INTRODUCTION

³ERP comprises of a commercial software package that promises the seamless integration of all the information flowing through the company - financial, accounting, human resources, supply chain and customer information.´ T.J. Davenport Harvard Business Review

ERP, which is an abbreviation for Enterprise Resource Planning, is principally an integration of business management practices and modern technology. Information Technology (IT) integrates with the core business processes of a corporate house to streamline and accomplish specific business objectives. Consequently, ERP is an amalgamation of three most important components; Business Management Practices, Information Technology and Specific Business Objectives. In simpler words, an ERP is a massive software architecture that supports the streaming and distribution of geographically scattered enterprise wide information across all the functional units of a business house. It provides the business management executives with a comprehensive overview of the complete business execution which in turn influences their decisions in a productive way. At the core of ERP is a well managed centralized data repository which acquires information from and supply information into the fragmented applications operating on a universal computing platform. Information in large business organizations is accumulated on various servers across many functional units and sometimes separated by geographical boundaries. Such information islands can possibly service individual organizational units but fail to enhance enterprise wide performance, speed and competence. The term ERP originally referred to the way a large organization planned to use its organizational wide resources. Formerly, ERP systems were used in larger and more industrial types of companies. However, the use of ERP has changed radically over a period of few years. Today the term can be applied to any type of company, operating in any kind of field and of any magnitude. Today's ERP software architecture can possibly envelop a broad range of enterprise wide functions and integrate them into a single unified database repository. For instance, functions such as Human Resources, Supply Chain Management, Customer Relationship Management, Finance, Manufacturing Warehouse Management and Logistics were all previously stand alone software applications, generally housed with their own applications, database and
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network, but today, they can all work under a single umbrella - the ERP architecture. In order for a software system to be considered ERP, it must provide a business with wide collection of functionalities supported by features like flexibility, modularity & openness, widespread, finest business processes and global focus.

Integration is Key to ERP Systems
Integration is an exceptionally significant ingredient to ERP systems. The integration between business processes helps develop communication and information distribution, leading to remarkable increase in productivity, speed and performance. The key objective of an ERP system is to integrate information and processes from all functional divisions of an organization and merge it for effortless access and structured workflow. The integration is typically accomplished by constructing a single database repository that communicates with multiple software applications providing different divisions of an organization with various business statistics and information. Although the perfect configuration would be a single ERP system for an entire organization, but many larger organizations usually deploy a single functional system and slowly interface it with other functional divisions. This type of deployment can really be time-consuming and expensive. In other words Enterprise resource planning (ERP) is an integrated computer-based system used to manage internal and external resources including tangible assets, financial resources, materials, and human resources. It is a software architecture whose purpose is to facilitate the flow of information between all business functions inside the boundaries of the organization and manage the connections to outside stakeholders. Built on a centralized database and normally utilizing a common computing platform, ERP systems consolidate all business operations into a uniform and enterprise wide system environment. An ERP system can either reside on a centralized server or be distributed across modular hardware and software units that provide "services" and communicate on a local area network. The distributed design allows a business to assemble modules from different vendors without the need for the placement of multiple copies of complex, expensive computer systems in areas which will not use their full capacity.

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supply chain and warehouse management modules in an enterprise for better. PeopleSoft and JD Edwards. inventory. Another benefit is of better marketing opportunities. Its use has a much broader scope in today's world rather than of just planning the use of the enterprise resources. Whatever a person needs can be immediately accessed by him subject to the delegated authority. ERP has the effect of making an enterprise more time-sensitive. SAP AG etc. This is how [Type text] Page 3 . They also help managers make decisions about introducing some new value added features to an existing 'hot-demand' product to enhance sales further.g for making other products. fast and accurate information availability to every single person which is its 'primary objective' because every single operation and action taken at any place by any person depends on consistent and updated information availability. They also enhance management decision making by making future projections about sales during a certain period of a certain product.. synchronizing. The integration of the business processes improves coordination between bodies. ERP penetrates one segment after the other and addresses solutions to many debacles existing in an enterprise. These systems link the order. planning and optimizing the resources available in the existing extremely competitive environment. Leading ERP giants making ERP systems are Microsoft.WHAT IS ERP ERP (Enterprise Resource Planning) is a strategic tool helping an organization to gain an edge over its competitors by helping in successfully integrating its key business operations. manufacturing. Different ERP systems have been made to facilitate organizations in Enterprise Resource Planning. ERP function has thus helped individuals. sales. streamlines workflows and processes and benefits them in terms of retaining and satisfying customers by delivering their orders "just-in-time" and keeping them well informed about their orders' current status rather than keeping them waiting for just a small piece of information. Management would then be able to make decisions whether to increase/decrease production of that particular product which in turn would help save resources from being wasted which could be used for other purposes e. Oracle. Organizations (especially those which are borderless) face many difficulties in quickly making out the information required. purchase.

