How can ERP improve a company’s business performance?

Prior to ERP systems, companies stored important business records in many different departments. Departments used different systems and techniques to manage that information. Information might also have been duplicated many times within an organization without necessarily being identical or similarly up to date. Some of this information might only have been on paper, making it difficult to access across the organization.

ERP takes a customer order and provides a software road map for automating the different steps along the path to fulfilling it. When a customer service representative enters a customer order into an ERP system, he has all the information necessary to complete the order (the customer’s credit rating and order history from the finance module, the company’s inventory levels from the warehouse module and the shipping dock’s trucking schedule from the logistics module, for example)

People in these different departments all see the same information and can update it. When one department finishes with the order it is automatically routed via the ERP system to the next department. To find out where the order is at any point, you need only log in to the ERP system and track it down

If you use ERP to improve the ways your people take orders, manufacture goods, ship them and bill for them, you will see value from the software. If you simply install the software without changing the ways people do their jobs, you may not see any value at all—indeed, the new software could slow you down by simply replacing the old software that everyone knew with new software that no one does

How long will an ERP project take?

Companies that install ERP do not have an easy time of it. Don’t be fooled when ERP vendors tell you about a three or six month average implementation time.

Over the last few years, however, Internet-driven changes have occurred that can drastically reduce how long it takes vendors to deliver ERP modules. These faster implementations (meaning weeks, not years) are the result of a new category of ERP software delivery referred to as on-demand or software-as-a-service (SaaS).

The basic steps of structured methodologies: Project Definition and Requirement

Analysis: Defining the terms of reference, determining user needs and system constraints, generating a functional specification and a logical model for the best solutions.

External Design: Detailing the design for a selected solution, including diagrams relating all programs, subroutines, and data flow.

Internal Design: Building, testing, installing, and tuning software.

Pre-implementation: Evaluation and acceptance

Implementation: Implementing systems.

Post-implementation: Evaluation of controls and debugging.

:Feasibility StudyThe purpose of the feasibility study is to

provide: An analysis of the objectives,

requirements, and system concepts.

An evaluation of different approaches for reasonably achieving the objectives.

Identification of a proposed approach.

ERP System Architecture

ERP systems are only as critical as the financial and/or operational sensitivity of the data they process and store. The security of the ERP systems can be thought of as a pyramid (see Exhibit 1.1).

The base of the pyramid is the physical

security of the hardware—the machine, the databases, and the off-line storage media (such as tape or cartridges).

The second layer deals with the operating system.

The third layer focuses on the security software. This component may be included in the operating system such as in the UNIX (The purpose is to secure the kernel, the privileged state, and to address spaces of the operating system and the hardware).

If the environment is secure, the ERP will enhance the financial and operational integrity of sensitive transactions in the production data and process. If not, the reverse is inevitable.

An ERP system uses or is integrated with a relational database system.

A relational database is a collection of data items organized as a set of formally described tables (which is sometimes called a relation) from which data can be accessed or reassembled in many different ways without having to reorganize the database tables