Erp Unit 3 Notes
Erp Unit 3 Notes
There are dynamic market forces other than price, demand, and supply. Human emotions also
drive decisions, influence the market, and create price signals.
KEY TAKEAWAYS
● Market dynamics are the forces that impact prices and the behaviors of
producers and consumers in an economy.
● These forces create pricing signals that result from a change in supply and demand.
● The basis of supply-side economics is on the theory that the supply of goods and services
is most important in determining economic growth.
● Demand-side economics holds that the creation of economic growth is from the
high demand for goods and services.
● Economic models cannot capture some dynamics which affect markets and increase
market volatility, such as human emotion.
Understanding Market Dynamics
Market dynamics are the factors that change the supply and demand curves. They form the basis
of many economic models and theories. Because market dynamics impact the supply and
demand curves, policymakers aim to determine the best way to use various financial tools to
stimulate or cool down an economy. Is it better to raise or lower taxes, increase wages or slow
down wage growth, do neither, or do both? How will these adjustments affect supply and
demand and the general direction of the economy?
There are two primary economic approaches when it comes to changing the supply or demand in
an economy with the ultimate goal of impacting the economy positively. One has a basis on
supply-side theory and the other has a demand-side base.
Demand-side economists believe tax cuts in general can stimulate aggregate demand and move
an economy that has significant unemployment back towards a full employment scenario.
However, tax cuts specifically for corporations and the wealthy may not end up stimulating the
economy. In this case, the additional funds may not increase the demand for goods or services.
Instead, it could be argued that the incremental income generated may go back into stock
buybacks that boost the market value of the stock or to executive benefits but do not end up
materially stimulating the economy.
Models of markets for physical goods or services with relatively straightforward dynamics are, for
the most part, efficient,
and participants in these markets are assumed to make rational decisions. However, in financial
markets, the human element of emotion creates a chaotic and difficult-to-quantify effect that
always results in
increased volatility.
Real-World Example
Consumer demand can at times be a powerful market dynamic. As explained in a study by The
NPD Group, consumer spending is on the increase, particularly for luxury fashion items, such as
footwear, accessories, and apparel.
According to the January 2019 NPD study, sales of luxury fashion items have increased as new
brands have emerged and online retail platforms have created a more competitive landscape while
gaining market
share due to buyer demographics and preferences.
As demand for luxury apparel increases, manufacturers and brands will be able to raise prices,
which will stimulate the industry and boost the overall economy.
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The dominance of cloud
You’re probably familiar with the rise of Cloud ERP and might even consider this old news.
However, cloud adoption is accelerating at a previously unseen rate in small-to-midsize
businesses since 2016, estimated to grow the Cloud ERP market to about $30 billion in 2021.
This makes a lot of sense when you consider some of the main benefits of using Cloud ERP:
lower TCO, easier management, improved security, and wider access, to name a few. As more
small companies with fewer IT employees can now take advantage of an enterprise technology
they wouldn’t otherwise be able to afford, new challenges and needs arise.
S/4HANA Cloud takes full advantage of its cloud nature by integrating its entire portfolio of
business capabilities (including CRM and HR) with intelligent technology and real-time
analytics that open previously untouched competitive advantages for SME’s. SAP is focused on
continued evolution towards the cloud future and the growth opportunity this represents for both
their enterprise-level and small-to-midsized customers.
2. Analytics in everything
Legacy systems are very effective at collecting and organizing company data but tend to struggle
with limitations in analytics and reporting.
We’re already living in the age of data-driven-decision-making-or-die
4. Industry 4.0
The fourth industrial revolution is experiencing rapid growth and development. We’re starting
to see an increased use of artificial intelligence, machine learning, IoT, and other new
technologies in day- to-day business processes
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.
It’s a way of automating business processes and improving productivity across the enterprise.
● Custom integrations, which refers to a business building its own core integration.
Programmers can match a software’s API code with the ERP system they want to
integrate with. They require technical resources and take time.
● Vendor-built or native integrations, which refers to out-of-the- box integrations that
allow you to connect specific applications. For example, many tools today connect
directly with Shopify. They cover popular use cases and typically don’t have additional
subscription costs.
● Integration Platform as a Service (iPaaS), which is a cloud- based solution that
builds and deploys integrations. With iPaaS, organizations can create workflows
that connect cloud-based applications and deploy them without installing or
managing
Hardware.