While there are absolute benefits. The choice depends upon the structure and type of the organization e. manufacturing etc. ERP system helps getting higher return on investments (ROI) in a fast manner. They provide tremendous benefits provided the Critical Success Factors of ERP system implementations are kept in mind. an ERP system also poses significant challenges in the areas of information security and business continuity planning. ERP has a great importance and ERP systems have become the biggest need of today's organizations to survive. Above mentioned things point to a very critical step.g financial. This is why some organizations experience higher benefits as compared to others because they've made the right choice and are able to make the right use of their system. To summarize. Inventory costs reduction must be given a great importance in every organization. [Type text] Page 4 . the right choice of an ERP for your enterprise! Off all the ERP systems exiting in the market. ERP helps reduce inventory costs by better planning and forecasting of requirements. all seem to be performing the same function but the one best suiting your requirements needs to be picked up in order to achieve required results.product quality is also enhanced.

proprietary systems are off the. Supply Chain Management (SCM) and other extended modules. management of organizations needs efficient information systems to improve competitiveness by cost reduction and better logistics. human resources and distribution of goods and services. It is universally recognized by large and small-to medium.shelf solutions requiring consultants to tailor and implement them based on the company¶s requirements. traditional in-house-designed company specific systems. The [Type text] Page 5 . Starting in the late 1980s and the beginning of the 1990s new software systems known in the industry as enterprise resource planning (ERP) systems have surfaced in the market targeting mainly large complex business organizations. and integration with the Internet-enabled applications. unlike the old. timely and efficient procurement of product parts. In many cases they force companies to reengineer their business processes to accommodate the logic of the software modules for streamlining data flow throughout the organization. The market position and general strategy of the major systems providers in preparation for this push are described. management of inventory. computer hardware and software systems has influenced all facets of computing applications across organization. accounting. powerful.EVOLUTION OF ERP ERP systems are now ubiquitous in large businesses and the current move by vendors is to repackage them for small to medium enterprises (SMEs). The unprecedented growth of information and communication technologies (ICT) driven by microelectronics. expensive. The chapter concludes that the growth and success of ERP adoption and development in the new millennium will depend on the legacy ERP system¶s capability of extending to Customer Relationship Management (CRM).size enterprises (SME) that the capability of providing the right information at the right time brings tremendous rewards to organizations in a global competitive world of complex business practices. Simultaneously the business environment is becoming increasingly complex with functional units requiring more and more interfunctional data flow for decision making. These software solutions. The advantages and disadvantages of the ERP systems will impact their penetration in this new market. In this context. These complex. This migration has many consequences that have to be addressed through understanding the history and evolution of ERP systems and their current architectures. are integrated multi-module commercial packages suitable for tailoring and adding ³add-ons´ as and when required.

The vendors already promise many ³add-on´ modules. [Type text] Page 6 . provide interchangeable modules and allow easy customization and user interfacing. finance. ERP systems first appeared in the late 1980s and the beginning of the 1990s with the power of enterprisewide inter-functional coordination and integration. extranet and the Internet in a seamless manner. breaking the barrier of proprietorship and customization. developed and implemented centralized computing systems. ALGOL and FORTRAN. Based on the technological foundations of MRP and MRP II. Material requirements planning (MRP) systems were developed in the 1970s which involved mainly planning the product or parts requirements according to the master production schedule. human resource and engineering. ERP vendors and customers have recognized the need for packages that follow open architecture. Following this route new software systems called manufacturing resources planning (MRP II) were introduced in the 1980s with an emphasis on optimizing manufacturing processes by synchronizing the materials with production requirements. MRP II included areas such as shop floor and distribution management. It is a never-ending process of reengineering and development bringing new products and solutions to the ERP market. During the 1960s most organizations designed. project management. ERP systems integrate business processes including manufacturing. These were legacy systems based on programming languages such as COBOL.phenomenal growth of computing power and the Internet is bringing ever more challenges for the ERP vendors and the customers to redesign ERP products. mostly automating their inventory control systems using inventory control packages (IC). and embracing the collaborative business over the intranet. some of which are already in the market as a sign of acceptance of these challenges by the ERP vendors.

and transportation. human resource management. visibility and consistency across the enterprise. financial.´ These ERP extensions include advanced planning and scheduling (APS). [Type text] Page 7 . project management. During the 1990s ERP vendors added more modules and functions as ³add-ons´ to the core modules giving birth to the ³extended ERPs. service and maintenance.distribution. inventory management. e-business solutions such as customer relationship management (CRM) and supply chain management (SCM). accounting. Figure 2 summarizes the historical events related with ERP. providing accessibility.

