Overview of Enterprise Resources &

Business Functions
 AKTUTHEINTACTONE12 JUL 2019 1 COMMENT
ERP stands for Enterprise Resource Planning. ERP software is comprised of
powerful and strategic business process management tools that can be used to manage
information within an organization. While every company and organization operating
today is different, they all face a common challenge: in order to stay competitive in
today’s business environment, they need a dependable and efficient way to store and
access information. That’s where ERP systems come into play. ERP systems integrate
all facets of an enterprise into one comprehensive information system that can be
accessed by individuals across an entire organization.

With effective ERP software in place, business owners and leaders can automate and
streamline tedious back office tasks, help employees become more productive and
successful in their roles, and get real-time visibility into the inner workings of their
operations. This resource will provide you with an in-depth overview on the topic of
Enterprise Resource Planning.

Basic ERP Concepts & Glossary of Terms

There are hundreds of concepts and terms that relate to enterprise resource planning,
but here are ten worth understanding now, before you decide whether you want to
implement an ERP solution at your business:

 Enterprise Resource Planning (ERP): Business process management tools

that can be used to manage information across an organization.
 On-Premise ERP: ERP software that is installed locally on your hardware and
servers, and managed by your IT staff.
 Cloud-Based ERP: ERP software that exists and is managed off-site by your
provider.
 Supply Chain Management: the flow of goods and services from origin point to
point of consumption.
 Third-Party Vendors: Businesses or partners that can be integrated into your
ERP system.
 Capacity Requirements Planning: A method used to determine the available
production capacity of a company.
 Mobility Solutions: The ability to access your data through your ERP from
anywhere, and by using mobile devices.
 ERP Deployment Options: The types of ERP system you can implement at your
organization.
 Business Architecture: How an organization is structured; all the moving parts.
 Customer Relationship Management: Tools that businesses use to manage
interactions with customers.

ERP System
 An ERP system is made up of applications and tools that help all areas of your business
communicate with each other more effectively. ERP systems integrate all facets of an
enterprise into one comprehensive information system. Employees in planning and
scheduling, for example, have access to the same data as the staff in financial
management for their specific needs. All data is available in real-time, which enables
employees to make faster, more informed business decisions. With ERP systems, all
vital business functions—estimating, production, finance, human resources, marketing,
sales, purchasing—share a central source of up-to-the-minute information. Enterprise
resource planning systems streamline the collection, storage and use of your
organization’s data. The right ERP system can help you collect and store data into one
centralized place from areas such as:

 Finance & Accounting

 Human Resources
 Customer Relationship Management
 Production Management
 Business Intelligence
 Warehouse Management
 Inventory Management
 Supply Chain Management
 Point-of-Sale (POS)
 eCommerce

Primary Benefits of ERP Systems

Why are more businesses of all sizes implementing ERP systems today than ever
before? Here are some of the main reasons and benefits why organizations use ERP
systems:

 Finance & Accounting

 Provide business leaders with real-time visibility into their operations.
 Provide business leaders and teams with instant access to their global supply
chains.
 Enable business leaders to identify challenges, uncover opportunities, and make
faster decisions that impact different areas of their businesses.
 Help automate and streamline tedious tasks and redundant processes.
 Give employees the tools and data they need to be successful.
 Provide a single point of truth for organizations.
 Can often be accessed from anywhere (off-site and from mobile devices).
 Help increase productivity among your team.
 Make it easier for teams to collaborate with each other, and with third-party
vendors.
 Offer powerful reporting and forecasting tools that you can use to make informed
decisions about the future of your business.
 Keep data secure, and help you ensure that your business continues to operate
in compliance with global regulatory laws and guidelines.

How To Decide If/When Your Business Needs ERP

 Every business is unique and faces different challenges at different times, so the
question is, how do you decide if and when investing in Enterprise Resource Planning is
right for your business?

If you’re able to check off most of the items on this list, it’s probably safe to start
evaluating ERP software providers and working to allocate the resources needed for
deployment:

 Your team members are spending too much time on tasks you know could be
automated and streamlined.
 You don’t have easy access into the data you need to make informed decisions
about your business.
 You work with vendors and third-party applications across the globe.
 You have a lot of different software tools and processes that you’ve adopted and
implemented for your business over the years, but they are not connected to each other.
 You don’t know what your inventory levels really look like on a daily basis.
 You’re personally spending too much time searching for information, trying to
boost productivity and efficiencies, and integrating new tools that are needed in order to
scale. Your teams can’t easily collaborate or share information with each other.
 You can’t access essential business data and information when you’re off-site.
 You’re having trouble keeping up with changes in regulatory compliance.
 You’re finding or addressing problems after it’s too late; in other words, you’re not
able to be as proactive as you’d like when it comes to identifying problems that need to
be fixed in order to keep your operations running smoothly.


Classification of Business Process
 A business process or business method is a collection of related, structured
activities or tasks by people or equipment which in a specific sequence produce a
service or product (serves a particular business goal) for a particular customer or
customers. Business processes occur at all organizational levels and may or may
not be visible to the customers. A business process may often be visualized
(modeled) as a flowchart of a sequence of activities with interleaving decision
points or as a process matrix of a sequence of activities with relevance rules
based on data in the process. The benefits of using business processes include
improved customer satisfaction and improved agility for reacting to rapid market
change. Process-oriented organizations break down the barriers of structural
departments and try to avoid functional silos.
 Broadly speaking, business processes can be organized into three types,
according to von Rosing et al.:
 Operational processes which constitute the core business and create the
primary value stream, e.g., taking orders from customers, opening an account,
and manufacturing a component
 Management processes the processes that oversee operational processes,
including corporate governance, budgetary oversight, and employee oversight
 Supporting processes which support the core operational processes, e.g.,
accounting, recruitment, call center, technical support, and safety training
 A slightly different approach to these three types is offered by Kirchmer:
  Operational processes, which focus on properly executing the operational tasks
of an entity; this is where personnel “get the things done”
 Management processes, which ensure that the operational processes are
conducted appropriately; this is where managers “ensure efficient and effective
work processes”
 Governance processes, which ensure the entity is operating in full compliance
with necessary legal regulations, guidelines, and shareholder expectations; this is
where executives ensure the “rules and guidelines for business success” are
followed
 A complex business process may be decomposed into several sub processes,
which have their own attributes but also contribute to achieving the overall goal of
the business. The analysis of business processes typically includes the mapping
or modeling of processes and sub-processes down to activity/task level.
Processes can be modeled through a large number of methods and techniques.
 For instance, the Business Process Modeling Notation is a business process
modeling technique that can be used for drawing business processes in a
visualized workflow. While decomposing processes into process types and
categories can be useful, care must be taken in doing so as there may be
crossover. In the end, all processes are part of a largely unified outcome, one
of “customer value creation.” This goal is expedited with business process
management, which aims to analyze, improve, and enact business processes.

Business Process
Management System
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Managing business processes is a huge challenge in most organizations. Businesses aren’t
investing enough efforts in streamlining their business processes due to the lack of awareness
about its repercussions.

Business Process Management is how a company creates, edits, and analyzes the
predictable processes that make up the core of its business.

Each department in a company is responsible for taking some raw material or data and
transforming it into something else. There may be a dozen or more core processes that each
department handles.

With Business Process Management, a company takes a step back and looks at all of these
processes in total and individually. It analyzes the current state and identifies areas of
improvement to create a more efficient and effective organization.

A business process is any sequence of events or tasks that must be performed for a business
to operate. For example, a customer’s purchase resulting in delivery is a key business process
that exists in many organizations.
 When left unorganized and unsystematized, poor business processes can lead to mayhem. At
the individual level, people only see one part of a process, and very few can scan out and see
the full effects of a process, where it starts and ends, the key data needed, and where potential
bottlenecks and inefficiencies lie.

Unmanaged, chaotic processes hurt business and lead to one or more of these scenarios:

 Time wasted
 More errors
 Increased blame
 Lack of data
 Demoralized employees

Applying business process management organizations can improve their processes and keep
all aspects of operations running optimally.

Business Process Management Life Cycle:

Step 1: Design

Most processes include a form to collect data and a workflow to process it. Build your form
and identify who will own each task in the workflow.

Step 2: Model

Represent the process in a visual layout. Fix details like deadlines and conditions to give a
clear idea of the sequence of events, and the flow of data through the process.
 Step 3: Execute

Execute the process by testing it live with a small group first and then open it up to all users.
Make sure you restrict access to sensitive information.

Step 4: Monitor

Keep an eye on the process as it runs through the workflow. Use the right metrics to identify
progress, measure efficiency, and locate bottlenecks.

Step 5: Optimize

As you analyze, notice any changes that need to be done to your form or workflow to make
them more efficient. Consider business process improvement steps.

Various Types of Business Process Management?

BPM systems can be categorized based on the purpose that they serve. Here are the three
types of business process management:

Integration-Centric BPM:

This type of business process management system handles processes that primarily jump
between your existing systems (e.g. HRMS, CRM, ERP) without much human involvement.
Integration-centric business process management systems have extensive connectors and API
access to be able to create processes that move fast.

Human-Centric BPM:

Human-centric BPM is for those processes that are primarily executed by humans. These
often have a lot of approvals and tasks performed by individuals. These platforms excel at a
friendly user interface, easy notifications, and quick tracking.

Document-Centric BPM:

These business process management solutions are required when a document (e.g. a contract
or agreement) is at the heart of the process. They enable routing, formatting, verifying, and
getting the document signed as the tasks pass along the workflow.

