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MANAGEMENT THESIS 1
SUBMITTED TO: Mr. MUKESH SRIWASTAVA FACULTY GUIDE FMS (IUD)
SUBMITTED BY:VIKASH KUMAR 0901120115 CON.NO-9198332064
TITLE “FINDING SCOPE OF ERP SOFTWARE FOR SMALL & MEDIUM ENTERPRISES IN DEHRADUN” .
TABLE OF CONTENTS ACKNOWLEDGEMENT……………………………………… LITREATURE REVIEW………………………………………. OBJECTIVES…………………………………………………… METHODOLOGY……………………………………………. b) IMPLIMENTATION …………………………… c) ERP’S SCOPE…………………………………… d) VENDORS………………………………………. a) INTRODUCTION………………………………. ACKNOWLEDGEMENT . BIBLIOGRAPHY……………………………………………….
valuable suggestions and constant motivation without which it would not have been possible for me to start this research.No:9198332064 INTRODUCTION OF ERP:- . MUKESH SRIVASTAVA for his continuous guidance. I want to extend my thanks to all friends and the other faculty guides who participated in process and supported me with their sweet cooperation.I wish to acknowledge my Thanks and gratitude to the contributions of people who helped me at every stage of the Management thesis 1. VIKASH KUMAR MBA  Con. I would very much like to express my gratitude and propounds thanks to respected faculty Guide Professor Mr.
software was developed to fit individual processes of an individual business. warehousing. and accounting for a company. delivery. logistics. and eFinance. at which time most companies had already implemented their Y2K solution. production. or the eBusiness systems such as eCommerce. When implementing an ERP system. In addition to areas such as manufacturing. human resources. This rapid growth in sales was followed by a slump in 1999. including sales. invoicing.HISTORY The term "Enterprise resource planning" originally derived from manufacturing resource planning (MRP II) that followed material requirements planning (MRP). and human resource management. A study conducted by Ludwigshafen University of Applied Science surveyed 192 companies and concluded that companies which implemented industry best practices decreased mission-critical project tasks such as . Best practices are incorporated into most ERP vendor's software packages. and information technology. or supplier relationship management (SRM) systems. eTelecom. billing. indicating that customers and the general public are not directly involved. eGovernment. most vendors have included "Best Practices" into their software. this typically includes accounting. ERP systems are now also available as Software as a Service. organizations can choose between customizing the software or modifying their business processes to the "best practice" function delivered in the "out-of-the-box" version of the software. Many companies took this opportunity to replace such information systems with ERP systems. Prior to ERP. Due to the complexities of most ERP systems and the negative consequences of a failed ERP implementation. This is contrasted with front office systems like customer relationship management (CRM) systems that deal directly with the customers. ERP systems saw a large boost in sales in the 1990s as companies faced the Y2K problem in their legacy systems. market Disadvantages ting and strategic management. is often used to describe what would be the next generation of ERP software. inventory management. marketing. MRP evolved into ERP when "routings" became a major part of the software architecture and a company's capacity planning activity also became a part of the standard software activity. inventory. These "Best Practices" are what the Vendor deems as the most efficient way to carry out a particular business process in an Integrated Enterprise-Wide system. logistics. This new generation of software is web-based and allows both employees and external resources (such as suppliers and customers) real-time access to the system's data. ERP systems typically handle the manufacturing. shipping. Though traditionally ERP packages have been on-premise installations. EAS — Enterprise Application Suite is a new name for formerly developed ERP systems which include (almost) all segments of business using ordinary Internet browsers as thin clients. quality management. ERP systems are cross-functional and enterprise-wide. ERP II. ERP systems are often incorrectly called back office systems. distribution. ERP software can aid in the control of many business activities. a term coined in the early 2000s. All functional departments that are involved in operations or production are integrated in one system.
