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Enterprise Resource Planning

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May 21, 2019

The Role of ERP in globalisation

Nowadays, more and more organisations provide products and services globally. They operate in different countries and in different locations; Also they have their manufacturing plants, regional sales offices, distribution centre, national, regional and global headquarters throughout the world. However, it brings the challenges for ERP, like legal and business principles of the country, multi-currency operations, language barrier (especially in developing countries).

The role of ERP is to use all available organisation resources efficiently. In general, it ensures flexibility of the company and creates the environment for achieving core competence of the organisations. Also, it can be identified as the critical component of corporate globalisation strategies and be required to satisfy the demands of support functionalities in a global environment- such as intercompany stock transfer, software localisation.

The survey from the Gartner Research study had identified that 70% of organisations desired to operate a single global ERP system. However, a centralised ERP solution is slow to implement in a global environment. And the company may have to change their existing IT solutions- from many to one, which requires a large amount of time. As a result, a better choice for the companies two-tier ERP solution, which means the company can use one core ERP with another solution from same vendor for subsidiaries or one core ERP with other solution from another one vendor.

Mengyun Hu (1862091)


April 20, 2016

Extended ERP

In the internet era, there is an intense competition of business occurring in the means of using information technology to increase the efficiency of the operational and management aspects in organizations. Therefore, changing the strategy toward e-businesses have to adapt the usage of ERP system which could share functions and communication to partners and customers. In addition, it has to develop data evaluating method and interface in order to connect processes for the bonding between ERP and external organization sites. E-business is a kind of business that have a rapid changing in technology and trend, so quick gathering of the useful information is become more serious factor to gain the advantages in the market. Allowing people to easily access to the entrepreneur ERP system helps increase the accuracy of the data while reducing the analysis time for the strategy planning. Thus, the ERP system is now extended to be developed together with the Thin Client or GUI (Graphic User Interface) to reduce the complexity in using the system. This allow the end-users or suppliers to input the data into the system and connect directly to the business. For the users with in organization, the extended ERP creates the convenience in access and interpret the data for analytical usages and reduce learning curve of the system. There are three main advantages of Extended ERP. First is the integration by using ERP-based can centralized between software such as SCM, CRM, and E-commerce, only one input of information can be pulled out for various usage. Moreover, the extended ERP also creates the supply chance network with organizations as center, connecting suppliers’ and customers’ operation with SCM and CRM respectively. Finally, Internet Protocol (IP) and Web application create the system that allow the online access to the data base of organizations, not only by the employees but also partners, suppliers and consumers. The sharing of information both internally and externally all type of business to occur virtually in the world of internet.

Chonlada Han-ong-art

Karl M. Kapp, William F. Latham, Hester N. Ford-Latham. Integrated learning for ERP success: a learning requirements planning approach. Boca Raton: The St. Lucie Press; 2001.

Mahesh gupta, Amarpreet kohli. Enterprise resource planning systems and its implications for operations function. Technovation 2006; 687-696.


April 19, 2016

Modules integration

Rapid and efficient flow of streams of information is a prerequisite for the smooth functioning of logistics processes. It is also important to note that the introduction of computerized information processes created an entirely new quality. This also applies to the logistics, where many functions are associated with various transition of information. Modern IT systems support the process of production planning at many levels, from the moment of the generation of orders by customers through the purchase of raw materials, storage of raw materials in the warehouse, production of the finished item with subsequent storage, picking, to delivery to the customer. Having an opportunity to work with ERP system alongside with appropriate modules it is possible to plan, control and manage resources.

However, chosen ERP system may have very good Shop Floor control module but insufficient Advanced Warehousing module. Very advanced Transportation Management module may not go with ‘decent’ Requirements Planning module or Purchasing Module. On the other hand, ERP can offer various modules where functional advancement can be there, however company requires very advanced Requirements Planning module as this is key strategic component of their success.

To me the question stands; how big risk is to ‘move’ specific functionalities to 3rd party systems. Is it good idea to create all necessary interfaces for the ERP to be able to communicate with second system or is it usually better to try to keep as many modules as possible from one provider. The benefit of second option is seamless integration, no interfaces, less risk (especially at implementation phase). Obviously answer would be different for each company. But we need to be prepare for choice we possibly would need to make at some point. Should we sacrifice functionality for benefit of seamless integration? Should we pay more for unused functionalities for some modules to use integrated system which is outstanding in single, strategic way? Or should we choose customization path?

