SAP and Enterprise resource planning (ERP)1

SAP and Enterprise resource planning (ERP).

The world has seen huge growth in the business by introducing the enterprise resource planning (ERP) and Supply chain management, product life cycle management. This all became possible due to the introduction of SAP-R3. The Sap has its customers more 100000 in number and $10.2 billion in income. It is here important to explain the relationship between the ERP, SAP and SCM.

Enterprise Resource Planning (ERP): it is an attempt to integrate 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. A key ingredient of most ERP systems is the use of a unified database to store data for the various system modules. The term ERP originally implied systems designed to plan the utilization of enterprise-wide resources ERP systems typically attempt to cover all basic functions of an organization, regardless of the organization's business or charter. Business, non-profit organizations, non governmental organizations, governments, and other large entities utilize ERP systems. Looking more closely at ERP systems, a key factor is the integration of data from all aspects of an organization. To accomplish this, an ERP system typically runs on a single database instance with multiple software modules providing the various business functions of an organization.

Some organizations - typically those with sufficient in-house IT skills to integrate multiple software products - choose to only implement portions of an ERP system and develop an external interface to other ERP or stand-alone systems for their other application needs. For instance, the people soft HRM solution s and Financials systems may be perceived to be better than SAPs HRM solution. This is very common in the retail sector, where even a mid-sized retailer will have a discrete Point-of-Sale (POS) product and financials application, then a series of specialised applications to handle business requirements such as warehouse management, staff rostering, merchandising and logistics. ERP delivers a single database that contains all data for the software modules, which would include:
Manufacturing: Engineering, Bills of Material, Scheduling, Capacity, Workflow Management, Quality Control, Cost Management, Manufacturing Process, Manufacturing Projects, Manufacturing Flow.
Supply chain management:
Inventory, Order Entry, Purchasing, Product Configure, Supply Chain Planning, Supplier Scheduling
Financials
General Ledger, Cash Management, Accounts Payable, Accounts Receivable, Fixed Assets
Projects:
Costing, Billing, Time and Expense, Activity Management
HRM:
Human Resources, Payroll, Training, Time & Attendance, Benefits

CRM:Sales and Marketing, Commissions, Service, Customer Contact and Call Center support

ERPs are often incorrectly called Back office systems indicating that customers and the general public are not directly involved. This is contrasted with front office systems like CRM systems that deal directly with the customers, or the E-Business systems such as eCommerce, eGovernment, eTelecom, and eFinance, ERPs are cross-functional and enterprise wide. All functional departments that are involved in operations or production are integrated in one system. ERP II means open ERP architecture of components. The older, monolithic ERP systems became component oriented.
EAS - Enterprise Application Suite is a new name for formerly developed ERP systems which include (almost) all segments of business, using ordinary Internet browsers as thin clients.

Duck worth before the ERP

Prior to the concept of ERP systems, departments within an organization would have their own computer systems. For example, the Human Resources (HR) department, the Payroll (PR) department, and the Financials department. The HR computer system (Often called HRMS or HRIS) would typically contain information on the department, reporting structure, and personal details of employees. The PR department would typically calculate and store 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 PR 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 the payouts made by the PR 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.

Duckworth after the ERP

ERP software, among other things, combined the data of formerly disparate applications. This made the worry of keeping employee numbers in synchronization across multiple systems disappear. It standardised and reduced the number of software specialties required within larger organizations.When implementing an ERP system, organizations essentially had to choose between customizing the software or modifying their business processes to the "Best Practice" functionality delivered in the vanilla version of the software.
Typically, the delivery of best practice applies more usefully to large organizations and especially where there is a compliance requirement such as IFRS, Sarbanes-Oxley or Basel II, or where the process is a commodity such as electronic funds transfer. This is because the procedure of capturing and reporting legislative or commodity content can be readily codified within the ERP software, and then replicated with confidence across multiple businesses that have the same business requirement.
Where such a compliance or commodity requirement does not underpin the business process, it can be argued that determining and applying a best practice actually erodes competitive advantage by homogenizing the business compared to everyone else in their industry sector.
Evidence for this can be seen within EDI, where the concept of best practice, even with decades of effort remains elusive. A large retailer, for example, wants EDI plus some minor tweak that they perceive puts them ahead of their competition. Mid-market companies adopting ERP often take the vanilla version and spend half as much as the license cost doing customizations that deliver their competitive edge. In this way they actively work against best practice because they perceive that the way they operate is best practice, irrespective of what anyone else is doing.