The worldwide license and maintenance revenue for ERP systems was US$21. These packages implemented by the Fortune 1000 companies run well over the IT budgets for most SMEs. customer relationship management and the integration of Internet-enabled applications for e-business. ERP vendors are targeting this untapped SME market with supposedly scaled-back systems suitable for smaller firms by offering simple. Organizations choose and deploy ERP systems for many tangible and intangible benefits and strategic reasons. It was estimated that the spending on ERP systems in 1998 was about US$17 billion following annual growth rates ranging from 30% to 50%. The benefits that an industry standard ERP system may bring to organizations To reap the benefits of ERP systems. The continued growth of the ERP systems market is attributed to the fact that the vendors are adding applications such as supply chain management. however. The high expectation of achieving all-round cost savings and service improvements is very much dependent on how good the chosen ERP system fits to the organizational functionalities and how well the tailoring and configuration process of the system matched with the business culture. 2001). For some vendors this may lead to offering centrally managed Internet-enabled ERP-system-based services for SMEs to access and use anytime from anywhere.5 billion in 2000.1% from the 1999 market value of $US19 billion (Broatch. organizations need to overcome certain problems and disadvantages. cheaper and pre-configured easy-toinstall solutions within budget and time constraints. More than 60% of the Fortune 1000 companies have installed or are in the process of implementing packaged ERP systems to support their back-end business activities (Kraft. strategy and structure of the organization. [Type text] Page 8 . 2001). which represented a growth of 13. In many cases the calculation of return on investment (ROI) is weighted against the many intangible and strategic benefits. Overall an ERP system is expected to improve both backbone and front-end functions simultaneously.ERP SYSTEMS AND ORGANIZATIONS It is generally a misleading perception that implementing an ERP system will improve organizations¶ functionalities overnight. Companies also spend a multiple of licensing costs on services related to implementation and maintenance of the software.

ERP SYSTEMS ARCHITECTURE ERP vendors. distribution. etc. Use centralized common database management system (DBMS) 3. They are or soon they will be Internet-enabled 11. Transportation management 6. Accounting management 2. Different ERP vendors provide ERP systems with some degree of specialty but the core modules are almost the same for all of them. manufacturing. They require time-consuming tailoring and configuration setups for 8. Manufacturing management 4. Modular design comprising many distinct business modules such as financial. realized the limitations of the old legacy information systems used in large enterprises of the 1970s and 1980s. increasing operational transparency through standard interfaces 5. integrating with the company¶s business functions 9. The modules work in real time with online and batch processing capabilities 10. It was difficult to increase the capacity of such systems or the users were unable to upgrade them with the organization¶s business changes. The modules are integrated and provide seamless data flow among the 4. accounting. They are generally complex systems involving high cost 6. modules. Human resources management [Type text] Page 9 . Some of the core ERP modules found in the successful ERP systems is the following: 1. creating islands of no compatible solutions unfit for seamless data flow between them. Some of these old systems were developed in-house while others were developed by different vendors using several different database management systems. Production management 5. Financial management 3. Sales & distribution management 7. mostly experienced from the MRP and financial software services fields. 2. languages and packages. They are flexible and offer best business practices 7. An ERP system is required to have the following characteristics: 1. strategic goals and new information technologies.

