Enterprise Resource Planning

ERP is an acronym that stands for Enterprise Resource Planning. ERP software saw
phenomenal interest from the corporate sector during the period 1995-2000. The ERP
market is estimated to be in excess of USD 80 Billion in the year 2000 Many analysts
feel that today’s global business environment - products and services customized to
suit the individual needs of millions of customers, delivered over multiple timelines in
a 24X7 basis - would have been impossible without such enterprise software.
Undoubtedly ERP represents one of the most complex and demanding application
software in the corporate environment.

ERP is a package software solution that addresses the enterprise needs of an

organization by tightly integrating the various functions of an organization using a
process view of the organization.

Why ERP?
In spite of heavy investments involved in ERP implementation, many organizations
around the world have gone in for ERP solutions. A properly implemented ERP
solution would pay for the heavy investments handsomely and often reasonably fast.
Since ERP solutions address the entire organizational needs, and not selected islands
of the organization, ERP introduction brings a new culture, cohesion and vigor to the
organization. After ERP introduction the line managers would no longer have to chase
information, check compliance to rules or conformance to budget. What is striking is
that a well-implemented ERP can guarantee these benefits even if the organization is
a multi- plant, multi- location global operation spanning the continents.

In a sense ERP systems can be compared to the “fly-by-wire” operation of an aircraft.

ERP systems similarly would relieve operating managers of routine decisions and
leave them with lots of time to think, plan and execute vital long-term decisions of an
organization. Just as “fly-by-wire” operation brings in amazing fuel efficiency to the
aircraft operation by continuous monitoring of the airplane operation, ERP systems
lead to significant cost savings by continuously monitoring the organizational health.
The seemingly high initial investments become insignificant in the face of hefty long-
term returns.

Need for Enterprise Resource Planning

Organizations today face twin challenges of globalization and shortened product life
cycle. Globalization has led to unprecedented levels of competition. To face such
competitions, successful corporations should follow the best business practices in the
industry. Shortened life cycles call for continuous design improvements,
manufacturing flexibility, super-efficient logistics control and better management of
the entire supply chain. All these need faster access to accurate information, both
inside the organization and the entire supply chain outside. The organizational units
such as finance, marketing,
production, human resource development etc. need to operate with a very high level
of integration without losing flexibility. ERP system with an organization-wide view
of business processes, business need of information and flexibility meet these
demands admirably. One of the developments in computing and communication
channels is providing tighter integration among them.

Definition of ERP

Researchers and practitioners have defined ERP in many different ways.

Minahan (1998) defines ERP as a complex software system that ties together and
automates the basic processes of a business. ERP has been defined by various authors
but with few differences.

Kumar et al. (2000) define enterprise resource planning (ERP) systems as

“configurable information systems packages that integrate information and
information-based processes within and across functional areas in an organization”

Al-Mashari and Zairi (2000) states that ERP represent an optimal enterprise-wide
technology infrastructure. The basic architecture of an ERP system builds on one
database, one application, and a unified interface across the entire enterprise.

Nah et al. (2001) defines ERP as “An enterprise resource planning (ERP) system is
typically defined as a packaged business software system that facilitates a corporation
to manage the efficient and effective use of resources (materials, human resources,
finance, etc.) by providing a total integrated solution for the organization’s
information- processing requests, through a process-oriented view consistent across
the company.”
 Evolution of Enterprise Resource Planning
Enterprise resource planning (ERP) has evolved as a strategic tool, an outcome of
over four decades. This is because of continuous improvements done to the then
available techniques to manage business more efficiently and also with developments
and inventions in information technology field.

Pre Material Requirement Planning (MRP) stage

Prior to 1960s businesses generally relied on traditional ways of managing inventories

to ensure smooth functioning of the organizations. These theories are popularly
known as ‘Classical Inventory Management or Scientific Inventory Control Methods’.
Most popularly used among them were Economic Order Quantity (EOQ); Bill of
Material (BOM) etc. However these systems had very limited scope.

ERP system has evolved from the Material Planning System of 1980’s. There are
various phases through which this evolution process has gone through. The various
phases of development of resource planning system in relation to time and evolution
of concept of ERP.

Stages of ERP Evolution

Material Requirement Planning (MRP)

MRP was the fundamental concept of production management and control in the mid-

1970s and considered as the first stage in evolution of ERP. Assembly operations
involving thousands of parts such as automobile manufacture led to large inventories.
The need to bring down the large inventory levels associated with these industries led
to the early MRP systems that planned the order releases. Such planned order releases
ensured proper time phrasing and accurate planning of the sub-assembly items, taking
into account complex sub-assembly to assembly relationships characterized by the
Bill of Materials.
Example:

A typical example is a bicycle manufacture. To manufacture 100 units of bicycles,

one needs 200 wheels, 100 foot-pedals, and several thousands of spokes. On a given
day, a plant may have 40 units of complete bicycles in stock, 57 units of wheels, 43
units of foot-pedals and 879 units of spokes. If the plant is to assemble 20 units of
bicycles for the next 4 days of production, wheels and spokes-is a non trivial problem.
If the independent demand of the spare parts is also to be taken into account, one can
visualize the complexity of it.

A typical automobile plant with hundreds, if not thousands of parts, has to face
problems that are in order of magnitude even more difficult. MRP systems address
this need. Using the processing power of computers, databases to store lead-times and
order quantities and algorithms to implement Bill-of-Material (BOM) explosion,
MRP systems brought considerable order into the chaotic process of material
planning in a discrete manufacturing operation.
Essentially MRP addresses a single task in manufacturing alone. Material requirement
planning (MRP) system was adopted by firms for creation and maintenance of master
data and bill of material across all products and part within an organization. MRP on
the other hand was an outgrowth of bill of material (BOM) processing, which is
purchase order management that utilizes parts list management and parts
development.

Manufacturing Resources Planning II (MRP- II)

A natural evolution from the first generation MRP systems was the manufacturing
planning systems MRP II that addressed the entire manufacturing function and not
just a single task within the manufacturing function. MRP II went beyond
computations of the materials requirement to include loading and scheduling. MRP II
systems could determine whether a given schedule of production was feasible, not
merely from material availability but also from other resource point of view.

Typically, the resources considered from MRP II systems would include production
facilities, machine capacities and precedence sequences. The increased functionality
enabled MRP II systems provided a way to run the system in a loop. First it was used
to check the feasibility of a production schedule taking into account the constraints;
second to adjust the loading of the resources, if possible, to meet the production
schedules; third

to plan the materials using the traditional MRP II systems. Both MRP system and
MRP II systems were fairly successful in industry. Due to the power of information
systems- databases, algorithms and their integration, organizations did find real
support for efficiently managing the manufacturing function in the eighties.

Enterprise Resource Planning (ERP)

The nineties saw unprecedented global competition, customer focus and shortened
product life cycles. To respond to these demands corporations had to move towards
agile (quick moving) manufacturing of products, continuous improvements of process
and business process reengineering. This called for integration of manufacturing with
other functional areas including accounting, marketing, finance and human resource
development.

Activity-based costing would not be possible without the integration of manufacturing

and accounting. Mass customization of manufacturing needed integration of
marketing and manufacturing. Flexible manufacturing with people empowerment
necessitated integration of manufacturing with the HRD function. In a sense the 1990s
truly called integration of all the functions of management. ERP systems are such
integrated information systems build to meet the information and decision needs of an
enterprise spanning all the functions of management4.

Extended ERP (E-ERP)

 Further developments in the enterprise resource planning system concept have led to
evolution of extended ERP (E- ERP) or web - enabled ERP. With globalization on
one hand and massive development in the internet technology on the other, need for
web based IT solution was felt. Thus E- ERP is development in the field of ERP
which involves the technology of Internet and World Wide Web (WWW) to facilitate
the functions of an organization around the web.