Most business process management systems will be able to incorporate elements of each of
these, but each one will usually have one specialty.

Benefits of Incorporating Business Process Management

 Gain control of chaotic and unwieldy processes

 Create, map, analyze, and improve business processes
 Run everyday operations more efficiently
 Realize bigger organizational goals
 Move toward digital transformation
 Improve and optimize tangled operations
 Closely track individual items as they move through a workflow

Characteristics and Value of

information in enterprise
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 Information needs to be of high quality to be useful and accurate.  The information

that is input into a data base is presumed to be perfect as well as accurate.  The
information that is accessed is deemed reliable.  Flaws do arise with database design
but do not let something in your control, accurate and reliable data, be one of them.  A
database design that is accurate and reliable will help achieve the development of new
business ideas as well as promoting the organizational goals.
 Completeness is another attribute of high quality information.  Partial information
may as well be incomplete information because it is only a small part of the picture. 
Completeness is as necessary as accuracy when inputting data into a database.
 Consistency is key when entering information into a database.  For example, with a
column for a phone number entry 10 digits is the expected length of the field.  Once
the fields have been set in the database, a number more or less than 10 digits will not
be accepted.  The same applies for any field, whether it is an entry that requires a
number, a series of numbers, an address, or a name, etc.  If the fields are not set to a
specific limit for information then consistency is even more important.
 Uniqueness is the fourth component of high quality information.  In order to add
value to any organization, information must be unique and distinctive.  Information is
a very essential part of any organization and if used properly can make a company
competitive or can keep a company competitive.
 A fifth important aspect of information is timeliness.  New and current data is more
valuable to organizations than old outdated information.  Especially now, in this era
of high technological advances, out-of-date information can keep a company from
achieving their goals or from surviving in a competitive arena.  The information does
not necessarily need to be out of date to have effect, it just needs to not be the most
current.  Real-time information is an element of timeliness.  
 Presentation

 Managerial information is valuable when presented in a way that facilitates decision-

making. Information should not only be given but presented in such a way that the
decision-making aspect becomes obvious.
 Context

 Information for management is highly contextual. Information is valuable to a manger

only if it has a decision-making connotation to it. For example, for a finance manager
any information about the competitor’s product is valueless.
  Expectation

 Information is generally more valuable to management when the information breaks

an expected view or an expected result or an expected’ reaction. Any information that
is unexpected carries a higher value. For example, if a manager has made a marketing
strategy expecting his competitor to launch a product A and before the launch he gets
information that the product to be launched by his competitor is not product A but
product S, then this information has got greater value for him as it is contrary to his
expectation.

Components of an
information System
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An information system is essentially made up of five components hardware, software,
database, network and people. These five components integrate to perform input, process,
output, feedback and control.

Hardware consists of input/output device, processor, operating system and media devices.
Software consists of various programs and procedures. Database consists of data organized in
the required structure. Network consists of hubs, communication media and network devices.
People consist of device operators, network administrators and system specialist.

Information processing consists of input; data process, data storage, output and control.
During input stage data instructions are fed to the systems which during process stage are
worked upon by software programs and other queries. During output stage, data is presented
in structured format and reports.

Classification of Information System

In any given organization information system can be classified based on the usage of the
information. Therefore, an information system in an organization can be divided into
operations support system and management support system.

 Operations support system

In an organization, data input is done by the end user which is processed to generate
information products i.e. reports, which are utilized by internal and or external users. Such a
system is called operation support system.

The purpose of the operation support system is to facilitate business transaction, control
production, support internal as well as external communication and update organization
central database. The operation support system is further divided into a transaction-
processing system, processing control system and enterprise collaboration system.
 Transaction Processing System (TPS)

In manufacturing organization, there are several types of transaction across department.

Typical organizational departments are Sales, Account, Finance, Plant, Engineering, Human
Resource and Marketing. Across which following transaction may occur sales order, sales
return, cash receipts, credit sales; credit slips, material accounting, inventory management,
depreciation accounting, etc.

These transactions can be categorized into batch transaction processing, single transaction
processing and real time transaction processing.

 Process Control System

In a manufacturing organization, certain decisions are made by a computer system without

any manual intervention. In this type of system, critical information is fed to the system on a
real-time basis thereby enabling process control. This kind of systems is referred as process
control systems.

 Enterprise Collaboration System

In recent times, there is more stress on team effort or collaboration across different functional
teams. A system which enables collaborative effort by improving communication and sharing
of data is referred to as an enterprise collaboration system.

 Management Support System

Managers require precise information in a specific format to undertake an organizational

decision. A system which facilitates an efficient decision making process for managers is
called management support system.

Management support systems are essentially categorized as management information system,

decision support system, expert system and accounting information system.

Management information system provides information to manager facilitating the routine

decision-making process. Decision support system provides information to manager
facilitating specific issue related solution.
Characteristics and uses of Decision
Support System

Characteristics of DSS:
(i) DSS incorporate both data and models.

(ii) They are designed to assist managers in their decision processes in semi-structured or
unstructured tasks.

(iii) They support managerial judgment; rather than replacing it.

(iv) DSS improve the effectiveness of the decisions; not the efficiency with which decisions
are being made.

Benefits of DSS:
(i) A DSS enables the solution of complex problems that ordinarily cannot be solved by other
computerized approaches.

(ii) A DSS enables a thorough quantitative analysis in a very short time. Even frequent
changes in a scenario can be evaluated objectively in a timely manner.

(iii) DSS imparts ability to try several different strategies under different configurations,
quickly and objectively.

(iv) Data collection and model construction experimentations are executed with active users’
participation; thus greatly facilitating communication among managers.

(v) Routine application of DSS results in reducing or eliminating the cost of wrong decisions.
Thus decisions are of a high quality and have a greater chance of successful implementation.

ERP/U1 Topic 7 Executive information System

AKTUTHEINTACTONE12 JUL 2019 1 COMMENT
An Executive Information System can be defined as a specialized Decision Support
System. This type of the system generally includes the various hardware, software, data,
procedures and the people. With the help of all this, the top level executives get a great
support in taking and performing the various types of the decisions. The executive
information system plays a very important role in obtaining the data from the different
sources, then help in the integration and the aggregation of this data. After performing these
steps the resulting information is displayed in such a pattern that is very easy to understand.
Executive information system is ‘a computer based system that serves the information that is
needed by the various top executives. It provides very rapid access to the timely information
and also offers the direct access to the different management reports.’

Executive Information System is very user friendly in the nature. It is supported at a large
extent by the graphics.

Executive support system can be defined as the comprehensive executive support system that
goes beyond the Executive Information System and also includes communications, office
automation, analysis support etc.

According to Watson, Executive Information System / executive support system depends on

some of the factors that can be summarized as the follows

1. Internal factors
i. Need for the timely information.
ii. Need for the improved communications.
iii. Need for the access to the operational data.
iv. Need for the rapid status updates on the various business activities.
v. Need for the access to the corporate database.
vi. Need for very accurate information.
vii. Need for the ability to identify the various historical trends.

2. External Factors
i. Increasing and intensifying the global competition.
ii. Rapidly changing the business environment.
iii. Need to be more pro active.
iv. Need to access the external database.
v. Increasing the various government regulations.

Characteristics of the Executive support system/ Executive Information System

1. Informational characteristics
i. Flexibility and ease of use.
ii. Provides the timely information with the short response time and also with the quick
retrieval.
iii. Produces the correct information.
iv. Produces the relevant information.
v. Produces the validated information.

2. User interface/orientation characteristics

i. Consists of the sophisticated self help.
ii. Contains the user friendly interfaces consisting of the graphic user.
iii. Can be used from many places.
iv. Offers secure reliable, confidential access along with the access procedure.
v. Is very much customized.
vi. Suites the management style of the individual executives.

3. Managerial / executive characteristics

i. Supports the over all vision, mission and the strategy.
ii. Provides the support for the strategic management.
iii. Sometimes helps to deal with the situations that have a high degree of risk.
iv. Is linked to the value added business processes.
v. Supports the need/ access for/ to the external data/ databases.
vi. Is very much result oriented in the nature.

Executive Information System / Executive Support System capabilities

1. Helps in accessing the aggregated or macro or global information.
2. Provides the user with an option to use the external data extensively.
3. Enables analysis of the address and the hoc queries.
4. Shows the trends, the ratios and the various deviations.
5. Helps in incorporating the graphic and the text in the same display, which helps to have a
better view.
6. It helps in the assessment of the historical as also the latest data.
7. Problem indicators can be highlighted with the help of the Executive Information System /
executive support system.
8. Open ended problem explanation with the written interpretations can be done with the help
of the Executive Information System / executive support system.
9. Offers management by the exception reports.
10. Utilizes the hyper text and the hyper media.
11. Offers generalized computing.
12. Offers telecommunications capacity.

Executive Information System / Executive Support System benefits

1. Achievement of the various organizational objectives.
2. Facilitates access to the information by integrating many sources of the data.
3. Facilitates broad, aggregated perspective and the context.
4. Offers broad highly aggregated information.
5. User’s productivity is also improved to a large extent.
6. Communication capability and the quality are increased.
7. Provides with the better strategic planning and the control.
8. Facilitates pro active rather than a reactive response.
9. Provides the competitive advantage.
10. Encourages the development of a more open and active information culture.
11. The cause of a particular problem can be founded.
 Management information System
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MIS is the use of information technology, people, and business processes to record, store and
process data to produce information that decision makers can use to make day to day
decisions.