8. The client/server system functions are performed following three layers of logic: 1. and programs acting on data received/transferred from/to the database servers 3. and HP-UX systems. The systems are usually designed to operate under several operating platforms such as UNIX. Database Layer: Management of the organization¶s operational or transactional data including metadata. The requests may be simple data files. MS Windows NT. and the database system to run on the database servers. transaction processing or master file updates. [Type text] Page 10 . Application Layer: Business rules. communication services. To run ERP systems relatively powerful PCs (clients) and powerful servers are required where most of the hundreds of thousands of operations are performed. creating a decentralized computing environment. the largest ERP vendor. In a C/S system a number of client devices operated by end users such as desktop PCs request services from application servers. Windows 2000. Presentation Layer: Graphical user interface (GUI) or browser for data entry or accessing system functions 2. provides a number of modules with its famous R/3 ERP system. Enterprise systems employ thin client/server (C/S) technology or client/fat server (C/FS) architecture. data values. New modules are introduced by SAP and other vendors in response to the market and technological demand such as the Internet technology. the processing modules to run on the middle-tier application servers. In this three-tier system the user interface runs on the client. logic. Supply chain management 9. which are shown in Table 3. IBM AIX. E-Business The modules of an ERP system can either work as stand-alone units or several modules can be combined together to form an integrated system. mostly employs industry standard RDBMS with structured query language (SQL) provisions This logical arrangement helps the ERP user interface to run on the clients. Customer relationship management 10. which in turn get the requested service-related information from the database servers. functions. The general practice is to have three-tier architecture such as in Figure 3. SAP AG.

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Due to keen competition for control of the lucrative ERP market share. In the following sections we provide brief profiles of these five ERP giants. PeopleSoft. Oracle. commitment to service and support. specialty. has a specialty in one particular module area such as Baan in manufacturing. Long-term vision. the vendors are continuously updating their products and adding new technology-based features. There are also about 50 established and a few more newly emerging smaller and midsize ERP vendors including third-party developers competing for the ERP market.COMMERCIAL ERP SYSTEMS The five dominating ERP software suppliers are SAP. experience and financial strength for R&D is considered the major vendor qualities for product selection and turnkey implementation. [Type text] Page 13 . due to historic reasons. Each vendor. Baan and J. The result is stiff competition and feature-overlapping products difficult to differentiate. Together they control more than 60% of the multibillion dollar global market. module features. SAP in logistics and Oracle in financials.D. Edwards. PeopleSoft in human resources management.

R/2. introduced in 1992. or Systems. including the recently added Microsoft NT. SAP¶s R/3 has been designed to be the best ERP system in the four areas of human resources. Some of the main advantages of using SAP R/3 are listed below: SAP's R/3. 2001). was launched in 1979 using a mainframe-based centralized database that was then redesigned as client/server software R/3 in 1992. SAP AG±Flagship Products R/3. The R/3 software package is designed to allow businesses to effectively and efficiently operate a variety of business processes within a single integrated information system. SAP¶s R/3 is very versatile. language. as it will operate on six different platforms. ERP systems are not only used by large corporations but becoming popular with small to mid-sized companies also.COM: SAP AG (³Systeme. and meets the local fiscal. [Type text] Page 14 . ABAP/4. Applications and Products in Data Processing. financial. The R/3 package includes several very attractive features like it has a three-tier client/server system. Its first ERP product. Providing three tiers offers scalability and easier adaptation to the specific needs of large companies and fast-growing companies. System R/3 was a breakthrough and by 1999 SAP AG became the third largest software vendor in the world and the largest in the ERP sector. An ERP system integrates these separate information systems and results in improved data reliability and processing efficiency. was started by five former IBM engineers in Germany in 1972 for producing integrated business application software for the manufacturing enterprise (SAP. mySAP. Many large corporations use several different and separate information systems. R/3 is scalable and highly suited for many types and sizes of organizations and runs on six different platforms. supply chain management. often because they have merged with and/or acquired other companies with varied systems. is the most used ERP system in the world. and tax requirements of most countries. The software is customizable using SAP's proprietary programming language. Anwendungen. R/3 is also an international product. und Produkte in Datenverarbeitung´). and marketing.1.