Enterprise Resource Planning II (ERP- II)

ERP II is the advanced step of E-ERP. It is the software package which has
strengthened the original ERP package by included capabilities like customer
relationship management, knowledge management, workflow management and
human resource management. It is a web friendly application and thus addresses the
issue of multiple office locations.

Benefits of ERP:

(a) Business integration: The first and the most important advantage lie in the promotion
of integration. The reason ERP packages are called integrated is the automatic data up
gradation between related business components, since conventional company
information systems were aimed at the optimization of independent business
functions in business units, almost all were weak in terms of the communication and
integration of information that transcended the different business functions in the case
of large companies in particular, the timing of system structure and directives differs
from each product and department / functions and sometimes they are disconnected.
For this reason, it has become an obstacle in the shift to new product and business
classification. In the case of ERP packages the data of related business functions is
also automatically updated at the time a transaction occurs. For this reason, one is
able to grasp business details in real time, and carry out various types of management
decisions in a timely manner based o that information.

(b) Flexibility: The second advantage of ERP packages is their flexibility. Diverse multi
functional environments such as language, currency, accounting standards and so on
are covered in one system and functions that comprehensively managed multiple
locations that span a company are packaged and can be implemented automatically.
To cope with company globalization and system unification, this flexibility is
 essential, and one could say that it has major advantages, not simply for development
and maintenance, but also in terms of management.

(c) Better analysis and planning capabilities: Yet another advantage is the boosting of
planning type functions. By enabling the comprehensive and unified management of
related business and its data, it becomes possible to fully utilize many types of
decision support systems and stimulation systems. Furthermore, since it becomes
possible to carry out flexibility and in real time the feeling and analysis of data from a
variety of dimensions, one is able to give decision makers the information they want,
thus enabling them to make better and informed decisions.

(d) Use of latest technology: The fourth advantage is the utilization of latest
developments in information technology (IT). The ERP vendors were very quick to
realize that in order to grow and to sustain that growth: they have to embrace the
latest developments in the field of information technology. So they quickly adopted
their systems to take advantages of the latest technologies like open systems, client
server technology, internet/ intranet, computer aided acquisition and logistics support,
electronic commerce etc. It is this quick adaptation to the latest changes in
information technology that makes the flexible adaptation to changes to future
business environments possible. It is this flexibility that makes the incorporation of
the latest technology possible during the system customization, maintenance and
expansion phases.

(e) Reduced inventory and inventory carrying cost: The manufacturing nature of many
ERP users makes the issue of process and material costs savings paramount. The main
factor behind these savings is that implementation of the ERP system allows
customers to obtain information on cost, revenues and margins, which allow it to
better, manage its overall material cost structure. This ability to manage costs is best
seen in savings that organizations can obtain in their inventory systems. Customers
can perform a more complete inventory planning and status checking with the ERP
system.

These checks and plans reveal existing surpluses or shortages in supplies. Improved
planning and scheduling practices typically lead to inventory reductions to the order
of 20 per cent or better. This provides not only a one time reduction in assets (cost of
the material stocked), but also provides ongoing savings of the inventory carrying
 costs. The cost of carrying inventory includes not only interest but also the costs of
warehousing, handling, obsolescence, insurance, taxes, damage and shrinkage.

(f) Reduced manpower cost: Improved manufacturing practices lead to fever shortages
and interruptions and to less rework and overtime. Typical labor savings from a
successful ERP system are a 10 per cent reduction in direct and indirect labor costs.
By minimizing rush jobs and parts shortages, less time is needed for expediting,
material handling, extra setups, disruptions and tracking splits lots odd jobs that have
been set aside. Production supervisors have better visibility of required work and can
adjust capacity or loads to meet schedules. Supervisors have more time for managing,
directing and training people. Production personnel have more time to develop better
methods and improve quality.

(g) Reduced material costs: Improves procurement practices lead to better vendor
negotiations
for prices, typically resulting in cost reductions of 5 per cent or better. Valid
schedules permit purchasing people to focus on vendor negotiations and quality
improvements rather than spending their time on shortages and getting material at
premium prices. ERP systems provide negotiation information, such as projected
material requirements by commodity group and vendor performance statistics. Giving
suppliers better visibility of future requirements help them achieve efficiencies that
can be passed on as lower material costs.

(h) Improves sales and customer service: Improved coordination of sales and production
leads to better customer service and increased sales. Improvements in managing
customer contacts, making and meeting delivery promises, and shorter order to ship
lead times, lead to higher customer satisfaction, goodwill and repeat orders. Sales
people can focus on selling instead of verifying or apologizing for late deliveries. In
custom product environment, configurations can be quickly identified and prices,
often by sales personnel or even the customer rather than the technical staff.
Taken together, these improvements in customer service can lead to fewer lost sales
and actual increase in sales, typically 10 per cent or more. ERP systems also provide
the ability to react to changes in demand and to diagnose delivery problems.
Corrective actions can be taken early such as determining shipment priorities,
notifying customers of changes to promise delivery dates, or altering production
schedules to satisfy demand.
(i) Efficient financial management: Improves collection procedures can reduce the
number of days of outstanding receivables, thereby providing additional available
cash. Underlying these improvements is fast, accurate invoice creation directly from
shipment transactions, timely customer statements and follows through on delinquent
accounts. Credit checking during order entry and improved handling of customer
inquires further reduces the number of problem accounts. Improved credit
management and receivable practices typically reduce the days of outstanding
receivables by 18 per cent or better. Trade credit can also be maximized by taking
advantage by supplier discounts and cash planning, and paying only those invoices
with matching recipients. This can lead to lower requirements for cash-on- hand.

The benefits from ERP come in three different forms i.e. in the short-term,
medium-term and long-term. When initially implemented, in a year of the
organization going live with ERP, it helps in streamlining the operational areas such
as purchase, production, inventory control, finance and accounts, maintenance,
quality control, sales and distribution, etc. This benefit is in form of ‘automating’ the
transactions which promises accuracy, reliability, availability and consistency of data.

ERP Consultants

Because the ERP market has grown so big so fast, there has been a shortage of
competent consultants. The skill shortage is so deep that it cannot be filled
immediately. Finding the right people and keeping them through the implementation
is a major challenge. ERP implementation demands multiple skills -- functional,
technical, and interpersonal skills. Again, consultants with
specific industry knowledge are fewer in number. There are not many consultants
with all the required skills.

One might find a consultant with a stellar reputation in some areas, but he may lack
expertise in the specific area a company is looking for. Hiring a consultant is just the
tip of the iceberg. Managing a consulting firm and its employees is even more
challenging. The success or failure of the project depends on how well you meet this
challenge.

Fundamental Technology of ERP:

When it comes time for your organization to evaluate ERP systems, whether you are
replacing a small business accounting package or an aging ERP, It is important to
clarify the components. Each piece (often called module) of the ERP system delivers
different value for your organization. To get the most from the full system, make sure
your evaluation team understands the fundamentals.

Financial Management

At the core of ERP are the financial modules, including general ledger, accounts
receivable, accounts payable, billing and fixed asset management. If your
organization is considering the move to an ERP system to support expansion into
global markets, make sure that multiple currencies and languages are supported.
Other functionality in the financial management modules will include budgets, cash-
flow, expense and tax reporting. The evaluation team should focus on areas that are
most important to support the strategic plans for your organization.

Business Intelligence

Business Intelligence (BI) has become a standard component of most ERP packages.
In general, BI tools allow users to share and analyze the data collected across the
enterprise and centralized in the ERP database. BI can come in the form of
dashboards, automated reporting and analysis tools used to monitor the organization
business performance. BI supports informed decision making by everyone, from
executives to line managers and accountants.