MIS is the acronym for Management Information Systems. In a nutshell, MIS is a

collection of systems, hardware, procedures and people that all work together to process,
store, and produce information that is useful to the organization.

The Need for MIS

The following are some of the justifications for having an MIS system

 Decision makers need information to make effective decisions. Management

Information Systems (MIS) make this possible.
 MIS systems facilitate communication within and outside the
organization: Employees within the organization are able to easily access the required
information for the day to day operations. Facilitates such as Short Message Service (SMS) &
Email make it possible to communicate with customers and suppliers from within the MIS
system that an organization is using.
 Record keeping: Management information systems record all business transactions
of an organization and provide a reference point for the transactions.

Components of MIS
The major components of a typical management information system are;

 People: People who use the information system

 Data: The data that the information system records
 Business Procedures: Procedures put in place on how to record, store and analyze
data
 Hardware: These include servers, workstations, networking equipment, printers, etc.
 Software: These are programs used to handle the data. These include programs such
as spreadsheet programs, database software, etc.

Automation and Structuring of

Business Processes
 AKTUTHEINTACTONE12 JUL 2019 1 COMMENT

A management characterizes an organizational process structure focused on final

delivery of products and services that are performed by processes along the value chain.
 Thus, the purpose of the process structure is moving away from management based on
separate departments, disjointed or hindered by the distance between hierarchical
levels.

In the same way that a process must flow, avoiding bottlenecks and waste, seeking
efficiency and effectiveness in an organizational process structure, the value created by
the company is managed in a way that a process always delivers to the next step all that
they need to progress efficiently.

Thus, an area or department will be responsible for a particular process from start to
finish.

Determining factors of an organizational process structure

Some elements must be established to succeed in implementing an organizational

process structure.

First, there must be a culture of processes installed in the company or, at least,
everyone should be aware of what the business processes are. Moreover, it is
necessary to have an objective consensus about the concept of the value of production
within the company, as well as the delivery to the end customer.

Therefore, it is determinate to keep in mind the importance of carrying out each process
with quality, make it clear what skills and knowledge are necessary to perform each
process and realize that a process has an influence on others and can interfere with the
results.

For all of this to happen in an organized manner, it is critical to formally define the
owners of processes, document them properly, systematically and continuously make
measurements of all of them and their results.

Only then can an organizational process structure be able to enable decision-making

based on the performance of each process.

In this context, an agile BPM tool, that’s intuitive and brings more fluidity to
communication and transparency to information is extremely necessary.

Functions of an organizational process structure

When defining an organizational process architecture, some tasks must be implemented

in the company, check them out:

Sponsor process management

It is necessary that a member of the senior management of the company is responsible

for sponsoring and encouraging process management. Among its functions, we can
highlight:

 Defining the vision of process management.

 Encouraging continued improvement.
 Directing BPM initiatives.

Process Owner

It is the employee directly responsible for a process, its important to know who this is
and how they perform.

Process Design Manager

In this case, the employee is responsible for conducting a process management project
to make it better. It is subject to the decisions and guidelines of the process office.

Process Analyst

This developer, as the functions name suggests, should be alert and always analyzing
the processes and proposing improvements. His role includes giving full support to
process owners, so they have all the necessary information and data that will help them
make decisions.

Process Architect

With a broader view, the process architect has an important role in the organizational
process structure; they should ensure that the architecture is maintained properly and
within reference standards or even suggest changes and improvements that bring
results to generate value for the company.

Business Analyst

Unlike the process analyst, this employee analyzes the technology demands that the
company needs to manage processes, seeking the most appropriate solutions.

Specialist

They are experienced employees and should be closely linked to improvement initiative
processes. Their role is crucial in helping the other professionals to have great
knowledge about the business

An organizational process structure only works if the company understands the concept.
Also, the company should ensure that they will not ignore initiatives, and they occur in a
coordinated manner, with a common goal aligned with the top management of the
organization.

For this, the process empowerment office can be an excellent addition to ensure the
success of a process structured organization.
 Business Process Re-Engineering
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The Business Process Re-engineering or BPR is the analysis and redesign of core business
processes to achieve the substantial improvements in its performance, productivity, and
quality. The business process refers to the set of interlinked tasks or activities performed to
achieve a specified outcome.

Simply, the business process reengineering means to change the way an individual performs
the work such that better results are accomplished. The purpose of business process
reengineering is to redesign the workflows in order to dramatically improve the customer
service, achieve higher levels of efficiency, cut operational costs and become a world-class
competitor.

The business process re-engineering involves a series of steps. These are:

Step 1: Define Objectives and Framework

Step 2: Identify Customer Needs

Step 3: Study the existing business process

Step 4: Formulate a redesign business plan

Step 5: Implement the Redesign Plan

The business process is required to be re-engineered because of the following reasons:

 The processes the company is using might have become outdated or holds no
relevance in the current market scenario.
 Often, the sub-divisions in the organization aims at improving their respective
division performance and overlook the resultant effects on the other departments. This might
lead to the underperformance of the firm as a whole.
 Due to the departmentalization, each employee focuses on the performance of his
respective department and may overlook the critical issues emerging in other areas of the
firm, and therefore, the need for re-engineering arises so that the role of the employees could
be broadened and shall be made more responsible towards the firm.
 The existing business process could be lengthy, time-consuming, costly, obsolete,
therefore, is required to be redesigned to match it with the current business requirements.
 The technology keeps on updating and in order to catch up with it, reengineering is
a must.
 Thus, the business process re-engineering focuses on obtaining the quantum gains in terms of
cost, time, output, quality and responsiveness towards customers. Also, it emphasizes on
simplifying and streamlining the business process by eliminating the unnecessary or time-
consuming business activities and speeding up the workflow by making the use of high-tech
systems.

The Business process re-engineering comprises of following steps:

1. Define Objectives and Framework: First of all, the objective of re-engineering must

be defined in the quantitative and qualitative terms. The objectives are the end results that the
management desires after the reengineering. Once the objectives are defined, the need for
change should be well communicated to the employees because, the success of BPR depends
on the readiness of the employees to accept the change.
2. Identify Customer Needs: While, redesigning the business process the needs of the
customers must be taken into prior consideration. The process shall be redesigned in such a
way that it clearly provides the added value to the customer. One must take the following
parameters into the consideration:
o Type of Customer and customer groups.
o Customer’s expected utilities in product and services
o Customer requirements, buying habits and consuming tendencies.
o Customer problems and expectations about the product or service.
3. Study the Existing Process: Before deciding on the changes to be made in the
existing business process, one must analyze it carefully. The existing process provides a base
for the new process and hence “what” and “why” of the new process can be well designed by
studying the right and wrongs of the existing business plan.
4. Formulate a Redesign Business Plan: Once the existing business process is studied
thoroughly, the required changes are written down on a piece of paper and is converted into
an ideal re-design process. Here, all the changes are chalked down, and the best among all the
alternatives is selected.
5. Implement the Redesign: Finally, the changes are implemented into the redesign
plan to achieve the dramatic improvements. It is the responsibility of both the management
and the designer to operationalize the new process and gain the support of all.

Thus, the business process re-engineering is collection of interrelated tasks or activities

designed to accomplish the specified outcome.

Cross Functional and Integrated

Enterprise Systems
 AKTUTHEINTACTONE12 JUL 2019 1 COMMENT
Business Process
It is a set of logically related activities for accomplishing a specific business result. It is
the manner in which work is organized, coordinated, and focused to produce a valuable
product or service. It sets unique ways to coordinate work, information, and knowledge.
Business processes represents the ways in which management chooses to coordinate
work and shows the concrete work flows of material, information and knowledge in any
organization.

Cross Functional Business Process

A business process, which cross functional areas and requires coordination across
departments are called Cross functional business process. It requires group of
employees from different functional specialties to complete a piece of work .For example
Order fulfillment process. The first process in the order fulfillment is initiated by the sales
department. The order received by the sales department is passed first to accounting
department to ensure the customer can pay for the order either by credit verification or
request for immediate payment prior to shipping. Once the customer credit is
established, the production department pulls the raw materials from

inventory to produce the product .The product is shipped. A bill or invoice will then have
to be generated by the accounting department and a notice is sent to the customer
indicating that the product is shipped. Such systems which support the cross functional
business processes are called cross functional business systems.

Cross-Functional Enterprise Systems

Information systems that cross the boundaries of traditional business functions in order
to reengineer and improve vital business processes all across the enterprise.

The new product development process in a manufacturing company. This is an example

of a business process that must be supported by cross functional systems that cross the
boundaries of several business functions.

There is a strong emphasis in many organizations to develop such composite or cross-

functional information systems that cross the boundaries of traditional business functions
in order to reengineer and improve vital business processes. These organizations view
cross-functional information systems as a strategic way to share information resources
and improve the efficiency and effectiveness of a business, thus helping it attain its
strategic objectives.

Many companies today are using information technology to develop integrated cross-
functional enterprise systems that cross the boundaries of traditional business functions
in order to reengineer and improve vital business processes all across the enterprise.
These organizations

view cross-functional enterprise systems as a strategic way to use IT to share

information resources and improve the efficiency and effectiveness of business
processes, and develop strategic relationships with customers, suppliers, and business
partners.

