Open Source ERP or Managed Services? Finding the right solution for your business needs

Enterprise Resource Planning (ERP) software is an essential component for any businesses, irrespective of the size or industry. An ERP solution enables a business to automate, integrate, and streamline business processes, thereby making operations more efficient. A business may choose to implement either an Open Source ERP or go with a managed services provider, depending on the resources that are at their disposal.

Below is a brief comparison showing the pros and cons of the two options.

The Pros of Open Source ERP vs. Managed ERP Services

Accessibility:

Open Source ERP software is easily accessible, since you can download from the internet, at no cost. For this reason, even the small and medium sized business that had no access previously, have a chance to try out ERP software.

Commercial ERP software must be purchased from the vendor. The vendor will then issue licenses and terms for its use, normally forbidding any form of distribution. For this reason, the software is only made available to those companies that are able to pay, in order to use it.

Cost:

Open source ERP software is available online, free of charge. Therefore, no acquisition, implementation, or licensing costs are necessary. In addition, the developers or third parties make every effort to have documentation and training tutorials, which users can download and use for implementing the system, as well as training their employees. However, third parties may charge a small fee, in order to access their documentation and tutorials.

On the other hand, managed ERP services are quite costly, thus making them out of reach for most small and medium-sized enterprises. Some of these costs include the software acquisition costs, licensing costs, employee training costs, and professional fees.

Scalability:

Open Source ERP is scalable. For this reason, the solution caters for the needs of both small and medium businesses, as well as large enterprises.

Commercial ERP solutions, on the other hand, are designed with the large businesses in mind. Therefore, they will tend to be more complex and have features that cannot be implemented or be applicable for the small business.

Flexibility:

With Open Source software, everyone has access to the source code. In addition, anyone has the right to modify or tamper with the code, provided it is done in accordance with the software agreement. As such, a business has the opportunity to implement some features, or customize the system to meet individual needs of the business.

Commercial ERP software does not allow for any modifications. The license agreement strictly prohibits tampering with the code, and gives all the rights to the respective vendors. Therefore, the vendor must be contacted to undertake any modifications that may be required.

The Cons of Open Source ERP vs. Managed ERP Services

Support:

The greatest disadvantage of using Open Source ERP is the fact that the business has to independently, manage its ERP system. Therefore, no technical or professional support is available. As such, a business is forced to manage, backup, and even troubleshoot their system. In extreme cases, a business might need to hire the services of a competent professional to manage the system internally.

With managed services, the business gets to enjoy various additional services from the vendor. These services may include hosting, backup and recovery, troubleshooting, and regular updates.

Features:

In as much as the developers of Open Source ERP will make every effort to include all the major features that are found in the commercial ERP systems, it is common to find some important features missing. Usually, Open Source software is developed, as a result team effort, relying on the input of volunteers with specialized skill in the various areas involved. Therefore, lack of such skilled personnel results in certain features being left out. Apart from this, the funds that are required to develop and test some the features may lack.

On the other hand, companies that have sufficient resources, in terms of funds and skilled manpower, develop the commercially managed systems. This ensures that all the required features are included.

Overall, the Open Source ERP system has its advantages and disadvantages over the managed service. However, the fact that the commercial solution is out of reach for many small and medium-sized businesses makes the Open Source ERP a viable solution to streamline their business processes.

Fundamentals of Manufacturing ERP

By Chris Shaul

What is Manufacturing ERP?

Manufacturing ERP (Enterprise Resource Planning) software is a much more complicated system than standard ERP systems. Before we talk about software though we need to understand that Manufacturing ERP also consists of the business processes that it takes to run a manufacturing operation. Unlike distribution or service businesses, there is a complete set of processes that enable the create of value from raw materials. These materials are supported by a supply chain which also needs to be managed.

Setting the software aside, there are inventory processes, shop floor processes, design processes, procurement processes, quality control measures and processes, and order management processes that need to be properly managed in the manufacturing ERP system. Many people have tried to solve the issues related to all of these processes by applying a new software solution to manage the process and have failed.

A blend of people, technology and process factors needs to be evaluated and optimized. If any of these three areas are missing or weak then the overall manufacturing process will not succeed. What will make you successful is improving the processes before you apply a manufacturing ERP software solution.

When evaluating Manufacturing ERP software, it is important that the functional requirements for each of the three factors needs to be evaluated. How will the people be managed and evaluated in the Manufacturing ERP system? How will controls on the machinery and other technology be managed in the manufacturing ERP system? How will the technology enable efficient operations?

