ERP-Systems – Situation and future Developments

Enterprise Resource Planning (ERP) integrates core business areas such as manufacturing, distribution, financials and human resources. ERP is often implemented in companies together with process-oriented organization or Supply Chain Management (SCM). In order to manage the information-flow of such structures new IT-systems are generated – known as ERP-Systems. IT-systems of this kind allow managers from all departments to look vertically and horizontally across the organization to see what others are accomplishing or not. It attempts to integrate all departments and functions across a company onto a single computer system that can serve all those different department's particular needs. ERP-systems also implement and automate business processes, putting them into a useful format that is standardized across the corporation and between their suppliers and customers. ERP-systems capture data about historical activity, current operations and future plans and organize it into information people can use to help develop business strategies.

In the ERP industry, the systems are often referred to as the 4M’s. Man, Money, Materials and Machines. This type of system brings all four aspects of business together, giving them a synergistic value. ERP is an enabling technology that can give corporations a strong competitive edge. In addition, this technology is as close to virtual enterprises as business today has ever seen.

http://www.ebz-beratungszentrum.de/pps_seiten/sonstiges/erp_engl.htm

Enterprise resource planning Implementation

Because of their wide scope of application within a business, ERP software systems are typically complex and usually impose significant changes on staff work practices. Implementing ERP software is typically not an "in-house" skill, so even smaller projects are more cost effective if specialist ERP implementation consultants are employed.The length of time to implement an ERP system depends on the size of the business, the scope of the change and willingness of the customer to take ownership for the project. A small project (e.g., a company of less than 100 staff) may be planned and delivered within 3-9 months; however, a large, multi-site or multi-country implementation may take years.

To implement ERP systems, companies often seek the help of an ERP vendor or of third-party consulting companies. These firms typically provide three areas of professional services: consulting, customization and support.

Process preparation

ERP vendors have designed their systems around standard business processes, based upon best business practices. Different vendors have different types of processes but they are all of a standard, modular nature. Firms that want to implement ERP systems are consequently forced to adapt their organizations to standardized processes as opposed to adapting the ERP package to the existing processes.^[5] Neglecting to map current business processes prior to starting ERP implementation is a main reason for failure of ERP projects.^[6] It is therefore crucial that organizations perform a thorough business process analysis before selecting an ERP vendor and setting off on the implementation track. This analysis should map out all present operational processes, enabling selection of an ERP vendor whose standard modules are most closely aligned with the established organization. Redesign can then be implemented to achieve further process congruence. Research indicates that the risk of business process mismatch is decreased by:

- linking each current organizational process to the organization's strategy;

- analyzing the effectiveness of each process in light of its current related business capability;

- understanding the automated solutions currently implemented.^{[7] [8]}

A disadvantage usually attributed to ERP is that business process redesign to fit the standardized ERP modules can lead to a loss of competitive advantage. While documented cases exist where this has indeed materialized, other cases show that following thorough process preparation ERP systems can actually increase sustainable competitive advantage.^[9][10]

http://en.wikipedia.org/wiki/Enterprise_resource_planning

The future of ERP

Covering functional gaps, providing seamless integration and incorporating SOA are some key trends in ERP, says Ranga Pothula

Manufacturers are under constant pressure from customers, shareholders, and suppliers to continuously improve and make better products quickly and efficiently. Competing in a dynamic environment and meeting global challenges requires agility. Successful companies must be able to respond quickly and cost-effectively to change. The change could be of any type; shift in customer demands and supply chain partners, modifications to a business model or business process, business expansion and the need for new initiatives like outsourcing, and regulatory pressures imposed by financial markets, industry groups, and government bodies.

Manufacturers need to convert their factories into responsive, demand-driven, profit-making enterprises by optimising their operations. Their competitive advantage and ultimate survival depends on the use of information systems and technology.

http://www.expresscomputeronline.com/20060605/technology02.shtml

Enterprise resource planning Best Practices

Best Practices were also a benefit of implementing an ERP system. When implementing an ERP system, organizations essentially had to choose between customizing the software or modifying their business processes to the "Best Practice" function delivered in the vanilla version of the software.

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.

Where such a compliance or commodity requirement does not underpin the business process, it can be argued that determining and applying a Best Practice actually erodes competitive advantage by homogenizing the business as compared to everyone else in the industry sector.

http://en.wikipedia.org/wiki/Enterprise_resource_planning

Future of ERP systems and Microsoft Dynamics

f you want to make your next enterprise resource planning (ERP) investment a long-lasting one, you better know something about the future. Stewart McKie, a 20-year veteran of IT consulting, gives his opinion on two major emerging technologies and advises on how to implement them.

You can't keep information secret. It wants to get out. It dies if it doesn't circulate. For proof, look at the evolution of business applications. From departmental systems to enterprise systems to business partner integration, the trend is to spread information further and further.

It's hardly surprising. The better informed you are, the better positioned you are to act. So it's important to know which new technologies are currently helping to spread the word. According to McKie, there are two emerging technologies that you can't ignore. The first is Web services and the second is XML (extensible markup language).

"Until XML came along," McKie says, "there was no technology that could unleash the full potential of business collaboration. Now everyone has pretty much decided that XML will be the standard for exchanging documents between systems." With the emergence of the Internet and XML, EDI (electronic data interchange linking systems with different data formats) has become cost-effective and accessible to all.

http://www.microsoft.com/dynamics/businessneeds/erp_future.mspx