the ERP system has reached a stable state necessary action should be taken to improve the performance.

The ERP tools that are implemented are another area that needs maintenance. The project manager should be in regular contact with the vendors to see whether any upgrades or updates are available. All patches and upgrades should be installed to ensure that the tools are working at their maximum efficiency.

Employees should be given refresher courses on the new functionality that gets added with each new upgrade. The training documentation should also be updated so that it is in sync with the procedures and processes.

What is ERP II? Can eresource ERP be placed in ERP II category ?

ERP II is a solution that includes the traditional materials planning, distribution, and order-entry functionality strengthened by capabilities like customer relationship management (CRM), human resources management (HRM).

Such a system can quickly, accurately and consistently operate an entire organization. It delivers information in an instant to the people who need it. It manages the access to that information by establishing security roles and ratings that define which employees can use certain pieces of information. It also addresses the issue of multiple office locations by making the solution web-based, so employees can access the system no matter where they may be.

Businesses are utilizing the Internet more and more. It is no longer just a tool for e-mail, research and single transaction commerce. It is quickly becoming a tool for globalizing a business – a tool that allows an organization to tie together its employees, its suppliers and its customers. It enables the free flow of information and the next generation of solution will be built upon it.

Eresource ERP, India’s leading web-based ERP solution is integrated with all these latest modules and therefore can be termed as extended ERP or ERP II.

How important is ERP in textile industries? Is eresource ERP a suitable ?

Traditionally the textile industry is highly concerned with the design or manufacture of clothing as well as the distribution and use of textiles. However, the industry has been changed extremely in the last few years.

Flexibility and rapid response has become essential qualities for any successful textile business. Achieving them requires dynamic management of the entire organization.

Eresource ERP system maintains the benefits of a standard package with a high level of adaptability, ensuring that the solution can be tailored to almost any requirement. Its modules could be configured to the needs of any textile business, whatever its size.

Eresource ERP provides a framework within which textile industries can organize their business and manufacturing know-how to create a vital management resource. Of course industry decision makers have to have rapid access to company data, but the most pressing need is to have answers to critical questions such as “What happens if…?”, “How can we…?”.

It is here that eresouece ERP demonstrates its superiority as an ERP tool.

Can we purchase individual modules of eresource ERP ?

Though it is practically possible to purchase resource ERP modules individually, technically it is not advisable. This is because many of the modules are integrated functionally and must be purchased together.

Keeping in mind the requirements of customers, eresource has recently introduced a novel system by providing the client only the modules what they required. This new package allows the customer to choose an ERP system with modules required for them. By purchasing this filtered ERP modules organizations will able to implement an ERP system within their limited budget and their employees can enjoy working in a comfortable environment of an ERP system.

What are the roles and responsibilities of ERP consultants ?

Consultants are responsible for administering each of the phase of the implementation so that the required activities occur at the scheduled time and at the desired level of quality and with effective participation of all those who must participate.

For keeping the promises that the consultants have made during the negotiations, they have to transform their approaches and methodologies into detailed work plans. The methodology will have to be converted into tasks and should be allocated to the right people. The time schedule for each phase and each task has to be determined and the project plan has to be finalized.

Consultants should add value to the project. They bring know-how about the package and about implementation. This also known as practical knowledge is derived from their expertise, which stems from practical experience, because the consultants have seen many project and have made or seen many mistakes, they can avoid the phenomenon of ‘re-inventing the wheel’.

They will know what will work and what will not. Thus, by eliminating the trial and error method of implementation and doing it right the first time the consultants help in saving huge amounts of money, time and effort.

Why are financials, the first module implemented in many ERP packages ?

  1. Financial module impacts all others modules.
  2. It also provides the basic pulse of an organization.
  3. Other modules cannot be implemented without the financial module in place.
  4. Successful implementations of financials show up immediately reinforcing the faith of an organization in ERP.
  5. All these factors explain the fact that financial modules are taken up first.

How to measure ERP performance ?

There are innumerable means of evaluating ERP performance. Each of them has their own advantages and disadvantages. There is no hard and fast rule as far as the appropriate method to be used is concerned. However, the organizations must decide and stick to one particular method, which must be put in use uniformly.

It is usually recommended to execute it midway through the ERP implementation. The next appraisal shall take place when the process is nearing completion. After ERP begins to operate the assessment shall take place within the time gap of 3, 6 and 12 months. These appraisals must be done on the basis of some set criteria. If these steps are not followed then the likelihood of the ERP’s success is limited.

The frequency of assessment depends on many factors such as the volume of business, ability to adapt to change and the characteristics features of the software that is in use. The performance assessment will not serve the purpose if these determinants are not taken into account. Besides, any other measure deemed to result in the benefit of ERP should be accounted for.

Why ERP implementation is a challenging task ?

There are few information systems whose design and implementation challenge an organization like enterprise resource planning (ERP). Done right, a new ERP implementation can dramatically improve business processes. But when an implementation fails huge amounts of money and effort could be misspent.

It is important to be aware of how ERP as a technology evolved, what its strengths and weaknesses are and the nature of important implementation challenges. Further, understanding of how ERP and legacy system metadata can be used to simplify implementation and help organizations best plan for this exciting new challenge.

ERP solutions provide integrated applications that access standardized enterprise data – replacing the unorganized legacy system. Following are the some of the challenges to a successful ERP implementation.

 

  1. Inadequate definition of requirements
  2. Resistance to Change
  3. Inadequate Resources
  4. Inadequate Training and Education
  5. Lack of Top Management support
  6. Unrealistic expectations of benefits and ROI
  7. Miscalculation of time and effort
  8. Poor communications
  9. Software business process incompatibility
  10. Poor project design and management
  11. Poor ERP package selection

What is meant by stabilization period in ERP implementation ?

After an ERP system goes live there is what has been referred to as a “stabilization period” that typically lasts three to nine months. During that period most companies should expect some dip in their business performance and should expect that they will need to manage through that dip.

During the stabilization period, all those processes that once were just plans are now being used. New software and processes may be unfamiliar to the users. Hence, there may be problems with the quality of the work, and consequently the system may not operate as it was hoped. To avoid this, it is critical that users get the appropriate training at the right time.

During the stabilization period, processing and network response times may not be adequate for the implemented system, forcing changes in bandwidth and processing capabilities. Where does support for these problems come from? Internally, the original project team can evolve to provide support for user needs, assist with additional training and make necessary system changes.

What is the difference between ERP and BPR ?

The major characteristics of Business Process Re-engineering (BPR) are cross-functional orientation, process innovation, and customer-focus, clean slate and radical change in the organization’s business process by usingDownload ERP Tour Enterprise Resource Planning (ERP) systems.

Innovations and major improvements in the performance of business processes are difficult to achieve without leveraging the potential of ERP. Most of the business processes are developed before modern computers and communication technologies existed. ERP and BRP go hand in hand. Therefore, it is recommended that ERP System should be used to innovate the business processes and not just automate.

ERP can be used not only to automate transactional and laborious business processes but also to redesign the work management systems in an organization. ERP improves coordination and information access across organizational units, thereby allowing for more effective management of task interdependence.

How and when the customization of ERP software is carried out ?

Customization of ERP software becomes necessary in every part of the technology and because of this technology development most of the organizations tend to customize their software as per their requirement. Customization is the process of fitting the chosen ERP software to the needs of a specific organization.

Whenever the processes represented in the ERP software differ significantly from the processes used by the firm one has two options. First is to build the organizational process into the ERP software through customization. The second one is to change the practice followed by the firm to suit the process native to the ERP software.

Does ERP fit in all businesses ?

Enterprise Resource Planning (ERP) system is used in almost any type of organization. It doesn’t matter whether it’s large, small or what industry it falls in. The main goal of ERP is to integrate data and processes from all areas of the organization and unify it, to provide ease of access and an efficient work flow. ERP Systems usually accomplish this through one single database that employs multiple software modules.

ERP systems can cover more than two functions and integrate them into one unified Data Base. Human Resources, Supply Chain Management, Customer Relations Management, Financial, Manufacturing functions and Warehouse Management functions can be found on modern companies under one umbrella – the ERP system.

In today’s competitive business environment ERP is becoming a essential business application for most of the organizations.

The reason behind this is, for any business success depends on having the ability to keep pace with rapidly changing customer and industry demands and execute in a short amount of time, the ability to quickly seize new opportunities and the flexibility to achieve sustainable business growth.

In the changing business environment, the time available for an organization to react to the market trend is very short. To survive, the organization must act quickly, gathering and analyzing the data – both internal and external. Any mechanism that will automate this information gathering and analysis process will enhance the chances of the organization to beat the competition.

What is the reason for end users accepting eresource ERP ?

The decision-makers of organizations have been fully convinced about the benefits of eresource ERP system. Our officials and technicians have succeeded in convincing and successfully implementing ERP system in most of these organizations which took the morale of the decision-makers and the end users to new height.

Another factor is eresource ERP business application is driven by business goals and not IT goals. This application also making a good communication with the end users in a language they understand well. Another major factor for end users accepting this application is that training and skills to use eresource ERP can be developed quite easily. The above factors all together contributed for the user acceptance of eresource ERP.

Do all ERP systems cater to the need of all departments of an organization ?

Different companies have different ERP requirements therefore there are many ways to implement a solution. But collectively the term ERP refers to large applications that replace a multitude of independent applications or legacy system of an organization which caters to the need of all departments.

Some companies limit the scope of their ERP software to a few vital applications that will help them streamline processes or make information more easily available. A company that wanted to just integrate accounting and finance with payroll, for example, also could use an ERP solution.

In such cases, organizations might prefer to use ERP to integrate certain systems and leave legacy systems in place that are better able to handle specific tasks.

How has the power of ERP improved using the Internet ?

The value from the ERP investment can be enhanced by taking advantages of a web-based ERP system for your organization. When you make your Enterprise Resource Planning (ERP) solution a Web-based interface system, the Internet becomes an enterprise information utility for employees, partners, suppliers and customers.

With the facilitation of an ERP system to a Web-enabled system, all participants – engineering and product design, vendors and suppliers, manufacturing, sales and marketing, distributors and customers – can gain access to the system when they need it for their mutual benefit.

