ERP Implementation in VIT
by Ayyappan.R Bhuvana.B Kandaswamy.C Kanu Priya Mahendran.S Mohammed Naufal CONTENTS
1. INTRODUCTION
3
2. EVOLUTION OF ERP
7
3. TRENDS IN ERP
13
4. IMPLEMENTATION OF ERP IN VIT
15
5. PEOPLE SOFT
30
6. SOME RECOMMENDATIONS
35
7. CONCLUSION
38
8. REFERENCES
39
Introduction :
ERP is an acronym that stands for Enterprise Resource Planning. ERP is a pack packag agee soft softwa ware re solu soluti tion on that that addr addres esse sess the the ente enterp rpri rise se need needss of an
organi organizat zation ion by tightly tightly integra integrating ting the various various functio functions ns of an organi organizati zation on using a process view of the organization. It is a package software and not a custom made software for a specific firm.It gives a company an integrated realtime view of its core business processes. The term ERP originally originally implied implied systems systems designed designed to plan the use of enterpr enterpriseise-wide wide resourc resources.A es.Altho lthough ugh the initialism ERP ERP orig origin inat ated ed in the the manufacturing environment, today's use of the term ERP systems has much broader scope. ERP systems typically attempt to cover all basic functions of an organization, regardless of the organization's business or charter. Businesses, non-pr non -profit ofit organ organizat izations ions,, nongove nongovernm rnmenta entall organi organizati zations, ons, governme governments, nts, and other large entities utilize ERP systems. It is the the tech techno nolo logi gica call back backbo bone ne of e-bu e-busi sine ness ss,a ,an n ente enterp rpri rise sewi wide de trans transac actio tion n frame framewor work k with with links links into into diffe differen rentt un units its in the compa company ny.ER .ERP P includes in its breadth all the resource planning for the enterprise including product design, information warehousing, material planning, capacity planning and communications system, to name just a few. ERP integrates integrates the functional functional modules tightly. tightly. It is not merely the import and export of data across the functional modules. It integra integrates tes all data and processes of an organization into a unified system. A typical ERP system will use multiple components of computer software and hardware to achieve the integration. integration . The integration ensures that the logic of a process that cuts across the function is captured genuinely. This in turn implies that data once entered in any of the functiona functionall modules modules is made availabl availablee to every every other module module that needs this data. This leads to significant improvements by way of improved consistency and integrity of data.
Comaparing to its previous softwares, ERP uses the relational databases, fourth generation languages, integrated computer-aided engineering tools such as produ product ct data data mana manage gers( rs(PDM PDM), ), and and op open en-s -sys ystem tem po porta rtabi bilit lity y to integ integra rate te systems systems such as advanc advanced ed plannin planning g and schedul scheduling( ing(APS) APS),, finite finite schedul scheduling ing systems, and manufacturing execution systems(MES).The APS tools that are part of a fully integrated ERP system provide excellent “what if” scenarios for the manager to determine the most beneficial mix of orders and customers. ERPs are often often incorre incorrectly ctly called called back office systems indicating that customers and the general public are not directly involved. This is contrasted
with with fron frontt offi office ce syst system emss like like customer customer relatio relationshi nship p managem management ent (CRM) systems that deal directly with the customers, or the eBusiness systems such as eCommerce, eGovernment, eTelecom, and eFinance, or supplier relationship management (SRM) systems. Modules in ERP
Idea Ideally lly,, ERP delive delivers rs a sing single le datab databas asee that that conta contain inss all data data for for the the software modules, which would include: Manufacturing: Manufacturing : Engine Engi neer erin ing, g, Bill Billss of Mate Materi rial al,, Sche Schedu duli ling ng,, Capa Capaci city ty,, Workf orkflo low w Mana Manage geme ment nt,, Qual Qualit ity y Cont Contro rol, l, Cost Cost Mana Manage geme ment nt,, Manu Manufa fact ctur urin ing g Process, Manufacturing Projects, Manufacturing Flow. Supply Chain Management: Management : Inventory Inventory,, Order Entry, Entry, Purchasing, Purchasing, Product Product Configurator Configurator,, Supply Chain Planning, Supplier Scheduling, Inspection of goods, Claim Processing, Commission Calculation. Financials: Financials : Gene Genera rall Ledg Ledger er,, Cash Cash Mana Manage geme ment nt,, Acco Accoun unts ts Paya Payabl ble, e, Acco Accoun unts ts Receivable, Fixed Assets. Projects: Projects : Costing, Billing, Time and Expense, Activity Management.
Human Resources: Resources : Human Resources, Payroll, Training, Time & Attendance, Benefits. Customer Relationship Management : Sales and Marketing, Commissions, Service, Customer Contact and Call Center support. Data Warehouse: arehouse : and and vari variou ouss Self Self-S -Ser ervi vice ce inte interf rfac aces es for for Cust Custom omer ers, s, Supp Suppli lier ers, s, and and Employees.
Why ERP?
Corporations go for ERP either to solve the existing problems or to explo explore re new new op oppo portu rtuni nitie ties. s. Actua Actually lly these these two appr approa oach ches es are are negat negativ ivee & positive approach respectively. One aspect of the negative approach forces some corporations corporations to go for ERP to solve their Y2K problem. This is particularly true of those corporations that are heavily dependent on legacy systems running on old main frames. The second aspect of the negative approach is to get over the problems of islands of heterogeneous and incompatible information systems that that were were deve develo lope ped d ov over er the the past past seve severa rall year yearss in many many orga organi niza zati tion ons. s. Functional IS modules representing areas such as Finance, Marketing, HR, and Production in these organizations would be running on diverse hardware and software platforms leading to nearly insurmountable problems of reconciling data locked up among the diverse systems. From a positive perspective many organization look at the great opportunity provided by ERP software that lead to almost instant access of transactional information across the corporation. Such an information rich scenario permits organization to reduce inventory across multiple units/ departments/ plants; reduce cycle times from weeks to hours; and improve customer satisfaction by orders of magnitude. All these translate to incre increas ased ed profi profitab tabil ility ity or incr increas easee in mark market et share share and in turn turn much much large larger r market capitalization. However ERP is only means and not an end by itself. ERP provides an opportunity for a corporation to operate as an agile entity to improve production / operation, customer service and customer satisfaction. The creative ingenuity of an organization to drive towards these corporate goals determines the extent of success an ERP implementation can deliver.