Business firms are turning to Internet technologies to integrate the flow of information
among their internal business functions and their customers and suppliers. Companies
are using the World Wide Web and their intranets and extranets as the technology
platform for their cross- functional and interorganizational information systems.

UNIT-2

Characteristics of
Enterprise Systems
 AKTUTHEINTACTONE13 JUL 2019 1 COMMENT
Earlier, in large organizations, different information systems were used to serve different
business functions like sales, marketing, production, manufacturing, etc., separately. The
business processes in each business function were disparate and not capable of sharing
information with each other. It was difficult for the managers to assemble the data
fragmented into separate systems in order to present an overall picture of the organization’s
operations and take firm-wide decisions.

At the time a customer places an order, for example, the sales personnel might not be able to
tell him whether the desired items are in inventory or are to be produced. To overcome such
difficulties, in recent years, many organizations have opted to replace the several distinct
information systems with a single integrated system that can support the business activities
for different business functions. Such systems are called enterprise systems.

An enterprise system, also known as enterprise resource planning (ERP) system, is a cross-
functional information system that provides organization-wide coordination and integration
of the key business processes and helps in planning the resources of an organization. With the
help of enterprise resource planning systems, information can flow seamlessly across the
firm. Also, different business processes from sales, production, manufacturing, logistics, and
human resources,can be integrated into organization-wide business processes.

An ERP system is driven by the ERP software suite-a set of integrated software modules–and
a common centralized database. The software modules support the basic business processes
 under different functional areas, and the database stores data from and feeds the data to
various applications supporting the internal business activities.

Some examples of business processes supported by ERP software include accounts payable,
general ledger, cash management and forecasting, personnel administration, payroll, time
management, inventory management, product pricing, billing,etc. Initially, ERP software was
designed for automating a firm’s internal ‘back-office’ business processes, but now, it can
also communicate with customers, suppliers, and other business partners.

For implementing ERP systems, organizations need to identify the business processes to be
automated and then map those processes to the processes provided by ERP systems. All this
requires a great amount of effort. Moreover, organizations may find that the business
processes of these systems are not able to support the way that organization’s business
processes work.

In such cases, the software may need to be customized to satisfy the requirements of the
organizations. This may not only deteriorate the system’s performance but also need
compromising the information and process integration. Thus, to obtain the maximum benefit
from enterprise resource planning software, the organizations should change their way of
working according to the business processes of software instead of customizing the software.

Nowadays, a variety of ERP software offered by different software vendors are available in
the market. Some major enterprise resource planning software along with their vendors are:

ERP Software
ERP Software Vendor

SAP R/3 SAP

Oracle
Oracle
Manufacturing

PeopleSoft Prople

iRenaissance Ross Systems

MFG/Pro QAD

Bann
Triton

Benefits of Enterprise Resource Planning (ERP) Systems

 Communicate the critical firm-wide information on the business performance to

managers all across the organization quickly, so as to enable them to make better decisions
and at the right time.
 Reduce the cost involved in transaction processing, hardware, software, and IT
support staff in a significant manner.
 Improve the quality and efficiency of customer service, production and distribution by
integrating the company’s internal business processes in sales, finance, production,custom
logistics,etc.
 Help to create a more uniform organizational culture where everyone uses similar
type of processes and information to do business.

Enterprise Applications
 AKTUTHEINTACTONE13 JUL 2019 1 COMMENT
Several of the biggest ERP benefits when implementing this type of software:

1. Focused IT Costs
Although ERP is often a large investment, it can unify your IT costs and improve
efficiency. Instead of spending resources on multiple systems that all need dedicated
staff, infrastructure, support teams and licenses, you can focus all these costs into one
ERP. Additionally, if you spend more on disparate systems than you would on a
centralized ERP, you might even save on IT costs overall. Using a single system also
reduces training requirements for end-users, since they only need to learn one system
rather than interacting with numerous individual applications.

While an ERP can include numerous functional areas such as customer resource
management (CRM), accounting, HR management and supply chain management, the
design of the system is to be modular. This lets you use only the pieces that align to your
needs. At the core, an ERP is the glue that binds other systems and their data together.
Some ERPs let you integrate numerous third-party systems into a unified whole.

2. Total Visibility
This benefit of ERP is one of the biggest selling points for the software. ERP allows total
access to every important process in your business by making data from every
department easily accessible to you and your senior management. For example, you
can monitor inventory levels on a daily basis, including future consignments that are yet
to be received and inventory currently in transit. By knowing precisely where you stand
regarding inventory levels, you can control your working capital on a more precise level.

In addition, the availability of all of your company’s information in a centralized location

allows for increased collaboration and more streamlined completion of tasks. This
complete visibility provides more coherent workflows and allows inter-departmental
processes to be easily tracked with maximum efficiency. All of this makes it possible to
make quick decisions in confidence, as you can rest assured that you’re seeing the full,
complete picture at any given moment.

3. Improved Reporting and Planning

Along with improved visibility, better insight is a major advantage of ERP. Implementing
an ERP suite across departments means your organization has a single, unified
reporting system for every process. By having a single source of truth, an ERP system
can readily generate useful reports and analytics at any time. This software gives you
the ability to analyze and compare functions across departments, without the hassle of
multiple spreadsheets and emails. One of the most popular reports involves finances (go
figure). Standard financial reports such as income and cash flow statements generally
are built-in, and custom reports can be quickly generated without IT intervention.

In addition to this, many ERP vendors also offer business intelligence services with their
software. This BI functionality allows businesses to gain a deeper level of analytical
insight into their operations. These insights aid in corporate planning by identifying both
operational strengths and problem areas that need improvement. Providing this kind of
detailed view into a company’s data gives ERP users the ability to make better-informed
decisions based on trends and metrics.

4. Complete Customization
One of the biggest advantages of enterprise resource planning software in the present
day is its modular makeup. Most ERP vendors offer several applications that can be
implemented together according to business needs. Barring a few exceptions, each
application is designed to be able to stand alone or integrate with the larger suite. This
way, your company can pick and choose which components work best and can leave
out what you don’t need.

Another aspect of customization involves how the software is implemented. The two
major deployments are on-premise and through the cloud. With an on-premise system,
physical software must be purchased and installed on all company computers and
servers. With a cloud-based system, the entire software bundle is handled completely
off-site by an ERP provider.

5. Improved Efficiency
Along with reduced IT and training costs, an ERP can reduce the time and effort
required by your workforce to carry out their daily activities. Properly implemented, an
ERP can greatly reduce or eliminate repetitive manual processes, thus freeing up team
members to focus on revenue-affecting tasks. The system likewise can aid in the
adoption and enforcement of industry best-practice processes, aligning all actions
across the enterprise.

6. Customer Service
Your company’s clients also receive ERP system benefits, even if they don’t know it.
Because client information is centralized and streamlined, your sales team will be able to
focus on building and maintaining customer relationships instead of maintaining
spreadsheets. At the end of the day, the number one thing a business should be
concerned about is customer acquisition and retention. Through the end-to-end tracking
and insight offered by an ERP, you can provide better customer interaction from targeted
marketing all the way through late-phase customer service.
Most up-to-date ERP suites also support eCommerce integration. This means your
business will be better able to handle web-based order processing and client
interactions.

7. Data Security and Quality

One of the biggest advantages of an ERP system is data security. After all, at the heart
of the ERP concept is data. Sharing data across functional silos such as customer
service, sales, marketing and business development enhances collaboration throughout
a company. The other side to widespread data access is controlling who can see and
edit the information. ERP solutions have intrinsic controls to ensure the security of your
data.

Further, what helps ERPs maintain a high level of data security is that they provide a
single input system. Merging information from multiple systems often causes conflicts
between sources, but having a single repository of information helps improve the
accuracy, consistency and security of your company’s data.

Both on-premise and cloud-based ERP systems offer your organization a higher degree
of security. The database system the ERP runs off of also enables centralized backups
of your critical and sensitive data. Cloud-based ERP systems, despite what many people
think, offer an extra layer of security. Since all of your company’s data is managed
through the cloud, they employ round-the-clock security experts to ensure their servers
are protected. This makes it far more difficult for hackers to run test attacks like they
would on a private server.

8. Improved Collaboration and Workflows

Collaboration is an essential part of a thriving business. But more often than not,
companies find their teams working in silos simply because collaboration requires more
time and effort. But ERP makes collaboration a piece of cake. An ERP platform
streamlines the process of collaborating with others by providing employees with access
to the data they need when they need it. They do this by providing an interdepartmental
database, where information from each department is funneled into one centralized
location.

This allows for real-time project updates and better communication across the whole
company. With an ERP system in place, every employee has on-demand access to the
entire company’s wealth of data, which allows them to see the big picture. In turn, this
gives your employees the tools they need to make proactive decisions while making
them feel more valued. The net effect on your business is increased efficiency and
reduced operational costs associated with manual data tracking, as well as higher
employee engagement.

9. Standardized Business Processes

Most ERP systems are developed according to industry best practices. These tried-and-
true processes bring major benefits to the table for businesses of all sizes. It also allows
businesses to standardize their own processes and systems, which further enhances
productivity and efficiency.
These processes deliver consistent results that allow you to continually improve the way
in which you operate your organization. And because many processes are automated,
errors and costs are greatly reduced. As a result, there’s less friction and improved
synergy between departments.