For instance, a retailer can use its ERP system to adjust its charges for shelf space and to better manage inventory levels. Product designers, both for manufacturing and service companies can capture customer information in real-time, refining their products for greater market appeal or customizing them for key customers. In a financial services company, a product designer can capture information about customers’ investment habits, which will help to develop new investment packages. By making the ERP system a Web-enabled interface, you can integrate the supply chain, speeding time to market and gaining manufacturing efficiencies.

Why it is recommended to change business practice to suit the ERP software rather than customizing the software ?

Before implementing an ERP software the organization needs to analyze current processes, identify non-value adding activities and redesign the process to create value for the customer, and then develop an ERP system package to suit the organizations requirements.

A key contribution of ERP software is the bundled business process knowledge that comes along with ERP software. These processes have evolved over the past two decades of ERP implementation in some of the most well-managed corporations around the world. By adapting to those processes that have proved successful in some of the finest corporations around the world, an organization implementing ERP would get the advantage of these “best of the breed” practices. That is the reason behind the consultant recommendations.

What are the functions of ERP project management team ?

The project management team is responsible for conducting the scheduled work, administering the project, communicating with the in-house team and the consultants.

The team members should monitor the implementation team’s progress, assess the amount and quality of the contribution of the team members – both in-house and consultants – and resolve the issues that exist. Since the project management team has the project manager, the consultant team’s head, the vendor team’s head and the work team leaders, most problems could be resolved at this level. If any problems cannot be resolved at this level, then the project manager will escalate it to the executive committee for resolution.

The project management team should also ensure that the company personnel and the consultants are working together as a team and that there is full co-operation between the two groups. They are also responsible for ensuring that the consultants are transferring their knowledge to the in-house team and all the documentation is done properly. The project management team should make sure that even after the external consultants and vendor representatives leave the system will run smoothly.

What does supply chain integration mean ?

When eBusiness is integrated with ERP, the whole extended system provides a vision of business processes that span multiple businesses and enterprises. In the most ideal case companies should be able to connect disparate platforms, applications and data formats across the value chain, including not only suppliers but customers as well. Furthermore, companies should retain the flexibility to change and add functions to applications as business needs evolve. Companies need to be able to adapt their ERP systems to the emerging world of eBusiness.

The major partners of the supply chain are the suppliers, the organization and the consumers and any other partners involved in the business transactions (like banks, middlemen, etc.). Supply chain refers to the complex network of relationships that organizations maintain with trading partners to procure manufacture and deliver products or services. Supply chain encompasses the facilities where raw materials, intermediate products and finished goods are acquired, transformed, stored and sold.

These facilities are connected by transportation links along which materials and products flow. Supply chain consists of many companies, individuals and institutions. Supply chain management is the coordination of material, information and financial flows between and among all the participants.

Is ERP system more than a sales solution ?

ERP is no longer just a competitive advantage. It is an important requirement for every enterprise. It has been undoubtedly proved that ERP is completely necessary to deal with businesses in every nook and corner of the market. ERP just does not work in only one way. It gets to focus on all the relevant aspects that decision makers need to take into account when they are facing important decisions.

In today’s hypercompetitive markets, small and midsize companies are faced with ever-growing challenges and they could overcome these challenges if only they are fully prepared. Business enterprises must be occupied with the infrastructure, whether it is in the form of man power strength or the software system, which could streamline and handle the workload successfully and help deliver the result in a desired manner.

It is also important that to keep pace with the rivals in the field every organization need to make some smart moves to take their business ahead and help yield a pre-conceived profit. A good resource planning system required to support any smart move to make the desired results.

Therefore it is entirely wrong to classify ERP system as sales solution software. It is much more than that.

How the ERP system can make impact on organization ?

With the fast developing of industries and the need for managing procedures and resources, it has become very important to have a tool which can help you coordinate several activities, and the best one is ERP. TheDownload ERP Tour advantages of having ERP are many. It gives you the opportunity of integrating every procedure of your business while improving the quality of several areas simultaneously. These areas include human resources, accounting and operations. In addition, ERP helps to increase your production levels and to control your costs more efficiently, and this means that you will be able to control the whole enterprise more efficiently.

A very important facility of the ERP systems is that they increase the availability of the information, helping companies to have information in real time to make decisions and accurate prognostics regarding the organization. It is important to mention that ERP systems are a very powerful tool when it comes to processing and organizing financial data. It improves the development of the commercial activity in the short and long term.

In the enterprise management module you can perform integral strategic planning, keeping an eye on the daily activities and having fluent communication with the investors. The human resources module allows you to make decisions and optimize the company’s investments regarding employees. With all of this one can see that an ERP system brings visible advantages.

Another important consideration to make is that the implementation of ERP takes time and generates deep changes in the way you do business. But the important thing to remember is that every enterprise can see the benefits of the ERP systems, although for the first period it may only seem like an investment. The benefits indeed are really bigger than the costs, and it is very valuable l to invest in an ERP system.

How ERP system is useful in Quality Control Management ?

Quality Control Management is a way of life for a company. It has to be introduced and led by top management. This is a key point. Attempts to implement Quality Management often fail because top management does not lead and get committed but just delegates and pays lip service.

For the past few years, ERP systems have became one of the most powerful tools for quality control management. The important characteristics of quality control management include customer-driven quality, top management leadership and commitment, continuous improvement, fast response, actions based on facts, employee participation and a quality management culture.

Each part of the company is involved in total quality, operating as a customer to some functions and as a supplier to others. The engineering department is a supplier to downstream function such as manufacturing and field service, and has to treat these internal customers with the same sensitivity and responsiveness as it would external customers.

Commitment and personal involvement is required from top management in creating and deploying clear quality values and goals consistent with the objectives of the company and in creating and deploying well-defined systems, methods and performance measures for achieving those goals.

The main objectives of the quality control module are the construction and maintenance of the filing of the quality control. The control of reception, internal rejections, clients, claims, providers and evaluations of the same corrective actions are related to their follow-up, and are also some of the goals that this module offers. Furthermore, it is also helpful for internal auditory procedures and for the control of auditory providers.

These systems and methods guide all quality activities and encourage participation by all employees. The development and use of performance indicators is linked, directly or indirectly, to customer requirements and satisfaction, and to management and employee remuneration.

What is Difference Between E-commerce and E-Business ?

E-commerce is buying and selling using an electronic medium. It is accepting credit and payments over the net, doing banking transactions using the Internet, selling commodities or information using the World Wide Web and so on.

E-Business in addition to encompassing E-commerce includes both front and back-office applications that form the engine for modern E-commerce. E-business is not just about E-commerce transactions; it’s about re-defining old business models, with the aid of technology to maximize customer value. E-Business is the overall strategy and E-commerce is an extremely important facet of E-Business.

Thus e-business involves not merely setting up the company website and being able to accept credit card payments or being able to sell products or services on time. It involves fundamental re-structuring and streamlining of the business using technology by implementing enterprise resource planning (ERP) systems, supply chain management, customer relationship management, data ware housing, data marts, data mining, etc.

Should ERP be implemented by Big Bang theory ?

The answer to this question is case specific. It will be difficult to generalize the theory for it. For big organizations Big Bang theory is the best choice. Mostly decision on this depends on the readiness audit result, available strength of consulting human power – both internal and external – relevance of ERP at various units, timeframe, and the budget.

The drawback of the big bang implementation approach is that the project is often rushed. On this process sometimes details are overlooked, and sudden changes to business processes may affect negatively. Many times the projects that implement an overly aggressive big bang approach are more risky and result in less satisfaction with the system’s abilities to meet important business requirements.

Therefore it is advisable to go for the key modules such as sales order processing, material planning including purchasing and factory management at the first stage. Modules such as human resources, document management, maintenance and even financials can be implemented later. If there is more than one business unit involved it is best to implement in a relatively easy but not untypical unit first then roll out the implementation to the other units.

What is the difference between ERP and WMS ?

It is important to understand the difference between Warehouse Management System (WMS) and Enterprise Resource Planning (ERP) system.

Though many of today’s ERP systems have tightly integrated WMS systems, the earlier version ERP systems had a limited participation for WMS. This may be the reason why many companies installed a WMS software separately to manage their warehouse activities.

An advanced system takes into account the data of the product, status, lot, dates, dimensions, location, area, region, owner and inventory details. For this function, WMS determines which would be the best location to store the recently received product. Some of the ERP package is not supported to determine the proper location. The selection of an ERP system with all these functions must be evaluated thoroughly before implementing it.

An effective ERP package gives the possibility to assign tasks automatically to the staff using rules and parameters previously defined. An intelligently integrated WMS module in an ERP system can give directions to the workers in an organized way.

Why is ERP important to a company ?

An organization such as Manufacturing that has no ERP will be running on many kinds of software that do not allow interaction. Customization also may be difficult it in some cases. This will negatively affect the optimized functioning of organization’s business activities.

The organization such as manufacturing, construction, trading etc will be facing hardship in many areas of its functions. The engineering design of the software will be needed in order to improve the product, and to follow the client’s behavior and choices since the first contact is quite important. Administration of the different receipts interdependence will be very complex, such as invoices regarding materials purchases, general expenditures or salaries.

All of these things change when ERP Manufacturing system is implemented. Information flows constantly and allows you to follow a client’s processes at any moment, no matter which part of the process they are going through. Purchases and expenditures are registered in a centralized database which allows you to have close control over these activities. In this regard ERP helps you to prevent possible abuse.

A powerfully integrated ERP system enables interactions of marketing, sales, quality control, products processes, supply lines, stocks and many other areas and it can be in a single database. This will eliminate the occasional loss of and retyping errors. It integrates all departments and functions across a company in a single computer system that is able to serve all those different department’s particular needs.

An ERP system also automates business processes by placing them into a useful format that is standardized and common for the whole organization. Moreover it could even be used between their suppliers and customers

How Enterprise Resource Planning system can help cash management ?

ERP offers two options for making payments. Firstly, the cheque feature allows you to print a cheque for a vendor immediately, but not against a specific bill, which is comparable to the bill centric payment cycle found in accounts payable.

It is possible for you to verify the transaction by attaching a support document. And secondly, it is possible for you to record and post cheque you write through a chequebook. The system can also smoothly handle the transfer of funds from one cash account to another.