SAP has released ³MySAP. The General Ledger function in the FI module provides a comprehensive record of all information needed for external financial reporting. Spanish. product costing.com´ which is software that provides for data interaction and processing connections with the Web. R/3 offers multiple currency features and a three-tier system that is capable of meeting very high demands from the accounting system for either transaction processing or financial reporting. and activity based costing. the modules are fully-integrated and provide real-time applications. and Human Resources (HR) modules. While information is entered separately for each specific module. virtual file structure with no subsystems. Management accounting tools in SAP R/3 are cost center accounting. Materials Management (MM). R/3 is composed of a single.) and also incorporates multiple currency features that provide essential information processing capabilities for multinational corporations. In addition to the FI and CO modules. etc. This attractive feature allows a corporate treasury department to function as an in-house bank by automating the control of cash flow. English. As stated previously. and portfolio management. R/3 provides check writing capability in its Accounts Receivable component which very few other programs offer. profitability analysis and profit center accounting. investment trades. and thus they are well-organized and very efficient in processing accounting information and providing accounting statements and financial reports. This means that data entered into one module is immediately and automatically updated and reflected in all the functional areas. In addition. internal orders. SAP R/3¶s accounting features are modeled on German approaches to accounting. [Type text] Page 15 . SAP was the first to implement integrated treasury capabilities. and marketing.SAP¶s R/3 is available in 14 different languages (German. The accounting data is complete and accurate because the SAP system fully integrates all business transactions that were entered from all the operational areas of a company. Sales and Distribution (SD). human resources. Financial and managerial accounting tools in SAP R/3 are contained in the financial accounting (FI) and the controlling (CO) modules. the SAP system includes the Investment Management (IM). supply chain management. R/3¶s modules are organized by the functional areas of financial.

immediately updated reporting.3 billion in 1999. High level of stability and performance: response times are consistently under one second. A manual Block These blocks make it much less likely that improper payments will occur.Additionally. Oracle¶s enterprise software applications started to work with its database in 1987. Oracle has other strong products in the software field including DBMS. Oracle Corporation±Flagship Product Oracle Applications Oracle (Oracle. The receiving Block 3. application [Type text] Page 16 . R/3 also provides for a "single data entry point" where the data entered from any location is instantly sent to all other appropriate modules in the ERP system. 2001).000 customers in 140 countries. manufacturing. work flow. supply chain. which places Oracle second to SAP in the enterprise systems category with over 5. which means that the company implementing R/3 may have to change and reorganize itself to properly fit with R/3 and use it effectively. data warehousing. R/3 offers real-time. Minimum operating costs: no retention of redundant data in the back office. Oracles ERP system is known as Oracle Applications. is best -known for its database software and related applications and is the second largest software company in the world after Microsoft. This means that personnel can access financial data directly from a computer screen rather than physically meet with the treasurer. The Audit Block 2.5 billion out of the company¶s $9. systems administration. accounts payable. It accounts for $2. controller. human resources. having more than 50 different modules in six major categories: finance. founded in 1977 in the USA. projects and front office. The accounts payable component of SAP R/3 contains four types of transaction blocks namely: 1. The Vendor Block 4. SAP R/3 is organized with the concept that a business operates as a series of processes. Good user interface available which makes system user friendly and requires no training for the end user. or some other similar person. there is equal access to all data in the system. 2. In other words.

Baan and PeopleSoft because of the use of Oracle¶s DBMS in their ERP systems. SQL-Server one have facilities for using loops. Oracle comes with new versions with new features implemented in new version while the features of earlier versions still being maintained. purchase orders. pre-integrated business applications. In fact ten of the world¶s top 10 banks run Oracle applications this is because oracle offers a powerful combination of technology and comprehensive. The operations are not implemented as in Oracle which is efficient enough. order entry. arrays and so on in a program and also facilities like cursors and temp tables but all this would be used in a convoluted fashion which are very slow and resource consuming operations. conditions. One important aspect is Oracle databases tend to be backwards compatible. Oracle takes a lead role because of some of the following reasons: Oracle is used for almost all large application and one of the main applications in which oracle takes its major presence is banking. Oracle also offers an easy-to-activate Web presence that helps companies to sell their goods via the Internet. new versions releases which serves better than the earlier versions and thus the performance is improved much in [Type text] Page 17 . their documentation contains a list of all the features new to that version thus makes it user friendly for one to learn the new features. Also when Oracle releases a new version. Advantages of Oracle: Oracle has many advantages and features that makes it popular and thereby makes it as the world's largest enterprise software company. and CRM functionality±all delivered as a Web service. Oracle has integrated its ERP solutions with the Internet and has introduced several applications in the electronic commerce and Internet based commerce areas. payroll. and consulting services.development tools (APIs). Also with the features available in oracle with the earlier versions in market the oracle company keeps upgrading and releasing new products into market. inventory control. Another significant feature of Oracle is its OSBS. A notable feature of Oracle is that it is both a competitor and a partner to some of the industry leaders in the ERP market such as SAP. or Oracle Small Business Suite which provides consistent financials. Some similar databases like Sybase. including key functionality built specifically for banks. Oracle¶s Internet infrastructure is created around two powerful products: Oracle9i Database and Oracle9i Application Server.