Oliwia Lewandowska


March 28, 2016

The Role of the Enterprise Resource Planning (ERP) in the Business Process Re–engineering (BPR):

The fast movement in the technological world and the new systems that have been developed though the time has played a significant role into re-engineering the business process within any organization. According to Soliman and Youssef (1998), the implementation of ERP is considered to be one of the fundamental element of the BPR process, where the others include objectives, radical change and the examination of the current process. Most companies used to employee IT to the present process, where BPR process needs a radical change to the process. Thus, the implementation of ERP systems is helpful in terms of changing the current process to be aligned with ERP system, which will meet the BPR objective as well as it will be more integrated and productive (Soliman and Youssef, 1998).

On the other hand, Baloglu (2005) suggested that the implementation of ERP systems needs to be aligned with the BPR projects, which will give employees time to accommodate of using the new system. Thus, training employees is an important element in the implementation of ERP and BPR, where might be fail if not applied sufficiently (Glykas, 2013).

References

Baloglu, A. (2005) Implementing SAP R/3 in the 21st Century: Methodology and Case Studies, Istanbul: Anatürkler Yayınevi.

Glykas, M. (2012) ‘Effects of business process reengineering on firm performance: an econometric analysis’ in Ozcelik, y. (ed.) Business Process Management: Theory and Applications. London: Springer Berlin Heidelberg, 99-111.

Soliman, F. and Youssef, M. A. (1998) ‘The role of SAP software in business process re-engineering’. International Journal of Operations & Production Management, 18 (9): 886 – 895.


ERP system and Internet of Things

In recent years, many ERP systems have competed each other by trying to provide the best solution for improving the business. After introducing cloud-based platform i.e. SAP HANA, Oracle ERP Cloud, Microsoft Dynamic cloud ERP and so on, they tried to seek for other new technologies to support the organisation. However, this article will only focus on SAP solution. While the user of internet has dramatically grown every year, and devices has become more and more intelligent. From SAP’s research, they found that the number of connected devices through the internet would be more than fifty billion by 2020. They expected that many physical objects would be able to communicate via the internet. The internet of things (IoT) can be defined as the integration of several technologies such as RFID, sensor, actuators, and wireless network (Atzori, Iera and Morabito, 2010).

 As last few year ago, SAP introduced an additional solution (IoT connector solution) which can use to connect sensor-based data with SAP HANA platform. This solution will combine data from automation devices and smart devices to perform a better retrospective and predictive analysis. Moreover, there are several benefits that the organisation can gain from these technologies solution.

  • Improve efficiency, sustainability, quality, and safety
  • Increase decision-making performance
  • Improve decentralised data consistency
  • Reduce operation cost
  • Simplify software integration

Although, this solution may not be suitable for every business, there are some businesses can use it to improve their processes such as manufacturing, supply chain integrity, energy, health service and so on. But, they still have some major technical issues that require to consider. For example, Internet scalability, identification and addressing of the network, heterogeneity technologies (Haller, Karnouskos and Schroth, 2008).


Atzori, L., Iera, A. and Morabito, G. (2010). The Internet of Things: A survey. Computer Networks, 54(15), pp.2787-2805.

Haller, S., Karnouskos, S. and Schroth, C. (2008). The Internet of Things in an Enterprise Context. Lecture Notes in Computer Science, pp.14-28.

SAP. (2016). IoT Platform | Internet of Things Applications | SAP HANA. [online] Available at: http://go.sap.com/product/technology-platform/iot-platform-cloud.html.


Chompassorn Pholtanasak (1465063)


April 20, 2015

Disadvantages of cloud–based ERP vs. on–premise

Summary of disadvantages of cloud-based vs on-premise ERP systems,

  • Subscription expenses (Periodic vs Capital expenditure)
  • Security risks
  • Performance risks
  • Customization and integration limitations
  • Strategic risks (high dependancy on service provider)
  • Compliance risks
  • Loss of IT competencies
  • Functionality limitations (Relatively new system)
  • Limitation on hybrid deployment strategy (retaining legacy systems and integration with on-premise solutions)
  • Service Level Agreement (SLA) issues

Reference: Duan, Jiaqi, et al. "Benefits and drawbacks of cloud-based versus traditional ERP systems." Advanced Resource Planning(2012).


April 19, 2015

ERP implementation in China

Background of ERP implementation and its situation in China:

ERP is a type of business management software with multimodule including manufacturing resource planning, supply chain management, financial management, customer relationship management and human resource management. ERP comes form original material requirement planning (MRP) and has developed to integrate some new module in the control system during the period of evolution.

Nevertheless in China, implementation of ERP still in the developing stage during which time industry equipped with this information system would come across some difficulties and even failure. While ERP system enables multi-functional information system integrate into a coherent network in enterprise, the implementation of ERP still is a challenge in China due to its expensive implementation cost, complicated technology, insufficient information technology infrastructure, inexperienced operation staff. This situation sometimes is caused by cultural difference from foreign countries, especially for the state-owned companies that are always lack of passion and incentive for ERP integration.