Prior to the concept of ERP systems, departments within an organization (for example, the human resources (HR) department, the payroll department, and the financials department) would have their own computer systems. The HR compu compute terr syste system m (ofte (often n calle called d HRMS HRMS or HRIS) HRIS) would would typi typica cally lly conta contain in informat information ion on the departm department, ent, reporti reporting ng structur structure, e, and persona personall details details of empl employ oyee ees. s. Th Thee payr payrol olll depa depart rtme ment nt woul would d typi typica call lly y calc calcul ulat atee and and stor storee paycheck information. The financials department would typically store financial transactions for the organization. Each system would have to rely on a set of common data to communicate with each other. For the HRIS to send salary information to the payroll system, an employee number would need to be assigned and remain static between the two systems to accurately identify an employee. The financials system was not interested in the employee-level data, but only in the payouts made by the payroll systems, such as the tax payments
to various authorities, payments for employee benefits to providers, and so on. This provided complications. For instance, a person could not be paid in the payroll system without an employee number. But after the introduction introduction of ERP, ERP, the ERP software, among other things, combined the data of formerly separate applications. This made the worry of keeping keeping numbers numbers in synchr synchroniz onizatio ation n across across multipl multiplee systems systems disappe disappear ar.. It standardised and reduced the number of software specialities required within larger organizations. An ERP softwar softwaree packa package ge matur matures es ov over er time time with with addit additio ions ns of new new mod odu ules and functio tionality ity by the the softwa tware vendors. Th Thee continuing developments developments in ERP software, including web-enabled modules and e-business e-business software software suites,h suites,have ave made made ERP more flexibl flexiblee and user-fri user-friend endly ly,, as well as extending it outward to a company’s business partners.
Evolution of ERP
ERP Growth Rings Ri ngs ERP MRP II CL MRP MRP BOMP
Beginning of Hierarchical Data Base
ERP (Enterprise Resource Planning) is the evolution of Manufacturing Requ Requir irem emen ents ts Plan Planni ning ng (MRP (MRP)) II. II. From From bu busi sine ness ss pers perspe pect ctiv ive, e, ERP ERP has has expanded from coordination of manufacturing processes to the integration of enterprise-wide backend processes. From technological aspect, ERP has evolved from legacy implementation to more flexible tiered client-server architecture. 1. Bills of material processor(BOMP):
BOMP BOMP is the the combin combinat ation ion of inform informat atio ion n tech techno nolog logy y and and bu busin siness ess processes of maintaining the appropriate level of stock in a warehouse. The activities of this processor include identifying inventory requirements, setting targ targets ets,, prov provid iding ing reple replenis nishme hment nt tech techniq niques ues and and op optio tions, ns, monit monitori oring ng item item usages, reconciling the inventory balances, and reporting inventory status.
2. Material requirement planning:
MRP1 is the predecessor of enterprise resource planning application. ERP has become the talk of the day not only with regards to management and information systems but also for the whole business. When there is much hype around it is also equally important to trace the origin of ERP and its Predecessors.MRP1 the acronym of material resource planning was the first business application that set foot in the ERP family. The credit cre dit of comp computer uterizin izing g the bus busines inesss pro process cesses es sole solely ly goe goess to MRPI MRPI.MRP .MRP1 1 functioned with the objective of increasing the business profit by enriching the business. It is important to know the problems faced by companies before understanding underst anding how Materia Materiall resourc resourcee planning solved them. MRP software was a boon to companies facing troubles in production. MRP planning facilitated the functions of the software. Predicting the demands in advance
Companies were able to turn raw material into finished products easily even ev en wit witho hout ut an any y te tech chnic nical al bac backu kups ps.. Com Compa pani nies es co could uld no nott en enga gage ge in ma mass ss production schedule for fear of decline in the customers demand. Hence they suffe suf fered red fro from m so some me lim limita itati tions ons lik likee no nott be being ing ab able le to pre predi dict ct th thee dem deman and d properly. If they produced more and the demand was loss the surplus amounted to loss. On the other hand if they engage in lower production scale when the demand is really high it will affect their business and potential loss. There seemed to be no end due to these discrepancies. Purchasing Raw materials
The question of allocating raw materials and scheduling their purchase turned out to be another headache. If companies were unable to predict sales it would neither be logical to expect them to decide the exact quantity of raw materialss required for production. If they bought excess it was a mere waste .on material the other hand deficit purchase affected sales. MRP1
Dr Jo Jose seph ph Or Orli lick cky y in inve vent nted ed MR MRP1 P1 in th thee ye year ar 19 1960 60.T .Thi hiss sy syst stem em comp co mpri rise sed d a co comp mput uter er th that at he help lped ed to co comp mput utee th thee ex exac actt qu quan antu tum m of ra raw w materials and sales. This point proved to be the start for integrating IT with manu ma nufa fact ctur urin ing g Sy Syst stem ems. s. Ev Ever er si sinc ncee th they ey ha have ve be beco come me in inse sepa para rabl blee af afte ter r adva ad vanc nceme ement ntss in the nam namee of MRP MRPII II an and d ERP while while the latest latest on onee be being ing ERPII.MRP planning is the crux of MRP software.
Nature of functioning
MRP1 works like a simple mathematical formula. formula. If all the inputs are fed in one end and the calculations are applied the output is received at the other end. Input here reefers to the quantity of raw materials and expected demand alon al ong g wi with th mi minu nute te de deta tail ilss of re reso sour urce cess li like ke Pe Peri riod od,, op opti timu mum m pr prod oduc ucti tion on capacities and the current level of stocks. This will be processed by the system .It will then let the user to know the steps that should be taken for achieving achieving the said production limits and there ends the troubles. MRP software solved all the problems related to production. MRP planning was helpful to a great extent in this aspect. Applications
MRP's application in the working environment is wide in nature. It just does do esn't n't lim limit it to pr prod oduc uctio tion. n. It ca can n ca calc lcula ulate te ea each ch an and d ev ever eryth ything ing re relat lated ed to production. The functioning of MRP1 is quiet diverse and it can be put to use in many industries. 3. Manufacturing resource planning (MRP II):
MRP was in ex exist istenc encee ri righ ghtt fro from m the ye year ar 19 1960 60.. MRP II oth other erwis wisee referred to as manufacturing resource planning enabled to overcome the setback of MRPI the acronym of material resource planning. The analysis of MRP 1 reveals that it is made on the basis of finding out the quantum of materials that have to be given inorder to gain the said optimum productivity levels depending on other parameters like production capacity and facto fac tors. rs. The MRP systems systems wer weree in ex exist isten ence ce be befo fore re ERP te tech chno nolog logy y wa wass invented.