A trend in manufacturing over the last decade has been to apply lean manufacturing principles. Essentially, you want to remove waste from a process before automating it. If you do not, you will make the inefficiencies operate faster, creating more in-balances in supply and demand. It really doesn’t matter what you produce in terms of products, or what you utilize as your input raw materials. Lean principles balance out your supply and demand and in doing so, create better throughput. With the advent of Lean Manufacturing principles, many ERP software systems have incorporated a lean thinking into their systems.

Using a combination of Lean principles and common sense, you can work at creating operational efficiencies that will help when you apply any manufacturing ERP software system to help manage the business processes. Bottom line: don’t automate a mess.

Manufacturing ERP Software

Looking at Manufacturing ERP Software, you need to evaluate how well it manages the manufacturing business functions (such as creating purchase orders, the business processes (such as managing the demand planning process), and how well it manages the data (as in providing efficient access and ease of reporting). That being said, all systems typically have a set of financial modules, a collection of inventory modules, manufacturing modules, and sales and order modules. These various modules each have certain functionalities that help you run the core business.

The differentiation between these various systems is in how well they accommodate the niche business that you are in. If you are a process manufacturer making blends then there is a certain set of Manufacturing ERP systems that work best for you. If you are a machine shop, then another class of Manufacturing ERP solutions work for you. If you are a complex or project based manufacturer, then you will look for different software than others. The good news is that there are ERP vendors that specialize in these different niche areas and others.

Understanding the class of software you want to evaluate is key to creating a short list of vendors. Keep in mind that there is a class of ERP software that fits in as a generalist niche solution. In other words, these software do all aspects of manufacturing fairly well, but do not have a specialty in any certain industry. Often these manufacturing ERP solutions will rely on their value added reseller chain to create add-on modules to fit certain industries. For example, there may be a generalist solution that has a set of 3rd party modules (written in the native tool-set) that provides the process manufacturing functionality.

Things to look for in Manufacturing ERP solutions

When you evaluate Manufacturing ERP software, it can seem overwhelming. There are hundreds of manufacturing ERP software vendors all looking to be the next system at your company. If you step back and look at the industry that you belong to and evaluate the systems based on those that are successful in your industry, you will have taken the first step.

Second, you need to look at those systems that support all areas of your business. If you have unusual requirements make the vendor demonstrate how they will handle these unique functions. Many vendors claim to support various business processes, but when you make them show them in detail, there will be a clear distinction between those that can and those that only think they can handle your requirements.

Thirdly, you should evaluate the standard functions, but do not spend too much time on those things. Being able to cut a check or create a debit memo are pretty standard these days. Rather, have the vendor spend time showing you how they will handle your unique Return Merchandise process or your specialized Quality Management requirements. There is a consulting joke about the fact that “you as a customer are unique just like everyone else.” This is both true and false at the same time. Every business thinks it is unique on the whole. But the reality is that you probably do a majority of the things that most other businesses do. However, there is probably 20 percent of the things you do that make you special and make you successful. You want to make sure that these are the things that you drill down on with the vendors to ensure that you can continue to be special in those areas.

What if you cannot make a decision on a Manufacturing ERP solution?

We know how hard it is to try and make a software selection on your own, but if you want to really be successful and choose the perfect fit software for your organization, you will need to find the right guidelines to help you be successful.

These methods are simple to pick up and they don’t take a lot of learning. You can read how to do it in our free report on ERP Selection, the ERP Software Buyers Guide.

Don’t worry, it is not impossible. Learn more ways on How to Have a Successful Selection Project by clicking on the link.

Article Source: http://EzineArticles.com/?expert=Chris_Shaul

http://EzineArticles.com/?Fundamentals-of-Manufacturing-ERP&id=6289823

Business Process Optimization Using ERP And CRM

For any business to be successful, it has to manage its operations deftly, both within its organizational framework as well as with the outside world. Today, a lot of innovative solutions and software are available in the market to address to both these needs and make management easier. These are Enterprise Resource Planning (ERP) and Customer Relationship Management or CRM.

ERP utilizes ERP software applications to improve the performance of organizations’ resource planning, management and operational control. ERP software is multi-module application software that integrates activities across functional departments like product planning, purchasing, inventory control, product distribution, order tracking, finance, accounting and human resources aspects of an organization. The goal of ERP is to improve and streamline internal business processes, which typically requires reengineering of current business processes. The users of ERP systems are employees of the organization at all levels, from workers, supervisors, mid-level managers to executives.