Upgraded legacy systems
In today’s competitive business environment, organizations are discovering they have no
choice but to add a modern ERP system. A recent report from Panorama Consulting Group
revealed that homegrown legacy systems are still prevalent, with 35% of respondents
moving away from them in 2020, up from 14% the year prior.
Software bought years ago may no longer support the company's business model. An
ecommerce brand may go global or need more internal procedures. These reasons can turn a
legacy system ineffective.
Automated processes
One study found that 70% of back-office executives are looking for advanced automation in an
ERP. These integrations facilitate automated, bi-directional data exchange between your systems
and apps, eliminating costly human errors. Automation can be used across numerous touchpoints
to streamline business processes.
The following activities can all be passed between systems to create an intelligent ERP system:
● Order information
● Customer data
● Shipping details
● Accounting systems
● Product and price information
● Inventory counts
● Purchase orders
Supply chain management (SCM) involves planning, execution, control, and monitoring of
supply activities. An ERP solution takes care of physical aspects of supply that includes
storage and transportation and the market aspect of effectively managing demand and supply to
meet customer demands.
Supply chain management plays an important role in the overall success of a business,
especially for the manufacturing industry. Manufacturers rely on partners and vendors to supply
them with the right type and amount of resources at the necessary time to keep production
moving according to schedule. However, and according to a recent 2021 State of Manufacturing
Report, “97% of respondents report supply chain management consumes a significant amount
of employee’s time.” Supply chain management can be a cumbersome and time-consuming
process if not managed efficiently, and ineffective management can inhibit productivity, cause
delays, affect quality, and result in unnecessary expenses and profit loss.
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ERP automates demand planning, creating demand upon receiving orders. When an order is
received, the software implements scheduling. Team members are able to see real-time
information about how resources are being used in production and can better plan production
jobs and product delivery. Warehouse resource management, transportation of materials, and
other supply chain tasks can be auto
Enhanced Collaboration
ERP and supply chain management processes are especially helpful in streamlining coordination
between businesses and vendors. When suppliers are connected to your ERP system, they can
work more effectively with you to meet your goals and reduce bottlenecks, such as recognizing
when certain supply inventories are low and ensuring resource availability.
Increased Visibility
With more visibility and transparency, businesses can create smarter strategies around how they
use their resources, from parts to personnel. ERP software can give your team a detailed, real-time
look into your
operations so you can see where things are going well and where they’re not, allowing you to
target specific inefficiencies for better outcomes.
Cloud Capabilities
Though ERP systems are available as on-premise solutions, cloud
ERP software has become popular in recent years. The major benefits of cloud ERP are dedicated
data security and mobility. Using a cloud- hosted ERP solution means that the system can be
accessed anywhere, anytime on mobile devices as long as there’s an internet connection. This
allows for quicker action without the need for team m
What are the 5 major steps in the ERP implementation? Image result for ERP
Implementation Basics
The six-part ERP implementation phase lifecycle includes discovery and planning, design,
development, testing, deployment and support.
...
Discovery & Planning. What is the first phase of ERP implementation? ...
Design. ...
The implementation of ERP includes various steps and phases, most typically consisting of:
Transfer of financial and transaction data from the old system (aka data migration)
Setting up employees (or “users”) with defined roles, ERP system access, and security settings
In other words, the timeline for a financial services company implementing core accounting
modules like General Ledger, Accounts Payable and Accounts Receivable is going to be faster
and less complex than a manufacturing business also needing shop floor and production
modules, inventory and purchasing, order processing and all the additional configuration,
workflow processes, and data that comes with it.
1. Pre-evaluation screening :
This phase starts when company decides to go for ERP system. For this, search for package
starts. It is time-consuming process because every package has to analyze first before
reaching to any decision. As all packages are not same and each has its own strengths and
weakness. This process should eliminate those packages that are not suitable for company’s
business processes.
2. Package Evaluation :
It is the most important phase in implementation. This phase depends on success and failure
of entire project with package selection. Most important factor while selecting any package
is that not every package can be totally perfect for project but at-least it should be good fit
for project.
3. Project Planning Phase :
This phase plans and designs implementation process.
4. Gap Analysis :
It is the most crucial phase in this implementation. Here, gaps are analyzed between
company’s practices and that practices which are supported by ERP package. It has been
estimated that even best ERP package only meets 80-85% of company’s functional
requirements.
