An In-Depth Review of Enterprise Resource Planning ERP System Overview, Methodology & List of Software Options Contents
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An In-Depth Review of Enterprise Resource Planning ERP System Overview, Methodology & List of Software Options Contents 1 Enterprise resource planning 1 1.1 Origin ................................................. 1 1.2 Expansion ............................................... 1 1.3 Characteristics ............................................. 2 1.4 Functional areas of ERP ........................................ 2 1.5 Components .............................................. 2 1.6 Best practices ............................................. 2 1.7 Connectivity to plant floor information ................................ 3 1.8 Implementation ............................................ 3 1.8.1 Process preparation ...................................... 3 1.8.2 Configuration ......................................... 3 1.8.3 Two tier enterprise resource planning ............................. 4 1.8.4 Customization ......................................... 4 1.8.5 Extensions ........................................... 5 1.8.6 Data migration ........................................ 5 1.9 Comparison to special–purpose applications ............................. 5 1.9.1 Advantages .......................................... 5 1.9.2 Benefits ............................................ 5 1.9.3 Disadvantages ......................................... 6 1.10 See also ................................................ 6 1.11 References ............................................... 6 1.12 Bibliography .............................................. 8 1.13 External links ............................................. 8 2 Enterprise planning system 9 2.1 Purposes ............................................... 9 2.1.1 Survival ............................................ 9 2.1.2 Competition .......................................... 9 2.1.3 Opportunities ......................................... 9 2.1.4 Vulnerabilities ......................................... 9 2.2 Strategic planning ........................................... 9 2.2.1 Strategy via analysis ..................................... 10 2.2.2 Strategy via geography .................................... 10 i ii CONTENTS 2.2.3 Strategy via projects integration ............................... 10 2.3 Planning and budgeting ........................................ 10 2.3.1 Classifications ......................................... 10 2.4 Group planning ............................................ 11 2.5 Transition plan ............................................ 11 2.6 Planning software ........................................... 11 2.7 See also ................................................ 11 2.8 References .............................................. 11 3 ERP system selection methodology 13 3.1 Overview ............................................... 13 3.2 Poor system selection ......................................... 13 3.3 A proper system selection methodology ............................... 14 3.4 References .............................................. 15 3.5 External links ............................................. 15 4 List of ERP software packages 16 4.1 Free and open-source ERP software ................................. 16 4.2 Proprietary ERP vendors and software ................................ 16 4.3 See also ................................................ 17 4.4 References ............................................... 17 5 Comparison of project management software 18 5.1 General information .......................................... 18 5.2 Features ................................................ 18 5.3 Monetary features ........................................... 18 5.4 See also ................................................ 18 5.5 References ............................................... 18 5.6 Text and image sources, contributors, and licenses .......................... 20 5.6.1 Text .............................................. 20 5.6.2 Images ............................................ 23 5.6.3 Content license ........................................ 23 Chapter 1 Enterprise resource planning of business functions. IT investments have become the largest category of capital expenditure in United States- based businesses over the past decade. Though early ERP systems focused on large enterprises, smaller enterprises increasingly use ERP systems.[3] The ERP system is considered a vital organizational tool because it integrates varied organizational systems and facilitates error-free transactions and production. How- ever, developing an ERP system differs from traditional system development.[4] ERP systems run on a variety of computer hardware and network configurations, typically using a database as an information repository.[5] Diagram showing some typical ERP modules 1.1 Origin Enterprise resource planning (ERP) is a category of The Gartner Group first used the acronym ERP in the business-management software—typically a suite of inte- 1990s,[6] where it was seen to extend the capabilities grated applications—that an organization can use to col- of material requirements planning (MRP), and the later lect, store, manage and interpret data from many business manufacturing resource planning (MRP II),[7][8] as well activities, including: as computer-integrated manufacturing. Without replac- ing these terms, ERP came to represent a larger whole • product planning, cost that reflected the evolution of application integration be- yond manufacturing.[9] • manufacturing or service delivery Not all ERP packages developed from a manufactur- • marketing and sales ing core; ERP vendors variously began assembling their packages with accounting, maintenance, and human- • inventory management resource components. By the mid-1990s ERP systems • shipping and payment addressed all core enterprise functions. Governments and non–profit organizations also began to use ERP systems.[10] ERP provides an integrated view of core business pro- cesses, often in real-time, using common databases maintained by a database management system. ERP systems track business resources—cash, raw materials, 1.2 Expansion production capacity—and the status of business com- mitments: orders, purchase orders, and payroll. The ERP systems experienced rapid growth in the 1990s. Be- applications that make up the system share data across cause of the year 2000 problem and introduction of the various departments (manufacturing, purchasing, sales, euro disrupted legacy systems, many companies took the accounting, etc.) that provide the data.[1] ERP facili- opportunity to replace their old systems with ERP.[11] tates information flow between all business functions, and [2] ERP systems initially focused on automating back of- manages connections to outside stakeholders. fice functions that did not directly affect customers and Enterprise system software is a multibillion-dollar in- the public. Front office functions, such as customer re- dustry that produces components that support a variety lationship management (CRM), dealt directly with cus- 1 2 CHAPTER 1. ENTERPRISE RESOURCE PLANNING tomers, or e-business systems such as e-commerce, e- • Management accounting: Budgeting, costing, cost government, e-telecom, and e-finance—or supplier re- management, activity based costing lationship management (SRM) became integrated later, • when the Internet simplified communicating with exter- Human resources: Recruiting, training, rostering, nal parties. payroll, benefits, 401K, diversity management, retirement, separation “ERP II” was coined in 2000 in an article by Gartner Pub- lications entitled ERP Is Dead—Long Live ERP II.[12] It • Manufacturing: Engineering, bill of materials, work describes web–based software that provides real–time ac- orders, scheduling, capacity, workflow manage- cess to ERP systems to employees and partners (such as ment, quality control, manufacturing process, man- suppliers and customers). The ERP II role expands tra- ufacturing projects, manufacturing flow, product life ditional ERP resource optimization and transaction pro- cycle management cessing. Rather than just manage buying, selling, etc.— • Order Processing: Order to cash, order entry, credit ERP II leverages information in the resources under its checking, pricing, available to promise, inventory, management to help the enterprise collaborate with other shipping, sales analysis and reporting, sales commis- enterprises.[13] ERP II is more flexible than the first gen- sioning. eration ERP. Rather than confine ERP system capabili- ties within the organization, it goes beyond the corporate • Supply chain management: Supply chain plan- walls to interact with other systems. Enterprise applica- ning, supplier scheduling, product configurator, tion suite is an alternate name for such systems. order to cash, purchasing, inventory, claim process- Developers now make more effort to integrate mobile de- ing, warehousing (receiving, putaway, picking and vices with the ERP system. ERP vendors are extend- packing). ing ERP to these devices, along with other business ap- • Project management: Project planning, resource plications. Technical stakes of modern ERP concern planning, project costing, work breakdown struc- integration—hardware, applications, networking, supply ture, billing, time and expense, performance units, chains. ERP now covers more functions and roles— activity management including decision making, stakeholders’ relationships, standardization, transparency, globalization, etc.[14] • Customer relationship management: Sales and mar- keting, commissions,