You can examine the cash balance report to verify the balances of your account to determine if you need to make a transfer, and you can also check to see if there are sufficient funds.

With the ERP system in place, the received payments can be deposited in two ways. The receipt function records both the receipt of payment and its deposit if you have already deposited the payment.

You may also receive payments, accumulating them in an account for later deposit. At this point you can create a “deposit slip” on the system, which posts the amounts of the deposits

How can ERP database be kept protected all the time ?

ERP database is perhaps one of the most vital assets a company owns. Keeping that ERP database fully protected from threats such as security breaches, performance issues, and technical breakdowns is crucial to ensuring continuity and consistency in most important business activities.

A threat to ERP database can affect all the major operations of a company and management of human resources, production planning, procurement, accounting and finance and other critical back-office function could come to a halt.

There are some measures that can be taken to enhance the security of a company’s ERP database. Role-based IDs and passwords will ensure that users can access only the data they are authorized to view, based on their job function or position within the company. A practice of changing the password on regular basis by the users will be a good habit that could act as a ideal ERP data protection. And, data encryption, firewalls, and other measures can help you keep hackers, cyber-criminals, and other outsiders far away from your ERP database.

Organizations are also to be prepared with other natural disaster recovery management. Today there are few companies that are prepared in the event of a major fire break out or a flooding situation. To face this kind of natural disaster the companies must be occupied with well-designed back-up plan in place. Loss of critical information and database could cost the company millions of rupees and could take the company back to years in terms of business growth.

What is pre-valuation screening of ERP package ?

Search for a suitable ERP system starts when a company decides to implement an ERP system. It is not an easy procedure because there are hundreds of ERP vendors, all claiming to have a system that is suitable for your organization. It is not practically possible to evaluate each every package. Therefore it is better to limit the number of packages that are evaluated to less than five. It is always better to do a thorough and detailed evaluation of a small number of packages, than going a superficial analysis of dozens of packages. Hence, the company should do a pre-evaluation screening to limit the number of packages that are to be evaluated by the committee.

Not all packages are equal – each has its own strengths and weakness. The pre evaluation process should eliminate those packages that are not suitable for the company’s business processes. One can closely screen the few best packages by carefully studying at the product literature, getting proper guidance from professional consultants. Companies must also look for the packages that are used by companies which are in the same field.

While making the pre-evaluation screening it would be a good idea to look at the origins of the different packages. As there is a wrong conception that a system that was developed initially for manufacturing industry is not capable of catering to the needs of another business. With a proper understanding of the functional method of a particular field and its business process, the developers could make the necessary changes in the system which will obviously cater to the need of the particular industry in a successful way.

How could we convince our manager to implement an ERP system?

When you think it is the right time that your organization must implement an ERP system and your manager can’t decide as he is not sure about the advantages, first you need to make strong opinion among your internal personnel in favour of implementing an ERP system. You also need to do some homework and prepare a list of pros and cons from the point of view of each member of your management team.

After this you should talk to each member of management team as well as all head of department one on one and understand their opinion while introducing your proposal. This way you may select management members who are in favor of an ERP. After this step, plan the next step of internal presentation first by yourself and then from a third party who are well-versed with your industry-specific needs. You may also arrange a third party presentation separately for the members in favour, before the presentation for the deciding authorities from the high level management team. You may make any further changes in your presentation as per the opinion collected from the members in favour before the final presentation to the deciding authorities.

Final presentation must consists of details of advantages and disadvantages of an ERP system, evaluated ERP solutions for your industry, figures in form of estimated time, benefitted users, cost savings, cost of ERP software and implementation cost etc. The presentation should be made effective and your proposal must be fool proof. We feel you will definitely succeed in your mission if you could plan the above strategies in rightful manner and present it well to your deciding authorities. We can assure you that your managers will get fully convinced about the benefit of an ERP system, which obviously help them to implement the system without any doubt.

Is ERP implementation an expensive and time-consuming exercise ?

In the early years of ERP, the implementation process took more time. In some cases the implantation took years to complete and involved a huge financial investment by the companies. However, with the changing technology scenario the implementation of ERP system also become an easy process. Now the web-based ERP solution such as eresource could complete the implementation within a short period under its guaranteed on-time implementation method.

Nowadays the ERP system software has become much cheaper and affordable to any kind of organization within their limited budget. The affordable eresource ERP solution has helped many smaller companies go for ERP solution and started benefiting from its effectiveness in a big way.

Having said that, we would also like to remind all the companies that would be planning an ERP implementation must be careful in their selection of the right ERP solution. An ERP system can also bring negative result due to poor selection process or a poor ERP implementation.

What are the main points to be considered while selecting an ERP solution ?

On the priority basis the first choice should be that the ERP you are selecting must be Product Fit. As you know there are many ERP products on the market and each designed for a particular segment. Therefore, you must ensure the product is aimed at your type of organization. If you are a small, regional discrete manufacturer, then don’t buy a product intended for very big organizations such as oil refineries etc.

Second point is the ERP software must be Process Fit. After doing a rough cut analysis for product fit, it is necessary to look thoroughly at your own needs and match them against the ERP solution you have opted for. Make sure that the software is integrated with all the modules you are looking for and it is well designed to suit your requirement.

You must also check the reliability of the solution providers. Since ERP is a long-term commitment, ongoing support / maintenance are essential. The software firm that you are dealing with must have the resources and technician to carry out the whole operation and further maintenance and training successfully. You must also check that their implementation methodology is efficient and reasonable.

Lastly before you have decided with one of them consider whether the pricing is reasonable and the terms are acceptable. Don’t forget to include ongoing support and maintenance in the price discussion.

Is ERP suitable for only big companies ?

This is one of the main misconceptions prevailing among some small and medium sized companies. This is due to the unawareness of the functioning of an ERP system. Mainly what is to be understood is that an ERP system automates business processes across an organization and thus eliminates inefficiency caused by a legacy system.

It is true that there are some big players like SAP in the market that may be taking care of business process of huge organizations. But today, medium and small sized companies are benefited from automation and streamlining of their business process with efficient and affordable web-based ERP solutions like eresource. Both SAP and eresource are ERP systems and designed for large, small and medium sized organizations across every industry.

What is the reasonable cost for an ERP system ?

As you know that not all ERP system costs are the same. It is natural that the big players in the market such as SAP and Microsoft will charge you very high even if your organization falls under the small and medium sized category. But providers like eresource develop ERP system to fit the needs and budget constraints of small businesses. As everyone is aware that eresource ERP is one of the most affordable and effective ERP systems available in the market.

Another factor about the high or prohibitive ERP system is its cost estimates may be based on the option of buying and implementing a complete integrated ERP solution and then hiring an independent IT department to manage and maintain it. With web-based eresource ERP system all the operational methods becomes an easy process and all the technical aspect of the system could be managed efficiently by the users with the proper training and timely assistance from eresource personnel.

What is the difference between ERP & E-supply chain management ?

In the first hand you must understand what supply chain management (SCM) is. Traditional SCM used the telephone, fax and regular mail to keep contact between suppliers and customers. It involved lots of time and costs. With the advent of computer technologies support for supply chain relationship became Electronic Data Interchange (EDI) systems. But EDI is an inter-organisational process, so business partnerships have been shown to be very important in the adoption and use of EDI.

Supply Chain Management (SCM) in today’s Internet environment, especially the e-business is important to create significant competition advantages to firms and business partners worldwide. Since the objectives and goals are essential factors in the use of supply chain management in the e-business.

ERP being a business tool that manages day-to-day business process and is usually comprised of several modules such as financial module, distribution module, production module and supply chain management module as well as many other modules. Each of these modules share information that is housed within the database structures on which the ERP system was coded. ERP helps to break down barriers between departments within a company.

At a broader context, you must understand that ERP is an integrated system which holds many modules and SCM could be considered as one of the modules.

What is the functionality of Lot Tracking in an ERP system ?

Lot tracking system records information regarding a batch of product. Lot tracking allows to track several units of a stock item using the same lot or batch number. User can determine what can be purchased or sold by Lot status. Expiry dates and user defined statuses allow you to further control the stock item. You cannot sell stock items that have reached or passed their expiry date.. You can track items by lot number and serial number – Lot tracked items are where the tracking (Lot) number refers to a specified quantity of the items, serial numbers are applied to individual items.

Lot Control and serialization options are defined at the system level and when one of these options is activated individual items are defined to be controlled by either lot number or serial number or by item number (not lot or serial tracked) on the part master file. When a part is defined as being tracked by lot number or serial number, that tracking is enforced throughout all material transactions for that item and upward through its parent items.

For purchased items lot or serial numbers are required for the full quantity of receipt, and are entered as part of the receiving transaction. For receipts with many serial number tracked items, ranges of numbers may be entered. A running total of items accounted for with lot or serial number assignments are displayed, thereby ensuring that the entire received quantity is properly identified prior to completion of the transaction.

Furthermore, the system checks current inventory to ensure that duplicate numbers are not assigned. On subsequent inventory transactions, lot and serial traceability is enforced upward through the item’s bill of material structure. The lot or serial number and quantity are required on all material issues.

Can a running ERP system be coupled with BI capabilities?

Yes you can, but it is really a big challenge. Integrating BI (business intelligence) capabilities with ERP (enterprise resource planning) systems need a lot of planning. To succeed in the integration you should have an efficient and single ERP system working across your organization. The integration process can be even easier if the utilization of a single BI system within the organization.

As it is a common knowledge that when you have fewer disparate systems to tie together, the easier the integration. Additionally, it helps to ensure that your master data and metadata definitions are homogeneous throughout the organization. It is also important to recognize that, while ERP systems provide a wealth of operational data, they do not paint a complete picture of your business. For this reason it’s important to ensure that the BI tools you choose can be readily integrated with your mission-critical systems.

How can an ERP system help you meet Strategic Objectives ?

Normally in all organizations, managers have to utilize large part of their time and energy in dealing with crises. This is due to someone from the staff is not having done his job in the manner it was expected to be done.

There may be many cases such as tax payment to the government is not done with accuracy, a shipment to a customer not being made on time, bills not collected, production department not meeting the deadlines etc. We are not saying that these works will be carried by an ERP system once it is implemented. As always, people have to do all of the above, but the advantage of an ERP system is that it will enable them to do all this, in a timely, planned and process driven manner.