Supply Chain Management

Supply Chain Management (SCM), sometimes referred to as logistics, improves the

flow of materials through an organization by managing planning, scheduling,
procurement, and fulfillment, to maximize customer satisfaction and profitability. Sub
modules in SCM often include production scheduling, demand management,
distribution management, inventory management, warehouse management, and
procurement and order management.
Any company dealing with products, from manufacturers to distributors, needs to
clearly define their SCM requirements to properly evaluate an ERP solution.
Human Resource Management

Human resource management ERP modules should enhance the employee experience
– from initial recruitment to time tracking. Â Sub modules can include payroll,
performance management, time tracking, benefits, compensation and workforce
planning. Self-service tools that allow managers and employees to enter time and
attendance, choose benefits and manage PTO are available in many ERP solutions.

Manufacturing Operations

Manufacturing modules make manufacturing operations more efficient through

product configuration, job costing and bill of materials management. ERP
manufacturing modules often include Capacity Requirements Planning, Materials
Requirements Planning, forecasting, Master Production Scheduling, work-order
management and shop-floor control.

Integration
Key to the value of an ERP package is the integration between modules, so that all of
the core business functions are connected. Information should flow across the
organization so that BI reports on organization-wide results.

Issues to be consider in planning design and implementation of cross functional

integrated ERP systems:

The problem with ERP packages is that they are very general and need to be
configured to a specific type of business. This customization takes a long time,
depending on the specific requirements of the business. The extent of customization
determines the length of the implementation. The more customization needed, the
longer it will take to roll the software out and the more it will cost to keep it up-to-
date.

For small companies, SAP recently launched Ready-to-Run, a scaled-down suite of

R/3 programs preloaded on a computer server. ERP vendors are now offering
industry-specific applications to cut the implementation time down. SAP has recently
outlined a comprehensive plan to offer 17 industry-specific solutions, including
chemical, aerospace and defense, insurance, retail, media, and utilities industries.
Even though these specific solutions would able to substantially reduce the time to
implement an application, organizations still have to customize the product for their
specific requirements.

Implementation Costs

Even though the price of prewritten software is cheap compared with in-house
development, the total cost of implementation could be three to five times the
purchase price of the software. The implementation costs would increase as the
degree of customization increases. The cost of hiring consultants and all that goes
with it can consume up to 30 percent of the overall budget for the implementation.

Once the selected employees are trained after investing a huge sum of money, it is a
challenge to retain them, especially in a market that is hungry for skilled SAP
consultants. Employees could double or triple their salaries by accepting other
positions. Retention strategies such as bonus programs, company perks, salary
increases, continual training and education, and appeals to company loyalty could
work. Other intangible strategies such as flexible work hours, telecommuting options,
and opportunities to work with leading-edge technologies are also being used. Many
companies simply strive to complete the projects quickly for fear of poaching by
head-hunting agencies and other companies.

ERP Vendors

As there are about 500 ERP applications available and there is some company
consolidation going on, it is all the more important that the software partner be
financially well off. Selecting a suitable product is extremely important. Gartner
Group has BuySmart program, which has more than 1700 questions to help a
company choose a suitable ERP package. Top management input is very important
when selecting a suitable vendor. Management needs to ask questions about the
vendor, such as its market focus (for example, midsize or large organization), track
record with customers, vision of the future, and with whom the vendor is strategically
aligned.

For a global ERP rollout, companies need to be concerned about if the ERP software
is designed to work in different countries. Also, the management must make sure the
ERP vendor has the same version of the software available in all the countries the
company is implementing the system. Vendor claims regarding global readiness may
not be true, and the implementation team may need to cross-check with subsidiary
representatives regarding the availability of the software. Vendors also may not have
substantial presence in the subsidiary countries. It is important to evaluate if the
vendor staffers in these countries are knowledgeable and available. If there is a
shortage of skilled staff, bringing people from outside could solve the problem, but it
would increase the costs of implementation.

Selecting the Right Employees

Companies intending to implement an ERP system must be willing to dedicate some

of their best employees to the project for a successful implementation. Often
companies do not realize the impact of choosing the internal employees with the right
skill set. The importance of this aspect cannot be overemphasized. Internal resources
of a company should not only be experts in the company's processes but also be aware
of the best business practices in the industry. Internal resources on the project should
exhibit the ability to understand the overall needs of the company and should play an
important role in guiding the project efforts in the right direction.

Most of the consulting organizations do provide comprehensive guidelines for

selecting internal resources for the project. Companies should take this exercise
seriously and make the right choices. Lack of proper understanding of the project
needs and the inability to provide leadership and guidance to the project by the
company's internal resources is a major reason for the failure of ERP projects.
Because of the complexities involved in the day-to-day running of an organization, it
is not uncommon to find functional departments unwilling to sacrifice their best
resources toward ERP project needs. However, considering that ERP system
implementation can be a critical step in forging an organization's future, companies
are better off dedicating their best internal resources to the project.

Training Employees

Training and updating employees on ERP is a major challenge. People are one of the
hidden costs of ERP implementation. Without proper training, about 30 percent to 40
percent of front- line workers will not be able to handle the demands of the new
system. The people at the keyboard are now making important decisions about buying
and selling -- important commitments of the company. They need to understand how
their data affects the rest of company. Some of the decisions front-line people make
with an ERP system were the responsibility of a manager earlier. It is important for
managers to understand this change in their job and encourage the front-line people to
be able to make those decisions themselves.

Training employees on ERP is not as simple as Excel training in which you give them
a few weeks of training, put them on the job, and they blunder their way through. ERP
systems are extremely complex and demand rigorous training. It is difficult for
trainers or consultants to pass on the knowledge to the employees in a short period of
time. This "knowledge transfer" gets hard if the employees lack computer literacy or
have computer phobia. In addition to being taught ERP technology, the employees
now have to be taught their new responsibilities. With ERP systems you are
continuously being trained. Companies should provide opportunities to enhance the
skills of the employees by providing training opportunities on a continuous basis to
meet the changing needs of the business and employees.

Employee Morale

Employees working on an ERP implementation project put in long hours (as much as
20 hours per day) including seven-day weeks and even holidays. Even though the
experience is valuable for their career growth, the stress of implementation coupled
with regular job duties (many times employees still spend 25 to 50 percent of their
time on regular job duties) could decrease their morale rapidly. Leadership from
upper management and support and caring acts of project leaders would certainly
boost the morale of the team members. Other strategies, such as taking the employees
on field trips, could help reduce the stress and improve the morale.

Business Process Reengineering:

In the first option of reengineering business processes, before implementing ERP, the
organization needs to analyze current processes, identify non-value adding activities
and redesign the process to create value for the customer, and then develop in-house
applications or modify an ERP system package to suit the organizations requirements.
In this case, employees will develop a good sense of process orientation and
ownership.
This would also be a customized solution keeping with line of the organization's
structure, culture, existing IT resources, employee needs and disruption to routine
work during the change programmer likely to be the least. It could have a high
probability of implementation. The drawback of this option is that the reengineered
process may not be the best in the class, as the organization may not have access to
world-class release and best practices. Moreover, this may be the only chance to
radically improve in the near future and most attention should be paid while
choosing the right ERP. Also, developing an in-house application or implementing a
modified ERP is not advisable.

The second option of implementing ERP package is to adopt ERP with minimum
deviation from the standard settings. All the processes in a company should conform
to the ERP model and the organization has to change its current work practices and
switch over to what the ERP system offers. This approach of implementation offers a
world-class efficient and effective process with built-in measures and controls, and is
likely to be quickly installed.

But if the employees do not have good understanding of their internal customer needs
or current processes, or if these processes are not well defined and documented, then
it is quite possible that while selecting the standard process from the ERP package,
employees may not be able to perceive the difficulties likely to be encountered during
the implementation stage. Employees would lack process ownership and orientation.
Other than technical issues, issues like organization structure, culture, lack of
involvement of people etc. can lead to major implementation difficulties, and full
benefits of standard ERP package may not be achieved. It may lead to a situation
where the organization may have to again reengineer its processes. This could be a
very costly mistake.

