Enterprise Resource Planning, A Guide To

Information technology has transformed the way we live and the way we do business. ERP, or Enterprise Resource Planning, is one of most widely implemented business software systems in a wide variety of industries and organizations. In this short article, we’ll try to concisely explain the basic yet important concepts relevant to ERP.

What is ERP - ERP is the acronym of Enterprise Resource Planning. ERP definition refers to both ERP software and business strategies that implement ERP systems. ERP implementation utilizes various ERP software applications to improve the performance of organizations for 1) resource planning, 2) management control and 3) operational control. ERP software consists of multiple software modules that integrates activities across functional departments - from product planning, parts purchasing, inventory control, product distribution, to order tracking. Most ERP software systems include application modules to support common business activities - finance, accounting and human resources.

ERP Systems - ERP is much more than a piece of computer software. A ERP System includes ERP Software, Business Processes, Users and Hardware that run the ERP software. An ERP system is more than the sum of its parts or components. Those components interact together to achieve a common goal - streamline and improve organizations' business processes.

History of ERP - Enterprise Resource Planning (ERP) is the evolution of Manufacturing Requirements Planning (MRP) II in 1980s, while MRP is the evolution of Inventory Management & Control conceived in 1960s. ERP has expanded from coordination of manufacturing processes to the integration of enterprise-wide backend processes. In terms of technology, ERP has evolved from legacy implementation to more flexible tiered client-server architecture.

Benefits of ERP - ERP software attempts to integrate business processes across departments onto a single enterprise-wide information system. The major benefits of ERP are improved coordination across functional departments and increased efficiencies of doing business. The implementation of ERP systems help facilitate day-to-day management as well. ERP software systems is originally and ambitiously designed to support resource planning portion of strategic planning. In reality, resource planning has been the weakest link in ERP practice due to the complexity of strategic planning and lack of adequate integration of ERP with Decision Support Systems (DSS).

ERP Failures - We couldn’t conclude our brief guide to ERP without mentioning ERP failures. The failure of multi-million dollar ERP projects are reported once in a while even after 20 years of ERP implementation. We have identified the four components of an ERP System - 1) ERP software, 2) Business Processes that ERP software supports, 3) Users of ERP systems, and 4) Hardware and Operating Systems that run ERP applications. The failures in one or more of those four components could cause the failure of an ERP project.

Copryright @2006, 4th-Media Corporation

Enterprise Resource Planning And Enterprise Content Management

The word Enterprise Resource Planning or ERP conveys a sense of planning the use of enterprise-wide resources to achieve enterprise objectives in the best possible manner. However, ERP has come to mean something much less ambitious. It simply means integrating two or more separate applications.

The integration is done by the use of a common database and multiple software and hardware components. Thus an ERP system can include Manufacturing, Financials, Sales & Distribution, and HR functionalities in separate modules.

Integration of a number of systems results in:

• Creation of a unified database that results in greater reporting capabilities,


• Elimination of external interfaces between different applications that were needed earlier to exchange information between them, and


• Standardization and lower maintenance costs as a single system replaces the earlier multiple systems.

Typical modules in modern ERP systems:

ERP System Modules

Manufacturing: This module facilitates manufacturing and related operations such as plant engineering, production scheduling, materials requirements lists, workflow and process management, quality control and cost control.

Supply Chain Management: Inventory control and purchasing functions, including supply chain planning, and supplier performance monitoring, are the major functions facilitated by this module.

Customer Relationship Management: Sales and Distribution, Commissions and Customer Support are covered by this module.

Financials: This module covers the traditional accounting and cash flow management functions, including accounts receivable, accounts payable, cash flow control, and general ledger.

Other typical modules include Human Resources (including payroll), Project Management and Data Warehouse. ERP systems also provide direct interfaces for external entities like customers and suppliers, and internally for employees.

The separation of modules in this manner has resulted in some large organizations selecting different modules from different ERP vendors. Some functionality might be better with one vendor's module while other vendors’ modules better manage other functionalities. This would, however, involve building interfaces between modules from different vendors, which might have to be done by in-house staff. It follows that the staff should have the required skill level.

Implementing ERP in Organizations

Implementing ERP typically involves significant changes in working practices. Necessary skills might also not be available in-house. Either the ERP vendor or a third-party consultant usually helps implement ERP in an organization.

The ERP implementation needs to be aligned with the organization's business processes, which usually need to be re-engineered.

New user interfaces and even some processing might have to be coded where the ERP system does not meet certain work practices in the organization. The ERP system should ideally accommodate such customization.

Implementation will also involve training to the organization's personnel to work with the ERP system, and continuing support to keep the system running with minimal additional costs.

Why ERP?