Whether a small or home-based business venture or a large corporate, the customers shape future potential of any business venture. Hence keeping the customer happy is one of the baselines of a successful business. Achieving customer satisfaction involves various things like understanding their problems and solving them quickly, and serving them in a better manner thenceforth. And so to simplify things, we have Customer Relationship Management or CRM.

CRM is a term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized way. For example, an enterprise might build a database about its customers that describes relationships in detail so that management, salespeople and perhaps the customs themselves can directly access information. Most online shopping portals can be cited as an example. Effective CRM application involves customizing the CRM software to match your own business type, whether it is B2B or B2C, and making sure that the customer care executives understand the basic premise and technicalities of operating the software.

About Author
CRM software is easy to use and very dominant. Small business software always helps improve sales and conversions. If you need to manage bulky databases crm application and erp software visit for more decent detail on http://www.interprise.co.uk

Video: Microsoft vs. SAP and Oracle’s mid-market offerings

How can Microsoft ERP compete with SAP and Oracle’s mid-market offerings?

Don Fornes, CEO of our partner Software Advice, interviewed the Microsoft Director of Marketing for ERP, Guy Weismantel, about the latest updates to the Microsoft ERP product line. In this video he talks about where and how Microsoft competes in the Enterprise with SAP and Oracle.

Often a corporate headquarters runs SAP or Oracle for the financials and the various plants, divisions and subsidiaries are running differing software, including Microsoft. Guy discusses the competitive advantages that Microsoft brings the these corporations at the divisional or plant level. There are some distinct advantages for these smaller segments of a large business to running Microsoft Dynamics. Find out more in this interesting video.

This is the fifth in a series of 7 videos that we will be posting.

Microsoft vs. SAP and Oracle’s mid-market offerings

Getting More Microsoft ERP Information

If you are interested in exploring Microsoft ERP for your company, please select one of the two links below:

For information on other ERP software products, please see our ERP Software Directory for many more vendors.

Microsoft ERP Channel Partners

For information on the Microsoft ERP Channel Partner Program, please see http://partner.microsoft.com
Insight into the Microsoft ERP Mix

Video: Insight into the Microsoft ERP Mix

Where does Microsoft Dynamics AX stand in the Microsoft ERP Mix?

Don Fornes, CEO of our partner Software Advice, interviewed the Microsoft ERP Director of Marketing, Guy Weismantel, about the latest updates to the Microsoft ERP product line. In this segment he provides some clues to release dates of Microsoft products and their fit to the market place.

Providing some interesting insight into the Microsoft Dynamics product line, Mr. Weismantel discusses the release plan for the various MS Dynamics products. Interestingly enough, he talks about how they go to market with the different products based on geography and customer buying behaviors. In the video, he talks about the following:

Dynamics AX and its niche for high end, multi-channel, multi-country/language strengths
Dynamics GP and how they play to its strengths (and even mentions a few weaknesses)
Dynamics NV which is a highly customizable solution for vertical markets
Dynamics SL which provides a good fit for project accounting clients

This is the fourth in a series of 7 videos that we will be posting.

Is Microsoft ERP Dynamics AX the Favorite Child?

Getting More Microsoft ERP Information

If you are interested in exploring Microsoft ERP for your company, please select one of the two links below:

For information on other ERP software products, please see our ERP Software Directory for many more vendors.

Microsoft ERP Channel Partners

For information on the Microsoft ERP Channel Partner Program, please see http://partner.microsoft.com
Insight into the Microsoft ERP Mix

Video: ERP Channel Partners – Can they Survive the Cloud?

ERP Channel Partners – Can they Survive the Cloud?

Don Fornes, CEO of our partner Software Advice, interviewed Microsoft’s Director of ERP Marketing, Guy Weismantel, about the latest updates to the Microsoft Dynamics ERP product line. The topic of discussion turned to ERP Channel Partners and how the cloud computing era will affect them.

Mr. Weismantel talks about how Microsoft ERP Channel Partners can adjust to the new marketplace where there is now hardware or software to install or maintain. Cloud computing brings a new way of doing business. Traditional resellers and implementors make money on both the licenses of the software, the hardware provided, and the service to install and configure the systems. But additionally, they should be making money from the value added services such as crafting the best solution for the client and providing an upsell opportunity. This is the area that will need to expand for these ERP Channel Partners to survive.

This is the third in a series of 7 videos that we will be posting.

How Can ERP Channel Partners Survive in the Cloud Era?

Getting More Microsoft Dynamics Information

If you are interested in exploring Microsoft AX 2012 for your company, please select one of the two links below:

For information on other ERP software products, please see our ERP Software Directory for many more vendors.