Implementation of ERP in Duck worth

Because of their wide scope of application within a business, ERP software Systems are typically complex and usually impose significant changes on staff work practices (if they did not, there would be little need to implement them). Implementing ERP software is typically not an "in-house" 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 (eg, 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 important aspect of any ERP implementation is that the company who has purchased the ERP product takes ownership of the project.

Supply chain management ,BPR and CRM 1

Supply Chain management, Business process reengineering and customer relationship management


In the today’s world the success of any organization is depend on the success of its Supply chain management , The business process reengineering and the better customer relationship management. The supply chain management is used as a tool to take the competitive advantage. The duck worth group can deploy the Customer relationship management (CRM)in the following way:
the group has to develop the realsation plans
it has to develop the relationship models
it has develop the relation ship metrics
The group has to develop the train and market relationship model
The group has to implement the relationship modelso as to achieve the better result for the group.
After implementation of the system , it is very important to monitor the implementation programme.


After the introduction of the KM system in the group it is important to establish the CRM in the organization. For this purpose it is necessary to establish the E-CRM (Electronic Customer Relationship management) in the Duckworth group because it will be required for the company seeing its expansion as global organizations. The diagram given below is explaining relationship between the supply chain management, customer relationship management and BPR. BPR is a formal technique to reassess the existing process and devise new process. The group has to reassess its all the existing process and to devise a new process keeping in mind the global challenges.
Operations
It includes the Banks, Audit, insurance, advertisement and agents
Influences
-investors
-press,
Consultants
And trade
Customer/ channels
-End user
-VARS
Supply chain:
-Suppliers
-Logistics
-Manufactures

Extending the value chain for supply chain management to different departments such as:

Product development, manufacturing
And research
Finance HR MIS and administration.
Sales force auto mation
Andmarketing
Vendor group:
Management, billing call center and customer care
Connecting the Duckworth group
Thus for achieving the above purposes the group has to take the following steps:
System analysis
Awareness
Project management
Training management
Implementation
Vendor management.
The seller chain
The buyer chain

The seller chain :it includes terms negotiations, market stimulation, market product research, customer service and support,order schedule aned fulfilling the delivery, Order billing and payment management and order selection and priority.

The buyer chain: the buyer chain includes the product discovery, product receipt, customer service and support, receiving the order payment and placing the new order.

The company has to create the value chain according to the porter model:
The Primary Activities :
in bound logistics
operations
outbound logistics
marketing and sales
Service to the customers
The Support Activities:
Duckworth infrastructure
HRM
Technological development
Procurement

Source: Peter Michael,E comptetive advantage, free press newyork1985 p.37

The supply chain management is the combination of material management and end product distribution which constitutes the two vital components of the business process and form the key task at the front and back ends of the process respectively. The supply chain constitutes a value delivery network. The group has to formulate the supply chain keeping in view the global expansion plan of the group. The group has to open new ventures in India, Africa , and USA so that it can cater the needs of the whole market and this can be possible only by having a supply chain management system..

