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.