In the absence of ERP, the different applications in use might not be able to exchange information. Such information exchange can become very critical for efficient operations and competitiveness. Organizations that have implemented ERP properly will be able to operate in a lean manner, leading to lower costs and customer prices, giving them an advantage in the marketplace.

ERP and Enterprise Content Management Systems

Enterprise Content Management systems seek to create a knowledgebase consisting of both structured and unstructured content generated all over the enterprise. Enterprise Resource Planning systems facilitate this goal by combining applications and using a common database.

Using E-Learning in ERP Systems Implementation

In today's world, information technologies are actively used in many spheres of life, including learning. In particular, e-learning courses are becoming more and more popular. Computer-based training saves you time, money, and effort when implementing such intricate software solutions as MS Dynamics AX or NAV. This way of studying can be useful not only for individuals, but also for large corporations.

In this article we will explain the advantages of online training during the implementation of complicated software products in general and Microsoft Dynamics products in particular. So, why should you use e-learning, and what benefits can it bring to your organization?

• Theory and practice. Online courses allow students to gain theoretical knowledge and ground it in practice on the spot.
• Knowledge assessment. Assess your knowledge by answering online test questions.
• Interactivity. Software emulations enable the students to work with the program interface without installation.
• Flexibility. Learn any time you wish within the 3-month access period.
• Reasonable prices. Distance education for Microsoft Dynamics products costs less than offline classes.

Implement ERP Systems with E-Learning

These days, ERP systems develop so fast that it's hard to ensure that employees are properly trained on them. Traditional trainings are not sufficient, and that's why a new technology needs to be introduced.

Trainings:
http://www.speedteach.com/dynamics-nav-training.aspx
http://www.speedteach.com/dynamics-ax-training.aspx

When implementing Microsoft Dynamics products, namely ERP systems, most companies hire experienced professionals to do this job, which involves additional expenses. Instead of this you can use e-learning to train the specialists who are already employed in your company. When correctly integrated with ERP processes, a comprehensive e-learning solution makes it possible to increase knowledge and improve skills for both internal and external users of the system.

However, in no circumstances should you put the offline courses aside. E-learning solutions cannot completely substitute conventional classroom training, so you can effectively combine online and offline education for your specialists. For example, the theory can be taught traditionally, while the practical tasks can be done by the means of online trainings. Moreover, if someone of your employees need to conduct trainings on MS Dynamics software, he or she can effectively use e-learning courses to prepare beforehand.
Source: http://www.speedteach.com/

Causes of ERP Failures

ERP is the acronym of Enterprise Resource Planning. Multi-module ERP software integrates business activities across various functional departments, from product planning, parts purchasing, inventory control, product distribution, to order tracking. ERP has transformed the way multi-billion dollar corporations conduct their businesses. Successful implementation of ERP systems could save tens of millions of dollars and increase employee satisfactions, customer satisfactions and sustain competitive advantages in every-changing marketplace. Corporate executives are often perplexed by the stories that how reputable corporations (Hershey Foods, etc.) have failed miserably and lost ten of millions of dollars in their ERP endures.

The failures of ERP projects are preventable if we can identify the common causes of the failures regardless the companies and industries that implement them.

An ERP system is the combination of ERP software, the business processes that the ERP transforms, the users of the ERP system, and the computer systems that run the ERP applications. The failures of a ERP project is often the result of the failures in one or more of those four components. The failures in computer systems (hardware and operating systems) are much easier to identify and to fix, so we'll examine the failures in software implementation, business process and user acceptance.

Failure of ERP Software Implementation

Module-based ERP software is the core of ERP systems. Most ERP projects involve significant amount of customizations. Packaged ERP software modules have built-in functionality that work in a standard and simplified enterprise environment. However, every organization is unique in data requirements and business processes. It is the customizations that transform packaged ERP software into ERP software that meets organizations' individual business processes and operations. Long and expensive customization efforts often result the pass of release deadline and budget overrun. Customizations may make the software more fragile and harder to maintain when it finally goes to production. Major changes may be required in the later stage of the implementation as a result of incomplete requirements and power struggles within organizations

The integration of ERP systems with the IT infrastructures also challenges ERP project teams. The use of appropriate implementation methodologies can often make or break a ERP project.

Failure of Accommodating Evolution of Business Processes

According to Anthony, R. A, business processes fall into three levels - strategic planning, management control and operational control. Organizations continuously realign their business processes of all levels in response to the ever-changing market environment. Many ERP systems aren't flexible enough to accommodate evolution of business processes. many ERP system need a major overhaul in every a couple of years.

Failure of User Acceptance

The users of ERP systems are employees of the organizations at all levels. ERP projects usually modify the company's business processes which create extra workload for employees who use them initially. They may not think that the workflow embedded in the software are better than the ones they currently use. Ongoing end-user involvement and training may ease the difficult in organization's adaptation of new systems and new business processes.