Brief Notes on Enterprise Resources Planning ERP

Dr.  S.  Maurer,  
MBA Professor

Companies often meët with resistance on the part of employees who are reluctant to let go of their proven methods.

The blurring of enterprise boundaries can cause problems in accountability,  lines of responsibility,  and employee morale.

Today's manufacturing businesses operate in an environment of constant and high-speed change where the ability to adapt quickly and effectively has become essential for success.  management judgments assume critical importance as customers develop ever higher expectations of competitive price,  improved delivery,  excellent quality and exceptional performance.

The availability of open source points out that disconnect in the value chain,  he says.  it is almost a miracle that SAP got as great as it did; they're just selling a skeleton.

Retail distribution firm Frilac chose Openbravo to ensure control over the erp system's capabilities when it decided to replace its hodgepodge of disconnected back-office applications with a unified erp suite.

Just another it manufacturer acronym? Not quite.   erp or enterprise resource planning to give it its full name is the term used to describe the automation of core business functions,  including production,  accounting,  distribution,  supply chain and human resources.

SAP and those guys are not serving the mid-market—they provide more functionality than customers need at a price they can't afford, she says,  but open source is meeting the needs.

Customizing an erp package can be very expensive and complicated,  because many erp packages are not designed to support customization,  so most businesses implement the best practices embedded in the acquired erp system.

Large enterprises,  and especially those with multiple sites or countries,  will often spend considerably more on the implementation than the cost of the user licenses   -   three to five times as more is not uncommon for a multi-site implementation.

Some organizations may justify the purchase of an erp system,  but choose to purchase the PeopleSoft HRMS and Financials modules from Oracle,  and their remaining applications from SAP.

A small project [eg,  a enterprise of less than 100 staff] may be planned and delivered within 3 months; however,  a large,  multi-site or multi-country implementation may take years.

Open-source erp should have increasing appeal because of the wave of erp consolidation—mostly acquisitions by Oracle,  Microsoft and Infor,  she says.

Typically,  the delivery of best practice applies more usefully to large organizations and especially where there is a compliance requirement such as IFRS,  Sarbanes-Oxley or Basel II,  or where the process is a commodity such as electronic funds transfer.  This is because the procedure of capturing and reporting legislative or commodity content can be readily codified within the erp software,  and then replicated with confidence across multiple businesses who have the same business requirement.

Customisation Services: Customisation is the process of extending or changing how the system works by writing new user interfaces and underlying application code.  Such customisations typically reflect local work practices that which are not currently in the core routines of the erp system software.

Even the most established and longest-lived project,  Compiere,  mostly attracts enterprises that have significantly customized their commercial software and thus are more likely to do the same for open-source software,  says Forrester's Hamerman.  [There's little hard deployment data because the software isn't licensed through normal sales channels.]