a company of less than 100 staff) can be planned and delivered within 3–9 months. The following are steps of a data migration strategy that can help with the success of an ERP implementation[1 1. a significant amount of planning must occur. ERP systems are modular. The length of time to implement an ERP system depends on the size of the business. Data Migration Data migration is one of the most important activities in determining the success of an ERP implementation. Unfortunately. Customization. data migration is the last activity before the production phase of an ERP implementation. Implementation Businesses have a wide scope of applications and processes throughout their functional units. customization. and support. The typical project is about 14 months and requires around 150 consultants. In addition. 2. however. multi-site or multi-country implementation can take years. or Basel II easier. 5. 6. Consulting firms typically provide three areas of professional services: consulting. or phase-ins. Implementing ERP software is typically too complex for "inhouse" skill. and the willingness of the customer to take ownership for the project.configuration. the scope of the change. There are three types of services that may be employed . and therefore receives minimal attention due to time constraints. companies often seek the help of an ERP vendor or a third-party consulting company. This is because the procedure of capturing and reporting legislative or commodity content can be readily codified within the ERP software. A small project (e. and Support. the extent of customization. and then replicated with confidence across multiple businesses who have the same business requirement. Sarbanes-Oxley. business analysis. documentation. Since many decisions must be made before migration. They can also help where the process is a commodity such as electronic funds transfer. To implement ERP systems.g. 3. producing ERP software systems that are typically complex and usually impose significant changes on staff work practices. The use of best practices can make complying with requirements such as IFRS. so it is desirable and advisable to hire outside consultants who are professionally trained to implement these systems. testing and training. the number of modules. Identify the data to be migrated Determine the timing of data migration Generate the data templates Freeze the tools for data migration Decide on migration-related setups Decide on data archiving . and UAT specialists to ensure their business requirements remain a priority during implementation. This is typically the most cost-effective way. the use of best practices reduced over risk by 71% when compared to other software implementations. a large. so they don't all need be implemented at once. change management. The length of the implementations is closely tied to the amount of customization desired.Consulting. The client organization can also employ independent program management. Implementation can be divided into various stages. 4.
risks and changes involved. Research indicates that the risk of business process mismatch is decreased by: • • • linking each current organizational process to the organization's strategy. Modules — Most systems are modular simply for the flexibility of implementing some functions but not others. understanding the automated solutions currently implemented. the greater the number of modules selected. Neglecting to map current business processes prior to starting ERP implementation is a main reason for failure of ERP projects. authorization hierarchies and decision centers. Other times companies will not adopt a module because they already have their own proprietary system they believe to be superior. Configuration Configuring an ERP system is largely a matter of balancing the way you want the system to work with the way the system lets you work. federated implementation using loosely integrated instances (e. 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. ERP systems can actually increase sustainable competitive advantage. ERP implementation is considerably more difficult (and politically charged) in organizations structured into nearly independent business units. For example. enabling selection of an ERP vendor whose standard modules are most closely aligned with the established organization. an organization can select the type . if this is not possible. such as finance and accounting are adopted by nearly all companies implementing enterprise systems. Different vendor(s) have different types of processes but they are all of a standard. Generally speaking. each responsible for their own profit and loss. Solutions include requirements coordination negotiated by local change management professionals or. but also the increase in costs. modular nature. While documented cases exist where this has indeed materialized. the greater the integration benefits. Redesign can then be implemented to achieve further process congruence. data semantics. This analysis should map out all present operational processes. Some common modules. because they will each have different processes. analyzing the effectiveness of each process in light of its current related business capability. Begin by deciding which modules to install. others however such as human resource management are not needed by some companies and therefore not adopted. A service company for example will not likely need a module for manufacturing. other cases show that.g.Process preparation ERP vendors have designed their systems around standard business processes. business rules. following thorough process preparation. linked via Master Data Management) specifically configured and/or customized to meet local needs. then adjust the system using configuration tables to achieve the best possible fit in working with your company’s processes. It is therefore crucial that organizations perform a thorough business process analysis before selecting an ERP vendor and setting off on the implementation track. Configuration Tables – A configuration table enables a company to tailor a particular aspect of the system to the way it chooses to do business. based upon best business practices. 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.