MRP II was developed with all the features of MRP I .There were also some other elements in addition to those contained in MRPI. Key Elements
In addition MRP II boasts of the following four elements. These give the added advantages and differentiate MRP I from MRP II. Response
The significant feature of MRP II is the fact that the lay man in the industry will be able to realize its effects and hence be able to comment on the working. Any process is bound to achieve progress if and only it receives valuable criticism from reliable sources and more so preferably from end user. MRP II capitalizes on this advantage mainly .This response is not restricted to a particular section of employees. Everybody will be asked to pass their opinion .The response will therefore include all the views. This will help greatly in correcting the progress from one process to another. This is deemed to be effective as it gathers the response and the necessary corrections are made then and there. Still the MRP Systems cannot out beat ERP Technology. Allocating reserves
The system of MRP helps to maintain a neat agenda for the manner in which the resources are to be allocated without any confusions and khais. This means everybody will know what is expected from them within the stipulated deadline. deadlin e. Any discrepancy discrepancy between the actual time taken and the one allotted is likely to affect the effectiveness of this operation. Matching the requirements
MRP helps in deciding the ideal software requirements of the company. It is eit eithe herr ca calc lcul ulate ated d on the ba basis sis of min minimi imizin zing g in inves vestme tment ntss or pur purch chas asing ing products that render benefits for a particular time or selecting sets of products based on the coincidence of factors among them. Software extension programmes
MRPII bu MRPII buy y its itself elf com compo poses ses of a num numer erou ouss so softw ftwar aree pr prog ogram ram.. The These se softwa sof tware re pr prog ogram ramss aid in th thee fu funct nction ionin ing g of th thee bu busin sines ess. s. Th They ey ha have ve be been en manufactured manufac tured with the intent to benefit the company in all possible ways. There is lot of calculations involved with regards to these softwares. Popularity
MRP II ha MRP hass no nott ye yett lo lost st po popu pula lari rity ty in insp spit itee of th thee in inte terv rven enti tion on of ERP.Many organizations still consider it as a part of the manufacturing process. MRP systems are still in vogue in many industries and the manufacturing sector deserves special credit in this aspect.
The success of MRP 2 is to be determined by a set of factors. Firstly there should be cent percentage accuracy in the calculations that are performed. These calculations determine the success of MRP 2 so as its workings. The technique adopted to follow the operations is another factor that decides the success of MRP.
Advantages of ERP: There are a number of powerful advantages to Enterprise Resource Planning. It has been used to solve a number of problems that have plagued large organizations in the past.
1. Effi Effici cien ency cy:: It should first be noted that companies that fail to utilize systems such as ERP may find themselves using various software packages that may not function well with each other. In the long run, this could make the company less efficient than it should be. 2. Desi Design gn proc proces esss There are a number of processes that a company may need to integrate together. One of these processes is called design engineering. When a company is in the process of designing a product, the process of actually creating it is just as important as the end result. ERP can be useful in helping a company find the best design process. 3. Orde Orderr tack tackli ling ng Another area where ERP can be useful is order tracking. When a company receives orders for a product, being able to properly track the orde orders rs can can allo allow w the the comp compan any y to get get deta detail iled ed info inform rmat atio ion n on thei their r customers and marketing strategies. If different software packages are being used, this data may not be consistent. 4. Accou Account nting ing appli applica catio tion: n: Perh Perhap apss on onee of the the most most impo import rtan antt adva advant ntag ages es of ERP ERP is its its accoun accounting ting applica application tions. s. It can integra integrate te the cost, cost, profit, profit, and revenue revenue
information of sales that are made, and it can be presented in a granular way. 5. Manu Manufa fact ctur urin ing: g: Enterprise Resource Planning can also be responsible for altering how a product is manufactured. A dating structure can be set up which can allow the company to be informed of when their product should be updated. This is important, because it will allow the company to keep better track of their products, and it can allow the products themselves to be produced with a higher level of quality 6. Security ity: Another area where ERP can be an indispensable tool is the area of security. It can protect a company against crimes such as embezzlement or industrial espionage.
Disadvantages of ERP: However, with all the advantages that ERP offers, there are a number of disadvantages as well. 1. High High inve invest stme ment nt One of the biggest disadvantages to this technology is the cost. At this time, only large corporations can truly take advantage of the benefits benefits that are offered by this technology. This leaves most small and medium sized businesses in the dark. A number of studies have shown that the biggest challenges companies will face when trying to implement ERP deals with investment. 2. Cost Cost of trai traini ning ng:: The success of the system is fully dependent on how the workers utilize it. This means they must be properly trained, and a number of comp compan anie iess have have atte attemp mpte ted d to save save mone money y by redu reduci cing ng the the cost cost of training. Even if a company has enough money to implement ERP, they may not be able to successfully use it if they do not have enough money to train their workers on the process of using it.
3. Alte Altera rati tion on:: Most ERP vendors will not allow the structure of the software to be altered. One advantage to ERP is that making the necessary changes to use it may actually make a company less competitive in the market. In
addi additio tion n to the the costs costs invol involve ved d with with implem implemen ente ted d ERP and and train training ing workers to use it, the ERP vendors may charge additional license fees, putting a strain on companies that do not have enough resources to pay for them.
Trends in ERP: ERP is still evolving –adapting to development in technology and the demands demands of the market. market. Four Four importan importantt trends trends are shaping shaping ERP’s ERP’s continu continuing ing evolution: improvements in integration and flexibility, extensions to e-business applications, a broader reach to new user and the adaption of new technology.
Flexible ERP:
Firs First, t, the the ERP ERP soft softwa ware re pack packag ages es that that were were the the main mainst stay ay of ERP ERP implementations in the 1990’s and were often criticized for their inflexibility, have gradually been modified into more flexible products. Companies who installed ERP systems pressured software vendors to adopt more open, flexible, stand standard ardss-ba based sed softw softwar aree archi archite tectu cture res. s. This This makes makes the softwa software re easie easierr to integrate with other application programs of business users, as well as making it easier to make minor modifications to suit a company’s business processes. Web-enabled ERP:
This is the second development in the evolution of ERP. The growth of the internet and corporate corporate intranets and extranets extranets prompted software companies to use internet technologies to build Web interfaces and networking capabilities into ERP systems. These features make ERP systems easier to use and connect to other internal applications as well as to the systems of a company’s business partners. Interenterprise ERP:
The Internet connectivity has led to the development of interenterprise ERP systems that provide Web-enabled links between key business systems of a company and its customers, suppliers, distributors and others. These external link linkss sign signal aled ed a move move towa toward rdss the the inte integ grati ration on of inte intern rnal al-f -fac acin ing g ERP ERP applications of supply chain management and company’s supply chain partners. E-business suites:
All the deve develop lopme ments nts have have provi provide ded d the the bu busin siness ess and tech techno nolog logic ical al momentum for the integration of ERP functions into e-business suites. The major ERP software companies have developed modular, Web-enabled software suites suites that integra integrate te ERP, ERP, customer customer relatio relationshi nship p managem management ent,, supply supply chain chain managem management, ent, procu procureme rement, nt, decisio decision n support support,, enterp enterprise rise port portals als,, and othe other r busines businesss applica applicatio tions ns and function functions. s. Examples Examples includ includee Oracle’ Oracle’ss e-Busine e-Business ss Suite and SAP’s my SAP.