Barrier of ERP implementation:

ERP often faces with the crisis of being abandoned just before completing or gaining the expected outcome, especially for the small and middle-sized enterprise with limited budget, although ERP has numerous benefits to win competitive advantages. Apart from the huge expense of implementation, another factor is the complex technical process of implementation (Soh et al., 2000), which requires expertise to give training or guidance for the employees.

In China, expensive cost and technical complexity are two most common barriers in the ERP implementation. As for the specific enterprise, the IT infrastructure is the big headache for Chinese companies, followed with less well-trained staff, cultural difference and language barrier. In order to pursue a better outcome of managing resource via ERP, overcoming the obstacles listed above is the key to success.

Too much rely on the ERP software vendors can also endanger the whole company, which means company purchasing the ERP system should invest more time to study and be familiar with its function. Otherwise, if enterprises just rely on their providers, the whole business process can be a failure. To sum up, company should be aware of the project initiative and how to manage it with ERP system, only doing like this, the ERP implementation could be a success.

Management problem is another barrier of ERP implementation. Before explaining this point, it is necessary to illustrate the background and situation in China. Several years ago, China witness a long period of planning economy and then market economy took a place of that, leading to managerial method and strategy lagging behind industries in western countries. Apart from that, even laws and policies are not ready to serve and organization forms a hierarchical structure. However, these changes had a bad influence on the ERP implementation, as the key to ERP implementation is to integrate suitable and state-of-art management concept and method into business process. In this case, with enough support of management experience and practice, company is unlikely to achieve a better performance in ERP implementation.

By Bo Yang (U1451409)


April 04, 2015

Vendors perspective on a Cloud–based ERP

Several vendors are endorsing that their Cloud based ERP is the best option to be purseud; thus introducing their own version of terminologies and gathering requirements which eventually dispute with the true cloud based ERP.

1>MULTIPLE TENANCY:

From the vendors perspective in order to qualify for a cloud application, multiple useers are requuired must utlise the same software application. This is, however, can be productive in terms of future cost of upgrades and product updates through running similar infastructure.

Furthermore, multi tenancy occur at infrastructure level, platform levels and application levels. Optioning for multi-tenant infastructure and multi-tenant platform can be a trade off between achieving cost and flexibility. Depending on the company demand Multi-tenancy makes sense to option for application level only if the cost of software is low. Whereas, flexibility comes secondary.


2>INERNAL CLOUDS:

Also depending on the size of an organisation cloud server can be hosted internally. However, it can be argue that no matter the size of the company is, still difficult to hold the the cloud internally. Further limitation being company only consist of signle server making it impossible to add more capacity will be a major drawback.


3>PERSONAL HOSTING SERVER VS CLOUD:

The amount of data a company produces and hosted on personal server is a kind of an outsourcing its ERP operations. But if the company grows its operation adding more data, it is certainly make sense to host it on an external cloud because of capacity limitation. But major question of concerning whether the intellectual (data) is protected properly.


Article by; Noor Butt - 1466360


Reference: (Acumatica, 2015) Cloud Base ERP from vendors perspective


March 18, 2015

Benefits and challenges of ERP in management control

Title:
ERP in actionóChallenges and benefits for management control in SME context.
Rating:
Not rated

This article is about benefits and challenges for management control when implementing an ERP system.


Benefits:


1. Top management:

(1) Enabling the vision: ERP makes it possible to implement new strategy. Growing and globalizing business needs new kind of control systems.

(2) Transparency: ERP system is a good control tool. In particular it makes business transactions transparent.

(3) Routine tasks: Top management perceives that ERP system works well in routine tasks, but only negative things will be discussed openly.


2. Administration:

(1) Transparency/bookkeeping: Accounting and book keeping work well. Monthly profit and loss statements will be gathered very quickly.

(2) Possibilities: In ERP systems are numerous functions (some not utilized).

(3) One system: Only one system. Knowledge and support will be focused on the ERP system. There is no need to support other systems.


3. Production:

(1) Transparency/bookkeeping: Accounting and book keeping work well. Monthly profit and loss statements will be gathered very quickly.

(2)Routine tasks: Basic and simple things can be done by ERP. ERP works if things happen as predefined in the system.


Challenges:


1.Top management:

Making entries: ERP is based on processes, but employees do not know what the processes are. Employees do not understand why it is required to make entries in processes. Too many steps included in the entry process. It takes time and generates incorrect entries. Employees perceive that making entries is not part of their job. If supervisors use the ERP reluctantly, shop floor workers follow their lead.


2. Administration:

(1) Making entries: It is not possible to make correct entries. Such problems occur when there are different kinds of

machines or production lines than predefined in ERP system. Employees will take a short cut and in this way speed up their tasks.