An efficient ERP system frees up various levels of management form a very large number of operational problems. The managers will get enough time to look at what is going on, without the information seeking becoming an end in itself.

Also when the CEO of a company wants to know the top strategic objectives for the next year from the Function Head, he can actually get down to defining what those objectives are, and how they will be measured. Again, the defining of the objectives cannot be done by the ERP system, but will help in measuring the parameters associated with the strategic objectives.

Why ERP training is considered to be a more important issue ?

Enterprise Resource Planning (ERP) solution training is important equal to or placed little above the evaluation and selection of an ERP system itself. However, training is often the most overlooked and underfunded portion of any large-scale integration.

When the decision being taken to implement an ERP system in an organization, training session to the end-users should be discussed and finalized in detail. As lot of money and time is invested in this effort to increase productivity, efficiency and out-put over time from the end-users, it is very important to pay much attention to the training to end-users for the effectiveness of the system in the business operations.

In a normal process, during the “validation” or “cost case” phases of the ERP implementation, companies determine the overall business goals. The training goals also should be aligned during one of these two phases. Insufficient training could cause operational delays and an impediment to realizing your business goals.

While implementing an ERP system the members of the project team need to develop such knowledge and skills that will enable them to establish how to best use the functionality for the operation and maintenance phase. Since the members of the project team will become the trainers of other employees, they need to develop the skill to be able to formulate and deliver a training course.

The users need to have the skill for using the functionality relevant to their roles. They should understand the basic concepts of ERP and also how to perform the day-to-day activities in the ERP system. Others who require training include managers, who should have at least an appreciation of what the system does. Ideally, the project manager should have a good understanding o f all aspects of the system so that he can be effective in dealing with any issues raised.

A select number of people will require more specific technical training so that they can design databases, write scripts, manage users, generate reports and query the database for specific requirements.

The system administrators need to be able to setup the system and then maintain it. They will require knowledge about how to handle system security and deal with technical problems. They will need to develop a level of understanding of the functionality so that, at some stage after implementation when the project team is disbanded, they are able to manage the system smoothly.

Additionally, over the period it can be expected that the ERP tool will evolve to some degree along with the company and projects that it serves. From time to time it may be necessary to conduct additional training sessions to keep everyone abreast of the changes that have been implemented.

What is cloud computing and how it is related with eresource ERP ?

If you ask the question what is cloud computing means, there are chances that you may get different descriptions from each answers. Cloud computing in simple terms means you will be able to work on a computer without having to install or buy a software which is has been developed for your requirement.

In a wider description, cloud computing is a movement that has been occurring in the technology applications. In this case it is not necessary to buy servers or need not install the software in the PCs. Buying more user licenses This all will contribute to a lot of money saving for the companies in the long run.. With the cloud computing method smaller companies can now access technologies and computing power from the internet “clouds” that become a company’s server, software, and data center, that can be readily accessed on demand.

Web-based eresource ERP system as a service is another description of cloud computing that is broadly used by companies today. eresource ERP system opening up technologies to the masses by smashing the costly constraints required by on-premise applications. With cloud computing method service provider who is the server and the data center making expanding and shrinking user demand incredibly fast, flexible and affordable.

As the benefits of cloud computing are becoming more clear even larger companies that are working on-premise solutions now looking into cloud computing for their ERP application requirements. This demand is putting some pressure on the large on-premise ERP vendors and web-based applications are gaining more and more popularity among the SMEs and large scale industries alike.

What is the impact of an ERP system on the audit process ?

ERP systems typically provide elegant technological solutions for organizations information needs through radical changes in information processing orientation. Due to the robust nature of these applications and the changes associated with the implementation, auditors may need to adjust the audit processes and procedures when auditing in such an environment.

As you know the ERP systems facilitate horizontal and vertical integration of business processes across an organization. When an ERP system if successfully implemented, can enable companies to better manage supply chains, perform business reengineering and reorganize their accounting processes along with different other functions. In addition, currently the ERP systems are becoming a necessary tool for companies to remain competitive in this new business environment rather than constituting a new strategic move.

It is also a fact that the changes from the legacy system made the auditors are faced with the daunting task of auditing in a new ERP. Some ERP systems implementations initially in some companies has lead to increased audit related risk due to automated interdependencies among business processes, and integrated relational database. As technological developments continued, auditors also expanded their technological knowledge and skills in order to perform effectively and efficiently in audit functions in an ERP environment.

What are the main advantages of a web-based ERP solution ?

This is the one common question asked by companies when they plan to implement an ERP system and also want to choose the right one. Though there are many advantages of a web-based ERP solution, here are some of the important points.

A Web-based ERP solution ensures a lower outlay and predictive spread of cost over time. You will be able to make a substantial saving in cost and that money can be invested in your other business process.

A web-based system needs less time to implement and you do not need to upgrade your network for Windows/Exchange Server and SQL Server database. Security concerns about a web-based application that companies had in the past seem to have subsided as the technology has improved.

Web-based ERP system eliminates the worries about any technical problem as online help from the vendors will able to solve any such issues within a short period

Web-based ERP solution such as eresource makes the implementation process very easy and operational methods are also easy. Users can be easily trained and work can be commenced as soon as the system is ready after implementation is completed.

Web-based ERP system can be accessed from anywhere and at anytime from a simple browser. Remote users like executives and sales reps can access the company system with any browser.

eresource ERP system said to be a scalable. Can you please elaborate ?

As this is one word you may be hearing from many quarters and have no idea what is it. Let us explain you with a simple example. Today you are company tomorrow you become an organization and then a group. You may want to increase your branch or your users on the system, eresource gives you the flexibility to scale the ERP whichever way that you wish.

Therefore it has been said that eresource ERP system is scalable where the system administrator can create new users, and there is no limit to the number of users created. However, the number of concurrent users is subject to the license restrictions.

What are the advantages of ERP in pharmaceutical industry ?

Efficient management of batch recipes is the most important and complex aspect of ERP system for the pharmaceutical industry. Every aspect of a pharmaceutical recipe must be documented. Here are some of the details required to be documented.

ingredients and information of their technical compositions, how much the ingredient cost and how much it cost to prepare the ingredient for use, and historical data about the ingredients, how they were received and from where, how they were stored, how they were processed/manufactured, how they were prepared for packaging, how they were packaged, where stored before shipping and all shipping data. Again, when any one aspect is altered, it changes the rest of the processes.

Pharmaceutical companies need to have an effective management application method to keep all this data in a proper manner and use them efficiently whenever required. Selection of a right ERP system is very important, especially one that is familiar with the pharmaceutical industry is crucial to gaining the most when it comes to financial savings and increased efficiencies.

Pharmaceutical companies that have implemented eresource ERP are gaining competitive advantages in their operational method.

Will just implementing an ERP system solve my business worries ?

No software including even an ERP system will solve your problems unless the system is used in proper manner. What is to be remembered is that ERP is a tool and not a magic wand. Therefore the tool must be used properly if you expect any result out of it.

It is also important that tools are only as good for you as you are good and skilled and disciplined at handling them. Poor tools are just that, poor tools – they won’t help you much. But good tools won’t help you any better if you don’t use them properly.

Huge inventory levels may well be result of bad tools to manage inventory properly. Or they may come from people being irresponsible about ordering only what’s necessary. It may come from poor planning tools. Or from people avoiding planning, or not planning at all.

There are many instances when a company’s profitability may be low due to huge administrative overhead or due to shot of personnel to take care of unnecessary costs. Your company can become unprofitable in sales, because somebody is doing favors to certain “big” and “important” customers, and nobody knows or nobody cares. The people who are associated with these malpractices will keep all the transactions under the carpet.

In the above scenario, an ERP system could make a big difference. That means the ERP will not miraculously make those customers profitable for you, but being a tool, it could expose them and pinpoint the reason for low profitability.

It is just an example how an ERP system could be used as an effective tool to curtail malpractices in an organization which will ultimately solve many of your business problems.

What is customer order management in an ERP system ?

As integration of business functions is one of the key strength of ERP system, the integration process begins at the contact with a potential customer. Therefore, this process of customer ordering is at the heart of the ERP system.

In an ERP system the integration of sales and distribution to capture the order and ship the goods, material management to control the inventory, financial accounting to manage the billing and flow of cash, controlling to measure the profitability of operations and production planning to ensure an economical flow of goods to inventory and customers.

What are the necessary skills, knowledge and attitude an ERP manager should have ?

An ERP Manager must have the ability to exercise overall day-to-day control of project leaders and the resources of the program, balancing the needs for program success with the skills and capabilities of the staff. He should also be a good communicator and must interact regularly and comfortably across various departments — from individual to the ERP Management Team level in order to negotiate solutions that foster strong relationships and continued success of the project.

The ERP Manager is responsible for the development of an effective planning process, for the creation of an integrated project schedule that encompasses all aspects for the ERP Program and for the actual execution in conformance to plans and the continuing update and adjustment of plans and execution to fit changing circumstances.

Implement and lead an effective project change management process that pro-actively identifies project changes and incorporates an appropriate impact analysis and approval for such changes across the ERP program team. He is responsible for creating and maintaining a monthly financial management process that incorporates actual financial performance to forecasted performance and justifies all variances; accurately forecasts expenditures in alignment with the project budget and supports the budgeting process throughout the project lifecycle. He also must follow the company’s financial processes and policies.

Actively directs the development and maintenance of plans, practices and assignments to identify, quantify and contain the occurrence and potential impact of risks and risk events on the execution of a program and its likelihood of success.

An ERP Manager is responsible for making timely, effective decision at the project level and communicating those decisions both up and down the program structure, while approaching needed decisions in a logical and thoughtful manner and weighing conflicting information.

Leadership quality including the ability to motivate, inspire, counsel and facilitate individuals and teams to take responsibility and accountability for the goals will be an added advantage.

What is lead time and how the inventory management is maintained ?

Lead time is the time that elapses between the placing of an order (either a purchase order or a production order issued to the shop or the factory floor) and actually receiving the goods ordered.

If a supplier (an external firm or an internal department or plant) cannot supply the required goods on demand, then the client firm must keep an inventory of the needed goods. The longer the lead time, the larger the quantity of goods the firm must carry in inventory.