Implement Impl ementatio ation n of ERP in VIT
Becau Because se of their their wide wide scope scope of appli applica catio tion n withi within n a bu busin siness ess,, ERP software systems are typically complex and usually impose significant changes on staff work practices. Implementing ERP software is typically not an "inhouse" skill, so even smaller projects are more cost effective if specialist ERP implementation consultants are employed. The length of time to implement an ERP system depends on the size of the business, the scope of the change and willingness of the customer to take ownership for the project. A small project (e.g., a company of less than 100 staff) may be planned and delivered within 3 months; however, a large, multi-site or multi-country implementation may take years. The most The most impo import rtan antt aspe aspect ct of any any ERP ERP impl implem emen enta tati tion on is that that the the company who has purchased the ERP solution takes ownership of the project. To implement ERP systems, companies often seek the help of an ERP vendor or of third-party consulting companies. These firms typically provide three areas of professional services: consulting, customization and support. Consulting Services:
The Cons The Consul ulti ting ng team team is typi typica call lly y resp respon onsi sibl blee for for yo your ur init initia iall ERP ERP implementation and subsequent delivery of work to tailor the system beyond "go live". Typically such tailoring includes additional product training; creation of process triggers and workflow; specialist advice to improve how the ERP is used used in the the bu busin siness ess;; syste system m op optim timiz izati ation on;; and and assist assistan ance ce writin writing g repor reports, ts, complex data extracts or implementing Business Intelligence. The consulting team is also responsible for planning and jointly testing the implementation. This is a critical part of the project, and one that is often overlooked. Cons Consul ulti ting ng for for a larg largee ERP ERP proj projec ectt invo involv lves es thre threee leve levels ls:: syst system emss arch archite itectu cture re,, bu busin sines esss proc process ess cons consult ultin ing g (prim (primari arily ly re-en re-engi gine neer ering ing)) and and technical consulting (primarily programming and tool configuration activity). A systems architect designs the overall dataflow for the enterprise including the future dataflow plan. A business consultant studies an organization's current business processes and matches them to the corresponding processes in the ERP system, thus 'configuring' the ERP system to the organization's needs. Technical consulting often involves programming. Most ERP vendors allow modification of their software to suit the business needs of their customer.
For most mid-sized companies, the cost of the implementation implementation will range from around the list price of the ERP user licenses to up to twice this amount (depend (depending ing on the level level of customiz customizatio ation n require required). d). Large Large companie companies, s, and especially those with multiple sites or countries, will often spend considerably more on the implementation than the cost of the user licenses -- three to five times more is not uncommon for a multi-site implementation. Customization Services
Customization is the process of extending or changing how the system works by writing new user interfaces and underlying application code. Such customisations customisations typically reflect local work practices practices that are not currently currently in the core routines of the ERP system software. Example Exampless of such such code include include early early adopte adopterr feature featuress (e.g., (e.g., mobilit mobility y interfaces were uncommon a few years ago and were typically customised) or interfacing to third party applications (this is 'bread and butter' customization for larger implementations as there are typically dozens of ancillary systems that the core ERP software has to interact with). The Professional Services team is also involved during ERP upgrades to ensure that customisations are compatible with the new release. In some cases the functionality delivered via a previous customization may have been subsequently incorporated into the core routines of the ERP software, software, allowing customers to revert back to standard product and retire the customization completely. Customizing an ERP package can be very expensive and complicated, because many ERP packages are not designed to support customization, so most businesses businesses implement implement the best practices embedded embedded in the acquired ERP system. Some ERP packages are very generic in their reports and inquiries, such that customization is expected in every implementation. It is important to recognize that for these packages it often makes sense to buy third party plug-ins that interface well with your ERP software rather than reinventing the wheel. Cust Custom omiz izat atio ion n work work is usua usuall lly y un unde derrtake taken n as besp bespok okee soft softwa ware re development on a time and materials basis. Because of the specialist nature of the customization and the 'one off' aspect of the work, it is common to pay in the order of $200 per hour for this work. Also, in many cases the work delivered as customization is not covered by the ERP vendors Maintenance Agreement, so while there is typically a 90-day warranty against software faults in the custom code, there is no obligation on the ERP vendor to warrant that the code works with the next upgrade or point release of the core product.
One One ofte often n negl neglec ecte ted d aspe aspect ct of cust custom omiz izat atio ion n is the the asso associ ciat ated ed docum do cumen enta tatio tion. n. While While it can can seem seem like like a consi conside dera rable ble -- and expe expens nsive ive -overhead to the customization project, it is critical that someone is responsible for the creation and user testing of the documentation. Without the description on how to use the customisation, the effort is largely wasted as it becomes difficult to train new staff in the work practice that the customization delivers. Maintenance and Support Services
Once your system has been implemented, the consulting company will typically enter into a Support Agreement to assist your staff to keep the ERP software running in an optimal way. To minimize additional costs and provide more realism into the needs of the units to be affected by ERP (as an added servi service ce to custo customer mers), s), the the op optio tion n of crea creatin ting g a commi committe tteee head headed ed by the consultant using participative management approach during the design stage with the client's heads of departments departments (no substitutes allowed) allowed) to be affected affected by the changes in ERPs to provide hands on management control requirements planning. This would allow direct long term projections into the client's needs, thus minimizing future conversion patches (at least for the 1st 5 years operation unless unless there there is a corpor corporateate-wide wide organ organizat izationa ionall structu structural ral change change involvi involving ng operational systems) on a more dedicated approach to initial conversion. A Maintenance Agreement typically provides you rights to all current version patches, and both minor and major releases, and will most likely allow your staff to raise support calls. While there is no standard cost for this type of agreement, they are typically between 15% and 20% of the list price of the ERP user licenses. There is no easy magic through which one can 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 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. Features of ERP
Some of the major features of ERP and what ERP can do for the business system are as below:
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ERP facil facilita itates tes compa company ny-wi -wide de Integ Integra rated ted Infor Informa matio tion n Syste System m cove coverin ring g all func functio tiona nall areas areas like like Manuf Manufac actur turin ing, g, Selli Selling ng and and distribution, Payables, Receivables, Inventory, Accounts, Human resources, Purchases etc., ERP perform performss core core Corpora Corporate te activiti activities es and increas increases es customer customer service and thereby augmenting the Corporate Image. ERP bridges the information gap across the organisation. ERP provides for complete integration of Systems not only across the departments in a company company but also across the companies companies under the same management. ERP is the only solution for better Project Management. ERP allow allowss autom automat atic ic intro introdu ducti ction on of latest latest tech technol nolog ogies ies like like Electronic Electronic Fund Transfer(EFT), Transfer(EFT), Electronic Electronic Data Interchange(EDI Interchange(EDI), ), Internet, Intranet, Video conferencing, E-Commerce etc. ERP eliminates the most of the business problems like Material shortag shortages, es, Produc Productivi tivity ty enhance enhancemen ments, ts, Customer Customer service service,, Cash Manag Manageme ement, nt, Inve Invento ntory ry prob problem lems, s, Quali Quality ty prob problem lems, s, Promp Promptt delivery etc., ERP not only addresses the current requirements of the company but also provides the opportunity of continually improving and refining business processes. ERP provide providess busines businesss intelli intelligen gence ce tools tools like Decision Decision Support Support Systems (DSS), Executive Information System (EIS), Reporting, Data Mining and Early Warning Systems (Robots) for enabling people to make better decisions and thus improve their business processes
Cost of Implementing an ERP System:
ERP implementation cost can be divided into one-time costs and ongoing annual costs. Both types of costs can be segmented into hardware, software, external assistance and internal personnel.