There is also a third option of reengineering business process during implementation

of ERP. But it does not considered to be a practical option and is likely to cause
maximum disruption to existing work. It should not be forgotten that during BPR and
ERP initiatives, routine work is still to be carried out and customers need to be served.

Enterprise resource planning (ERP) is a software platform that helps business owners
determine how to best use their available resources. Business process re-engineering
(BPR) involves observing and analyzing how the business works to determine
changes that may streamline operation at the business. ERP and BPR can go hand-in-
 hand. An organization's management might use BPR as a means of looking at the
current operations of a business to determine how to best proceed when designing or
choosing a new ERP.

The goal of business process re-engineering is to determine what changes can be

made in the way the business operates to improve aspects of a business. Often, BPR
will focus on a specific part of the business, like costs, customer service or marketing
and advertising. Using BPR does not necessarily lead to ERP. Though ERP and BPR
are related, a well-conducted BPR may find that there is no need for an ERP platform
in the business. A business conducting BPR may determine to drop an ERP method
for reasons including cost, effectiveness, or maintenance.

Business Process Management (BPM):

The term business process management covers how we study, identify, change, and
monitor business processes to ensure they run smoothly and can be improved over
time. Often framed in terms of the daily flow of work.

BPM is best thought of as a business practice, encompassing techniques and

structured methods. It is not a technology, though there are technologies on the
market that carry the descriptor because of what they enable: namely, identifying and
modifying existing processes so they align with a desired, presumably improved,
future state of affairs. It is about formalizing and institutionalizing better ways for
work to get done.

Successfully employing BPM usually involves the following:

 Organizing around outcomes not tasks to ensure the proper focus is maintained
 Correcting and improving processes before (potentially) automating them; otherwise
all you’ve done is make the mess run faster
 Establishing processes and assigning ownership lest the work and improvements
simply drift away – and they will, as human nature takes over and the momentum
peters out
 Standardizing processes across the enterprise so they can be more readily understood
and managed, errors reduced, and risks mitigated
 Enabling continuous change so the improvements can be extended and propagated over
 time
 Improving existing processes, rather than building radically new or “perfect” ones,
because that can take so long as to erode or negate any gains achieved
BPM should not be a one-time exercise. It should involve a continuous evaluation of
the processes and include taking actions to improve the total flow of processes. This
all leads to a continuous cycle of evaluating and improving the organization.

Functional Modules of ERP Software

ERP software is made up of many software modules. Each ERP software module
mimics a major functional area of an organization. Common ERP modules include
modules for product planning, parts and material purchasing, inventory control,
product distribution, order tracking,finance, accounting, marketing, and HR.
Organizations often selectively implement the ERP modules that are both
economically and technically feasible.

However, it is not necessary that every enterprise system application will have all
modules mentioned above. Some organizations intending to use customized ERP
software generally implement specific ERP modules that are technically feasible and
also economical to implement. Such business organizations approach ERP Software
Company with their enterprise resource planning software requirements and ask them
to study and design enterprise system software as per their business requirements.
Let’s take a look at some main functional modules of Enterprise resource planning
system in detail.

FIGURE: FUNCTIONAL MODULE

 ERP Production Planning Module

In the process of evolution of manufacturing requirements planning (MRP) II into

ERP, while vendors have developed more robust software for production planning,
consulting firms have accumulated vast knowledge of implementing production
planning module. Production planning optimizes the utilization of manufacturing
capacity, parts, components and material resources using historical production data
and sales forecasting.
ERP Purchasing Module

Purchase module streamline procurement of required raw materials. It automates the

processes of identifying potential suppliers, negotiating price, awarding purchase
order to the supplier, and billing processes. Purchase module is tightly integrated with
the inventory control and production planning modules. Purchasing module is often
integrated with supply chain management software.

ERP Inventory Control Module

Inventory module facilitates processes of maintaining the appropriate level of stock in

a warehouse. The activities of inventory control involves in identifying inventory
requirements, setting targets, providing replenishment techniques and options,
monitoring item usages, reconciling the inventory balances, and reporting inventory
status. Integration of inventory control module with sales, purchase, finance modules
allows ERP systems to generate vigilant executive level reports.

ERP Sales Module

Revenues from sales are live blood for commercial organizations. Sales module
implements functions of order placement, order scheduling, shipping and invoicing.
Sales module is closely integrated with organizations' ecommerce websites. Many
ERP vendors offer online storefront as part of the sales module.

ERP Market in Module

ERP marketing module supports lead generation, direct mailing campaign and more.

ERP Financial Module

Both for-profit organizations and non-profit organizations benefit from the

implementation of ERP financial module. The financial module is the core of many
ERP software systems. It can gather financial data from various functional
departments, and generates valuable financial reports such balance sheet, general
ledger, trail balance, and quarterly financial statements.

ERP HR Module

HR (Human Resources) is another widely implemented ERP module. HR module

streamlines the management of human resources and human capitals. HR modules
routinely maintain a complete employee database including contact information,
salary details, attendance, performance evaluation and promotion of all employees.
Advanced HR module is integrated with knowledge management systems to
optimally utilize the expertise of all employees.

Each of these above functional modules of ERP software plays an important role. The
organizations can choose to implement some of the modules or all according to their
requirements. The companies opt for the modules which are technically and
economically feasible to them. These modules streamline the flow of the
communication across the company by integrating the various functional departments.
 The enterprise resource system is bound with all these functional modules. These
distinct yet seamlessly integrated modules cover most of the functional needs of an
organization. The functional modules of ERP software help to achieve efficiency of
operations, cost savings and help to maximize the profits.

ERP IMPLEMENTATION LIFE CYCLE:

1. During the pre-evaluation phase, ERP vendors available in the market are screened
based on business requirements. ERP packages that don’t suit the business
requirements are eliminated.
2. During the package evaluation phase, selected package is evaluated against
requirements across departments.
3. A detailed requirement analysis is done, involving different managers from across the
departments. Requirement analysis helps list down all the functionalities required to
ensure efficient processes across the organization.
4. Based on the analysis of requirements and functionalities, a detailed project plan is laid
out. This involves senior management team and ERP experts. Designs are finalized;
key resources to be involved in the project are identified in various departments;
special arrangement is also made to tackle contingencies.
5. Once the planning is done, business process re-engineering takes place. Implementing
ERP will impact the job responsibilities of lot of employees. So, new roles and
responsibilities are to be assigned to employees. Processes are to be re-structured and
integrated with ERP tools.
6. Post implementation and integration, staff and managers are to be trained properly so
that they get good practice. Consultants will help employees to get hands on
experience of the ERP tools.
7. At last, the tools that are implemented are tested rigorously. Issues arising during the
testing phase are fixed and required changes are made.
Thus ERP Implementation process can be explained.

ERP Implementation Lifecycle

 ERP Implementation

 ERP implementation lifecycle focus on the ERP project which is carried out to make
ERP up and running.

 ERP project is likely to go through different phases like any other project.
 Most often these phases do not necessarily depend on one another in a sequence, i.e.
one phase might start before previous phase has finished.

 Also all phases that will be discussed may not be applicable in all cases.

 The different phases of ERP implementation are:-

Pre-evaluation Screening
Package Evaluation
Project Planning Phase
Gap-Analysis
Reengineering
Configuration

ERP mplementation

Implementation Team Training

Testing
Going Live
End-user training
Post – implementation

Pre-Evaluation Screening

When the company has decided to implement the ERP the search for the convenient
and suitable ERP package begins.
Refers to the discussed previous lecture (“ERP Selection”) to understand the criteria
used in selecting particular ERP package.