A just-in-time (JIT) manufacturing firm, such as some automobile manufacturing fims, can maintain extremely low levels of inventory. Some of these companies take delivery of some goods as many as 18 times per day. However, steel mills may have a lead time of up to three months. That means that a firm that uses steel produced at the mill must place orders at least three months in advance of their need. In order to keep their operations running in the meantime an on-hand inventory of three months’ steel requirements would be necessary.

Is the Cloud ERP model faster and cheaper to deploy ?

Yes, it is absolutely correct that Cloud ERP model is much faster and easier to implement than a conventional ERP system. Having said that, companies must also remember that an ERP strategy still has to include comprehensive business process mapping, data cleansing, organizational change management, end-user training and a number of other activities to ensure your organization achieves the highest possible ROI.

When considering the cost factor Cloud ERP could bring a big relief to organizations as the cost structure of cloud ERP is quite different than a conventional ERP system. With Cloud ERP companies can pay for yearly subscription for the system rather than paying one lump sum up-front.

It is also an advantage for companies that when they choose the Cloud version of ERP application there will be no extra hardware requirement, no maintenance hassles, no investment and no need of an IT team to run the system. Over and above, Cloud ERP model allows the companies to choose the only modules they required with per user payment option. Another advantage eresource Cloud ERP model is it is also scalable.

How the case studies of ERP system has been made ?

Basically ERP case studies are carried by companies to promote their products and help prospective customers to study the various aspects of development and installation and usage of the ERP software.

An ERP case study begins with a detailed understanding of the cost saving analysis, working of the company the various business processes which occur in a company, a detailed vendor evaluation process, requirement study, implementation process including the date wise steps and customization issues, and a final concluding study. Reputed companies conduct intense case studies and conclusions are translated into actions in their future ERP releases.

ERP case studies can be based on companies which have had a successful ERP implementation or a failed implementation. Such case studies highlight the practical aspects of ERP implementation and enable people to learn and avoid mistakes committed earlier.

What is the Big Bang theory in ERP implementation ?

When companies layout a plan for their ERP implementation there are two options they will look into. That is, they have the option to choose the big bang theory where the installation of ERP systems of all modules happens across the entire organization at once or the phased out module-wise implementation.

The big bang approach promises to reduce the integration cost in the condition of thorough and careful execution. Majority of the ERP implementations are carried out in big bang way.

When the question comes about whether an organization should adopt the big bang theory, we can’t generalize the theory for it. For big organizations, Big Bang theory is the best choice. Mostly decision on this depends on the readiness audit result, available strength of consulting human, etc.

What is an ERP software license means and how to own it ?

An ERP software can be termed as consumer software and this enterprise application software is typically not bought and sold instead it is licensed for use. It may be licensed to be used by a company, on a particular computer or by other criteria such as number of users. Buying it once doesn’t mean you can duplicate it and share it with all your friends, or even sometimes use it on all your own computers. For enterprise application software how you pay for that license and the term of the license can vary.

Today, a software license can be perpetual. This means you pay for it once and can use the enterprise application forever. Even in this case more often a perpetual license agreement might have a stipulation that you have the right to use that software only for as long as you continue to pay maintenance to the software vendor that provides the product.

A maintenance agreement, which is a recurring cost, typically provides both technical support and certain innovations. Some of those innovations will be included in your maintenance fee and others may still need to be purchased. Maintenance is typically priced as a percentage of the software license.

But perpetual licenses are not the only type offered. Instead your license might be for a specific period of time. This is generally referred to as a “term” license. At the end of the term, you must either renew the license or discontinue use of the software.

How does the detailed data about production and quality inspections get into the ERP system ?

As far as a manufacturing organization is concerned, these are the most important factors affecting profitability and success. If this data could be captured and validated as the activities are happening, everyone in the organization will have accurate, timely information for decision-making.

eresource ERP enables a single, logical portal to capture and validate this information as it is happening on the production floor. When using the web=based ERP system eresource, data will be captured and validated in real time, summarized and instantly available to decision makers throughout the organization, wherever they may be and whatever role they may play.

Today’s manufacturing solutions should enable shop floor workers to be knowledge workers. They should have a system that is capable of doing everything needed at his fingertips to set up the work center quickly and accurately and to make, count and measure parts or assemblies. Drawings, setup instructions, material requirements, customer alerts, inspection specifications and more should be available in electronic form on the shop floor. Alerts can be triggered immediately if a dimension or operating parameter is out of specification. Also when operators makes errors it could be identified on the spot and corrective actions can be taken immediately.

What is the difference between Cloud ERP and SaaS model ?

A Cloud ERP system means traditional ERP solutions hosted off-site. It is also flexible and scalable. The system has the capability to access real-time data from anywhere without using complicated and costly remote-access software.

On the other hand SaaS (Software-as-a-Service) model offerings are typically smaller. This is normally best for organizations with limited complexity, size and global presence. ERP system providers host SaaS model on their own infrastructures instead of locating the systems on-premise at the purchasing organization.

In SaaS model, the vendor will have the full control of the application and not the customer wheere as in Cloud ERP system your data and your application can be placed on server that you control. Both these models provide instant gratification, taking mere minutes to be up and running.

What is course structure of ERP training and its curriculum ?

ERP training courses are usually of short duration and these training sessions can bring many benefits to participants who have some functional experience about an ERP system.

Courses are usually conducted for modules such as finance, manufacturing, sales and marketing and material management. ERP vendors integrate ERP courses as part of their training program and curriculum is designed to suit as per the knowledge each section of students such as beginners, IT students, professionals and corporate.

The ERP course curriculum is designed to suit all categories of participants as they get exposed to the various aspects of the ERP software in a graded fashion. They will able to understand the concept in a comprehensive way. First level will consist of the activities and business processes which occur in accompany. Second level, the relationship between each activity, the business process and data recorded should be taught. At the third level the curriculum will be included the department wise data entry forms and the relationship with the activities shown. And at the fourth level, participants will be taught how the data entered in the data entry forms is shown in reports. At the last level, the macro features such as creation of masters, editing, deleting etc will be explained.

What are the possible mistakes committed during implementation of an ERP system ?

As we have said it earlier, all ERP implementations cannot be 100 per cent successful and the reasons for this are various. Though this may be the ground reality, the failure percentages are getting reduced to the lowest, which is surely an encouraging development.

Poor planning is the main cause of ERP implementation failure. The scope, size, complexity and change required for a successful ERP implementation requires support from all corners of an organization. Without major decision makers involved from the beginning, critical steps and activities can be easily overlooked.

Change management is the second reason for any ERP implementation failure. Changing the corporate culture, business processes and employee training can be a long-term, uphill climb. Understanding change management and training are essential components to a successful ERP implementation. Employee training should begin before implementation, educating all employees of the benefits of using this new tool; making their jobs easier and the organization more efficient as a whole.

Poor selection of wrong ERP tool is another reason. Some of the biggest ERP implementation failures occur due a mismatch between the needs, processes and structure of your organization with the implemented software. This can create significant problems such as loss of productivity and time along with many of the new system’s benefits. Therefore it is very important to select the right ERP system for your business to avoid any failure from that quarter.

Thoroughly understanding the complexity of an ERP implement would contribute to the success of its implementation. Some companies, on the process of cost-saving exercises, will run over budget on their ERP project by requiring their IT department to work overtime to complete the implementation. However, with inadequate skills and directives from the contracted software provider this exercise of the IT department will turn out to be disaster which would create only more knots in your ERP implementation than make any progress.

It is important consider your ERP system as a complex project. Considering the ERP system as a simple IT project can be the most costly mistake one can make. Without proper input company-wide, your ERP system will not be engineered and aligned to work with the business processes and needs of your employees.

Which companies implement ERP and will it be useful to pursue training in ERP ?

Various businesses, large and small, have implemented Enterprise Resource Planning (ERP) systems. ERP software supports the distribution of information between various functional departments and geographic locations of a company. ERP systems currently exist in many different forms and offer many different features.

Many manufacturing, pharmaceuticals, Construction, Trading, Transportation and many other companies rely on ERP systems to communicate data between departments such as production, shop floor planning, purchasing and accounting.

Although more and more companies are implementing ERP system to manage their business more effectively, the companies are facing a taunting task in finding professionals to manage the system. This is due to the fact that though the demand for trained ERP professionals are growing day by day, the market is not able to meet the demand due to shortage of sufficient trained professionals. Therefore pursuing training in the ERP field is going to bring handsome career dividends for the IT professionals in immediate future.

Why some companies are still using legacy systems ?

Legacy systems utilize outmoded programming languages, software and/or hardware that typically are no longer supported by latest ERP software.

Legacy systems are still used by some companies because they think a change over may cost them lot and potential risk of business interruption associated with the movement of data and key business processes to more advanced and contemporary technologies.

We have seen number of companies still heavily reliant on decades-old legacy systems. Further complicating the situation, many of these companies has been built through a series of mergers often must manage a variety of incompatible legacy systems inherited from their predecessor organizations.

In general, legacy systems tend to be given inadequate resources for their proper maintenance, even when an upgrade to contemporary technology is not being contemplated seriously. The blame must go to the decision makers in the organization and the non-technical executives who tend to assume that they can continue to run on the cheap, and underestimate the risks of taking this approach.

What is MIS, its functions and the main characteristics ?

Management Information System (MIS) are computer based information systems consisting of the network of all communication channels used within an organization.

Its functionalities include :
    >> Integrated database of the MIS enables greater flexibility in meeting the information needs of the management.
    >> The MIS integrates the information flow between functional areas.
    >> MIS caters to the information needs of all levels of management .
    >> Management’s information needs are supported on a more timely basis with the MIS.

The main characteristics of the management information system are :
    >> MIS is flexible and can be adapted to the changing needs of the organization.
    >> MIS uses an integrated database and supports a variety of functional areas.
    >> MIS supports the data processing functions of transaction handling and record keeping.
    >> MIS provides operational, tactical and strategic levels of the organization with structured information.

It is important to be noted that today’s ERP systems are integrated with functionalities of MIS (Management Information System) and DSS (Decision Support System). Therefore organizations that implement an ERP system could get advantage of all these functions.

How to succeed in ERP implementation ?