ERP Channel Partners

For information on the Microsoft ERP Channel Partner Program, please see http://partner.microsoft.com
ERP Channel Partners

Video: Microsoft Dynamics AX 2012 – An Inside Look

Microsoft Dynamics AX 2012 – An Inside Look

Don Fornes, CEO of our partner Software Advice, interviewed Microsoft’s Director of ERP Marketing, Guy Weismantel, about the latest updates to the Microsoft Dynamics ERP product line. Over the next two weeks, we are publishing 7 videos, each centered on one question about the Microsoft Dynamics ERP offerings.

They discuss amongst other things, the more than 1200 new features that are being incorporated into the new product. He makes an interesting point about the fact that many companies are around the tenth or eleventh year of use on their current ERP systems and so they are targeting these clients looking to get off of their legacy (Y2k) systems.

Additionally, they are looking into the Business Intelligence area with the new release. They are also enhancing the solution with several acquisition products. It should be a very exciting product when it is released at their user conference Convergence, later this year.

This is the first of a series of 7 videos that we will be posting.

Microsoft Dynamics AX 2012 – Video 1

Getting More Microsoft Dynamics Information

If you are interested in exploring Microsoft AX 2012 for your company, please select one of the two links below:

Microsoft Dynamics AX Featured Product:

Inside Microsoft Dynamics AX 4.0

For information on other ERP software products, please see our ERP Software Directory for many more vendors.

Microsoft Dynamics

ERP System

“ERP System” is a way of describing Enterprise Resource Planning. An ERP System is a set of people, process and technology that enable an business to optimize and fully utilize all of their resources. So often people think of an ERP System as simply a software package. But it is much more. Let’s look at some of the aspects of a true ERP System.

ERP System Explained

If you consider all of the aspects of an ERP System, you must look at the parts of the business from a process perspective. Take for example a process of “Order-to-Cash”. This process follows the concept of taking an order for a product, checking and requisitioning inventory, preparing it for shipment, and shipping it out. Then it is invoiced, and ultimately the invoice is paid.

If you map out the Order-to-Cash process in your organization, you will likely find a lot of inefficiencies. You don’t want to automate these inefficiencies. That would only make the inefficiencies faster. So you should first look at the system of people, processes and then ultimately automate it with technology.

So your ERP System is all of the inputs and outputs to the process of taking an order and processing it through until your receive payment for that order. Take for example the Order process. The input is the order itself. The output may be the printed order or the picklist for pulling the inventory. This order is input and processed by an order entry clerk. You can see in this simple example the process of taking the order (input) and generating a picklist (output) as the first step in your order-to-cash processs.

Where possible an ERP System drives data inputs to their source. That is why Internet-based shopping carts and order systems are becoming essential. The customer is the source of the data, so they should be the source of the input into the system. You can see the beginning of a supply chain where the customer pulls inventory from the company, who then pulls inventory from a supplier. This customer, processor, supplier model repeats again and again, in both a micro level and a macro level. The order entry station is the micro level processor in the above example, and the distribution company is the macro level processor in the larger picture. You can take any process and look at the input (or the customer pull) and see what makes up the transaction, and who is the supplier for the process.

The ERP System is a many operational and financial processes that are run by people to fulfill the supply and demand of the process and ultimately streamlined and enabled by technology

Steps to improving your ERP System before automating

There are a number of things you can do, but the obvious first thing is to identify your processes and systems. Tools such as Lean Enterprise (or Lean Manufacturing) can help you reduce and eliminate waste in your processes. Based on the Toyota Production system, Lean is a very effective way to reduce wasted efforts, reduce costs, and improve your throughput.

Another area to look at is improving quality. Quality methods and tools can greatly increase your bottom line when properly applied. ISO9000 and similar certifications are both effective at communicating a message internally and externally, that only high quality products and services will be tolerated.

Scaling these two system improvements upon a well matched business software system will create a world-class organization. Key to finding a software to support your ERP System is matching your processes and key functions to an ERP Software solution.

Resources for Improving your ERP System

The first thing you should check out is ERPandmore.com’s free ERP System Tools that you can download. These can help you better define functions within an ERP system, Vendor Evaluations, and compare competing solutions.

Some other resources you should look to include the American Production and Inventory Control Society and the Quality Management Institute. These two organizations have a lot of publications and information about business process improvement.

With regards to the software for your ERP System, you can find a multitude of vendors in our ERP Software Directory. You can also find ERP Vendor reviews and get price quotes from SoftwareAdvice.com.

ERP System