Costs of implementing a new ERP ER P sy syst stem em
Reengineering 43%
One-Time Costs Software:
The cost cost of an ERP softwa software re pack packag agee varie variess widely widely,, rangi ranging ng from from Rs.15,0 Rs.15,00,00 0,000 0 for micro-b micro-base ased d package packagess to several several million million rupees rupees for some some mainfram mainframee packag packages. es. The number number of concur concurren rentt users users general generally ly drives drives the software cost, so that smaller systems cost less. In addition to the ERP software pack packag age, e, on onee-tim timee costs costs may may inclu include de syste systems ms softw software are,, deve develo lopme pment nt of customized software, or integration with other applications. Hardware:
Hardware selection is driven by the firm’s choice of an ERP software package. The ERP software vendor generally certifies which hardware must be used to run the ERP system. Hardware may need to be replaced or upgraded. As a gener neral rul rule, small mall--to medi edium size ize manufa ufactur turers alre lready have microcomputers and a local area network, so that a micro-based ERP system build standards which requires a little additional investment in hardware. External Assistance:
Extern Exte rnal al assi assist stan ance ce incl includ udes es the the cons consul ulti ting ng and and trai traini ning ng cost costss to impleme implement nt the ERP packag package. e. The software software vendor vendor,, reselle reseller, r, or indepe independe ndent nt cons consult ulting ing grou group p may may provi provide de exter externa nall assis assistan tance ce.. The amoun amountt of exter externa nall assistance required is dependent on several factors, such as the complexity of
the ERP package, the experience and knowledge of internal personnel, and the extend to which external personnel are used in place of internal personnel to implement the system. Internal personnel:
Inter ternal perso rsonnel time time ref reflect ects the the time ime comm ommitme tments for the implementation project team, the executive steering committee, the users in various functional areas and MIS personnel. The time commitments include training training classes, classes, develo developmen pmentt of intern internal al proced procedure uress for using using the system, system, deve develop lopin ing g custom customiz ized ed repor reports ts and and appl applic icati ation ons, s, prepa prepara ratio tion n of the data data,, meetings with external consultant and team meetings. A general guideline for internal personnel costs can also be expressed as a ratio with the ERP software costs, where a typical ratio is 0.5 to 1.0. The one-time costs for implementing an ERP system can be simplistically estimated using typical ratios with ERP software costs. Ongoing Annual Costs: Software:
Ongoi Ongoing ng softw softwar aree costs costs shou should ld inclu include de the the annu annual al custo custome merr supp support ort agreeme agreement nt with the ERP software software vendor vendor.. This custome customerr support support typical typically ly provides telephone assistance and software upgrades and is priced around 15 percent to 20 percent of the software price. Upgrades to software releases are also required. The up upgr grade ade path path for for new new relea releases ses of the ERP softwar softwaree pack packag agee is critical. New releases contain enhancements for functionality and bug fixes, and ensure that the software runs on the latest technology platform. platform. From the user’s point of view, the upgrade path enables the manufacturer to take advantage of hundreds of labor-years of development efforts undertaken by the ERP software vendor with minimal investment. From the vendor point of view, it is much easier to support users to the latest releases. However, user changes to sources code code and and othe otherr user user cust custom omiz izat atio ions ns can can make make it very very expe expens nsiv ivee or even even impossible to upgrade. Hardware:
Ongoing hardware cost will reflect new requirements specified by the ERP vendor to run the software. External assistance:
External assistance should be used as part of a continuous improvement program to effectively use an ERP system application for running the company. Training and consulting can focus on improved business processes, new or poorly used software functionality, and training of new personnel. A phased impl implem emen enta tati tion on appr approa oach ch requ requir ires es addi additi tion onal al assi assist stan ance ce at each each ph phas ase. e. Additi Addition onal al custo customiz mizat atio ions ns may may be requ require ired, d, espe especia ciall lly y with with evol evolvin ving g user user sophistication. Internal personnel:
The imp The implementat tation ion project team team does oes not necessa ssarily ily end its its responsibilities at time of system cut over. A phased implementation approach and continuous improvement efforts will require ongoing time commitments. Employee turnover and job rotation will also require ongoing training efforts. The nature of the ERP software package typically mandates the number and expertise of MIS personnel needed for ongoing support. This support may range from a part-time clerical person to aa large group of MIS experts. Replacing or Reimplementing an ERP system:
An investment analysis focusing on ERP benefits frequently applies to those firms initially justifying an ERP implementation. It can also used to justify a reimp reimplem lemen enta tatio tion n when when the initi initial al effo efforts rts have have faile failed d to produ produce ce desir desired ed results. The breakout box describing classifications of ERP success identifies situa situatio tions ns where where the the ERP imple impleme menta ntati tion on falls falls shor shortt of prod produc ucin ing g desir desired ed benefits.
Benefits of ERP in VIT: Even though much of ERP success has been in facilitating operational coordination across functional departments, successful implementation of ERP systems benefit strategic planning and management control one way or other. Some of the various benefits of ERP in VIT are as follows; 1.Help reduce operating costs:
ERP software integrates business processes across various various departments 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 immediate benefit from implementing ERP systems we
can expect is reduced operating costs, such as lower stationary cost, and lower help desk support costs. 2.Facilitate Day-to-Day Management:
The other benefits from implementing ERP systems are facilitation of day-today-to-day day manageme management. nt. The implemen implementat tations ions of ERP systems nurture nurture the esta establ blis ishm hmen entt of back backbo bone ne data data ware wareho hous uses es.. ERP ERP syst system emss offe offerr bett better er accessibility to data so that management can have up-to-the-minute access to information for decision making regarding payment of wages. ERP software helps track actual costs of activities and perform activity based costing. 3.Support Strategic Planning:
Strategic Planning is "a deliberate set of steps that assess needs and resources; define a target audience and a set of goals and objectives; plan and design coordinated strategies with evidence of success; logically connect these strategies to needs, assets, and desired outcomes; and measure and evaluate the process and outcomes." Part of ERP software systems is designed to support resource planning portion of strategic planning. In reality, resource planning has been been the the weake weakest st link link in ERP practic practicee du duee to the the compl complex exity ity of strat strateg egic ic plann plannin ing g and and lack lack of adeq adequa uate te integ integrat ration ion with with Decis Decisio ion n Supp Suppor ortt Syste Systems ms (DSS).