10. Facilitated Regulatory Compliance

One of the most difficult ongoing tasks for businesses is meeting compliance
requirements. Maintaining perfect accuracy within your financial records isn’t exactly
easy, but needs to be done nevertheless. ERPs aid in regulatory compliance by virtue of
secure and validated data, combined with built-in reports. These reports can also be
automated to reduce the cost of continual audits. Additionally, many ERP vendors take
specific regulations into account such as the Sarbanes–Oxley Act (SOX) and the
Federal Information Security Management Act (FISMA).

11. Improved Supply Chain Management

For companies that deal with the moving of physical inventory and production, an ERP
system bolsters supply chain management in a variety of ways. This improvement
results in shortened lead times, more on-time deliveries and many other benefits that
enhance the overall operation and success of your business. Through a well-designed
ERP platform, your supply chain can become better and more responsive via improved
demand forecasting, inventory management, procurement and more. A streamlined
supply chain also facilitates manufacturing innovations, which can help you reduce costs
and develop exciting new products that give your business the competitive edge it needs
to stay ahead.

In addition, an ERP can dramatically improve profitability and reduce overages involving
inventory and production. Unified insight into sales, production and delivery schedules
permit stock levels to be optimized rather than relying on “best guess” estimates for
upcoming volumes.

12. Superior Scalability

To ensure the ongoing success of your business, you have to keep an eye on the future.
All too often, businesses fail to plan properly and experience serious growing pains that
pose serious roadblocks to whatever progress they’re enjoying. Having a system in
place that can elegantly and efficiently accommodate your company’s growth is of the
utmost importance, and the right ERP system makes it easy.

Whether you’re expanding your customer base; entering new markets; rolling out new
processes, departments or products; or are otherwise growing your business, adding
new functionality to an ERP platform is easy with the right software vendor. Just make
sure that when you’re speaking to vendors they understand your intentions for growth in
the future.
Features of Enterprise
Resource Planning
ERP is the short form of Enterprise Resource Planning. In an organization there are many
important processes such as customer order fulfillment and manufacturing etc.

ERP uses ERP software applications to automate or advance the performance of an

organization. ERP System

ERP software designed to automate and integrated major/important business process of a

company. ERP system tries to integrate all data and process of an organization. ERP software
perform multiple tasks which integrate different process like functional, department, product
planning, part purchasing, inventory control, product circulation to order tracking.
 Evolution of ERP System
ERP is one of the major part of an industry and using it correctly will help in making the
industry more efficient and optimize their supply chain, however ERP didn’t came to be
suddenly, evolution of ERP occurred in a timely manner and it evolved as time passed and
finally came into the form we know.

It started in the form of a inventory control system in 1960. Looking at how beneficial a
computer based database is for industries and in response to Toyota manufacturing
program Joseph Orlicky developed material requirements planning (MRP) in 1964. The first
company to use MRP was Black & Decker in 1964.

Material requirements planning further evolved to manufacturing resource planning in 1980s

also called MRPII. While MRP was primarily concerned with materials, MRPII was
concerned with the integration of all aspects of the manufacturing process, including
materials, finance and human relations. This then further evolved and finally in 1990’s
Gartner group chipped in the term ERP. Now on the 21st century ERP is also evolved and
ERPII has came into existence.

2000s Extended ERP

1990s Enterprise Resource Planning (ERP)

Manufacturing Resources Planning (MRP

1980s
II)

1970s Material Requirements Planning (MRP I)

1960s Inventory Control Packages

MRP (Material requirements planning)

Evolution of ERP began with MRP. MRP stands for material requirement planning. It was
developed by engineer Joseph Orlicky. MRP is a production planning and inventory control
system that was in use extensively before ERP came in the picture. MRP helps in integrating
data from production schedules from inventory and Bill of Materials (BOM) to calculate
purchasing and shipping costs and schedules for the parts required to build a product. The
first computerized MRP system was tested successfully by Black & Decker in 1964.

MRP is generally used for 3 functions:-

 MRP helps in ensuring that right materials are available for production with right
quantity to avoid shortages.
 MRP helps in reducing waste by maintaining lowest possible materials and product
levels in stock.
 An MRP system helps plan manufacturing functions, delivery schedules and
purchasing.

The main shortcoming of an MRP system is Data Integrity. For successful material
requirements planning the data fed in the system must be accurate or it can cause serious
production and stock errors.

MRP 2.0 (Manufacturing resource planning)

Manufacturing resource planning or MRP 2.0 is an integrated system used by businesses, it is
an upgrade from manufacturing requirement planning, it allows additional data such as
employee and financial needs. The system is designed to centralize, integrate and process
information for effective decision making in scheduling, design engineering, inventory
management and cost control in manufacturing.

It is a computer based system that can create detail production schedules using real time data
to coordinate the arrival of component materials with machine and labor availability.

MRP 2.0 is widely used in industries today by itself but it can also be used as a module of
more extensive ERP systems.

ERP (Enterprise resource planning)

ERP stands for enterprise resource planning. All business have different systems, like
financials to watch the accounts, production to watch productivity, inventory to keep tracks
of your supplies, sales to keep in bringing the customers, services to look into your customer
needs and purchasing to shop for your product, now data of some of these systems are needed
for the functioning of other systems like data of sales system can be needed for production
system which can be needed for finance. Various interfaces are used to transfer data from
sales to manufacturing and than from manufacturing to financial. This can reduce the
efficiency of the company and can cause data loss too.

The function of ERP is to create a common database serving in multiple functional areas so
whenever data of one system is needed for other it can be attained easily. An ERP system
seeks to streamline business operations by integrating the data and refining the processes
required to operate an organization. ERP is business solution software that integrates and
automates the data management of a company’s business processes.

ERP 2.0 (Enterprise resource planning II)

The current step in the evolution of ERP is ERP 2.0. ERP 2.0 comes with all the functions as
ERP with improvement in functionality associated with supply chain management, supplier
relationship management and customer relationship management. All of these tend to
encourage collaboration with entities or companies outside of the original enterprise that
implemented ERP.

ERP II can enable access to information by those outside the company or original entity, e.g.,
a manufacturing plant that allows access to planning information by another plant or its
customers. Software that allows access by those outside the company has more stringent
security plus design to avoid access to certain company information.

Benefits of an Enterprise Systems
Enterprise systems can integrate business processes such as sales, financial
management, human resource management and inventory management into a single
platform that makes it easier for you and your employees to do your work and get
access to key data that you need. Consider the advantages and disadvantages of
enterprise business systems to get the most benefits for your small business.

Better Productivity and Flexibility

The main benefit of an enterprise system is that it makes the jobs of managers and
employees easier. These systems automate repetitive business processes so that
your staff is more productive. For example, these systems might send sales emails,
process employee pay or even place automated inventory orders.

At the same time, these systems help organize key information in a place for easy
access regardless of location. That means your employees will all have access to the
data necessary to do their jobs even if they work from home or do field work.

Easier Business Planning

Another benefit of enterprising systems is that they make it easier to make business
plans and track how your company is reaching its goals. Whether you want to check how
production is going, monitor your business expenses or see customer satisfaction
results, it’s often as easy as taking a look at an online dashboard that groups this
information into easy-to-read charts and tables.

These systems also have alert capabilities that can inform you when potential
problems occur, such as a spike in product defects or a low inventory.

Improved Record Keeping and Compliance

Using enterprise systems can also benefit your company when it comes to record
keeping and compliance. Thanks to built-in security systems, the data you collect in
enterprise systems is less at a risk for loss or theft, although the risk is not zero.

At the same time, that data is of use when you need proof of your business’s
performance for some regulatory body. The University of Scranton suggests that these
systems make it easier to meet the Sarbanes-Oxley Act’s requirements regarding
inventory and asset management.

Cost Challenges of Enterprise Systems

One of the challenges of enterprise systems for small businesses is the cost of
investment, which will ultimately depend on the number of users, level of customization,
license type (perpetual or subscription) and desired application modules. Depending on
the system you choose, you may pay yearly subscription fees and maintenance costs
that go beyond the initial license fee, and you might have to buy new hardware as well.

Generally, cloud-based enterprise systems are more affordable initially. For example,
Software Advice listed an estimated budget of $87,209 for a cloud-based enterprise
system for 21 to 50 users versus $205,533 for a perpetual license.

Additional Work for Implementation

Another challenge is the additional work you’ll have to do to get the system ready for
optimal use in your company. You’ll likely need to customize the modules for what you
need to do in your business, train your employees on how to use the systems and
possibly migrate data from an existing system. At the same time, you’ll have to convince
your employees and managers to actually want to use the system.

All of these require time that you’ll have to take away from other business tasks. This
can be a challenge if you’re already struggling with other demands.

Data Loss and Downtime Risk

While enterprise systems come with security and accessibility benefits, there is a
downside to relying on a single system for your business’s most important processes. If
someone from inside or outside the company hacks your system, you risk that person
getting confidential data. Also, if something in the system fails, your company may
experience downtime that leaves workers unable to do their jobs and customers without
their needs met. You could even lose key information if backups aren’t regularly
performed.

Introduction to Database
Management System
Database: Database is a collection of inter-related data which helps in efficient retrieval,
insertion and deletion of data from database and organizes the data in the form of tables,
views, schemas, reports etc. For Example, university database organizes the data about
students, faculty, and admin staff etc. which helps in efficient retrieval, insertion and deletion
of data from it.

Database Management System: The software which is used to manage database is called

Database Management System (DBMS). For Example, MySQL, Oracle etc. are popular
commercial DBMS used in different applications. DBMS allows users the following tasks:

Data Definition: It helps in creation, modification and removal of definitions that define the
organization of data in database.
 Data Updation: It helps in insertion, modification and deletion of the actual data in the
database.