5. Re-engineering :
It is the fundamental rethinking and radical redesign of business processes to achieve
improvements.
6. Customization :
It is the main functional area of ERP Implementation. Arrived solution must match with
overall goals of company. Prototype should allow for thorough testing and attempts to solve
logistical problem.
7. Implementation Team Training :
Now after above processes, implementation team knows how to implement system. This is
phase where company trains its employees to implement and later run system.
8. Testing :
This is the phase where team break system. Sometimes, system overloads or multiple users
trying to login at same time etc. Test cases are designed specifically to find weak links in
system. Different types of testing are: Unit testing, integration testing, acceptance testing,
security testing, performance and stress testing.
9. Going Live :
Once technical and functional side is properly working and testing is done. There comes
next phase i.e, “Going Live”. Once system is ‘live’, old system is removed & new system is
used for doing business.
10. End-User Training :
This is the phase where user of system is given training on how to use system. Employees and
their skills are identified and training is given to them in groups based on their current skills.
Every employee is provided with training of job which he is going to perform.
11. Post-Implementation :
It is the most important and critical factor. Post Implementation is based on two words-
Operation and Maintenance of system. Duration of this phase depends on training efficiency.
Necessary enhancements & upgrades are made in this phase.
● The TL (team lead), who focuses on technical implementation and advises on how to
translate initial ideas into technical solutions. They also monitor the architectural logic
of the product and solve other technical issues.
Let’s take a look at the “ideal” scenario of interactions among these roles. At Django Stars, we
usually strive to adhere to them.
The PO creates tasks, prescribes requirements, and sets priorities.
After the team discusses the tasks and evaluates them, the PM, based on information about the
team’s estimates and velocity, shows which scope
— part or all of the proposed tasks — the team can take into the sprint. The PM draws up a
Commitment letter, and after PO approval the team is ready to start the sprint. Also, the PM
organizes any necessary meetings for all project participants. Meanwhile, the TL helps shape
the initial ideas into software solutions, builds the product’s architectural logic, and oversees
other technical tasks.
After implementing the sprint tasks, the PM prepares reports (including reports on the tests
performed). This information is passed on for review by the PO and stakeholders such as the
client’s CEO, investors, and other persons who provide feedback and make the final go/no-go
decision (whether to release the achieved results).
The main responsibilities of the PO are to set the direction and prioritize. Since he or she
represents the stakeholders, the PO must clearly communicate their interests to the development
team.
PO Skills
The ideal PO has many important skills, namely:
● The ability to convey information to the team (i.e., the ability to create good User
Stories);
● Knowledge of how to communicate new requirements and keep old ones up to date;
Introduction
Object Oriented Architecture is an important concept for developing the software. It is a design
paradigm based on the division of responsibilities for an application or system into individual
reusable and self-sufficient objects. The popular approach of object-oriented design is to view a
software system as a collection of entities known as objects. Object oriented is based on modeling
real-world objects.
● Object-Oriented architecture maps the application to real world objects for making
it more understandable.
● It is easy to maintain and improves the quality of the system due to program reuse.
● This architecture provides reusability through polymorphism and abstraction.
● It has ability to manage the errors during execution. (Robustness)
● It has ability to extend new functionality and does not affected on the system.
● It improves testability through encapsulation.
● Object-Oriented architecture reduces the development time and cost.
Disadvantages of Object-Oriented Architecture
● Object-Oriented architecture has difficulty to determine all the necessary classes
and objects required for a system.
● It is difficult to complete a solution within estimated time and budget because object-
oriented architecture offers new kind of project management.
● This methodology do not lead to successful reuse on a large scale without an explicit
reuse procedure.
Object
● Object is an instance of a class.
● Object is an entity that keeps together state and behaviors.
● All the instance of a class have similar properties like class definition.
● In object-oriented architecture, objects are the basic building blocks and a real-world element
which has a physical or a conceptual existence.
● Object model is a thing or an entity in the application domain. For example, a
student, a book, etc.
● Object has a set of attribute values which define a state of the object. For example, the status
attribute of library book values: 'available', 'checkout', 'on reserve', 'missing' and 'removed'.
These values are used to determine the state of a book object.
Class
● Class is a blueprint of an object.
● A class represents description of objects that share same attributes and actions.