How to avoid ERP failures ? The failures of ERP can be avoided by following the simple ERP ERP impl implem emen enta tati tion on tech techni niqu ques es.. They They are are di disc scus usse sed d as follows;
a,Phased-in approach: Implementation of ERP should have a phased-in approach. In other words, the applications must be installed by taking one department at a time. Ex; Russ Berrie & Co, basically a teddy bear maker had failed installation of Packaged ERP applications but after rolling out J. D. Edwards & OneWorld Xe suite of ERP. They succeeded. The The reaso eason n for for the the su succ cces ess s was was the the foll follow owin ing g of phas phased ed-i -in n approach.
b, Estim Est imati ation on of o f the th e com co mplex plex natu n ature re:: The Agilent technology, which is a multinational communication & life sciences company had problems with ERP. ERP. Initially they failed. But now they are stable. The reason behind the failure was underestimation of the complex nature of ERP implementation. So for successful implementation, there must be a prop proper er unde unders rsta tand ndiing of the the comp compllex natu naturre of ERP ERP implementation process.
c,Involve Invo lvement ment of affecte aff ected d empl e mployee oyees s: Failure to involve affected employees in the planning and and devel develop opme ment nt phase phases, s, were were typi typica call cause causes s of fail failed ed ERP ERP proj projec ects ts.. So ther there e must must be prop proper er in invo volv lvem emen entt of affe affect cted ed empl employ oyee ees s in devel develop opme ment nt and and pl plan anni ning ng proc process ess of chang change e management.
d,Slow process: Whirlp Whirlpool ool corpor corporati ations ons is the world’ world’s s leadin leading g manufacturer & marketer of home appliances failed in their ERP implem implement entati ation. on. The execut executive ives s made made a damagi damaging ng busine business ss decision by going live with SAP R/3 ERP applications on the 3 day labour holiday. There were many problems that were to be addressed but everything was done too fast. Finally as a result of this, there was a delay in shipment and Whirlpool lost a lot of potential sales. es. So a slow proces cess must be followed in conversion process.
e,Effective testing: When ERP is ready to be implemented, it must be tested several times for any problems that may arise. And also there must be proper conversion process & effective training must done before implementing ERP. The spectacular failures of ERP systems could have been avoided if the above steps were followed.
Present scenario at VIT
Present Scenario at VIT
Interface Admiss ion
Interface
Fee structure
Interface
Attend ance
Interface Marks
Academic updates
After implementing ERP
ERP in VIT Int Ext
Ext Int Admission
F A C U L T Y
Fee Structure
Academic updates
Unified database
Marks
Attendance
Student records
S T U D E N T S
Campus Sol olut utiions @ VIT VIT
ACADEMIC
EXTERNAL ASSOCIATION
ADMINISTRAT STRAT ION IO N
FINANCIALS
CHALLENGES IN ERP IMPLEMENTATION :
There are many challenges that have to be faced in ERP implementation. These challenges are explained as follows :
1.Convincing people:
One of the most difficult challenge in ERP implementation is to convince people of the change process .some people might feel insecure about their job in order to make a successful ERP implementation we must convince people . This can be done only when there is proper sharing and sharing of ERP vision.
2.Techno stress:
It is the technological term which means there is stress among the employees employees due to the technology technology . the the technology technology get updated updated now and and then, people must be aware it .so there is lot of stress among the people because of technology . another form of techno stress is the drawbacks in a technology that causes . so the management and organization must cop up with technostress.
3.High cost :
The implementation involves high cost . There is high risk involved in it so a organization must be prepared to invast heavily and there must be prepared commitment to the top management. There There is high high risk risk in ERP impleme implement ntati ation on will will cost cost an organi organiza zatio tion n heavily if it fails. 4.Return on Investment:
Critical success factor for ERP including readiness to invest in high risk , high reward project. In the other words , a company must implement ERP only if it brings high return . Therefore a company must seek high renewal process. 5. Downsizing:
Downsizing Downsizing literally means means to reduce the number number of people who work in a company company. Depending Depending on the requireme requirement nt in a departm department ent , the number number of people people can can be reduc reduced ed or increas increased ed . then then leads leads to to low moral moralee among among the workers.
PEOPLESOFT
History
Foun Founde ded d in 1987 by David David Duffiel Duffield d and and Ken Ken Mo Morr rris is,, orig origin inal ally ly headqu headquarte artered red in Walnut alnut Creek Creek,, Califo Californ rnia ia,, and and even eventu tual ally ly Pleasanton, California, California , PeopleSoft's roots began with an idea Duffield had about a " ClientServer " version of Integral Integral Systems popular mainframe HRMS package. Once Integral Integral declined declined development and released Duffield to pursue this endeavor on his his own, own, Peopl PeopleS eSof oftt was was bo born. rn. In 20 2003 03,, when when the the compa company ny acqu acquire ired d J.D. Edwards, Edwards, it deci decide ded d to dif differe ferent ntia iate te its its form former er prod produc uctt line line with with thos thosee of Edwards by renaming both products. products. In January January 2005, 2005, PeopleSoft was acquired in a hostile takeover by Oracle Corporation. Corporation . This takeover was resisted, but Orac Oracle le ov over erca came me the the lega legall chal challe leng ngee and and Peop People leSo Soft ft ceas ceased ed to be an independent company, although its products continue to be used. Product design
The whole software suite of PeopleSoft moved from the traditional clientserv server er base based d desi design gn to web-c web-cen entri tricc desig design, n, calle called d Peop PeopleS leSof oftt Inter Interne nett Architecture Architecture (PIA) with their version 8 releases. The end result was that all of a company's business functions could be accessed and run on a web client. A small number of security and system setup functions, though, still needed to be perfo performe rmed d on a fat clien clientt machine machine.. The inheren inherentt nature nature of Interne Internet-b t-based ased applications allowed for a straightforward transition from a client-server model . One important feature of PeopleSoft's PIA is that no code is required on the client - there is no need for additional downloads of plugins of plugins,, or JVMs or JVMs such as the Jinitiator required Jinitiator required for Oracle Applications. The arch The archit itec ectu ture re is bu buil iltt arou around nd Peop People leSo Soft ft’’s own own PeopleTools technology. PeopleTools is a proprietary development platform (similar to a 4GL) 4GL) created by PeopleSoft. This platform includes many different components a developer theoretically needs to create an application including a scripting language, design tools to define various types of metadata, standard security structur structure, e, and batch process processing ing tools. tools. The metadat metadataa describe describess data for user interfac interfaces, es, tables, tables, message messages, s, security security,, naviga navigation tion,, portals portals,, and so forth. forth. The benef benefit it of creat creating ing their their own deve develo lopme pment nt platfo platform rm allow allowed ed Peopl PeopleS eSof oftt applications to run on top of many different operating systems and database platforms, It is not tied to a single database platform (though with the Oracle take takeov over er,, it is po poss ssib ible le this this coul could d chan change ge in the the futu future re). ). Peop People leSo Soft ft implem implemen entat tation ionss exist exist or have have exis existed ted on Oracle, Oracle, Microsof Microsoftt SQL Server Server , Informix, Informix , Sybase, Sybase, IBM DB2 (including its z/OS, z/OS, Unix and OS/400 variants), Oracle Rdb and HP AllBase/SQL. AllBase/SQL.