The benefit of an EATM is that it offers a complete. or it can continue to use an existing system and build interfaces between it and the new enterprise system. Relational Database (RDB) Integration – ERP systems connect to plant floor data sources through a Relational Database Staging Table. Custom Integrated Solutions typically run on workstation or server class computers. this can be through a staging table. Additionally they can dilute the system’s integration benefits. . or through system specific business system APIs. managed by the OPC Foundation. Long term costs can be minimized through careful system testing and thorough documentation. created on a per instance basis to meet site and system requirements. The benefit of RDB Staging is that ERP vendors do not need to get involved in the complexities of plant floor equipment integration. product line. Plant floor systems will deposit the necessary information into a Relational Data Base. Both options will add time and cost to the implementation process. able to bring their unique knowledge on process.of inventory accounting – FIFO or LIFO – it will employ. EATM (Enterprise Transaction Modules) – These devices have the ability to communicate directly with plant floor equipment and will transact data with the ERP system in methods best supported by the ERP system. Again. and can have a higher long term cost in terms on maintenance and reliability. the most widely known being OPC. ERP Vendors must be expert in their own products. Standards exist within the industry to support interoperability between software products. Custom Integrated Solutions – Many system integrators designs offer custom crafted solutions. These systems are typically configured by System Integrators. or whether it wants to recognize revenue by geographical unit. There are a wide variety of communications drivers available for plant floor equipment and there are separate products that have the ability to log data to relational database tables. off the shelf solution. often those offered by competitors. equipment and vendor solutions. The ERP system will remove and use the information from the RDB Table. or distribution channel. Connectivity to Plant Floor Information ERP systems connect to real-time data and transaction data (data accumulated into collections to deliver sets of information) in a variety of ways. The more customized the system becomes the less possible seamless communication between suppliers and customers. This requires the ERP system developers to offer specific support for the variety of plant floor equipment that they want to interface with. and connectivity to other vendor products. It can re-write some of the enterprise system’s code. Connectivity becomes the responsibility of the System Integrator. minimizing long term costs and customization. So what happens when the options the system allows just aren't good enough? At this point a company has two choices. Web Services. both of which are not ideal. These systems tend to have the highest level of initial integration cost. Direct Integration – ERP systems include connectivity (communications to plant floor equipment) as part of their product offering.
Key differences between customization and configuration include: • • • • • Customization is always optional. creation of process triggers and workflow. The effect of customization is unpredictable and may require time-consuming stress testing by the implementation team. ERP vendors have tried to reduce the need for customization by providing built-in "configuration" tools to address most customers' needs for changing how the out-of-the-box core system works. The effect of configuration changes on the performance of the system is relatively predictable and is largely the responsibility of the ERP vendor. purchase approval rules. a consulting team is responsible for the entire ERP implementation including: 1. etc. whereas some degree of configuration (e. specialist advice to improve how the ERP is used in the business. organizational trees. system optimization. Configuration is available to all customers. Some customizations (e. Examples of customization includes creating processes and reports for compliance.g. 3. Typically. whereas customization usually requires some element of programming and/or changes to table structures or views. whereas customization allows an individual customer to implement proprietary "market-beating" processes. Configuration changes are almost always guaranteed to survive upgrades to new software versions. and assistance writing reports. 5. ERP packages have historically included full source code and shipped with vendor-supported team IDEs for customizing and extending the delivered code. Large companies. will often spend considerably more on the implementation than the cost of the user licenses— three to five times more is not uncommon for a multi-site implementation. Unlike most single-purpose applications.g. code that uses pre-defined "hooks" that are called . selecting planning training testing implementation delivery of any customized modules. or assembling a cross-functional solution by integrating multiple "best of breed" applications. For most mid-sized companies. This results in many organizations offering consulting services for ERP implementation. 4. During the early years of ERP the guarantee of mature tools and support for extensive customization was an important sales argument when a potential customer was considering developing their own unique solution in-house. 2. the cost of the implementation will range from around the list price of the ERP user licenses to up to twice this amount (depending on the level of customization required). and especially those with multiple sites or countries.. additional product training. complex data extracts or implementing Business Intelligence.Consulting services Many organizations do not have sufficient internal skills to implement an ERP project. setting up cost/profit centre structures. 6. Configuration changes tend to be recorded as entries in vendor-supplied data tables.) may be needed before the software will work at all. "Core system" customization vs configuration Increasingly.