● It defines the characteristics of the object, such as attributes, actions or
behaviors
Encapsulation
● Encapsulation means hiding the data of a class from the object.
● It is the process of binding the elements of an abstraction.
● It binds the data in a single unit.
● It hides the internal details of the class and implementation details of the procedures.
● It allows the elements of the class to be accessed from outside only through the interface
provided by the class.
Polymorphism
● Polymorphism means having multiple forms.
● It allows object with different internal structure to share some external interface and
particular effective while implementing inheritance.
● For example, class draw is implemented for various graphic objects like circle, rectangle,
triangle etc. Here, draw operation is used to draw of more than one type of graphic object.
Inheritance
● Inheritance is a technique of deriving a new class from existing one.
● It increases code reusability.
● The existing class is called as base or parent or super class and the new class are called the
derived or child or subclasses.
● Subclass inherits or derives the attributes and methods of the super class.
● Subclass can add its own attributes and methods and can modify any of the super class
methods.
● For example, shape is a base class. Class Rectangle and Triangle are the derived class. It is
derived from the base class that is Shape class. All the attributes and methods of the base class
are accessible in a derived class.
Message Passing
● Sending and receiving information among objects through function parameters is known
as Message Passing.
● Object communicates through invoking methods and sending data to them.
Association
● Association is a group of links having a common structure and behavior.
● Association illustrates the relationship between objects of one or more classes.
● A link is defined as an instance of an association.
● The degree of association indicates the number of classes involved in a connection.
● Association is used to show that the instances of classifiers could be either linked to each
other or combined logically or physically into some aggregation.
Composition and Aggregation
● Aggregation is a specialized form of association among two or more objects.
● Composition is a specialized form of aggregation in which if the parent object is destroyed, the
child object would cease to exist. Composition is also referred to as a death relationship.
Object Modeling
2) Dynamic Modeling
3) Functional Modeling
Importance of Vendors, Consultants and End Users in developing ERP
n organization is not able to develop an efficient ERP System alone. They have to look for
Vendors, Consultants, and End Users.
Vendors are those who develop ERP Packages. Consultants are those
who develop different Methods and techniques to deal with the implementation of ERP. End
Users are those who use the ERP system once it has been developed.
So from that, a question arises.
“Why Can’t Company Develop their own ERP Packages ?”
● Developing an ERP Package is a complex and time-consuming activity that
requires lots of skilled people and other resources.
● Such Specialized Computer Work is not the main business of many companies.
● It costs too much for the companies to develop their own ERP Package as
compared to purchasing from others.
● An organization has to hire a skilled person for creating and maintaining ERP
systems which acts as an extra cost for the Organization.
● The team which is developing ERP must have organization skills, project management
skills, team management skills, and project management skills and also have
experience in this field.
1. VENDORS :
Vendors are the people who develop ERP packages, they spent a huge amount of time and effort
in research and development to create the package solution which flexible, easy to use, and
efficient. ERP vendors spent a large amount of money so that they become experts to develop
flexible ERP Package.
Roles of Vendors:
● The vendors should supply product and its documentation as soon as the contract is signed.
● Vendor is responsible to fix bugs that are found during implementation
process.
● Vendor also provides training to the company’s users and also to the people who
● are involved in implementation process.
● Vendors take care of quality control factors while developing ERP.
● Vendors participate in all phases of an implementation in which he gives advice,
answers to all technical questions about product and technology.
2. CONSULTANTS :
Consultants are professional people who develop the different methods and techniques to deal
with the implementation process and with the various problems that will help during
implementation. They are experts in the field of Administration, management, and control
activities.
They have experience that ensures successful implementation. The only limitation to
Consultants is that they are expensive.
Roles of Consultants:
● They have to make a plan to carry activities in the right direction during the
implementation process.
● They provide best optimum result such as reduction in cycle time, increased response
time, improved productivity to satisfaction of customers.
● They have to make ERP implementation for an organization as their own business.
3. END USERS :
End users are the people who use the ERP system once it has been developed. End-users are
given training as to how to use various functions that are automated in the software.
Roles Of End Users:
● End users are the people who are doing functions that are automated by ERP System.
● They analyze and provide suggestions where customization needs to take place.
● They should be able to balance their loyalty to the client and project.
● Consultant should create a knowledge base and train people so that knowledge stays in
the organization when consultants leave the project.