This is very important because data is the heart of any system in organization. which is important in insuring the integrity of data. A reliable and adequate database system has the following properties: Atomicity: That is Results of a transaction's execution are either all committed or all rolled back. Durability: Once committed (completed). Illegal transactions aren't allowed and. had features like new features on partitioning to support large database and so on. All the above are well maintained by Oracle database. the results of a transaction are permanent and survive future system and media failures and thus ensuring maintenance and protection of data. if an integrity constraint can't be satisfied then the transaction is rolled back. Consistency: The database is transformed from one valid state to another valid state. Isolation: The results of a transaction are invisible to other transactions until the transaction is complete thus increasing the security on data. With the next version 9i oracle had these facilities maintained and had more new facilities added to it namely like new features added to help the DBA to handle change database configuration and so on. Oracle is a major database which along with its added features passes the ACID test. Oracle is a database that responds very well with excellent performance in demanding environments. Thus the advantage of a higher version is that one would have more features and better capabilities. For instance oracle 8i version has many new features which helped users namely like with oracle 8i one could run Java in the database.later versions and thereby retaining the market growth and thus proves greater satisfaction to the customers using this technology. [Type text] Page 18 .

deleting the wrong data. By Flash technology it helps in recovery by working just on the changed data. One of the strengths of PeopleSoft is the recognition by its customers that it is flexible and collaborative. finance. or dropping the wrong table. SAP AG and Oracle±with longer experience. stronger financial base and worldwide presence±are the main competitors to PeopleSoft. distribution. So it is very essential to take care of such situation and this is done in oracle's latest technology called flash introduced in its latest version. Many customers comment that PeopleSoft has a culture of collaboration with customers. with specialization in human resource management and financial services modules. materials management. The flagship application PeopleSoft8 with scores of applications was developed by PeopleSoft with an expenditure of $500 million and 2. PeopleSoft Inc. This option when enabled could be used by users just like Windows recycle bin or Mac Trash. But sometimes application outage can occur and mostly DBA claim the reasons for this as hardware failure and apart from this the reason would be human errors like accidental deletion of valuable data.The latest version oracle 10g has many features and one new feature is the introduction of recycle bin. which makes it more flexible than its competitors. That is we all know that data is the heart of any application or organization and thus this requires careful maintenance. and can be restored from the recycle bin. Dropped tables go "into" the recycle bin. One of the main advantage of oracle over other databases is in its recent version oracle has the concept of Flashback technology. Enterprise solutions from PeopleSoft include modules for manufacturing. Efficient recovery from human errors Faster database recovery Helps in simplifying the management and administration processes and so on. 2. 3. PeopleSoft quickly managed to offer other corporate functions and attained revenue of $32 million in 1992. Thus Flashback provides an 1. human resources and supply chain planning.±Flagship Product PeopleSoft8 PeopleSoft is one of the newest ERP software firms started in 1987 in Pleasanton. California.000 developers over [Type text] Page 19 . 3.

manufacturers and customers can work together to deliver the right product at the right price. defence.000 employees.´ ERP solution areas that Baan covers include finance. 2001) started with expertise in software for the manufacturing industry and by 1997 claimed an ERP market share of roughly 5%. PeopleSoft 8 requires no client software other than a standard Web browser. anywhere´ (PeopleSoft.¶ Suppliers. procurement. One innovative product from Baan is the Orgware tool that can cut implementation cost significantly by automatically configuring the enterprise software. Baan believes that ³the Internet is the ultimate enabler´ and ³Internet technologies help companies become order-driven and customer focused by enabling collaboration across the µvalue chain. PeopleSoft with about 10% market share is the third largest ERP vendor after SAP AG and Oracle. languages.000 customer sites all over the world and more than 3. Baan has more than 15. launched in 1998.231million and operating profit of £926 million. 2001). automotive. and electronics industries. and business processes for more than 4. The Baan Company±Flagship Product BaanERP Founded in 1978 in The Netherlands. ³Our eBusiness applications and consulting services enable true global operations±managing multiple currencies.2 years as a pure Internet-based collaborative enterprise system. Bann¶s revenue in 1998 was roughly $750 million and while facing a slight slowdown in 1999 started growing again in 2001 with sales up 12% at £7. sales. integration and implementation. 4. manufacturing. Baan¶s ERP software is best known in the aerospace. service and maintenance. Bann¶s flagship product is BaanERP (formerly called Triton. Baan (Baan.400 organizations in 109 countries´ (PeopleSoft. 2001). [Type text] Page 20 . ³Our revolutionary eBusiness platform is the first open XML platform to offer scalability and ease of use for all users. planning. distribution. distributors. giving you the ability to securely run your business anytime. then Baan IV). collaborative commerce and business intelligence. business portals.