Data Retrieval: It helps in retrieval of data from the database which can be used by
applications for various purposes.

User Administration: It helps in registering and monitoring users, enforcing data security,
monitoring performance, maintaining data integrity, dealing with concurrency control and
recovering information corrupted by unexpected failure.

Paradigm Shift from File System to DBMS

 File System manages data using files in hard disk. Users are allowed to create, delete, and
update the files according to their requirement. Let us consider the example of file based
University Management System. Data of students is available to their respective
Departments, Academics Section, Result Section, Accounts Section, Hostel Office etc. Some
of the data is common for all sections like Roll No, Name, Father Name, Address and Phone
number of students but some data is available to a particular section only like Hostel
allotment number which is a part of hostel office. Let us discuss the issues with this system:

 Redundancy of data: Data is said to be redundant if same data is copied at many

places. If a student wants to change Phone number, he has to get it updated at various
sections. Similarly, old records must be deleted from all sections representing that student.
 Inconsistency of Data: Data is said to be inconsistent if multiple copies of same data
does not match with each other. If Phone number is different in Accounts Section and
Academics Section, it will be inconsistent. Inconsistency may be because of typing errors or
not updating all copies of same data.
 Difficult Data Access: A user should know the exact location of file to access data,
so the process is very cumbersome and tedious. If user wants to search student hostel
allotment number of a student from 10000 unsorted students’ records, how difficult it can be.
 Unauthorized Access: File System may lead to unauthorized access to data. If a
student gets access to file having his marks, he can change it in unauthorized way.
 No Concurrent Access: The access of same data by multiple users at same time is
known as concurrency. File system does not allow concurrency as data can be accessed by
only one user at a time.
 No Backup and Recovery: File system does not incorporate any backup and
recovery of data if a file is lost or corrupted.

Advantages of DBMS
 DBMS helps in efficient organization of data in database which has following advantages
over typical file system.

 Minimized redundancy and data consistency: Data is normalized in DBMS to

minimize the redundancy which helps in keeping data consistent. For Example, student
information can be kept at one place in DBMS and accessed by different users.
 Simplified Data Access: A user need only name of the relation not exact location to
access data, so the process is very simple.
 Multiple data views: Different views of same data can be created to cater the needs
of different users. For Example, faculty salary information can be hidden from student view
of data but shown in admin view.
 Data Security: Only authorized users are allowed to access the data in DBMS. Also,
data can be encrypted by DBMS which makes it secure.
 Concurrent access to data: Data can be accessed concurrently by different users at
same time in DBMS.
 Backup and Recovery mechanism: DBMS backup and recovery mechanism helps
to avoid data loss and data inconsistency in case of catastrophic failures.

Data Warehousing
The term “Data Warehouse” was first coined by Bill Inmon in 1990. According to Inmon, a
data warehouse is a subject oriented, integrated, time-variant, and non-volatile collection of
data. This data helps analysts to take informed decisions in an organization.

An operational database undergoes frequent changes on a daily basis on account of the

transactions that take place. Suppose a business executive wants to analyze previous feedback
on any data such as a product, a supplier, or any consumer data, then the executive will have
no data available to analyze because the previous data has been updated due to transactions.

A data warehouses provides us generalized and consolidated data in multidimensional view.

Along with generalized and consolidated view of data, a data warehouses also provides us
Online Analytical Processing (OLAP) tools. These tools help us in interactive and effective
analysis of data in a multidimensional space. This analysis results in data generalization and
data mining.

Data mining functions such as association, clustering, classification, prediction can be

integrated with OLAP operations to enhance the interactive mining of knowledge at multiple
level of abstraction. That’s why data warehouse has now become an important platform for
data analysis and online analytical processing.

Understanding a Data Warehouse

 A data warehouse is a database, which is kept separate from the organization’s

operational database.
 There is no frequent updating done in a data warehouse.
 It possesses consolidated historical data, which helps the organization to analyze its
business.
 A data warehouse helps executives to organize, understand, and use their data to take
strategic decisions.
 Data warehouse systems help in the integration of diversity of application systems.
 A data warehouse system helps in consolidated historical data analysis.

Why a Data Warehouse is Separated from Operational Databases

A data warehouses is kept separate from operational databases due to the following reasons −
 An operational database is constructed for well-known tasks and workloads such as
searching particular records, indexing, etc. In contract, data warehouse queries are often
complex and they present a general form of data.
 Operational databases support concurrent processing of multiple transactions.
Concurrency control and recovery mechanisms are required for operational databases to
ensure robustness and consistency of the database.
 An operational database query allows to read and modify operations, while an OLAP
query needs only read only access of stored data.
 An operational database maintains current data. On the other hand, a data warehouse
maintains historical data.

Data Warehouse Features

The key features of a data warehouse are discussed below −

 Subject Oriented: A data warehouse is subject oriented because it provides

information around a subject rather than the organization’s ongoing operations. These
subjects can be product, customers, suppliers, sales, revenue, etc. A data warehouse does not
focus on the ongoing operations, rather it focuses on modelling and analysis of data for
decision making.
 Integrated: A data warehouse is constructed by integrating data from heterogeneous
sources such as relational databases, flat files, etc. This integration enhances the effective
analysis of data.
 Time Variant: The data collected in a data warehouse is identified with a particular
time period. The data in a data warehouse provides information from the historical point of
view.
 Non-volatile: Non-volatile means the previous data is not erased when new data is
added to it. A data warehouse is kept separate from the operational database and therefore
frequent changes in operational database is not reflected in the data warehouse.

Note − A data warehouse does not require transaction processing, recovery, and concurrency
controls, because it is physically stored and separate from the operational database.

Data Warehouse Applications

As discussed before, a data warehouse helps business executives to organize, analyze, and
use their data for decision making. A data warehouse serves as a sole part of a plan-execute-
assess “closed-loop” feedback system for the enterprise management. Data warehouses are
widely used in the following fields −

 Financial services
 Banking services
 Consumer goods
 Retail sectors
 Controlled manufacturing

Types of Data Warehouse

 Information processing, analytical processing, and data mining are the three types of data
warehouse applications that are discussed below −

 Information Processing: A data warehouse allows to process the data stored in it.
The data can be processed by means of querying, basic statistical analysis, reporting using
crosstabs, tables, charts, or graphs.
 Analytical Processing: A data warehouse supports analytical processing of the
information stored in it. The data can be analyzed by means of basic OLAP operations,
including slice-and-dice, drill down, drill up, and pivoting.
 Data Mining: Data mining supports knowledge discovery by finding hidden patterns
and associations, constructing analytical models, performing classification and prediction.
These mining results can be presented using the visualization tools.

Sr.No. Data Warehouse (OLAP) Operational Database(OLTP)

It involves historical processing of

1 It involves day-to-day processing.
information.

OLAP systems are used by

OLTP systems are used by clerks, DBAs,
2 knowledge workers such as
or database professionals.
executives, managers, and analysts.

3 It is used to analyze the business. It is used to run the business.

4 It focuses on Information out. It focuses on Data in.

It is based on Star Schema,

5 Snowflake Schema, and Fact It is based on Entity Relationship Model.
Constellation Schema.

6 It focuses on Information out. It is application oriented.

7 It contains historical data. It contains current data.

It provides summarized and It provides primitive and highly detailed

8
consolidated data. data.

9 It provides summarized and It provides detailed and flat relational

multidimensional view of data. view of data.
 The number of users is in
10 The number of users is in thousands.
hundreds.

The number of records accessed is The number of records accessed is in

11
in millions. tens.

The database size is from 100GB The database size is from 100 MB to 100
12
to 100 TB. GB.

13 These are highly flexible. It provides high performance.

Data warehousing is the process of constructing and using a data warehouse. A data
warehouse is constructed by integrating data from multiple heterogeneous sources that
support analytical reporting, structured and/or ad hoc queries, and decision making. Data
warehousing involves data cleaning, data integration, and data consolidations.

Using Data Warehouse Information

There are decision support technologies that help utilize the data available in a data
warehouse. These technologies help executives to use the warehouse quickly and effectively.
They can gather data, analyze it, and take decisions based on the information present in the
warehouse. The information gathered in a warehouse can be used in any of the following
domains −

 Tuning Production Strategies: The product strategies can be well tuned by

repositioning the products and managing the product portfolios by comparing the sales
quarterly or yearly.
 Customer Analysis: Customer analysis is done by analyzing the customer’s buying
preferences, buying time, budget cycles, etc.
 Operations Analysis: Data warehousing also helps in customer relationship
management, and making environmental corrections. The information also allows us to
analyze business operations.

Integrating Heterogeneous Databases

To integrate heterogeneous databases, we have two approaches −

 Query-driven Approach
 Update-driven Approach

Query-Driven Approach
 This is the traditional approach to integrate heterogeneous databases. This approach was used
to build wrappers and integrators on top of multiple heterogeneous databases. These
integrators are also known as mediators.

Process of Query-Driven Approach

 When a query is issued to a client side, a metadata dictionary translates the query into
an appropriate form for individual heterogeneous sites involved.
 Now these queries are mapped and sent to the local query processor.
 The results from heterogeneous sites are integrated into a global answer set.

Disadvantages

 Query-driven approach needs complex integration and filtering processes.

 This approach is very inefficient.
 It is very expensive for frequent queries.
 This approach is also very expensive for queries that require aggregations.