Package Evaluation

The objective of this phase is to find the package that is flexible enough to meet the
company’s need or in other words, software that could be customized to obtain a
‘good fit’.
Once the packages to be evaluated are identified, the company needs to develop
selection criteria that will permit the evaluation of all the available packages on the
same scale
To choose the best system, the identification of the system that meets the business
needs, and that matches the business profile.
 Some important points to be kept in mind while evaluating ERP software include:
a) Functional fit with the company’s business process.

b) Degree of integration between the various components of the ERP system.

c) Flexibility and scalability

d) Complexity

e) User friendliness

f) Quick implementation

g) It is better to have a selection committee that will do the evaluation process.

Project Planning Phase

a. This is the phase that designs the implementation process. Time schedules, deadlines,
etc. for the project are arrived at.
b. The project plan is developed in this phase.
c. In this phase the details of how to go about the implementation are decided. The
project plan is developed, roles are identified and responsibilities are assigned.
d. The organizational resources that will be used for the implementation are decided and
the people who are supposed to head the implementation are identified.
e. The implementation team members are selected and task allocation is done.
f. The phase will decide when to begin the project, how to do it and when the project is
supposed to be completed.
g. The phase will also plan the ‘What to do’ in case of contingencies; how to monitor the
progress of the implementation;
h. The phase will plan what control measures should be installed and what corrective
actions should be taken when things get out of control.
i. The project planning is usually done by a committee constituted by the team leaders of
each implementation group headed by CIO.
Gap Analysis
This is the most crucial phase for the success of the ERP implementation.
Simply it is the process through which companies create a complete model of where
they are now, and in which direction they want to head in the future.The trick is to
design a model which both anticipates and covers any functional gaps.
Some companies decide to live without a particular function. Other solutions include:
a. Upgrade

b. Identify the third party product that might fill the gap

c. Design a custom program

d. Altering the ERP source code, (the most expensive alternative; usually reserved for
mission-critical installation)

Reengineering

This phase involves human factors.

j. In ERP implementation settings, reengineering has two connotations. The first
connotation is the controversial one, involving the use of ERP to aid in downsizing
efforts.
k. In this case ERP is purchased with aim of reducing the number of employees.
l. Every implementation will involve some change in job responsibilities as processes
become more automated and efficient.
m. However it is best to regard ERP as investment and cost-cutting measure rather than a
downsizing tool.
n. ERP should endanger business change but not endanger the jobs of thousands of
employee.
o. The second use of the word ‘reengineering’ in the ERP field focus on the Business
Process Reengineering (BPR)
p. The BPR approach to an ERP implementation implies that there are two separate, but
closely linked implementations on an ERP site.

Configuration

It is important for the success of ERP implementation that those configuring the
system are able to explain what won’t fit into the package where the gaps in
functionality occur. ERP vendors are constantly make efforts to lower configuration
costs. Strategies that are currently being done include automation and pre –
configuration.

ERP Implementation

Implementation Team Training

Synchronously when the configuration is taking place, the implementation team is being
trained.
This is the phase where the company trains its employees to implement and later, run the
system.
For the company to be self-sufficient in running the ERP system, it should have a
good in-house team that can handle the various solutions.
Thus the company must realise the importance of this phase and selects right
employees with good attitude.

Testing

This is the point where you are testing real case scenarios.
The test cases must be designed to specifically to find the weak links in the system
and these bugs should be fixed before going live.
Going Live
This is the phase where all technicalities are over, and the system is officially declared
operational.
In this phase all data conversion must have been done, and databases are up and
running; and the prototype is fully configured and tested.

Going Live

The implementation team must have tested and run the system successfully for some
time. Once the system is ‘live’ the old system is removed and the new system is used
for doing business.

End-User Training

This is the phase where the actual users of the system will be trained on how to use
the system.The employees who are going to use the new system are identified and
their skills are noted.Based on their skill levels are divided into groups.
Then each group is given training on the new system.
This training is very useful as the success of the ERP system is in the hands of end-
users. The end-user training is much more important and much more difficult than
implementation team training since people are always reluctant to change.

Post – Implementation

This is the very critical phase when the implementation phase is over.
There must be enough employees who are trained to handle the problem that
might occurred when the system is running.
There must be technical people in the company who have the ability to enhance
the system when required.
Living with ERP systems will be different from installing them.
Projects for implementing the ERP systems get a lot of resources and attention.
However an organisation can only get the maximum value of these inputs if it
successfully adopts and effectively uses the system.

ERP implementation, Methodology and Frame work- Training

Implementation of ERP system is a complex exercise, involving many process

alterations and several legacy issues. Organizations need a implementation strategy
encompassing both pre implementation and implementation stages. The fallout of a
poor strategy is unpreparedness of employees, implementation not in conformity with
wider business strategy, poor business process redesign and time and cost overrun.

Following issues must be carefully thought out and formulated, as a part of

implementation strategy, before embarking on actual implementation:

Business Process: Hypothetically, company insiders should know best about the
processes of their organization. But employees often constrained to work in
departmental silos and overlook wood for the tree. Under most circumstances,
prevailing business practices are not properly defined and no”as is” flow charts,
documenting existing processes, are available.

An ERP implementation could be a great occasion to assess and optimize existing

business processes, control points, breaking points between departments, and
interfaces with trading partners. But, often, due to resistance to changes and
departmental clouts, ERP implementation is comprehended as an exercise to automate
legacy processes. This may lead to little improvement in underlying business
processes, resulting no appreciable return on investment.

Automating existing manual processes peculiar to a company necessitates, significant

source code customization, as even a best fit ERP product match to a maximum of
85% to 90% of legacy processes. Source code customization will not only require
changing of software objects but also need changing data models. The efforts needed
to make such changes are significant in terms of development, testing and
documentation. The future cost of maintenance and upgrades will be substantial,
affecting entire life cycle of the system.

Unless a considered view favoring process changes is taken as a part of

implementation strategy, pressure will mount subsequently for more and more
customization, when the exercise of Business Process Mapping and Gap Analysis is
taken up during implementation.

ERP systems are highly configurable and contain series of design trade off to meet
various nuances of the same business cycles / processes. This should, normally, be
sufficed to cover needed processes, probably with a little bit of swapping whenever
needed. At occasions, it may be imperative to change source code to account for some
unique core processes of the organizations. Procedure for authorization of such
changes, normally requiring attention from sponsor, should also form part of the
strategy document.

Implementation Methodology: Selection of implementation methodology

constitutes an important component of implementation strategy. Most popular
implementation methodology is “big bang” approach where on a scheduled cut-off
date; entire system is installed throughout the organization. All users move to the new
system and manual / legacy systems are discontinued. The implementation is swift
and price tag is lesser than a phased implementation. On the flip side, risk element is
much higher and resources for training, testing and hand holding are needed at a
much higher level, albeit for a shorter period of time.

Another major implementation strategy is “phased implementation”, where roll out is

done over a period. This method is less focused, prolonged and necessitates
maintenance of legacy system over a period of time. But, phased implementation is
less risky, provides time for user’s acquaintance and fall back scenarios are less
complicated. There are various choice of phasing such as i) phased roll out by
locations for a multi location company ii) phased roll out by business unit e.g. human
resources iii) Phased roll out by module e.g. general ledger.

Methodology of implementation should form an important constituent of

implementation strategy, which should be formulated after considering availability of
resources, state of preparedness, risk perception, timeframe of implementation and
 budgetary provisions.

Other important strategy issues:

 Legacy data: Gathering, cleaning and removing of duplicate data.

 Hardware and software: Addition and updating of existing resources. Compatibility
with existing Operating system and Database.
 Project structure: Project champions and competency centre.