(2) Personnel resources: Key person leaves the company. In that situation knowledge is lost away from the company. There is time to utilize only the basic functions of the ERP, even if people perceive that there are a lot of other utilizing possibilities. There are no experienced people to use ERP. There is a lot of data for different kind of management control purposes, but there are no people to do that.

(3) Technical problems: ERP system breaks down or it is very slow.


3. Production:

(1) Making entries: Employees do not know what processes are and how they relate to the whole. Employees do not understand why it is required to make entries. Rapid changes in production. Production lines are required to changes (by the customers), but there is no time and no personnel resources to make these changes into ERP system. Too many phases included in the entry process. It takes time and generates incorrect entries. The ERP system is very complex. Making entries is required to be done in many different screens. Complex system takes time away from physical production, which cause that people do not want to use the system. Mistakes occur (incorrect entries) and it takes lot of time to find and correct these incorrect entries. People who have only basic skills to use ERP, cannot solve this kind of problems.

(2) Technical problems: ERP system breaks down. Data which is required in production cannot be obtained from the ERP system.

(3) Standard nature of ERP: There are predefined processes in ERP system, but production is many times unpredictable: machines will break down, production lines will be changed, and the output of the machines is many times not known.

(4) Lost focus: ERP will attract all the focus away from development of production. Resources will be used to develop the ERP system and ERP processes, which is time away from the development of production.


Reference: Teittinen, H., Pellinen, J., & Järvenpää, M. (2013). ERP in action—Challenges and benefits for management control in SME context.International Journal of Accounting Information Systems, 14(4), 278-296.


June 22, 2013

The Business Network to Supplement ERP

Writing about web page http://info.e2open.com/rs/e2open/images/WP-E2open-ERP-Business-Network.pdf

The evolution of the manufacturing industry is one that portrays the development of the supply chain and all the elements based on it over the past few decades. Some time ago, the manufacturing industry used to rely on vertical processes, where materials would enter the plant from one side and come out as saleable products from the other. Nowadays however, companies rely upon partners, suppliers, and even customers in the design, manufacturing, and delivery of their products. This change in the type of relationships between the different parties involved in the processes of given products over the years, required and inspired the creation of the business network to supplement the ERP systems already in use.

ERP systems are best used when dealing with internal business processes within a given enterprise. Its main objective is to harmonize business processes by providing cross-departmental visibility into their statuses. This is done by automating “manual, paper-based processes (from order entry on one end, to invoice and payment collection on the other)”. ERP systems also allow the collection and storage of data needed for managing the business, as all transactions occurring between a given enterprise and other parties are recorded.

ERP systems have been around for quite some time now, pushing many to try and optimize it in order to make use of it in modern supply chains. And that’s where the problem lies. ERP systems were never meant to deal with the modern network-like supply chains (it was meant to deal with straight line supply chains). No matter how much we try to optimize ERP systems, they will still lack efficiency, be prone to error, and be slow to react in a dynamic and fluid networked world, where “customer demand pulls production in its wake, meaning that companies must be able to respond quickly to volatile demand”. For all the positives of the ERP systems, they will still be retrospective, as they rely on the data in store; still be rigid, as they rely on push production and management of inventory instead of pull; and will still provide a narrow picture of any given process within an enterprise, instead of putting it in perspective vis-à-vis the entire supply chain network (which includes partners, supplier, etc.). And that’s where the business network’s role comes.

The business network was created in order to solve the problems that the ERP systems were not meant to address. As a result of the interdependence of the different parties involved in a given operation, the business network provides a shared space, facilitating the communication and collaboration between different parties during the execution of shared processes. The architecture of a business network seems optimal as a cloud-based network, where the common objective is more easily set at the center of the value chain, with all trading partners forming the network represented by nodes interconnected in many different ways. Three points are essential for the business network to be effective. First, the trading partners are to be connected by exchanging related data in near-real time. Second, the data exchanged needs to be understandable to all parties involved. And third, all parties need to have access to the flow of data in order to make decisions based on the latest information available. In general, the business network allows the different parties to be leaner, by being able to respond quickly to the ever changing market demands, and gets them closer to being proactive by giving them access to fresh, instead if old stored data.

In conclusion, the business network was never meant to overtake ERP systems. It was meant to supplement it by providing more flexibility in one to many or many to many interactions that characterize the modern supply chain. So whilst ERP systems allow cross departmental visibility for processes within a given company, the business network enhances cross enterprises visibility for all parties involved in a given operation, which prompts us to realize that in order to optimize the processes, one ought to use the right tool for the job at hand.


E2open. 2013. Beyond The Four Walls: ERP and The Business Network. [online] Available at: http://info.e2open.com/rs/e2open/images/WP-E2open-ERP-Business-Network.pdf [Accessed: 20 Jun 2013].


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