g. cost and profit at a granular level. customizing an ERP package can be unexpectedly expensive and complicated. e. marketing and sales. Integration among different functional areas to ensure proper communication. Tasks that need to interface with one another may involve: • • • • • • • • ERP systems connect the necessary software in order for accurate forecasting to be done. Extensions In this context. customizing an ERP suite gives the scope to implement secret recipes for excellence in specific areas while ensuring that industry best practices are achieved in less sensitive areas. though they will still need to be retested.g. human resource. from invoice through cash receipt Managing inter-dependencies of complex processes bill of materials Tracking the three-way match between purchase orders (what was ordered). and costing (what the vendor invoiced) The accounting for all of these tasks: tracking the revenue. because they mainly address static data). a large manufacturer may find itself with many software applications that cannot communicate or interface effectively with one another. However. using scanners. More extensive customizations (e. Advantages In the absence of an ERP system. "Extensions" refers to ways that an ERP environment can be "extended" (supplemented) with third-party programs. from acceptance through fulfillment The revenue cycle. those involving changes to fundamental data structures) will be overwritten during upgrades and must be reimplemented manually. • • archiving. productivity and efficiency Design engineering (how to best make the product) Order tracking. ERP Systems centralize the data in one place. and tends to delay delivery of the obvious benefits of an integrated system. performing transactional data captures. and manufacturing applications Permits control of business processes that cross functional boundaries . Benefits of this include: • • Eliminates the problem of synchronizing changes between multiple systems consolidation of finance. because ERP applications typically contain sophisticated rules that control how data can be created or changed. By this analysis. reporting and republishing (these are easiest to achieve. tills or RFIDs (also relatively easy because they touch existing data).g. Nevertheless. e.before/after displaying data screens) will survive upgrades. inventory receipts (what arrived). This allows inventory levels to be kept at maximum efficiency and the company to be more profitable. It is technically easy to expose most ERP transactions to outside programs that do other things. some such functions can be very difficult to implement.
A data-tampering scenario. Some of the issues concerning ERP in Indian Market are as follows: . anytime to make proper decisions. Resistance in sharing sensitive internal information between departments can reduce the effectiveness of the software. switching costs are very high for any one of the partners (reducing flexibility and strategic control at the corporate level). Shorten production lead time and delivery time Facilitating business learning. ERP systems typically provide functionality for implementing internal controls to prevent actions of this kind.) ERPs are often seen as too rigid and too difficult to adapt to the specific workflow and business process of some companies—this is cited as one of the main causes of their failure. educational institutions and companies are constantly working towards promoting and expanding the IT market. Once a system is established. ERP systems can be very expensive. for example. then over time "dirty data" will reduce the reliability of some applications. lines of responsibility. independent resources. penetration future opportunities and challenges in India India is a well known player in the ERP market. and building common visions Some security features are included within an ERP system to protect against both outsider crime. real time information is available to management anywhere.The governments.• • • • Provides top-down view of the enterprise (no "islands of information"). might involve a disgruntled employee intentionally modifying prices to below-the-break-even point in order to attempt to interfere with the company's profit or other sabotage. ERP vendors are also moving toward better integration with other kinds of information security tools. In this context ERP holds lot of promises both in terms of supply and demand. Reduces the risk of loss of sensitive data by consolidating multiple permissions and security models into a single structure. Re-engineering of business processes to fit the "industry standard" prescribed by the ERP system may lead to a loss of competitive advantage. such as embezzlement. Disadvantages • • • • • • • • • Customization of the ERP software is limited. A company can achieve minimum standards. such as industrial espionage. (This has led to a new category of "ERP light" solutions. Many of the integrated links need high accuracy in other applications to work effectively. Some large organizations may have multiple departments with separate. and employee morale. and insider crime. India occupies a promising position in the whole of IT market . ERP's Scope. etc. empowering. and consolidation into a single enterprise may yield limited benefits. The blurring of company boundaries can cause problems in accountability. chains-of-command. missions. There are some issues to worry about and some others which deserve appreciation.