Update-Driven Approach
This is an alternative to the traditional approach. Today’s data warehouse systems follow
update-driven approach rather than the traditional approach discussed earlier. In update-
driven approach, the information from multiple heterogeneous sources are integrated in
advance and are stored in a warehouse. This information is available for direct querying and
analysis.

Advantages
This approach has the following advantages −

 This approach provide high performance.

 The data is copied, processed, integrated, annotated, summarized and restructured in
semantic data store in advance.
 Query processing does not require an interface to process data at local sources.

Functions of Data Warehouse Tools and Utilities

The following are the functions of data warehouse tools and utilities −

 Data Extraction− Involves gathering data from multiple heterogeneous sources.

 Data Cleaning− Involves finding and correcting the errors in data.
 Data Transformation− Involves converting the data from legacy format to
warehouse format.
 Data Loading− Involves sorting, summarizing, consolidating, checking integrity, and
building indices and partitions.
 Refreshing− Involves updating from data sources to warehouse.
 Note − Data cleaning and data transformation are important steps in improving the quality of
data and data mining results.

Data Mining
There is a huge amount of data available in the Information Industry. This data is of no use
until it is converted into useful information. It is necessary to analyze this huge amount of
data and extract useful information from it.

Extraction of information is not the only process we need to perform; data mining also
involves other processes such as Data Cleaning, Data Integration, Data Transformation, Data
Mining, Pattern Evaluation and Data Presentation. Once all these processes are over, we
would be able to use this information in many applications such as Fraud Detection, Market
Analysis, Production Control, Science Exploration, etc.

Data Mining is defined as extracting information from huge sets of data. In other words, we
can say that data mining is the procedure of mining knowledge from data. The information or
knowledge extracted so can be used for any of the following applications:

 Market Analysis
 Fraud Detection
 Customer Retention
 Production Control
 Science Exploration

Data Mining Applications

Data mining is highly useful in the following domains −

 Market Analysis and Management

 Corporate Analysis & Risk Management
 Fraud Detection

Apart from these, data mining can also be used in the areas of production control, customer
retention, science exploration, sports, astrology, and Internet Web Surf-Aid

Market Analysis and Management

Listed below are the various fields of market where data mining is used −

 Customer Profiling− Data mining helps determine what kind of people buy what
kind of products.
 Identifying Customer Requirements− Data mining helps in identifying the best
products for different customers. It uses prediction to find the factors that may attract new
customers.
 Cross Market Analysis− Data mining performs Association/correlations between
product sales.
 Target Marketing− Data mining helps to find clusters of model customers who share
the same characteristics such as interests, spending habits, income, etc.
 Determining Customer purchasing pattern− Data mining helps in determining
customer purchasing pattern.
 Providing Summary Information− Data mining provides us various
multidimensional summary reports.

Corporate Analysis and Risk Management

Data mining is used in the following fields of the Corporate Sector −

 Finance Planning and Asset Evaluation− It involves cash flow analysis and
prediction, contingent claim analysis to evaluate assets.
 Resource Planning− It involves summarizing and comparing the resources and
spending.
 Competition− It involves monitoring competitors and market directions.

Fraud Detection
Data mining is also used in the fields of credit card services and telecommunication to detect
frauds. In fraud telephone calls, it helps to find the destination of the call, duration of the call,
time of the day or week, etc. It also analyzes the patterns that deviate from expected norms.

Data mining deals with the kind of patterns that can be mined. On the basis of the kind of
data to be mined, there are two categories of functions involved in Data Mining −

 Descriptive
 Classification and Prediction

Descriptive Function
The descriptive function deals with the general properties of data in the database. Here is the
list of descriptive functions −

 Class/Concept Description
 Mining of Frequent Patterns
 Mining of Associations
 Mining of Correlations
 Mining of Clusters

Class/Concept Description
Class/Concept refers to the data to be associated with the classes or concepts. For example, in
a company, the classes of items for sales include computer and printers, and concepts of
customers include big spenders and budget spenders. Such descriptions of a class or a
concept are called class/concept descriptions. These descriptions can be derived by the
following two ways −
 Data Characterization− This refers to summarizing data of class under study. This
class under study is called as Target Class.
 Data Discrimination− It refers to the mapping or classification of a class with some
predefined group or class.

Mining of Frequent Patterns

Frequent patterns are those patterns that occur frequently in transactional data. Here is the list
of kind of frequent patterns −

 Frequent Item Set− It refers to a set of items that frequently appear together, for
example, milk and bread.
 Frequent Subsequence− A sequence of patterns that occur frequently such as
purchasing a camera is followed by memory card.
 Frequent Sub Structure− Substructure refers to different structural forms, such as
graphs, trees, or lattices, which may be combined with item-sets or subsequences.

Mining of Association
Associations are used in retail sales to identify patterns that are frequently purchased
together. This process refers to the process of uncovering the relationship among data and
determining association rules.

For example, a retailer generates an association rule that shows that 70% of time milk is sold
with bread and only 30% of times biscuits are sold with bread.

Mining of Correlations
It is a kind of additional analysis performed to uncover interesting statistical correlations
between associated-attribute-value pairs or between two item sets to analyze that if they have
positive, negative or no effect on each other.

Mining of Clusters
Cluster refers to a group of similar kind of objects. Cluster analysis refers to forming group of
objects that are very similar to each other but are highly different from the objects in other
clusters.

Classification and Prediction

Classification is the process of finding a model that describes the data classes or concepts.
The purpose is to be able to use this model to predict the class of objects whose class label is
unknown. This derived model is based on the analysis of sets of training data. The derived
model can be presented in the following forms −

 Classification (IF-THEN) Rules

 Decision Trees
 Mathematical Formulae
 Neural Networks
 The list of functions involved in these processes are as follows −

 Classification− It predicts the class of objects whose class label is unknown. Its
objective is to find a derived model that describes and distinguishes data classes or concepts.
The Derived Model is based on the analysis set of training data i.e. the data object whose
class label is well known.
 Prediction− It is used to predict missing or unavailable numerical data values rather
than class labels. Regression Analysis is generally used for prediction. Prediction can also be
used for identification of distribution trends based on available data.
 Outlier Analysis− Outliers may be defined as the data objects that do not comply
with the general behavior or model of the data available.
 Evolution Analysis− Evolution analysis refers to the description and model
regularities or trends for objects whose behavior changes over time.

Data Mining Task Primitives

 We can specify a data mining task in the form of a data mining query.
 This query is input to the system.
 A data mining query is defined in terms of data mining task primitives.

Note − These primitives allow us to communicate in an interactive manner with the data
mining system. Here is the list of Data Mining Task Primitives −

 Set of task relevant data to be mined.

 Kind of knowledge to be mined.
 Background knowledge to be used in discovery process.
 Interestingness measures and thresholds for pattern evaluation.
 Representation for visualizing the discovered patterns.

Set of task relevant data to be mined

This is the portion of database in which the user is interested. This portion includes the
following −

 Database Attributes
 Data Warehouse dimensions of interest

Kind of knowledge to be mined

It refers to the kind of functions to be performed. These functions are −

 Characterization
 Discrimination
 Association and Correlation Analysis
 Classification
 Prediction
 Clustering
 Outlier Analysis
 Evolution Analysis

Background knowledge
The background knowledge allows data to be mined at multiple levels of abstraction. For
example, the Concept hierarchies are one of the background knowledge that allows data to be
mined at multiple levels of abstraction.

Interestingness measures and thresholds for pattern evaluation

This is used to evaluate the patterns that are discovered by the process of knowledge
discovery. There are different interesting measures for different kind of knowledge.

Representation for visualizing the discovered patterns

This refers to the form in which discovered patterns are to be displayed. These
representations may include the following. −

 Rules
 Tables
 Charts
 Graphs
 Decision Trees
 Cubes

Data mining is not an easy task, as the algorithms used can get very complex and data is not
always available at one place. It needs to be integrated from various heterogeneous data
sources. These factors also create some issues. Here in this tutorial, we will discuss the major
issues regarding −

 Mining Methodology and User Interaction

 Performance Issues
 Diverse Data Types Issues

The following diagram describes the major issues.

 Mining Methodology and User Interaction Issues

It refers to the following kinds of issues −

 Mining different kinds of knowledge in databases− Different users may be

interested in different kinds of knowledge. Therefore it is necessary for data mining to cover
a broad range of knowledge discovery task.
 Interactive mining of knowledge at multiple levels of abstraction− The data
mining process needs to be interactive because it allows users to focus the search for patterns,
providing and refining data mining requests based on the returned results.
 Incorporation of background knowledge− To guide discovery process and to
express the discovered patterns, the background knowledge can be used. Background
knowledge may be used to express the discovered patterns not only in concise terms but at
multiple levels of abstraction.
 Data mining query languages and ad hoc data mining− Data Mining Query
language that allows the user to describe ad hoc mining tasks, should be integrated with a
data warehouse query language and optimized for efficient and flexible data mining.
 Presentation and visualization of data mining results− Once the patterns are
discovered it needs to be expressed in high level languages, and visual representations. These
representations should be easily understandable.
 Handling noisy or incomplete data− The data cleaning methods are required to
handle the noise and incomplete objects while mining the data regularities. If the data
cleaning methods are not there then the accuracy of the discovered patterns will be poor.
 Pattern evaluation− The patterns discovered should be interesting because either
they represent common knowledge or lack novelty.
 Performance Issues
There can be performance-related issues such as follows −

 Efficiency and scalability of data mining algorithms− In order to effectively extract

the information from huge amount of data in databases, data mining algorithm must be
efficient and scalable.
 Parallel, distributed, and incremental mining algorithms− The factors such as
huge size of databases, wide distribution of data, and complexity of data mining methods
motivate the development of parallel and distributed data mining algorithms. These
algorithms divide the data into partitions which is further processed in a parallel fashion.
Then the results from the partitions is merged. The incremental algorithms, update databases
without mining the data again from scratch.

