ERP ( ENTERPRISE RESOURCE PLANNING)|ERP Trends| BENEFITS OF ERP| Disadvantages|Life Cycle

ERP ( ENTERPRISE RESOURCE PLANNING)

Enterprise resource planning (ERP) is the integrated management of core business processes, often in real-time and mediated by software and technology. These business activities can include:

·         Product planning, purchase

·         Manufacturing or service delivery

·         Marketing and sales

·         Inventory management

·         Shipping and payment

·         Finance

Enterprise ERP Trends

The ERP field can be slow to change, but the last couple of years have unleashed forces which are fundamentally shifting the entire area. The following new and continuing trends affect enterprise ERP software:

1. Mobile ERP 

Executives and employees want real-time access to information, regardless of where they are. It is expected that businesses will embrace mobile ERP for the reports, dashboards and to conduct key business processes.

2. Cloud ERP

The cloud has been advancing steadily into the enterprise for some time, but many ERP users have been reluctant to place data cloud. Those reservations have gradually been evaporating, however, as the advantages of the cloud become apparent.

3. Social ERP

There has been much hype around social media and how important —or not — it is to add to ERP systems. Certainly, vendors have been quick to seize the initiative, adding social media packages to their ERP systems with much fanfare. But some wonder if there is really much gain to be had by integrating social media with ERP.

4. Two-tier ERP

Enterprises once attempted to build an all-encompassing ERP system to take care of every aspect of organizational systems. But some expensive failures have gradually brought about a change in strategy – adopting two tiers of ERP.

BENEFITS OF ERP

Scalability: An ERP system is easily scalable. That means adding new functionality to the system as the business needs change is easy. This could mean easy management of new processes, departments, and more.

Improved reporting: Much of the inefficiency in operational work stems from improper reporting. With an ERP system, this possibility is eliminated as reporting follows an automated template system, allowing various departments to access information seamlessly.

Data quality: As compared with manual record-keeping or other traditional approaches, an ERP system improves data quality by improving the underlying processes. As a result, better business decisions can be reached.

Lower cost of operations: An ERP system introduces fundamental innovations in managing resources, which eliminates delays and thus reduces cost of operations. For instance, use of mobility allows real-time collection of data, which is indispensable to lowering costs.

Better CRM: A direct benefit of using a good ERP system is improved customer relations as a result of better business processes.

Business analytics: Having high-quality data allows businesses to use the power of intelligent analytics tools to arrive at better business decisions. In fact, many good ERP systems have built-in analytics functionality to allow easier data analysis.

Improved data access: Controlling data access properly is always a challenge in organizations. With an ERP system, this challenge is overcome with the use of advanced user management and access control.

Better supply chain: Having the right ERP system in place means improved procurement, inventory, demand forecasting, etc., essentially improving the entire supply chain and making it more responsive.

Regulatory compliance: Having the system in control means organizations can better comply with regulations. Further, the most important and recurring regulatory requirements can be built right into the system.

Reduced complexity: Perhaps the most elegant argument in the favor of ERP systems is that they reduce the complexity of a business and introduce a neatly designed system of workflows. This makes the entire human resource chain more efficient.

Disadvantages

Direct Cost

This is by far the biggest disadvantage to ERP software. The up-front cost of the entire implementation process can be prohibitively high, especially for small-to-medium-sized businesses. This includes the full process of planning, testing, configuring and customizing the software as well as the cost of actual implementation.

Indirect Cost

Financial cost is not the only associated expense with ERP implementation. Businesses must also take into account the opportunity cost of manpower and time necessary for a successful deployment. Planning out a realistic timetable will give you a better idea of whether or not the cost is worth it for your company.

Customization

While this is a potential advantage, it can just as easily become a disadvantage if handled incorrectly. This blog post by expert ERP consultant Eric Kimberling outlines potential problems as well as tips for avoiding the pitfalls of both over-customization and under-customization.

ERP LIFE CYCLE

ERP Implementation Life Cycle is the process of implementation of the enterprise resource planning in any organization. It involves many steps and stages right from the start, planning for project implementation, analysis, design, implementation, transition and operations. ERP implementation lifecycle highlights the different phases of implementing an ERP system. It starts from the projection of the ideal ERP package that is suitable for the company. The steps involved in the life cycle of the ERP implementation are:

• Selection of packages: This is the first step of the life cycle where the perfect ERP package has to be selected in agreement that fits your business environment. In the selection process, ERP packages that are not suitable they are eliminated. The package has to be carefully selected and testified. The right choice will determine the success of the ERP implementation. A proper study and research should be done before the selection.
• Project Planning: Proper planning of the implementation process of the project shall be made and designed. Resources should be allocated and the team members have to be selected.
• Analysis GAP: GAP analysis is an important step in the life cycle of ERP implementation step. GAP analysis is performed to analyze the current situation of the organization and its future position as needed.
• Re-engineering is needed to make the implementation process involves many changes and alterations. The job responsibilities of employees and the number of employees can be altered as well. This step is done to make the business process more efficient.
• Training: Training of employees starts with the implementation process in the life cycle of the ERP implementation. Employees of getting used to the new system in order to run the system smoothly later. Get the time at this stage to learn the software and its features and become self-sufficient in order to be able to operate later, when consultants and suppliers to end and go.
• Testing: Testing is an important step and is carried out so that the errors can be found and resolved before the actual application process.
• Application: This step is performed when data conversion is done and the work of the database is over. After setup and testing is completed, the actual implementation is done. Once the new system is implemented, the old system is removed. The end user is trained on how to use the new system.
• Maintenance: Maintenance is carried out in the post-implementation life cycle of ERP implementation phase. The problems are identified and employees learn how to deal with it. Maintenance is also an important stage in the life cycle.