They were not given the due importance and treated just like another supporting function. This problem in itself helped to get another important solution. However doing it all on sudden is a difficult task. There was demand only for top notch services and professionals.But when it . This indirectly created the awareness among companies.ERP penetration on a vast scale in India? and venues. No doubt change is inevitable and an element for growth. They learned more on ERP and realized its diverse applications. This was not only the case in India but else elsewhere in the globe. 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. This is advantageous for the companies that go for ERP at the first instance . This is definitely appreciable. It was well evident that ERP market could boom and give the necessary impetus to stakeholders. penetration in terms of sectors like education. economical and overall). The fate of the businesses that have already implemented and deployed ERP remains a big question mark. The Y2K problem and other diminishing opportunities of IT professionals were seen as a big challenge to the IT market. This proved to be a biggest challenge to the nation who were banking (and are still) on IT skills for development aspects (individual. This naturally led to improvement in the quality of services offered. employment and the state run offices. Technical factors Secondly ERP in the nation calls for a restructuring in the technical aspects. Case ERP in India got more and more competitive. The ERP implementation in India demanded more than the custom erp India module. However it would be next only to impossible to change even before the current change has stabilized in the market. Such an improvement increased the competition among various players. The unrealistic deadlines and time pressures further add agony to this menace. As explained earlier the gradual demand for ERP increased with a slump in the software market. Once this got stabilized there was no looking back. The end user was getting assured that he would be receiving the best services for the money invested. The slump of the IT sector would add drudgery and smash the hopes of so many individuals and companies. The ERP experts will definitely be able to restructure the ERP systems with the help of resources and expertise available with them. ERP software programs were initially used only for back office functions. The demand and supply gradually transformed from general to enterprise resource market. 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. Compelling them to suddenly change will land things in a mess because there will be lot of confusions for the vendors. However this did not mean that mediocre could survive in the market. There are practical difficulties when it comes to this issue. Reasons like lack of awareness formed one part while other reasons were costs and technical difficulties. manufacturers and end-users. Finally they resorted to use ERP for the whole of the company and stopped the idea of restricting it to mere back office functions. Firstly this paved way for more prospects in ERP market. This naturally meant that the ERP manufacturers and vendors had to increase the functionalities and scope of the application. They must have been working with different requirements till then. As discussed earlier ERP was initially restricted to back office functions and later spread its wings to all the operations in the enterprise.
Conclusion The ERP market in India is definitely promising. However some of them are keeping quiet due to the risks involved besides the unforeseen expenses and losses. strong balance sheet. We apply new thinking to create simple. the world's largest web-based global trading community and expert capabilities and services. trusted experiences with technology. Ariba enables more efficient and effective buying. improving the way our customers work. solid customer relationships. and high-fit solutions into a value proposition unmatched by other vendors. Hewlett-Packard Company HP is a technology company operating in over 170 countries helping companies addresses their challenges. Some bigger companies still hesitate to invest in ERP due to the exorbitant costs. at 600 locations Ariba. Consona Corporation Backed by an experienced management team and deep financial resources. Consona combines an aggressive acquisition program. It is indeed encouraging to find that a vast majority of them have realized its benefits and have determined to go for 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. selling. They can decide to stick on to change but it will cost them heavily. in 40 countries. However India has got a long way to go when it comes to Improving ERP in terms of technology. The effectiveness of the replacement is an important issue. . scope and applicability in terms of opportunities List of Vendors companies Apriso Cor Apriso serves more than 160 of the world's largest manufacturing organizations. Finance This is another important determinant of ERP market in India. They can work on to find some replacement technology rather than going for an all round change. HP and Intel Hewlett-Packard is one of the world's largest computer companies and the foremost producer of test and measurement instruments. Inc. and realize their business goals. and cash management with software as a service (SaaS) commerce technology.
