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

ERP123 Manufacturing Software Review

ERP123 is a fully integrated ERP software package (business management software) that has been designed with Small to Mid-Sized manufacturers, distributors and service providers in mind. It brings big business capabilities to even the smallest of businesses. And we mean EVERYTHING. ERP 123 small business erp is composed of a series of modules so that the system can be deployed in a phased manner. All modules are included in the base system price. Use only what you need today and turn on what you need when you need it. Overall, its one of the better small business erp package on the market today.

This end-to-end solution is built on a rock-solid foundation using cutting-edge technology, with more than 300 modules and repeatable DVD training, making it an agile, accessible option even for smaller manufacturers. It can be tailored to a number of industries: apparel, automotive, plastics, job shops and more and supports most manufacturing modes – ETO, MTO, mixed and repetitive.

ERP123 Manufacturing Software Video Review

What we really like about ERP123 is the system’s flexibility. With its modular architecture, the system can be configured in any number of ways to suit the unique requirements of an organization. ERP123 can easily be expanded as the company grows, but since all modules are included in the price, companies can implement everything at the same time or employ a staged approach without incurring additional costs.

Modules include features for inventory and sales management, accounting, costing, production management, product structures, with additional capabilities that include user-defined layouts, Excel integration and “Super-Query” data reporting.
Small to midsized companies seeking an affordable solution that can grow with the company should take a look at ERP123.

ERP123 Manufacturing Software – Getting more information

Learn more about this amazing software by clicking on the following buttons:

When to use ERP Software Consultants

Many times companies try to select and implement ERP software on their own. Sometimes this works and sometimes it doesn’t. So the question is, when should a company use an ERP Software Consultant to guide them in their ERP Selection or ERP Implementation?

The answer is not so simple. If a company is mature and has the resources that can look independently at the business processes, then it may make sense to embark on a selection on their own. Most of the time in mid-market sized or even smaller clients, then it is difficult for them to 1. Spare the resources and 2. Look at the business processes objectively.

Any good ERP Selection begins with a company evaluating their business processes. Borrowing from the Toyota Production system (aka Lean Manufacturing), a company should first eliminate waste and then consider automating. Automating bad processes will only make things worse faster. However, automating good processes will help grow the business and promote better communication.

: Image via Wikipedia

ERP Software Consultants – Best Practices

The real question becomes how much is the company willing to flex their processes to adapt to “best practices” that are usually built into a commercial software system. If the company is flexible (and this takes a lot of leadership to make happen), they can select a system and model their business around that system. The larger commercial systems, such as those from Microsoft, Infor, SAP, Oracle, and others have all grown up from thousands of implementations from all sorts of companies. They have developed efficiencies that many companies who adopt the software’s methodology can benefit from.

The real key is understanding the fit of a software package to the business. If the company does some niche processing, then a mainstream commercial package may not fit. However it the company is a distributor or a manufacturer of discrete products as an example, then a standard mid-market product would likely work for them.

So how do you choose the software, it is back to the business processes and the key requirements. “Key Requirements,” not just all requirements. The things that the old system does not do well and those things that it does very well are good places to start. Additionally, discover those requirements or processes that set your company apart from others in your industry. Usually processes around your competitive advantage are part of the key requirements.

Going back to the original question, should you use independent ERP Software Consultants? If you have a clear and objective understanding, you can afford the time to really research the vendors and you have a strong will with salespeople, then going it on your own might be reasonable.

If you do not have the time, the understanding of the ERP Software market, or the will power to manage at an arm’s length the software vendor’s salespeople, then an ERP Software Consultant would be a wise choice.

ERP Software Consultants

SAP vs. Oracle

Here is an interesting comparison between the two leaders in the ERP space, SAP vs. Oracle. This is a hotly contested debate between the two giants in Enterprise Resource Planning Software. A company that is considering moving to an ERP will likely have one or both competing for their business.

They have distinctly different approaches to both the software business and to their software architecture. Once only for the Fortune 500, the mid-sized marketplace is looking more frequently at these software offerings. This is due to the consolidation of ERP software offerings, post 9/11, and due to the increased focus that SAP and Oracle have placed on this mid-market space.

SAP vs. Oracle
Alisher Muhammadiev

Both ERP rivals Oracle and SAP are different as their products

Enterprise Resource Planning system was designed and implemented in more than 20 different industries and all ERP companies together generate every year a $60 billion dollars profit on the global market. The biggest part of this pie is shared by two software giants Oracle and SAP. Although they compete on the same market and target their products for common industries, they have very distinguished strategies, corporate culture and distinctive offers.