data warehousing. J. J. 2001). customer support and after-sales service. maintenance management. The product includes modules for finance. Edwards¶ revenue jumped to $944 million in 1999 from $120 million in1992. Edwards was founded in 1977 in Denver (cofounded by Jack Thompson. J. quality management. static technologies´ (JD Edwards. Edwards & Co. distribution/logistics and human resources. having more than 5.D.5.D. [Type text] Page 21 .000 customers in over 100 countries.±Flagship Product OneWorld J. The OneWorld system is considered to be more flexible than similar competing products and within the reach of smaller enterprises.D. Edwards¶ flagship ERP product called OneWorld is ³capable of running on multiple platforms and with multiple databases revolutionizes enterprise software by liberating users from inflexible. J. Dan Gregory and C. Edward McVaney) with long experience of supplying software for the AS/400 market.D.D. manufacturing. Edwards¶ Internet-extended version of OneWorld was launched recently as OneWorld Xe (³Xe´ stands for ³extended enterprise´).

This naturally led to improvement in the quality of services offered. It was well evident that ERP market could boom and give the necessary impetus to stakeholders.ERP'S SCOPE. educational institutions and companies are constantly working towards promoting and expanding the IT market. There are some issues to worry about and some others which deserve appreciation. Such an improvement increased the competition among various players. In this context ERP holds lot of promises both in terms of supply and demand. The demand and supply gradually transformed from general to enterprise resource market. This problem in itself helped to get another important solution. As explained earlier the gradual demand for ERP increased with a slump in the software market. India occupies a promising position in the whole of IT market . The end user was getting assured that he would be receiving the best services for the money invested. economical and overall). They were not given the due importance and treated just like another supporting function. [Type text] Page 22 . Firstly this paved way for more prospects in ERP market. The ERP implementation in India demanded more than the custom erp India module.The governments. PENETRATION FUTURE OPPORTUNITIES AND CHALLENGES IN INDIA India is a well known player in the ERP market. The slump of the IT sector would add drudgery and smash the hopes of so many individuals and companies. This proved to be a biggest challenge to the nation who were banking (and are still) on IT skills for development aspects (individual. Once this got stabilized there was no looking back. Case ERP in India got more and more competitive. Some of the issues concerning ERP in Indian Market are as follows: How did ERP penetrate on a vast scale in India? The Y2K problem and other diminishing opportunities of IT professionals were seen as a big challenge to the IT market. However this did not mean that mediocre could survive in the market. This was not only the case in India but else elsewhere in the globe. There was demand only for top notch services and professionals. Reasons like lack of awareness formed one part while other reasons were costs and technical difficulties. ERP software programs were initially used only for back office functions.

Pressures mount on the industry The industry is facing two major challenges when it comes to dealing with ERP in the current context: Sudden change Firstly they are bound to increase the scope of ERP in enterprise operations.But when it comes to companies that already run successful ERP systems they have to stick on to the technical changes or ship out from the market. They learned more on ERP and realized its diverse applications. They can work on to find some replacement technology rather than going for an all round change. As discussed earlier ERP was initially restricted to back office functions and later spread its wings to all the operations in the enterprise. This naturally meant that the ERP manufacturers and vendors had to increase the functionalities and scope of the application. They can decide to stick on to change but it will cost them heavily. This indirectly created the awareness among companies. Technical factors Secondly ERP in the nation calls for a restructuring in the technical aspects. The effectiveness of the replacement is an important issue. Compelling them to suddenly change will land things in a mess because there will be lot of confusions for the vendors. There are practical difficulties when it comes to this issue. The unrealistic deadlines and time pressures further add agony to this menace. This is advantageous for the companies that go for ERP at the first instance . Finally they resorted to use ERP for the whole of the company and stopped the idea of restricting it to mere back office functions. [Type text] Page 23 .Since this led companies to go in for ERP they automatically started to learn more about it either by force or felt need as they were left with no alternative. No doubt change is inevitable and an element for growth. The fate of the businesses that have already implemented and deployed ERP remains a big question mark. The ERP experts will definitely be able to restructure the ERP systems with the help of resources and expertise available with them. However doing it all on sudden is a difficult task. This is definitely appreciable. However it would be next only to impossible to change even before the current change has stabilized in the market. They must have been working with different requirements till then. manufacturers and end-users.

employment and the state run offices. However India has got a long way to go when it comes to Improving ERP in terms of technology. Conclusion The ERP market in India is definitely promising. Some bigger companies still hesitate to invest in ERP due to the exorbitant costs. However some of them are keeping quiet due to the risks involved besides the unforeseen expenses and losses. penetration in terms of sectors like education.Finance This is another important determinant of ERP market in India. It is indeed encouraging to find that a vast majority of them have realized its benefits and have determined to go for it. [Type text] Page 24 . scope and applicability in terms of opportunities and venues.