Data Migration:

Data migration is the process of moving required volume of data from existing
systems to new systems. Existing systems can be anything from custom-built IT
infrastructures to spreadsheets and standalone databases. Data migration encompasses
all the necessary steps to cleanse, correct and move data into a new system.
Technological changes, change in providers, software updates or data
warehousing/data mining projects make such delicate and critical operations
necessary. A good data migration should allow one to:

Reduce risk: Data being an organization's most critical business asset, it is essential
that any manipulation be carried out without any disruption.

Lower operational expenses: Data migration is a one-off activity triggered by

certain circumstances. The data migration tool or solution reinforces the
organization's resources which can remain focused on its ongoing continuous core
activities.

Improve data quality: The cleansing and correction solutions ensure perfect data
integrity after it has been migrated. From a user and development perspective, the
migrated data results are completely optimized.

From a user perspective, the data migration solutions should make sure that a strategy
is put in place to achieve maximum flexibility and quality.

People Organization in implementation:

ERP CONSULTANTS & VENDORS:

 During 1990, ERP market was dominated by few vendors namely SAP, BaaN,
Oracle, People Soft and JD Edwards, who were also known as big five of ERP
market. The market was, then, was growing at compound rate of approximately 35%.
Fortune 500 companies were the major customers. Key focus of ERP vendors, during
that period, was to expand functional scope of their product and provide sharper
vertical focus. Manufacturing made up for the largest segment of ERP spending.

ERP market went into an upheaval and following trend emerges:

Increased acquisition and merger activities: Financially stronger ERP vendors

started to swallow their weaker brethren. Private Equity firms also started to play a
big role. BaaN was taken over by Invensys and subsequently by SSA Global. SSA
Global was later merged with Infor, which was supported by a large private equity
company. J. D. Edwards was merged People Soft which in tern was taken over by
Oracle through a hostile takeover.

Segmenting / diversifying of ERP Market: Due to saturation at top end, ERP

vendors were trying to penetrate medium and small market segments. The market thus
got segmented into tier 1(large organization), Tier 2(medium organizations) and tier 3
(small organization). Major ERP vendors started offering products for lower end of
the market either through extension/rationalization of their products or through
acquisition. ERP vendors were also diversifying their product to different verticals.
Whereas, manufacturing provided the major chunk of their revenue, the focus area
turned to retail, public sector, utility, financial sector, and telecom.

Web enablement: Rising opportunity of ERP vendors was to leverage their existing
products with niece acquisition, to extend beyond their earlier solutions, limited to
four walls of an organization. The explosive development of internet made possible
seamless web based collaboration by organizations with their vendors and customers,
such as “mySap.com” solution from SAP and e-business suite from Oracle.

Some Key Vendors

 SAP: They are the largest ERP solution provider with more than 75.000 customers and
12 million users and holding around 30% of market share. The flagship Solution, R/3
is unmatched for its sophistication and robustness. R/3 software gives an option of
around 1000 pre-configured business processes. This solution is available in all major
 currencies and languages and can be hosted on several Operating Systems and
Databases. As mid-market option, SAP has brought out, Business All in One, a
solution with industry tailored configurations. SAP offering for smaller organization
is SAP Business One. SAP offers a hosted solution, namely SAP Business by Design,
for organizations lacking IT resources.
 Oracle: Oracle is next to SAP in ERP market breadth, depth and share. It offers a
comprehensive, multilingual and multi-currency solution, mostly through its channel
partners.. It is the first to implement internet computing model for developing and
deploying its product. Oracle also took over various ERP solution providers during
2000 such as People Soft, JD Edwards, Retek (retail industry solution), and Siebel
(customer relationship management software). It has taken up project Fusion (based
on Service Oriented Architecture) to integrate various products, outcome of which is
keenly awaited.
 Infor: Infor is of recent origin and expanded through a number of acquisitions. Its
acquisition of SSA global during 2006 made it a forerunner as ERP solution provider.
SSA global had two strong product lines, BPCS and BaaN. SSA also made a number
of other acquisitions, such as MAPICS, Lily Software Associate and GEAC. SSA is
focused on building, buying and integrating best of breed solutions.
 Microsoft Dynamics: Microsoft, which did not have an ERP portfolio, started by
acquiring a host of ERP products like Navision, Solomon, Great Plain and Axapta.
Excepting Axapta, which is strong in manufacturing and suitable for mid-market,
other products are meant for smaller organizations. Microsoft is much dependent on
channel partners, not only for sales and consulting but also for add on development.
Their solutions are closely integrated with their office suit.

EMPLOYEES.

 ERP EMPLOYEES TRAINING:

We’ve all read about the benefits of ERP software solutions in businesses. However,
what many don’t seem realize is the importance of ensuring the proper training for all
employees (or ERP users). Simply implementing an ERP solution won’t increase
efficiency at your company; it’s the combination of the ERP solution and knowing
how to properly use the system. If employees don’t fully understand how to use the
ERP system, then efficiency will not be reached and some may view the investment
as wasted.

What Is Data Mining?

Data mining is a process used by companies to turn raw data into useful information. By
using software to look for patterns in large batches of data, businesses can learn more
about their customers to develop more effective marketing strategies, increase sales and
decrease costs. Data mining depends on effective data collection, warehousing, and
computer processing.

 Data mining is the process of analyzing a large batch of information to discern

trends and patterns.
 Data mining can be used by corporations for everything from learning about
what customers are interested in or want to buy to fraud detection and spam
 filtering.
 Data mining programs break down patterns and connections in data based on
what information users request or provide.
 Social media companies use data mining techniques to commodify their users in
order to generate profit.
 This use of data mining has come under criticism lately s users are often
unaware of the data mining happening with their personal information,
especially when it is used to influence preferences.

What is Data Warehousing?

A Data Warehousing (DW) is process for collecting and managing data from varied
sources to provide meaningful business insights. A Data warehouse is typically used to
connect and analyze business data from heterogeneous sources. The data warehouse is the
core of the BI system which is built for data analysis and reporting.
It is a blend of technologies and components which aids the strategic use of data. It is
electronic storage of a large amount of information by a business which is designed for
query and analysis instead of transaction processing. It is a process of transforming data
into information and making it available to users in a timely manner to make a difference.

Computer Crime

Alternatively referred to as cyber crime, e-crime, electronic crime, or hi-tech

crime. Computer crime is an act performed by a knowledgeable computer user,
sometimes referred to as a hacker that illegally browses or steals a company's or
individual's private information. In some cases, this person or group of individuals may be
malicious and destroy or otherwise corrupt the computer or data files.

Why do people commit computer crimes?

In most cases, someone commits a computer crime to obtain goods or money. Greed and
desperation are powerful motivators for some people to try stealing by way of computer
crimes. Some people may also commit a computer crime because they are pressured, or
forced, to do so by another person.

Some people also commit a computer crime to prove they can do it. A person who can
successfully execute a computer crime may find great personal satisfaction in doing so.
These types of people, sometimes called black hat hackers, like to create chaos, wreak
havoc on other people and companies.
Another reason computer crimes are sometimes committed is because people are bored.
They want something to do and don't care if they commit a crime.

Examples of computer crimes

Below is a list of the different types of computer crimes today. Clicking any of the links
gives further information about each crime.