and MRO. They provide value-added software. and maintain.IBM At IBM. Inc. business and consumer productivity applications. and interactive media programs. Infor Infor acquires and develops functionally rich software backed by domain experts and then makes it better through continuous innovation & faster implementation options. Microsoft Microsoft products include operating systems for personal computers. One of only 6 to earn SAP Global Hosting Partner status. EAM. including SAP consultancy. development and manufacture of the industry's most advanced information technologies. licensing. Lucid Imagination Lucid Imagination is a commercial company dedicated to supporting and promoting search using Apache Lucene/Solr open source technologies. server applications for client/server environments. In a few short years. IFS Optimized for ERP. single source solution with multiple location. networking systems. language and currency capabilities. Noetix Corporation Noetix provides instant operational reporting and packaged analytics for Oracle Applications. and Internet platform and development tools. storage devices and microelectronics. customer support and education. EnterpriseIQ is the best industry specific solution available. implement. . including computer systems. Designed as a scalable. meet regulatory requirements. and take advantage of new business opportunities. training and more. We offer a full-scope of SAP services. Infor has become the third largest provider of business software. itelligence. we strive to lead in the creation. IFS' industryfocused software solutions help leading companies improve profitability. Our patented technology and lean architecture deliver the lowest cost BI solution to acquire. commercial-grade support subscriptions. mid-market SAP provider. IQMS IQMS offers the innovative EnterpriseIQ ERP software for the manufacturing industry. itelligence is a global. managed hosting. software. high-level consulting.
com provides manufacturing IT and business professionals with information on ERP technology and best practices in the manufacturing industry with the latest news. webcasts and more. improve productivity and meet regulatory mandates. giving customers the confidence to start benefiting from virtualization now. www.Oracle Corporation UK Ltd Oracle (NASDAQ: ORCL) is the world's most complete. open. SAPAG SAP's vision is for companies of all sizes to become best-run businesses. value.SageERPsolutions. SAP is the recognized leader in providing collaborative business solutions for all types of industries and for every major market. To learn more please visit www. technical advice.com Sage North America At Sage. and ease of deployment in the dynamic data center of today and in the future. case studies. partners. streamline processes. and data quality. Founded in 1972. Talend makes data integration solutions available to organizations of all sizes. white papers.plex. VMwareand Intel VMware and Intel work together to deliver reliability. and integrated business software and hardware systems company. helping manufacturers cut costs. for all integration needs: integration between operational systems. Our range of business software and services is continually evolving as we innovate to answer our customers’ needs. visit oracle. Best-run businesses transform rigid value chains into dynamic business networks of customers.com Plex Systems Plex Systems develops Plex Online ERP. Market share 2005 according to Gartner Dataquest . SearchManufacturingERP SearchManufacturingERP. migration. we are passionate about helping our customers achieve their ambitions. Talend The recognized leader in open source data integration. and suppliers.com. For more information about Oracle. ETL. SAP America Inc. a comprehensive Software as a Service (SaaS) solution that covers the entire enterprise.
22 OBJECTIVES 1) Finding the scope of ERP for small and medium Enterprises in Dehradun.48 14. .25 7. 2)Studying the organizational perception for different ERP vendors.33 21.38 17.Vendor 1 SAP 2 Oracle Applications 3 The Sage Group 4 Microsoft Dynamics 5 SSA Global Technologies Revenue Million$ 1949 1314 1121 916 464 Market Share% 30.
personal characteristics and other descriptive items. knowledge. To carry on the research I will use the following methods:1) Primary data collection Method:a) Questionnaire b) Interviews 2) Secondary Method:a) Website search b) Books c) Journal . Survey can provide data on attitudes. questionnaire administration and data analysis. In other words research methodology is an Endeavour to discover answers to intellectual and practical problems through the application of scientific method. It is the most common method of collecting primary data for marketing decisions. questionnaire design. feelings. Survey research is concerned with administration of questionnaires (interviewing). past and intended behavior. The survey research must be concerned with sampling. beliefs. Research Design: Survey research is the systematic gathering of information from respondents for the purpose of understanding and/or predicting some aspects of the behavior of the population of interest. ownership.METHODOLOGY Research methodology is the systematic process of collecting and analyzing information (data) in order to increase our understanding of the phenomenon about which we are concerned or interested.
net.en.com www.BIBLIOGRAPHY www.erp.com www.com www.wikipedia.erpwire.com www.scribd.org .google.