Many see this as personally challenging . y The word "Enterprise" in ERP means that whatever happens in one area has a ripple effect in other areas. in other areas. there are very attractive reasons for going ERP. or leave the company. Training tends to focus on how do I do my job. on other areas of the company. The scope can grow out of control. is not something that happens overnight.even beyond their ability . The costs do not surface until well into the implementation . Many more tasks will be automated. y Users need to become more computer literate. Automation will significantly reduce the flexibility of how you operate as a business. Some of those are: y Implementation effort will be bigger then ever talked about or even imagined. y Because of the richness of functionality. Benefits include: y y y y y y A single system to support rather than several small and different systems A single applications architecture with limited interfaces Access to management information unavailable across a mix of applications Access to best practice systems and procedures More integration hence lower costs More "automation" of tasks Generic Costs and Impacts The costs and impacts are understandably not played up by the Vendors. Users see all the functionality available and suddenly they want it now. [Type text] Page 25 . the "toy box effect" can take over.Most organisations do not understand the costs associated with an ERP system when they first commence the implementation. Understanding the implications of actions of one area. We are yet to hear from an organisation who have implemented ahead of schedule and under budget. y The existing environmental mix between what is done manually and what is done by the system will swing dramatically after implementation. The Vendor will make sure of this. The benefits are usually well understood.and why should the Vendor talk to an organisation about the costs and difficulties when they are trying to make a sale? On the surface. It should also focus on what are the impacts of my job.and will not cope.

y ERP systems tend to replace old systems. If stock is moved. The system will tell someone to get the material from A and when it is not there. This happens at a Technical level as well as a Business Level. Even within one location.g. The information needs to be put into the system or there will be a domino effect. y [Type text] Page 26 . Things have to be done consistently. it is no good somebody remembering where they put it. you can no longer offer 45 day terms without changing configuration. The computer cannot make human judgments. special treatment may not be possible any more without changing the configuration of the system. there is good potential for cost savings as well as getting rid of special arrangements that reduce profit. 30 or 60 day credit terms. It is replacing the trusty Ford with a high performance Ferrari. The system is going to determine how we do things in all locations. they have to go looking. Stock is moved from location A to location B and the information is not put into the system. At the same time it is telling someone else to put new material in B. but B is full. We now have double the quantity in the system again and it doesn't reorder. And so it goes on and everyone is blaming the system. 15.y Near enough is no longer good enough. As such it is a quantum leap for all areas of the company. Data integrity becomes critical. If the system says you can either have 0. E. New ways need to be learnt in a very short space of time. The first person finds the original material in B and logs it into the system. If consistency can be implemented. No longer are we able to do something one way in one branch and another way in another branch.

These innovators will ultimately take the lead in the ERP software market as large systems will not produce the continual income stream that small. To this extent there are still opportunities for new ERP vendors to emerge from industries that so far have not contributed to the ERP phenomenon. Analysis of the market penetration of ERP systems shows clearly that the current players have to downsize their products and offerings to be attractive to SMEs. the finance industry and the logistics industry. robust. [Type text] Page 27 . which will provide a more consistent and enduring income stream. Importantly these attributes contribute to a system becoming ubiquitous in the same way that Microsoft has achieved ubiquity for its operating system. Future successful vendors will capture large markets of smaller businesses. Some obvious examples are the aerospace industry. There appears to be no public discussion as to how this will be achieved and whether it requires a significant change in software architecture. Hence the major providers are representatives of certain industries as much as competitors in a common marketplace. This situation again is an opportunity for smaller players to seize the day and offer smaller systems running on smaller hardware platforms more efficiently. easy-to-use systems can achieve.SUMMARY AND THE FUTURE The major industrial information systems manufacturers that emerged from the 1980s and early 1990s defined the history of the development of ERP systems.

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