Knowledge manangement and erp1

Knowledge Management and ERP

Individuals who are knowledge workers in a knowledge economy may find themselves, at different times and sometimes simultaneously, self-employed, working in an ad hoc network, or earning a salary with an organization. To be successful, they need to have a sense of how different aspects of knowledge management fit together as they guide their own career paths and find ways to add value to ad hoc and formal organizations. In Western countries, an increasing proportion of the workforce is employed for their knowledge. That knowledge is for the most part up to individuals to acquire and maintain, and it is largely portable. It may be of content or process, tacit or explicit, general or particular, linear or relational, timeless or up to the minute. It is utilized by individuals working alone and in small groups or large organizations. Especially in the private sector, many knowledge workers are self-employed or members of ad hoc virtual or network organizations rather than permanent salaried employees. The value of an individual's knowledge and intellectual capital is difficult to measure because it is usually time and context specific. Individuals can and often do take a long term view. Some choices, like taking a liberal arts degree, may depress short term earnings but be beneficial in the long run. Others, like pursuing knowledge out of curiosity or for pleasure are their own reward although sometimes they also result in monetary gain. In addition, some knowledge isn't of measurable external value, like knowing how to keep emotionally and physically fit, but it makes whatever a person does more effective. It bears consideration in these days of short term work and talent banks for individuals to assume conscious management of their personal intellectual assets. At the very least, individuals marketing themselves must know what they are selling to get a fair price and be able to assess the strengths they bring to a networked group. Networks create value from a combination of content and people knowledge. They vary widely in the strength and permanence of their connections and the resources necessary to maintain them. Some have very informal structures and almost no independent assets. Others do nearly the same work as formal organizations but operate without more than one or two full time employees or big offices. Most are characterized by heavy reliance on electronic communication.
The Duck worth group has to create the knowledge base for the organization, which will enable the company to create the culture of the knowledge generation and its transfer to the employees of the group. The Duck worth group (herein after called as Group), has to adopt the following procedure for the implementation of the knowledge management:
information regarding the group and its strategy
adoptability of the knowledge management in the group
the availability of the data to the management



Knowledge Base: The knowledgement base means the availability of the information regarding the group and its strategies to the concerned person and evaluation on the basis previous experiences of the group in turn to frame the current knowledge system, which should help to search the capabilities for future of the companies. This can be under stood from the following:

Knowledge Base= Information + Past experience of the Company + Current Knowledge System + Search the capabilities of the companies.

Once the group has crated the knowledge base then it has to take the steps to transfer it to the concern persons. The process of transferring the knowledge is known as knowledge transfer which can be under stood from the following process:

What Duck worth must know----- Strategy Gap--------What Duck worth must Do
Knowledge Gap Strategic Gap







What Duck worth Knows------Knowledge strategy link---What Duck worth can do


However while implementing the knowledge management in the group the management will have to face following barriers:
Cultural resistance of different groups of different nations
Some times it may have to face the immature technology between the processes of globalization.
The new technology which may require fulfilling the needs of the organization. The cost of technology maybe very high and the process of its implementation may be very costly. Which may incur huge costs for the group?
The last but not the least it may face the social barriers of different social group who may come in the way during its process of expension.

The Group has to adopt the following roadmap for the implementation of Knowledge management in the organization:

A: First Phase: Infrastructural evaluation:
To analysis the existing infrastructure in the group i.e. Asset management , extranets, Distance learning, intranet, Knowledge Map, Learnig Histories, online services, Search engines, Taxonomy, and visualization.
Alignment of knowledge management and business Stategy


B: Second Phase: KM System analysis, design and development:

The group has to design the knowledge management infrastructure to implement ERP and SAP.
It has to conduct the audit of existing knowledge assets and systems in the group.
It has to appoint the knowledge management team and chief knowledge officer.
The group has to create the knowledge management blue print for its further expansion.
It has to develop the knowledge management system

C: Third Phase: Deployment of KM

The group has to deploy using the result driven incremental methodology
The group has to manage the change, culture and reward structures

D: Fourth Phase: Evaluation

The group has to evaluate the the performance of the group by measuring the ROI and incrementally refine the knowledge management

The group has to follow the above explained road map for the implementation KM in the organization. However it has to keep in mind that the balance between the different key factors of the knowledge management team must be maintained. The different factors of the team are: Risk and pay off, Short term and long term impact, Bottom line effects and strategic impact, Scope and function.

Thus Duck worth group is advised to establish and implement the knowledge management system in the Company.