All All of Peop People leSo Soft ft’’s modu module less (Hum (Human an Reso Resour urce ces, s, Supp Supply ly Chai Chain, n, Financials, CRM, etc.) are built with the PeopleTools technology. A benefit of the technology technology is that all the code which makes up a module can be customized customized to suit the owner’s business needs. An auxiliary product, PeopleCode, PeopleCode , is an (ool) object-oriented prop propri riet etar ary y lang langua uage ge used used to expr expres esss bu busi sine ness ss logi logicc for for PeopleSoft applications. J.D. Edwards
In 2003, 2003, PeopleSoft performed a friendly merger with smaller rival J.D. Edwards software. The former rival's similar product line was differentiated by its target audience; mid-sized companies who could not hope to afford the origina originall People PeopleSoft Soft applica application tions. s. J.D. Edwards Edwards product product lines, lines, formerl formerly y J.D. Edwards World on the the AS/4 AS/400 00 and and OneW OneWor orld ld was was and and cont contin inue uess to be differentiated by its Configurable Network Architecture or CNC Architecture. This architecture is designed to shield applications from both the operating system of the database backend servers as long as some flavour of the SQL language is used. Thus, IBM's DB2/UDB, Microsoft's SQL 2000 and Oracle's databases are supported. J.D. Edwards also continued to support thousands of customers on AS/400s running its original J.D. Edwards World or WorldSoft" product. Likewise servers can run on a host of operating systems including including Linux, Linux, Windows Windows and IBM's AS/400 operating system. In addition, addition, PeopleSoft PeopleSoft remains committed to supporting J.D. Edwards's original AS/400-based AS/400 -based World software, also called WorldSoft, the old-style "green screen" application — the same application which drove Duffield to branch out and create PeopleSoft in the first place.
Oracle Corporation
Beginning in 2003, PeopleSoft battled with Oracle over control of the PeopleSoft company. In June 2003, Oracle made a $7 billion bid ($19.50/share) in a hostile corporate takeover attempt. takeover attempt. In February 2004, Oracle increased their bid to approximately $9.4 billion ($26/share), a 33% increase; this offer was also rejected forthwith by PeopleSoft's PeopleSoft's board of directors directors.. Later that month, the U.S. Department of Justice filed suit to block Oracle, on the grounds that the
acquisition would break anti-trust laws; however, in September 2004, the suit was rejected by a U.S. Federal judge, judge , who found that the Justice Department had not proven its anti-trust case; in October, the same decision was handed down by the European Commission. Commission . Though Oracle had reduced its offer to $7.7 billion ($21/share) in May, it again raised its bid in November to $9.4 billion ($24/share), marking a 14% increase. In December 2004, Oracle announced that it signed a definitive merger agreement to acquire PeopleSoft for approximately $10.3 billion ($26.50/share). In January 2005, Oracle made drastic cuts to the PeopleSoft ranks. Although these these cuts cuts affe affecte cted d appr approx oxima imate tely ly 9% of the the 55 55,0 ,000 00 staff staff of the comb combine ined d comp compan anie ies, s, they they have have main mainta tain ined ed at leas leastt 90 90% % of Peop People leSo Soft ft's 's prod produc uctt development and support staff. After its acquisition of PeopleSoft, Oracle rebranded the original J.D. Edwards products to once again include the J.D. Edwards name in order to capitalize capitalize on the strong brand loyalty that was perceived perceived to exist within the J.D. Edwards user community. Thus, PeopleSoft EnterpriseOne was rebranded JD Edwards EnterpriseOne and PeopleSoft World was rebranded rebranded JD Edwards World. PeopleSoft has merged with Oracle and a new product Fusion is to be released by Oracle in the near future. Oracle says Fusion will take the best aspects of the PeopleSoft, JD Edwards and Oracle Applications and merge them into a new product suite. Oracle is, however, offering to maintain support for the existing Oracle and PeopleSoft product lines for customers who wish to continue with what they have. The line they are taking appears to be an attempt to prevent customer defec defectio tions ns to riva rivall ERP vend vendor orss by makin making g it attra attract ctive ive to retai retain n curr curren entt applications or move to Fusion when appropriate. PeopleSoft in use
PeopleSoft software has been successfully implemented by many of its customers. However there have been several instances of litigation. As with any ERP software, the implementation process (including analysis, planning and development), performance (load) testing and various other types of software testing is absolutely critical towards the success of the project. Although Student Administration and Higher Education systems make up only a small proportion proportion of the company's user base, they seem to have attracted attracted a degree of adverse comment.
In 1997, 1997, Cleveland State University licensed PeopleSoft's software for tracking student records. They initially had an implementation partner, Kaludis Consulting Group Inc. After seven years of difficulties, CSU sued - initially naming Kaludis, but later (after Kaludis countersued) countersued) naming PeopleSoft PeopleSoft as the main defendant and including Kaludis. The suit was for $510 million, claiming breach of contract, contract , fraud, fraud, negligent misrepresentation and four other counts. The university claimed that software developed by PeopleSoft was missing specified feat featur ures es,, and and as a resu result lt caus caused ed disr disrup upti tion on to thei theirr admi admiss ssio ions ns proc proces ess. s. Peop PeopleS leSof oftt claim claimed ed that that they they had had follow followed ed indus industry try best best prac practi tices ces.. Court Court documents available online show the case was settled in 2005. The settlement agreement mentions a payment from Kaludis to CSU, as part of the settlement. There is no mention of any payment by PeopleSoft. In December 1999 December 1999,, seven of the eight " Big Ten" Ten" Midwestern universities which licensed PeopleSoft's software wrote a joint, open letter to the PeopleSoft CEO complaining about quality and performance issues. The California State University system adopted PeopleSoft in the early 2000 20 00s. s. Th Thee un univ iver ersi sity ty spen spentt $5 $500 00 mill millio ion n on this this syst system em in a proc proces esss so deficient deficient that it resulted in an investigation investigation and a rebuke by the state legislature. The Report of the California State Auditor criticised the University, amongst other things, for not having a business case for the implementation. When asked why it never conducted a formal return-on investment analysis on the CMS proje project ct,, the the un unive ivers rsity ity expl explain ained ed that that the magn magnitu itude de of po poten tenti tial al savin savings gs estim estimat ated ed by its consu consulta ltant nts, s, IBM and and Paci Pacific fic Partn Partner erss Consu Consulti lting ng Group Group (Pac (Pacif ific ic Part Partne ners rs), ), led led them them to beli believ evee that that such such a form formal al anal analys ysis is was was unnecessary. Arizona State University, University , one of the largest universities in the western region, recently migrated to an Oracle database and PeopleSoft solution. PeopleSoft timeline •
1987: PeopleSoft, Inc. founded by David Duffield and Ken Morris in Walnut Creek, CA, CA , USA.