 Child pornography - Making, distributing, storing, or viewing child

pornography.
 Copyright violation - Stealing or using another person's Copyrighted material
without permission.
 Cracking - Breaking or deciphering codes designed to protect data.
 Cyber terrorism - Hacking, threats, and blackmailing towards a business or
person.
 Cyberbully or Cyberstalking - Harassing or stalking others online.
 Cybersquatting - Setting up a domain of another person or company with the
sole intention of selling it to them later at a premium price.
 Creating Malware - Writing, creating, or distributing malware
(e.g., viruses and spyware.)
 Data diddling - Computer fraud involving the intentional falsification of
numbers in data entry.
 Denial of Service attack - Overloading a system with so many requests it
cannot serve normal requests.
 Doxing - Releasing another person's personal information without their
permission.
 Espionage - Spying on a person or business.
 Fraud - Manipulating data, e.g., changing banking records to transfer money
to an account or participating in credit card fraud.
 Green Graffiti - A type of graffiti that uses projectors or lasers to project an
image or message onto a building.
 Harvesting - Collect account or account-related information on other people.
 Human trafficking - Participating in the illegal act of buying or selling other
humans.
 Identity theft - Pretending to be someone you are not.
 Illegal sales - Buying or selling illicit goods online, including drugs, guns, and
psychotropic substances.
 Intellectual property theft - Stealing practical or conceptual information
developed by another person or company.
 IPR violation - An intellectual property rights violation is any infringement of
another's Copyright, patent, or trademark.
  Phishing or vishing - Deceiving individuals to gain private or personal
information about that person.
 Ransomware - Infecting a computer or network with ransomware that holds
data hostage until a ransom is paid.
 Salami slicing - Stealing tiny amounts of money from each transaction.
 Scam - Tricking people into believing something that is not true.
 Slander - Posting libel or slander against another person or company.
 Software piracy - Copying, distributing, or using software that was not
purchased by the user of the software.
 Spamming - Distributed unsolicited e-mail to dozens or hundreds of different
addresses.
 Spoofing - Deceiving a system into thinking you are someone you're not.
 Swatting - The act of calling in a false police report to someone else's home.
 Theft - Stealing or taking anything (e.g., hardware, software, or information)
that doesn't belong to you.
 Typosquatting - Setting up a domain that is a misspelling of another domain.
 Unauthorized access - Gaining access to systems you have no permission to
access.
 Vandalism - Damaging any hardware, software, website, or other object.
 Wiretapping - Connecting a device to a phone line to listen to conversations.

What is ERP Security—And Why Does it Matter?

ERP (Enterprise Resource Planning) Security is the practice of taking effective security
measures to prevent any infiltration inside of your ERP systems. While your ERP systems
make life easier because they unify all your different systems and departments, they are
also a weak point that hackers target specifically.

The purpose of an ERP System is to combine your administrative assets within one
application, from Human Resources to Supply Chain Management. These ERP systems
make our lives easier by centralizing data and allowing us to better manage our business
processes.

Unfortunately, by having all your eggs in one basket in terms of critical data and essential
business information, there is a higher risk of external threats. And one recent study shows
that cyberattackers are targeting ERP systems more often. That means you face more
vulnerability as an organization. If even just one piece of the system is compromised by a
hacker, they will then have access to the organization’s most valuable assets across various
departments.

And so, because of the amount of exposed and sensitive data, ERP Security is an essential
countermeasure to ensure safety in your organization.
What are the elements of ERP security?
ERP Security helps you protect a range of assets in a company. To keep all your private
information safe, it covers different areas like:

 Infrastructure security
 Network security
 Operating system security
 Database security

A secure ERP system covers the secure configuration of servers, enablement of security
logging, in-system communication security, and data security. Users and authorizations are
no less critical.

As you can imagine, it’s essential to ensure system compliance with continuous
monitoring, audits, and the establishment of emergency concepts.

Why are hackers targeting your ERP Security?

For many businesses, ERP security is often a blindspot. While companies spend time and
resources on upgrading their ERP systems and management, they often overlook or fail to
invest in adequate cybersecurity to match it.

Because it’s connected to a range of daily operations, an attack on ERP systems can have a
devastating impact on the business’s operations. And since cybersecurity threats are on the
rise, the chances of facing financial losses and a damaged reputation are real. Organizations
need to protect their systems against internal and external cyber threats to maintain
confidentiality, availability, and integrity.

Despite this, many organizations keep them out of scope for security teams or rely on the
ERP vendor tools alone—but that’s just not going to cut it anymore. This means that many
ERP systems are outdated and remain unpatched for years, and the necessary security
knowledge is often lacking.

As a result, these “gaps” in outdated ERP systems make it easier for cyber attackers to take
advantage of organizations, as they did in the Colonial Pipeline attack last year. This lead
to a gas shortage in the Eastern U.S. and caused prices to jump to the highest that had been
since 2014.

Of course, given the intricacies and complexities of ERP systems, ERP security is
challenging to monitor and maintain.
Difference between Intranet and Extranet
1. Intranet :
Intranet is owned by a single organization and is a tool for sharing information throughout
the organization.It is the type of Internet that is used privately. Since, intranet is a private
network so no one can use the intranet whose have not valid username and password. In
intranet, there are a limited number of connected devices as compared to internet. Intranet
is highly secure and has a small number of visitors. It is used in order to get employee
information, telephone directory etc.
2. Extranet :
Extranet is owned by either a single or a many organization. It is managed on a contractual
basis between organizations and is a tool for sharing information between the internal
members and external members. Like intranet, it is also a private network so only those
who have a valid username and password can use the extranet. Extranet is used to check
status, access data, send mail, place order etc.

Let’s see the difference between Extranet and Intranet which are given below:-
S.NO Intranet Extranet

Intranet is a tool for sharing Whereas Extranet is a tool for sharing

information throughout the information between the internal members
1. organization. and external members.

Intranet is owned by a single While Extranet is owned by either a single or

2. organization. a many organization.

In intranet, security is Whereas in this, security is implemented

implemented through a through a firewall in order to separate the
3. firewall. extranet and the internet.

Intranet is managed by an Whereas Extranet is managed by many

4. organization. organizations.

Intranet has a limited number Whereas in the extranet, connected devices

5. of connected devices. are comparable with the intranet.

While it is also a private network in which

Intranet is a private network public network is used in order to share the
6. type for an organization. information to the suppliers and customers.

Intranet is used in order to get

employee information, While It is used to check status, access data,
7. telephone directory etc. send mail, place order etc.

Intranet is the limited and

compromised version of While Extranet is the limited and
8. Extranet. compromised version of Internet.

9. A particular organization is the While it is regulated by multiple

 S.NO Intranet Extranet

regulating authority for

intranet. organizations.

It is accessible to only the It is accessible to members of organization as

10. members of organization. well as external members with logins.

It’s restricted area is upto an It’s restricted area is upto an organization and
11. organization. some of its stakeholders.

12. It is derived from Internet. It is derived from Intranet.

Example: WIPRO using

internal network for its Example: DELL and Intel using network for
13. business operations. business related operations.

Middleware

Middleware is software which lies between an operating system and the applications
running on it. Essentially functioning as hidden translation layer, middleware enables
communication and data management for distributed applications. It is sometimes called
plumbing, as it connects two applications together so data and databases can be easily
passed between the “pipe.” Using middleware allows users to perform such requests as
submitting forms on a web browser or allowing the web server to return dynamic web
pages based on a user’s profile.
Common middleware examples include database middleware, application server
middleware, message-oriented middleware, web middleware and transaction-processing
monitors. Each programme typically provides messaging services so that different
applications can communicate using messaging frameworks like simple object access
protocol (SOAP), web services, representational state transfer (REST) and JavaScript
object notation (JSON). While all middleware performs communication functions, the type
a company chooses to use will depend on what service is being used and what type of
information needs to be communicated. This can include security authentication,
transaction management, message queues, applications servers, web servers and
directories. Middleware can also be used for distributed processing with actions occurring
in real time rather than sending data back and forth.

Online analytical processing (OLAP) is a type of database used for data analysis. It
allows users to view data in different ways and analyze it differently. It is typically used for
reporting and analysis, and companies can track trends over time.

It is also known as multidimensional databases because they allow users to view the data in
multiple dimensions.