Information Technology has become an important part of any current business. The Enterprise Resource Planning system is a software package that was specially designed to help companies to run their businesses better. It consists of many modules. Each of the modules is used at different departments within one corporation. All those modules are interconnected with each other in one coherent system. According to the common definition of ERP – it is a system that processes all transactions in an organization and facilitates the planning, production and customer responses. It represents the companys culture. Moreover it can be thought of as the companys backbone coded into the software. That is why the ERP is so important and at the same time very expensive. Depending on the size of the project some companies spends from $2 to $130 million dollars for ERP implementation. Building an ERP package requires a lot of time and resources. ERP vendors develop, supply, and implement the ERP system as package software for enterprises. Some companies are loyal to one vendor and use all modules from same vendor. Others decide to mix together compatible modules from different vendors. This approach is called a best of breed system. When the vendors product is built in-house all work including software development, implementation, customers support and training are done by the vendor alone with no help from the outside or from outsourcing.

The world second-largest software supplier Oracle was founded in 1977 in the United States and by 1999 the company was serving 5000 clients in over 140 countries. Oracle is well known for their database systems rather than enterprise resource planning system. It is rating as the second ERP package vendor after SAP on the ERP market. Oracle has a reputation as a company with strong software support, a large financial budget and stable position among the competitors. At the same time the corporate culture of Oracle is conservative on benefits from revenues. Which causes such problems as inflexibility and slow implementation of their ERP products. In other words, the company lacks partners and consultants for technical expertise.

Hence the main player on ERP market is the German company SAP (Systems, Application, and Products in Data processing) which was founded in 1972. It was the first time in software history that a company outside of the United States had gained such success. In 1999 SAP had more than twice as many customers as Oracle in 100 countries around the world. Unlike Oracle, SAP decided to work in close collaboration with many other companies. The companys success derives from the fact that SAP invests 20 percent of the profit on research and shares 80 percent of the total revenues with their alliance partners. Moreover, SAP has many consultants who provide help and training to their customers. And there are even third party developers who supply a large number of add-in programs that can work together with SAPs products. As a result, customers enjoy more flexible and fast implementation of their ERP systems. There is no doubt about why SAP became a leader.

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Because Oracle products are built in-house in contrast to SAPs solutions they are based on one database system. Oracle became popular as a manufacturer of developing products that can be easily integrated with other models from other vendors, enabling them to build a best of breed system. The ERP packages from Oracle are based on three main parts: Supply, Demand and Finance with several included modules. Oracle offers a strong enterprise system that is able to accommodate more than 1000 users whereas the ERP package from SAP can be scaled from 25 to 1000 users. Such scalability is possible because of the high granularity of the SAP modules. The downside of the SAPs ERP systems is that the SAP vendor forces its customers to change or adapt their corporate culture to match how SAP software works. However as SAP as Oracle, both provide incredible enterprise resource planning systems which help many companies to operate more efficiently and more effectively these days.

Both vendors offer great ERP packages but choosing the right package among both is not an easy job. For SAP, being a leader on the market it does not always mean that SAP can offer the right software that customers want to have; and Oracle can appear as a good alternative for this case. If the company is limited in resources and restrained in time the best solution would be to go for SAP products. However the company with distinguished values which creates a competitive advantage would prefer to choose the Oracle to build a unique system that will fit well to their businesses. The lesson is that before moving to ERP the senior manager needs to balance all constraints and needs for the companys future.

Alisher Muhammadiev Hanyang University, Seoul, South Korea tel: +82-10-2304-0074 email: so***@ih******.kr web site: http://puzzleservice.com

sap vs. oracle

Best Practices in ERP Software Selection

This is a great post that gets right to the point about ERP Selections:

Best Practices in ERP Software Selection
Posted 8/2/2006 by Eric Kimberling (ERP Consultant)

ERP vendor selection can be a daunting task, and one that is often not given the appropriate attention. CIOs or other executives in charge of making such major decisions often make decisions based on perception, gut feel, or faulty information. For example, executives often choose ERP software vendors based on what competitors or other large companies have chosen. However, information such as this does not necessarily reflect what is appropriate or inappropriate for your specific company. Further, planning for a successful implementation involves more than choosing the right software; it also involves preparation to ensure that ERP enables measurable improvements to your business.
In choosing an ERP or IT software package and planning for the overall project, executives need to make decisions based on objective and unbiased information rather than gut feel. In particular, organizations should consider the following:
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