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1988: PeopleSoft HRMS released.
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1991: Begins opening international offices.
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1994: Public distribution of Distribution and Financials modules.
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1995: Launch of Student Administration System.
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1996: Releases Manufacturing and PeopleSoft 6, their first ERP package.
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1997: PeopleSoft 7 is released within upgraded ERP modules.
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1998: PeopleSoft 7.5 is released released with improved client/server client/server technology. technology. Acquired Intrepid Systems. 1999: Craig Conway named new CEO; release products to enable Internet transactions.
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2000: Acquired Vantive Corporation.
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2000: Deliver PeopleSoft 8 with an in-house application service provider.
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2003: Acquired J.D. Edwards
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2005: Acquired by Oracle Corporation.
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2007: PeopleSoft HCM 9.0 is released.
Some Recommendations Recommendations The top 20 ERP implementation implementation tips Planning 1. Know your goals for your ERP implementation. Choose the product that
promises to meet those goals and put measurement tools and processes in place to gauge your success. In particular set goals for performance, response time and downtime. 2.Don't Don't do any any proje project ct with withou outt a plan plan,, parti particu cula larly rly an ERP projec projectt which which
touches almost every part of your organization. organization. Be sure to test, test, test, all the way through. All of these things seem like 'nice-to-haves' rather than critical elements in a project, but can make the overall project much more successful. 3. Involve users in your ERP project planning phase. The software is not going
to do you much good if you don't have employee buy-in.
4. Don't do the planning and implementation alone if you don't have the in-
house skills to make it happen. Determining which options and features to use requires experience. If the in-house team doesn't have that experience finds a local ERP expert who is trustworthy and who collaborates well with your team. 5. Be realistic in your cost projections. Double the consulting firm's estimate.
Be real realis isti ticc abou aboutt trai traini ning ng cost costs. s. Ev Even en at the the larg larges estt leve level, l, comp compan anie iess underestimate the training costs. 6. Don't keep adding to your project. In the planning and evaluation stage,
people see the capabilities of products and want to use each new one they disc discov over er.. Comm Commit it to what what yo you u want want to do init initia iall lly y. Get Get yo your ur retu return rn on inves investme tment nt and and then then expa expand nd.. Other Otherwis wise, e, yo you'l u'lll have have a neve neverr-en endi ding ng and and unsuccessful project. To host or not to host? 7. If you'd prefer the hosting model for your ERP, then scrutinize your
application service provider (ASP) well. First of all, you must be able to trust this ASP with your data. Find out if that hosting company provides cookie cutter solutions or can customize the ERP suite to fit your needs. Many outsourcers don't know enough about ERP to customize it. Then again, if a cookie cutter solution is okay for you, then fine, use an outsourcer and you don't have to take care of your ERP. 8.Hosting should take out a lot of internal costs of labor. It should save you
money…by spreading payments over a period of time. You should be paying less over a period of time for hosting than you would do it yourself. If you're not paying less, don't use an ASP, he said Evaluation 9. Choose an ERP package that is industry-standards based. You don't want to
find find yo your urse self lf ou outt on a limb limb with with cust custom omer erss who who can' can'tt inte intera ract ct with with yo your ur proprietary, out-of-standard implementation. 10. Look closely at maintenance costs. You can pay a great purchase price and
find that it costs a fortune to maintain. 11. Evaluate Evaluate your processes processes and decide if changing them to fit a particular ERP
suite would be beneficial. Either you're looking for customization or going for out-of-the-box. With the latter, people have to change how they do things in order to conform to the package. That may work for a company that needs to make changes anyway. Often, however, it's better to choose a suite that can conform to your needs. 12. Discuss a vendor's stability with the vendor reps and outside experts. Find
out if the company is losing market share, which might make it a candidate for a takeover or failure. 13. Whenever a company and its ERP package are acquired, it's not usually
good news for the customer. Often, the vendor is buying the client base and is
not that interested in the software itself. Instead, they'll try to get clients to move to their own platform. In this situation, customers may have to migrate without good business reasons. 14. Get empirical evidence of return on investment from the vendor and/or a
consultant. Also, simulate the ERP suite in your company and make your own calculations. 15. Get vendors to come clean about their upgrade cycles. Once they get you as
a customer, their goal is to sell you new features and upgrades. You want a company that upgrades and adds necessary features and doesn't lock you into an expensive upgrade cycle. 16. Find out how much customization assistance the vendor will offer. If you
customize the ERP package to fit your business scenarios without vendor support, you can limit your support options from that vendor down the road. 17. Be efficient in contract negotiations. Don't spend too much time analyzing
details to the Nth degree. If vendor can answer 25 critical questions and give most of what you want, you're going to be in good shape. Focus more on critical items to get through negotiations more quickly. 18. You can't get everything you want. Do accept that there is always going to
be a functionality gap. Usually, you have to let 10% go. If the gap is more than 10%, keep shopping. After the implementation 19. Pay attention to the quality of your data and the daily workflow. This is
especially important during the transition time after implementation and during periods when your business is changing or growing. Watch for seasonal variations, too. For example, Christmas can cause big jumps in data volume for a retail company. company. 20. Don't sign up for long training sessions. Instead, do some initial, condensed
training on your own site, and then set up a regular class schedule that gives users time to learn before they move on. By the time the class is over, the trainees have forgotten the first half of the lessons.
Conclusion The growing information needs of an enterprise make it imperative to improve or replace old systems. Especially under the present Indian business environment, where the globalization has been initiated, full convertibility is coined, Infrastructure Projects are nearing completion, and it is expected that the the whol wholee bu busi sine ness ss syst system em will will un unde derrgo a majo majorr shif shift. t. Th Thus us by bein being g a proficient ERP consultant, ERP will prove their commitment to the business world and modern management.
References
From CTS, VIT
Maximizing your ERP system-HAMILTON
Management Information Systems-O’Brien Marakas
ERP tools,techniques,and applications for integrating the supply chainCarol A.Ptak
www.wikipedia.org
www.ebsco.com
www.peoplesoft.com
www.erpsupersite.com