An ERP implementation can be categorized in two ways. One is implementing it for the first time and the other one is updating the existing system. The first one takes more time as proper research and preparation is to be done. Also the employees who will be working in the new system has to be trained in appropriate manner so that the system can be handled correctly.

The second method of upgrading the existing system usually takes less time than the first time implementation. Despite this, both phases take place at different times and require different levels of difficulty. Having to face the second stage is not a sign of failure, but a chance of improving the functionality of the system. We must realize that organizations need to incorporate ERP more and more on every day basis. As the market is changing every day there is also growing competition among organizations. Everyone is competing to match with requirement of global market.

Can ERP improve General Ledger capacity ?

Organizations find it difficult to combine the reporting applications, and many companies had to spend a lot of money to ensure the effectiveness of their external and internal reporting. Also slow execution makes the records disorganized. ERP becomes the best tool to reorganize this function by increasing the data quality, combining the fields included in the different databases of one program.

Regarding the specific regulations and requirements related to the financial reporting ERP is the best solution to maintain company activities in order. It has the ability to represent the parallel financial reporting in several ledgers.

With the implementation of an effective ERP system, compliance and transparency are guaranteed, and it also makes it easier to gather and report the valuation bases needed to settle more than one account. Through this integrated reporting application the accounting is a simpler task to complete.

How to choose the right ERP ?

The foremost thing to understand about the ERP is that it is not a common software that can be used as any other software. As the ERP system consists of a revolution that involves every internal process, it must be preceded by a hard reevaluation of every department together with their functions, and the way they make decisions.

It is also to be understood that an ERP will not change the management functioning on its own. ERP is an important and decisive tool, but in order to obtain the desired results it is also important who will be commanding it as well as the way in which the data will be saved and how information will flow.

It is better that you assign an external consultant to evaluate a suitable ERP for your organization. The consultants are capable of evaluating the ERP system with functionality of your organizations in mind. They will also identify the effective needs of the moment. On the other hand, they focus on keeping intact the culture of the organization in order to avoid the chances of collision.

You also must take into the account the investment you are planning to make in an ERP system with its benefit equation. As the ERP is a system consists of many modules, price to be observed on the basis of total package until it is divided into several module units. The cost of implementation and even the chance of discounts when purchasing new versions are also to be taken into account.

Can all integrated applications be considered as ERP ?

Often some companies refer to what they have as an ERP system, and it might be something that was written in the 90s or even the 80s. This may be a combination of many applications with added-on functionality and other modifications. The outcome what they get is much less than what they have required. They must be encouraged to focus on adopting a dynamic plan that will enable them to implement an a full-fledged enterprise planning solution.

Companies are advised to look for a fully integrated and non-redundant system, where they will see tangible productivity improvements and maybe even a miracle! Many a time some clients are using “ERP” to refer to customer relationship management, product lifecycle management, supply chain management, business intelligence, and product lifecycle management. But it’s in the integration of all of those that you get to the nirvana where the ultimate productivity is.

What is the impact of ERP in an organization ?

The implementation of ERP  turns out to be a challenge for many enterprises, but their chances for success are greater if they get to implement it rightly. Nowadays, many ERP solution providers are reducing their prices and make the products more accessible to all industrial segments. They are also focusing on quick implementation procedures that in turn help these organizations save some money. High competition in this field also forces the ERP providers to show results in a short time of period.

Earlier, organizations were looking at ERP as a back-office application. Today many organizations are initiating new projects to use ERP in their sales activities, customer service and commercial planning. Majority of these organizations have found ERP system an ideal application to e-business functions, while others are taking several actions in order to use software that can facilitate client-vendor relationships.

Users in these organizations started realizing that it was a good decision to implement ERP technology. They also feel that it is really important to understand that the system as a basic software. This system also can be customized to accommodate additional modules and other functions as per the organization’s needs.

One important area that could demand for additional functions is commercial analysis. You should use applications that allow you to measure benefits directly. These kind of applications need a well designed backbone ERP to make them work, and in this way it is certain there are a number of reasons to install an ERP system.

Who are ERP package vendors and what is their role ?

Vendors are the people who have developed the ERP packages. They are the people who have invested huge amounts of time and effort in research and development, to create the packaged solutions. If one studies the history of ERP packages and finds out how each package evolved, then it soon becomes evident that every ERP package grew out of the experience or opportunity of a group of people working in a specific business who created systems that could deal with certain business segments.

Vendor selection is not a popularity contest and bigger does not always mean better. While the financial stability, ensured longevity and broad spectrum of offerings provided by the top vendors are good reasons for selecting them, size is not without its downside. Size breeds bureaucracy and bureaucracy hamper personal attention and agility.

While small vendors that are not quite household names may carry increased risks in the area of long-term longevity, they may actually provide a better solution if they specialize in your industry segment rather than covering a broad spectrum of industries.

It is important to remember that the vendor, as long as they provide working software and capable personnel, really as very little responsibility for your overall success. Responsibility for success of failure lies within the four walls of your business, and if you import failure in the form of a third-party, it’s still your responsibility.

What are the advantages of HR module in ERP ?

As you are aware that human resource is a fundamental part of the scheme of every successful organization. Information received and handled by this department needs to have a continuous follow-up and correct evaluation for the professional development and the social welfare of the workers.

However, due to the large quantity of information that is handled in this department, it is becoming impossible to handle this task manually or by a legacy system which has its own drawbacks. ERP is represented like a useful tool to help and orient the users to focus their work in the direct relationship with the staff, and to link the personal skills and aspirations of the personnel related to the objectives and goals of the company.

Through an ERP system it is possible to facilitate the centralized control and decentralized operation, which allows the leaders of the human resource area to focus on the strategic responsibilities of planning programs of personnel for development. Meanwhile, the operative activities are assumed and optimized by their own tool. By this way, an additional value is added.

ERP is able to provide the management of the human resource area with an integrated solution to the different processes of these sections, which includes the planning, the administration of payroll, the professional development, work health and administration in general.

It is also useful for decision making and analysis. The internal communication is an indispensable part of the daily tasks of the department, and therefore ERP is also prepared to provide a solution in this field.

The implementation of ERP contributes to automate the processes, setting resources free to develop tasks of major interest and optimizing the different human resource processes.

What are the main reasons to get an ERP system ?

There are many reasons to get ERP system for a successful organization. Here are some of them.

ERP systems automate business processes by putting them into a useful format that is standardized and common for the whole organization, and it could even be used between their suppliers and customers. It captures data about historical activity, current operations and future plans and organizes it into information that every staff member can use to help develop business strategies.

ERP integrates financial data. Managers try to understand the companies’ performance, and they may find many different versions of the truth. Financial department have their own set of revenue numbers, and the sales department has its own as well.

The different business units may have their own versions of how much they contributed to revenues. ERP creates a single version of the truth that cannot be questioned because everyone is using the same system, giving managers correct and complete information.

A special case is found in manufacturing enterprises. These companies – especially those with an appetite for mergers and acquisitions – often find that multiple business units across the company make the same kind of work using different computer systems. Standardizing those processes and using a single, integrated computer system can save time, increase productivity and reduce head count besides improving the quality of information.

How ERP system can help manufacturing industry ?

The manufacturing industry first experienced the ERP systems, created with the objective to integrate the details and information, and to organize the different productive processes with MRP.

Improved customer service, efficient distribution system, and reduced operation expenses are some of the other important business imperatives that are driving manufacturing industry to implement ERP solutions.

In today’s aggressive business environment it is essential to be prepared to face a vast and competitive world. In this time of diminishing global economic situation, manufacturers are one of the most worried sectors. They are challenged by the requirement of the customer and compliance mandates, effective management of supplier, costs control and finding new customers to grow the business. It is therefore opinioned by majority of the decision makers that ERP is an important tool to achieve competitive advantage.

What are the risks of the ERP implementation ?

ERP implementations are notoriously resource intensive, highly complex, time-consuming and unpredictable in terms of cost. The primary challenge that often leaves companies marooned when it comes to ERP is that most companies cannot handle a project of such complexity and one that requires huge amounts of resources.

Lack of budget and skilled personnel prevent many companies from focusing on the steps necessary to ensure that the new ERP is configured and rolled out in a fashion to best meet the business needs of the company. Then there are many people, technological, business process, implementation and operational issues that increase the risk of ERP implementations.

Are better known companies the best choice when considering ERP implementation ?

Members of the implementing team that are going to be dedicated for your company during the implementation, are a key success factor to consider. Rather than concentrating on having a big name behind your implementation, we would suggest you get more details on the Consultants and their project management that are going to form the team of this implementing company.

If small companies have good capabilities among them and seem to be up to their promises in the contract, then this would be satisfying.

Sometimes big named companies would issue a sub contract to smaller implementing companies brought from Asia, but usually and for some reasons such implementations fail.

Again, you might get excited during the discussions held, but nothing is going to be guaranteed if not documented in the contract.

Is there any preparation required before an ERP implementation ?

One of the biggest problems that many have had with implementing ERP is misunderstanding what ERP is all about and underestimating what it takes to effectively implement. Driving ERP preparation and implementation, senior operation management cannot relegate critical decisions to workers who may not have the background and/or the temperament for this type of decision-making.

Companies need a well thought out and comprehensive process that will help plan, guide and control the entire ERP implementation effort. Starting an implementation with an undocumented, skimpy or untailored implementation methodology is open invitation to disaster and at the very least, a long drawn up implementation.

Everyone from the board room to the stockroom needs to clearly understand their role and responsibilities for implementation and above all encourage dialogue that will get people focused on the business objectives as well as early identification and or correction of any problems. In addition, and no small matter, the question of how, when and who will be accountable for results must be an integral part of this understanding.

An implementation that is going astray becomes recognizable when repeated schedule slippage surface. As time moves on the schedules miss problems starts to compound the implementation quality, as the invariable response is too start taking short-cut; and by-passing critical business issues.

What is the role of technology in the ERP selection criteria ?

The existing technology in an organization will play a very important role in the ERP selection process. Each organization will have its own technological environment : how the business is being done, what kind of hardware and software are in use, what is the database management system that is used for storing the operational and historical data, how is the data processing done and so on.