OLAP is a process used to analyze data quickly and efficiently. It allows businesses to
examine their data in multiple dimensions to understand what’s happening within their
company. This can help with making informed decisions about the future of the company.

It is often used in conjunction with ERP software. ERP systems contain a lot of data that
can be difficult to analyze manually. It helps to make this data more manageable and
accessible.

Advantages of Online Analytical Processing

 It helps to get all the data together to create accurate and quick information about the
business.
 It helps to analyze the time series
 Provides a platform for all types of business, including planning, budgeting, forecasting,
financial reporting, and data warehouse reporting
 Allows users to do compatible calculations
 Allows users to divide a big cube into dice cube data by several dimensions, measures,
and filters.
 It helps the end-users to analyze data in multiple dimensions so that they make better
decisions in business.

Disadvantages of Online Analytical Processing

 It is challenging to have many dimensions in a single OLPA cube

 The snowflake schema required for organizing data is complex to implement
 Modification of a cube requires a complete update of the cube that consumes more time
 PLM Definition

Product lifecycle management (PLM) can be defined as the process of managing the
entire lifecycle of a product — right from its inception, through design and production, to
disposal of the final product and subsequent service. A PLM system thus can be defined as
a tool that provides control of the product record across all development stages such as
conception, designing, and production. Using a PLM system, a company can manage entire
product data, including items, bill of materials (BOMs), and product files. Such a system
also enables a company to track any changes to product information and communicate
revisions to the supply chain.

With a PLM system in place, organizations can manage key product decisions like real-
time product changes. The system also helps to consolidate, organize and track complete
product data — which is otherwise scattered throughout a wide variety of organizational
departments — in a centralized location. By capturing the product data in a PLM system,
manufacturers have access to the single and the correct version of their product record at
any point in time.

In a nutshell, PLM integrates all the organizational data, processes, resources, and systems
in order to provide a product information backbone for the organization. It can essentially
be broken down into the following stages:

 Beginning of life (BOL), which involves new product development and design processes.
 Middle of life (MOL), which includes collaboration with suppliers, product information
management (PIM) and warranty management.
 End of life (EOL), which includes strategies for how the products will be discontinued or
recycled.

Benefits of PLM

Benefits of a PLM system for an organization are many, such as:

 Development of customer-centric products

 Competitive pricing, traceability and better quality
 New market development
 Shorter time to market
 Lower product cost
 Lower lifecycle cost
 Increased productivity
 Accelerated revenue growth
 Development of innovative products
 Reduced compliance risks
 Waste reduction
 Improved efficiencies

A PLM system can help an organization efficiently manage their product’s lifecycle by
providing a data repository for all the information that affects the product. It can be used to
automate the management of product-related data and integrate the data with other business
processes such as an ERP software. It works on the lean philosophy and its objectives are
to eliminate waste and improve efficiency.

What Is Supply Chain Management (SCM)?

Supply chain management (SCM) refers to all the activities required to turn raw materials
into finished goods or services and the work required to distribute and deliver those
products or services to partners and, ultimately, customers.

SCM applies to the planning stage as well as the transfer and management of information
and capital that happens across the supply chain. This discipline consists of five main
components: planning, sourcing, manufacturing, delivery and returns.

Companies with the most efficient supply chains embrace an integrated approach to SCM.
They don’t treat components, like planning, manufacturing and delivery, as separate
business functions. Rather, they think about all the ways processes are interconnected.

And it’s not just processes that are linked. Increasingly, top supply chain professionals are
looking beyond their own borders, working in sync and staying in constant communication
with the upstream and downstream partners that provide critical elements for a product or
act as important sales channels. These top performers want to understand each and every
link in the value chain so they can reduce costs, increase speed and gain the flexibility to
respond quickly to disruptions.

The idea behind SCM is that the supply chain can add value to a business, even give it a
competitive advantage. This is in contrast to the historical view of seeing this network as a
cost center.
What Is a Supply Chain?

A supply chain is a coordinated network of people, businesses, resources and technologies

that play roles in producing, transporting, selling or delivering a good or service. Put
another way, a supply chain is a group of organizations that are connected by a shared goal.
Their individual roles might involve moving a product or service downstream — toward
the retailer/end customer — or upstream — toward the initial supplier.

Every company has a supply chain, and that includes services-based businesses. For
example, a software provider must first determine what product it should develop next
based on user demand, then it might “source” open-source code to start building that
application. From there, it needs to assess the quality of the application, fix any bugs or
security shortfalls, develop a marketing plan and put in place sales and distribution
channels. The vendor may also consider what other systems the app should integrate with
and partner with those software providers to build those connectors.

Essentially, a supply chain network covers all the steps that go into turning subcomponents
and materials into a finished item that customers want. SCM is all about managing that
network and finding ways to improve it.

Why Is Supply Chain Management Important?

Supply chain management has increasingly become a top priority as business leaders
realize how critical an efficient, resilient supply chain is to their bottom lines. Supply
chains are among a company’s largest expenses, so it makes sense to evaluate and optimize
all of the processes involved in getting a product or service to the end customer. Over time,
that fosters loyalty and distinguishes a company from its competitors.

Advanced companies understand that a well-executed supply chain reduces waste by

keeping supply aligned with demand. When all parties are in sync — from suppliers to
manufacturers to retailers to planners — they can avoid overstock or out-of-stock situations
that generate unnecessary costs or frustrate customers and lead to lost sales.

What is CRM?

A CRM (Customer Relationship Management) system is used to organize, automate, and

synchronize a company’s sales, marketing, and customer service. CRM is an approach to
manage a company’s interaction with current and potential customers.
It uses data analysis about customers’ history with a company to improve business
relationships, specifically focusing on customer retention and ultimately driving sales
growth. Long gone are the days of saving customer information on scattered spreadsheets
and constantly having to check in with your sales team about leads and opportunities. A
CRM allows you and your team to expertly manage prospects and existing customers from
one system.
SuperOffice released statistics showing CRM adoption and usage had increased in 2018 to
74% from 56% previously. It breaks down further with 91% of companies with 11 or more
employees using CRM. Plus, 74% say CRM has helped their overall access to customer
data.
CRM vs ERP
ERP
 Geared toward back-office
CRM
activities
 Geared toward front-office activities  Oriented toward business
 Oriented toward customers operations
 Focuses on increasing sales  Focuses on reducing cost
 Is frequently used by customer  Is frequently used by project and
service and sales teams inventory managers
Geographic Information System (GIS)

A geographic information system (GIS) is a language for communicating content and

processes for the utility business. People working in the utility industry need a better
understanding of the context of change, what it means, and how they can manage their
present and their future. They need better information and a framework for understanding
and collaboration. As utilities merge and staff shrinks, sharing workflows in an automated
and systematic way is vital. The enterprise GIS platform facilitates collaboration by
unifying the underlying data infrastructure and workflows with other key utility
information system (IS) platforms such as SCADA; enterprise resource planning (ERP);
asset, work, and outage management; and field force automation.

Benefits of GIS application in Power Distribution Utility

 Cost savings because of increased efficiency

 Better and faster decision making
 Better and permanent record keeping
 Aids capital planning
 Improved confidence in all aspects of utility management
 Meet regulatory reporting compliance
 Work order management decisions
  Utility system maps with the option to have links to as-built drawings
 Integration with and validation hydraulic modeling

SAP Integration Areas:-

· Customer Information System
· Asset Management System
· Trouble Call Management System
· Utility Billing and Energy Accounting System
· Load Flow and Load Growth studies
By successful integration with SAP we can able to
· Adding a new customer (reduces the technical feasibility check time)
· Registering a complaint
· Asset mapping
· Locating faulty equipments
· Work Order creation and crew assignment
· Locating customer on a map before servicing
· Mobile applications as a supplementary aide to Field Crews
· Identifying problematic zones