These factors can greatly influence the selection process in the sense that they can limit the number of packages available for evaluation. So, the management has to decide whether the ERP systems will be selected keeping in mind the existing infrastructure or, if the existing systems will not be considered. But it is always a better idea to find a package that is compatible with the hardware, software and technology that the company already has in place. Also, if the organization has the necessary infrastructure then it can think of buying the required components from the vendors and integrating them with the existing system.

For example, if an organization is using an HR management system and is quite satisfied with it, then it can go in for the other modules and not for the complete offering from the vendor. Later, if the organization wants to switch from the old HR management system it can then purchase that particular module of the ERP package. So, it is not imperative that all the components offered by the vendor be bought. The evaluation committee in association with the vendors can select the required components and then integrate them with the existing infrastructure. But do not forget here to get the vendor’s assurance that the existing system will integrate smoothly and seamlessly with the purchased components.

What are the common differences found in different ERP brands ?

Every ERP company offers its brand with different marketing strategies. Hence there could be significant differences in procedures, forms, looks, reporting structures, facilities, architecture, database designs, and also diffrence in prices for different ERP products. Since these products vary in their functional and technical efficiencies, it is crucial for the client side to decide which product to opt for huge investment.

Of course, most of these products are based on common theory but different implementation experience at their clients. They are evolved from the state of small automation and planning software that was addressing a particular business process. Thus the strengths of these products are different in addressing various business processes.

For example, one popular ERP brand is evolved from inventory management system. Hence, it is very strong in all materials transactions functionalities. Another brand is evolved from maintenance management system, which handles maintenance planning in a unique way with excellent efficiency. One brand is evolved from highly focused area of human resources management. Thus it is obvious to find different strengths and weakness in these products.

It is recommended that the final decision about a suitable ERP system for your requirement should be left to the professionals who could evaluate the system in a theoretical and practical manner.

What makes dot net application compatible to ERP ?

Be it enterprise resource planning or software programs the chances of errors are often very high. These errors not only undermine the working of the software but also disturb the whole process in an organization.

No platform (including dot net ) can be guaranteed for controlling errors. However the unique codes set in dot net helps in knowing as and when errors occur and that too at the early stage. This is an important issue especially for ERP as the functioning of ERP has to be constantly monitored to ensure accountability and performance. Since the platform immediately points out what is going wrong it is easier for the company to freeze the whole process rectify the errors and set back things to motion properly.

As far as ERP software is concerned it has the simultaneous function which leads to lot of collusions and confusions. Even though they work separately the functioning of one will clash with that of the other. Dot net will neither have interference nor an influence with other applications/platforms unless they are desired in the course of work. Even in such cases dot net will only act as an inducer. This explains the reason for preferring dot net platform.

Dot net also facilitates faster communication and renders many additional services to companies availing them.

How to prevent computer crimes by employees ?

There are several ways in which an authorized user of a computer, such as an employee using the company’s computer, can accomplish unauthorized and illegal objectives.

Here are some tips to prevent it.

References

    >> It is common to request three references when interviewing a potential employee: however, many employers never check these out. It is vital to call former employers and get their assessment of the candidate’s history.

Notice period 

    >> When firing an employee, it is common practice to give him two weeks’ notice so he can begin looking for another job. In a computer-related field though, this gives him two weeks to sabotage data, as well as copy data to sell to a competitor. If an employee is fired, have a security guard watch him clean out his desk and then escort him to the door. This may mean giving him two weeks’ pay for doing nothing but this is better than letting him stay around the office and potentially cause millions of rupees in damage through sabotage.

Keep employee lists up-to-date 

    >> Security guards get used to seeing the same faces every day and may let a former employee into an unauthorized (or formerly authorized) area because they think he still works there. It is important that security be kept up-to-date on this kind of personal change.

Access restrictions

    >> Make sure that access to crucial data such as grades and payroll data is limited to those who must have it.

What is the relation between SCM & ERP ?

Assembling the information need to feed the SCM applications from legacy systems can be tedious as it is difficult to get that information flowing on a fast, reliable basis from all the areas of an organization. An ERP system integrates all that information together in a single application and SCM applications benefit from having a single major source to go for up-to-date information.

Majority of the management people who have tried to install SCM applications say they are glad they did ERP first. They term the ERP projects making your information house in order. Now most ERP solution providers have SCM modules so doing an ERP project may be a way to have these both in one go. What the organizations must do is that they must evaluate whether these applications meet their needs.

Many times software applications that automate the logistics aspects of SCM do not gather information from around the company, so they tend to be independent of the ERP decision. But it is better to have these applications communicate with ERP in some fashion. It’s also important to pay attention to the software’s ability to integrate with the Internet and with ERP applications because the Internet will drive demand for integrated information.

What are the reasons for the popularity of ERP system ?

As the business world is getting sophisticated, more and more companies join the race, the competition is getting stiffer day by day. In such a scenario, ERP vendors are gearing up to meet this challenge by offering more features and better capabilities for their products.

So, the future will see a fierce battle for market share and mergers and acquisitions aimed at gaining strategic and competitive advantage. The ultimate winner in this race will be the customer, who will get better products and better services at affordable prices. These are some of the reasons for the increasingly popularity of the ERP market.

Described below are some of the reasons why many companies replaced their manual or semi-automated systems with ERP system.

Increased business agility : Improved productivity and reduced development time makes less time needed to get a product to market. This coupled with the ERP system’s ability to manage and track problems, fix them, rebuild the systems easily, accurately and quickly and release them faster results in improved customer satisfaction. So the company can be more agile and more responsive to the needs of the customer without compromising product quality.

Improved productivity : ERP systems improve the productivity and efficiency of organizations by eliminating data redundancy, streamlining processes, introducing best business practices and so on.

Error reduction : ERP systems automate most of the monotonous and repetitive tasks that were done earlier by people. Thus, SCM tools have greatly reduced the opportunity for human error.

Information integration : One of the major functions of ERP is to provide sufficient, relevant and accurate information about the software system to the different people in the project – programmers, managers, analysts, auditors and so on – allowing the functioning of the business processes to proceed smoothly.

Automation : ERP systems automate many processes. They also automate the workflow so that a single action like an entry into the order-processing system triggers a number of related events and actions in all the various but related departments automatically. This level of automation reduces data entry, errors, data duplication and helps the organization to react and respond faster. By automating the business processes and tasks, ERP systems have improved development productivity and give people more time for the system development process.

How important is ERP training ?

Many studies have revealed the fact that less number of ERP implementation has a smooth introduction that delivers the anticipated benefits. The remaining firms either experience teething problems or a significant shortfall in delivered benefits and the difference between the successful and the rest is better training.

Everyone knows that training is important, especially the ERP software vendors. They also charge the firms separately for training session. The third-party training firms, who conduct courses on how to operate an ERP vendor’s system, also know the important of training. Today training methods available in the market are plenty – on-site training, web-based virtual classrooms, computer-based training, knowledge warehouses, video courses, self-study books, context sensitive help screens – an almost endless menu to suit almost every need and budget.

The training should impart to the users the ability to figure out the underlying flow of information through the business itself. The program should explain the ERP basics, the business processes, how the ERP system functions, how it automates the business processes, how the action of a user affects the entire organization and so on. The focus should shift from mere training to providing education and with greater emphasis on education. Education will tell the users why they are doing it and will help in winning support for the project as it will enlighten the users.

What are the various pre-requisites of ERP ?

Let us understand and describe the essential cultural elements based on best practices to make ERP a great success.

1) Highly customer focused environment.
2) Hierarchy and boundary less structure with empowered employees.
3) Well desired process based activities.
4) Responsible and accountable process ownerships.

The absence of any one of the above will lead to ERP malfunction. Hence to make the successful implementation, ERP must be properly interpreted in the following ways.

    >> ERP is more a business strategy than IT strategy.  The concept of ERP is more suitable for the lean manufacture than mass manufacture. In fact, in assemble to order scenario, ERP brings excellent business results, whereas in make to order scenario, it goes beyond business results and improves employee morale and motivation.

    >> The culture of make to stock is not at all suitable to ERP, and hence forceful implementation of ERP will make ERP degenerate into more of a transactional system than a planning system, there by losing its core inherent capability.

    >> The typical qualities of ERP users include team spirit, analytical mindset, and readiness to be a change agent, willingness to accept process accountability, viewing IT as a tool for scientific experimentations and improve information level.

    >> The chief issue of ERP is not the process or the technology but the people. Hence, the Human Resource Head should be the main project leader for the ERP exercise.

How is technology helpful in the ERP selection criteria ?

The question should address the company’s business needs and concerns and each issue or question should be given a weight according to how critical that function is for the company. For example, if the company has offices in different countries, then the capability of handling multiple languages and currencies becomes an important criterion.

Likewise the selection criteria should be divided into categories – vital, essential and desirable – and points should be given to each criterion. This point rating system will simplify the evaluation process; but remember the importance of human intuition and judgment should never be underestimated.

The best method for preparing the selection criteria is to conduct a requirements analysis – find out what the company needs. The requirements must reflect those factors that the company considers indispensable for the successful running of the business according to company’s work culture and practices.

How to prepare an organization for ERP implementation ?

Exposing the top management to the benefits of ERP through the real world case studies, sharing of experience by other corporations that have successfully implemented ERP and creation of awareness is the first step.

Convincing the top management to use a high risk, high reward scheme such as ERP is a major challenge. Almost all the members of the organization should get the excitement about ERP project implementation. Communicating and sharing of the ERP vision is the most important organizational preparation for a successful ERP implementation.

Should SMEs implement ERP system ?

Every business now has the opportunity to take advantage of the internet’s geographical reach and potential for profit. Thus, the Internet has made it possible for small and medium-sized enterprises (SMEs) to compete effectively with the larger organizations. The enabling potential of the Internet guarantees that SMEs are appropriately represented and active participants in the globalized marketplace.

Today’s web-based ERP solutions provide SMEs with a technology solution having all the functionality and benefits with minimal investment and risk.

By not making the transition to this new way of doing business with the help of an effective ERP system, small firms run a serious risk of becoming less competitive, affecting both their present market positions and long-term viability. As larger companies integrate ERP and e-commerce into their business, small firms run the risk of being excluded if they are unable to establish strong e-commerce ties with others in their supply chains.

What is meant by Enterprise Application Integration ?

Applications such as supply chain management (SCM), customer relationship management (CRM), business intelligence (BI) and integrated collaboration environments have become imperative for organizations that need to maintain their competitive advantage. Enterprise Application Integration (EAI) is the process of linking these applications and others in order to realize financial and operational competitive advantages.

One of the challenges facing modern organizations is giving all their workers complete, transparent and real-time access to information. Many of the legacy applications still in use did not support seamless movement of information from one application to the other. EAI, as a discipline, aims to alleviate many of these problems as well as create new paradigms for truly lean proactive organizations.

EAI intends to transcend the simple goal of linking applications and attempts to enable new and innovative ways of leveraging organizational knowledge to create further competitive advantages for the enterprise.

When different systems cannot share their data effectively, they create information bottlenecks that require human intervention in the form of decision-making or data entry. With a properly deployed EAI architecture, organizations are able to focus most of their efforts on their value creating core competencies instead of focusing on workflow management.

What are the 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.

How is the cost of ERP implementation built up ?

The cost of ERP typically includes costs of hardware, software, training, data conversion and reengineering.

Hardware is a one-time cost. Hardware typically includes computers, servers, peripherals, network cables, hubs etc. The decision makers have to decide on implementing the best and most sophisticated hardware possible, at the same time keeping in balance with the costs so that the investment certainly results in benefits in the long run.

Software includes the range of different ERP packages available in the market. The cost of software would vary great on the ERP brand or vendor, the functionalities it covers, special options available, competitors markets, and so on.

Training cost is not only the cost of training the people to use the software but also the cost of correcting the mistakes while performing the job in ERP. Secondly, the person using ERP has to adapt a whole new process to get used to ERP. Quite often, it takes a year for people to learn this, which may have considerable impact on bottom line of the organization.

Data conversion includes costs in moving corporate information such as customer and supplier records, product design data, etc. from the old system to the new ERP system. These costs will generally be higher for enterprises that haven’t managed their data efficiency and concisely. Most of the time companies prefer to use some middle-level software to append the data into the ERP system. Those costs have to be considered as migration costs.

Reengineering as the name suggests, is a process of engineering everything again. As a result, it comprises a majority of the total cost of implementing ERP. It typically includes consultancy charges, process change costs, costs of removal of old policies and practices.

Costs of ERP should not be viewed as an expense but an investment towards an ability that provides better profitability, market share or customer service through integration and automation.

What is the difference between ERP and tools for ERP ?

One has to clearly understand here that ERP is not SAP, or Baan or anything else, but these are the tools of ERP. The concepts that ERP believes in should ideally get reflected in these products. But we see that not everything is observed in the same way because of many reasons, primarily attributed to marketing strategy.

Every ERP company offers its brand with different marketing strategies. Hence we find significant difference in procedures, forms, looks, reporting structures, facilities, architecture, database designs, and also the prices for different ERP products.

Since these products vary in their functional and technical efficiencies, it is crucial for the client side to decide which product to opt for. Of course, most of these products are based on common theory but different implementation experience at their clients.

They are evolved from the state of small automation and planning software that was addressing a particular business process. Thus we find that the strengths of these products are different in addressing various business processes. For example, one popular ERP brand is evolved from inventory management system. Hence we find it very strong in all materials transaction functionalities.

Another brand is evolved from maintenance management system, which handles maintenance planning in a unique way with excellent efficiency. One brand is evolved from highly focused area of human resource management. Thus we find different strengths and weaknesses of these products.

What are the major difference between service and manufacturing industry ?

Manufacturing Industries engaged in the production of goods (finished products) that have value in the marketplace. These industries are further classified into two as Process Industries (Flow production or continuous process production industries) and Discrete Manufacturing Industries.

Service Industries include those industries that do not produce goods, but provide certain services. The peculiarity of these industries is that often the consumption of the service takes place while it is in the generation. Typically, this sector includes hospitality, advertising, banking, insurance, consultancy, logistics, etc.

The significant difference between the various types of industries is observed when we analyze the manufacturing or service environment in which they operate. Elements of the manufacturing environment include external environmental forces, corporate strategy, business unit strategy, other functional strategies (marketing, engineering, finance, etc.), product selection, product/process design, product/process technology and management of competencies.

Ultimately, what matters is the framework in which the overall manufacturing or service strategy is developed and implemented.

What is the typical implementation time frame for ERP system ?

Just like implementation costs, implementation time frames vary widely based upon size and sophistication of the organization. The most important element in how long it takes to implement an ERP system is the level of commitment on the part of the senior management of the organization which purchased the ERP system.

While there are number of reasons why ERP implementations take substantially longer than originally anticipated (‘scope creep’, data conversion issues, etc.), the single largest issue in implementation is the staff of the implementing organization spending the necessary time to actually make the implementation happen.

This is difficult because in most mid-sized companies, implementation activities are typically performed by people currently working for the organization that purchased the ERP software (as opposed to larger organizations which typically use external sources to augment their staff during an implementation).

In most of these mid-sized companies, these individuals are already working a solid week without the added requirements placed on their time by an ERP implementation. An ERP software vendor should, based upon experience, be able to tell you how much time your organization will need to spend during the implementation process and how long the entire process should take.

Why can't companies develop their own ERP packages ?

Developing an ERP package is a very complex and time-consuming process that requires a lot of skilled manpower and other resources. Many companies have personnel on their payrolls who can absorb the necessary knowledge and who have experience in developing sophisticated systems. The problem is that ERP package development is not the man business of these companies. They should be directing all of their available resources into improving their own products or services so that they can remain competitive and better serve their customers and continue to grow.

ERP package vendors are people who have invested huge amounts of time and effort in research and development to create packaged solutions. ERP vendors spend billions of rupees in research and come up with innovations that make the packages more efficient, flexible and easy to implement and use. Also with the revolution of new technologies the vendors will be able to constantly upgrade their product to take advantage of the best and latest advancements of technology because their main focus is on improving the capabilities of their tools.

Since designing and implementing ERP systems is not the business of most companies, or a focus of their management, the systems an in-house team comes up with will never equal in quality, scope functionality, or technology with those created by software firms who are exclusively into these business.

ERP package vendors can produce sophisticated packages and provide their clients with products that allow them to main a focus on their own chief activities, thus improving revenues, profits and shareholder returns.

Why ERP is considered to be the backbone of e-business ?

Business enterprises in India are in the process of a major transformation due to globalization and the deregulation of Indian economy, coupled with fundamental changes in the business models due to the emergence of Information Technology based business practices.

Most of the enterprises in developing countries, such as India, are in the process of implementing Enterprise Resource Planning (ERP) system in alignment with organizational transformation and process of re-engineering initiatives. ERP system promise benefits that range from increased efficiency to transformation of quality, productivity and profitability.

However, its implementation poses some unexpected organizational challenges and changes that can be structural as well as cultural in nature. ERP not only helps establish world-class best business practices and brings transparency to the organization but also demands for empowerment and flexibility in decision making process.

The most promising argument is that, to thrive in the e-commerce world companies need to transform their internal business process with the deployment of ERP system. Hence, ERP is considered to be the backbone of e-business.

What are some key areas in which ERP systems can yield additional cost savings ?

Describing it at a very high level, companies can address efficiency issues by increasing the amount of automation (usually by reducing spreadsheet use or keying/re-keying data); redefining processes to eliminate unnecessary steps or increase commonality; increasing their use of electronic data links to customers, suppliers or partners (or even within their organization if they have not done it already); replacing paper documents with scanned images; and saving time by having computers count the beans and letting people manage by exception.

Increasing the use of end-to-end processes is one concrete way companies can use their ERP systems to increase efficiency. We found only half of the companies have implemented an order-to-cash process, even though it usually cuts the effort needed to manage transactions and shortens the cycle.

Who are ERP Consultants? What is their role ?

ERP consultants are professionals who specialize in developing techniques and methodologies for dealing with the implementation and the various problems that will crop up during the implementation. They are experts in the administration, management and control of these types of projects.

Each of them will have many man-years of implementation experience with various industries and have knowledge of time-tested methodologies and business practices that will ensure successful implementation. They will be good at all phases of the implementation life cycle right from package evaluation to end-user training.

Consultants provide a wide variety of functions often filling in the gaps. Some of the positions that consultants can fill include project manager, team leader, team member, service representative and end-user. A consultant’s success depends upon a number of factors including computer literacy, conceptual, skills, software knowledge, industry knowledge, maturity, problem-solving capability, communication skills and organizational skills.

The success of any particular consultant can vary tremendously from company to company and from situation to situation. Surprisingly, a consultant’s industry and software knowledge does not correlate strongly with his or her success or capability to help a company.

Many cases have been identified where consultants lacking in software and industry knowledge who were able to consistently out-perform other consultants considered the most knowledgeable in software and industry. These consultants showed strong interpersonal communication skills, were self-starters requiring little or no training, had good computer literacy, problem-solving capability and conceptual skills.

Many of the big consulting firms, having forecasted the ERP boom, invested a great deal of money in developing a range of consulting services in this field and assigned many of their professionals to become specialists in the various aspects of ERP packages and their implementation.

These firms researched various products, developed an in-depth understanding of each product’s strengths and weaknesses, worked by the side of the ERP vendors, confirmed that the vendor’s package worked and learned the tricks and techniques of the trade, found out the pitfalls and mistakes that should be avoided and thus created a pool of experts who could handle the ERP implementation without failure.

Is developing an in-house ERP system expensive ?

This is a question that has been asked repeatedly because there is a misconception that an in-house developed ERP system will be not only less expensive but also more reliable.

In fact the reality is something else. First of all, in-house development can be much more costly than it appears. Managing your own development team with their salaries and other perks, the downtime in user departments during all phases of development, and the opportunity cost of not putting developers on other worthy projects that would propel your business forward. The time it requires to extract meaningful data for executive analysis out of your database must also be included as a cost consideration.

Then comes the maintenance part. The maintenance of ERP system is time-intensive, slow, and fraught with undocumented functions. And remember the the cost of downtime when outages occur. The complexity of today’s computing environments only magnifies the difficulties and expense of implementing and maintaining an ERP system. Therefore it is better companies should avoid any plan to develop an ERP solution in-house that can bring only troubles and no benefit.

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