Diverse Data Types Issues

 Handling of relational and complex types of data− The database may contain
complex data objects, multimedia data objects, spatial data, temporal data etc. It is not
possible for one system to mine all these kind of data.
 Mining information from heterogeneous databases and global information
systems− The data is available at different data sources on LAN or WAN. These data source
may be structured, semi structured or unstructured. Therefore mining the knowledge from
them adds challenges to data mining.

OLTP & OLA

 OLTP (On-line Transaction Processing) is characterized by a large number of short
on-line transactions (INSERT, UPDATE, DELETE). The main emphasis for OLTP
systems is put on very fast query processing, maintaining data integrity in multi-
access environments and an effectiveness measured by number of transactions per
second. In OLTP database there is detailed and current data, and schema used to store
transactional databases is the entity model (usually 3NF).
 OLAP (On-line Analytical Processing) is characterized by relatively low volume of
transactions. Queries are often very complex and involve aggregations. For OLAP
systems a response time is an effectiveness measure. OLAP applications are widely
used by Data Mining techniques. In OLAP database there is aggregated, historical
data, stored in multi-dimensional schemas (usually star schema).
 The following table summarizes the major differences between OLTP and OLAP
system design.

OLTP System  OLAP System 

  Online Transaction Online Analytical
Processing  Processing 
(Operational System) (Data Warehouse)
Operational data; OLTPs are the Consolidation data; OLAP data comes
Source of data
original source of the data. from the various OLTP Databases
 Purpose of To control and run fundamental To help with planning, problem solving,
data business tasks and decision support

Reveals a snapshot of ongoing Multi-dimensional views of various

What the data
business processes kinds of business activities

Inserts and Short and fast inserts and updates Periodic long-running batch jobs refresh
Updates initiated by end users the data

Relatively standardized and simple

Often complex queries involving
Queries queries Returning relatively few
aggregations
records

Depends on the amount of data

involved; batch data refreshes and
Processing
Typically very fast complex queries may take many hours;
Speed
query speed can be improved by
creating indexes

Larger due to the existence of

Space Can be relatively small if historical
aggregation structures and history data;
Requirements data is archived
requires more indexes than OLTP

Typically de-normalized with fewer

Database Highly normalized with many
tables; use of star and/or snowflake
Design tables
schemas

Backup religiously; operational Instead of regular backups, some

data is critical to run the business, environments may consider simply
Backup and
data loss is likely to entail reloading the OLTP data as a
Recovery
significant monetary loss and legal recovery method
liability

Workflow Management Systems

 AKTUTHEINTACTONE13 JUL 2019 1 COMMENT
Workflow management software is a software application designed for setting up and
monitoring a defined set of tasks along with its sequence. It helps users in collaborating and
automating processes, as well as in defining different workflows for different types of
processes and applications. Workflow management software also helps in reducing the
manual efforts involved and in automating redundant tasks.

Every workflow management software makes use of a workflow engine, which helps in
creating and modifying the different tasks in the system. It also makes use of the necessary IT
and human resources based on the functionality and time, as well as taking care of scheduling
the different activities involved in different processes.
Workflow management software provides a well-planned, structured and centralized
 approach for managing business processes, and can help in reducing the resources involved in
the process. It is capable of increasing parallel run tasks, unlike with a manual process.

Workflow management software reduces the time needed for transferring pending work
between tasks and allows for continual tracking and notification. It also greatly reduces the
costs associated with documentation involving paper and manual interventions.

It is not difficult to implement, and allows business processes to continue without major
modifications in the application. It brings in continuous business improvements; streamlining
and simplification of business processes can be easily tackled, as it provides good process
control.

This software helps improve customer service as consistency in doing tasks allows greater
predictability in customer response levels. It also allows more flexibility to meet business
needs, as well as providing support for runtime functions, built time functions and runtime
interaction functions.

 It does the following:

 Enables individuals to streamline repetitive processes

 Allows creating and assigning tasks
 Provides an infrastructure where tasks can be defined and executed
 Defines the tasks involved in each step of the process
 Automatically follows up on unfinished tasks in the process
 Synchronizes tasks in every stage of the process chain
 Sets up, executes and monitor workflows, and adapts to changes along the way
 Coordinates the operation of individual components that constitute the workflow
 Provides overall visibility of the workflow along with performance metrics
 Combines a number of tools into one easy to use platform
 Helps users keep up and keep tab of sequences in operation
 Provides individuals the needed information to perform tasks effectively wherever
they may be
 Provides tailored solutions to fit your business process
 Allows operation staff to adjust and update process model to follow changes in an
evolving business process
 Allows custom email notifications regarding workflow status to concerned individuals
 Allows integration of other systems into the process model to reduce errors from
manually copying information

There are several benefits of workflow management software. Here are some of them:

1. Mobile access. Most workflow management software is now web-based which gives

your employees easy access to data on any device with internet access. Many offer an app for
offline workflow to allow users to keep working even when there is no internet connection.
Likewise, it allows multiple employees to access the system simultaneously.
2. Revenue and reporting. Workflow management software offer tools for users to
assess jobs and related daily expenses. It helps provide you with up to date information every
day, so you can resolve any concerns early to compensate and improve margins. Reporting
 dashboards and tools let you see snapshots across your entire company, as well as drill down
into specific details.
3. Affordable packages. Most workflow management software, especially cloud or
web-based, are offered via budget-friendly monthly subscription plans. You can pay a one-
time activation fee for a new account that comes with the use of the software, setup costs if
any, and training.
4. Ease of use. Having good features does not equate with easy operation. We always
advise that you try before you buy by checking out the free trials of the many workflow
management software offered to find out for yourself if they are responsive, easy to use,
operate, and navigate.

Below are some of the advantages you can gain with workflow management software.

1. Automated operation. Automation features in workflow management software can

provide employees with the opportunity to work on non-repetitive tasks and expand their skill
levels. It keeps employees more involved in tasks and the production process, aside from
getting things done faster and without human error.
2. Improved accountability. Workflow management system clearly shows which tasks
are required, who is to perform them, and when the task should be completed. When tasks
and goals are clearly defined, everyone can smoothly go about their work without
management intervention unless absolutely necessary. This enhances management and
employee relations. Also, databases can keep records of what has occurred in the system,
allowing management to conduct audit if needed.
3. Streamlined processes. Improved workflow can provide valuable insights into the
steps and stages that go into a process. Some platforms can determine when two tasks can be
completed simultaneously instead of sequentially, and can discover if some steps are
unnecessary. This gives companies more informed choices to match specific tasks with
relevant skills, rather than just picking someone who is free to do a task at a given time.
4. Enhanced communication. A main reason for employee turnover is poor inter-office
communication. Workflow management system is designed for automation, collaboration and
task tracking so everyone is aware of what is happening, who is doing what task in what
stage, and what will happen next in the process chain. This visibility into processes fosters
clear coordination and communication lines to keep things running like a well-oiled machine.
5.
6. Shortened process times. Workflow management systems speed up tasks from
starting a project to having it approved internally. The software can be set to notify
employees if a deadline is approaching or a target has been missed. Team leaders can use the
system to notify all concerned employees of any new projects, guidelines, or changes in
schedule. The software optimizes the number one resource available – time – and gives the
company the momentum to move on to new projects consistently.

Unit-3

ERP Modules: Finance,

Production Planning
 AKTUTHEINTACTONE6 AUG 2019 1 COMMENT
 An ERP (enterprise resource planning) finance module is a software program that gathers
financial data and generates reports such as ledgers, trail balance data, overall balance sheets
and quarterly financial statements.

ERP is an industry term for the broad set of activities that helps an enterprise manage the
important aspects of its business. The information made available through an ERP system
provides visibility for key performance indicators (KPIs) required for meeting corporate
objectives. ERP software applications can be used to manage product planning, purchase
parts, maintain and keep track of inventories, interact with suppliers, provide customer
service, and track orders.

Production Planning

In the process of evolution of manufacturing requirements planning (MRP) II into ERP, while
vendors have developed more robust software for production planning, consulting firms have
accumulated vast knowledge of implementing ERP production planning module. Production
planning optimizes the utilization of manufacturing capacity, parts, components and material
resources using historical production data and sales forecasting.

ERP production module will just handle a tiny portion of the production. The module
begins with Product creation. There will be a component master and stage master. This
module is mainly designed to monitor day-to-day production progress. On completion of any
work order information will be passed on to despatch for delivery. Reports on the delivery
schedule will be available in this module.

Production Planning helps an organization plan production with the optimum utilization of

all available resources. Material Requirement Planning is done based on the production
advice generated by the sales department. Feasibility of production is evaluated using details
like raw material availability and procurement time, machine availability and capacity. A
production schedule is generated for all machines where the scheduling is done in an
optimized fashion based on the priorities of production.

Main features of production and production planning module

 Process definition with inputs, outputs, by-products, and overheads

 Definition of Bill of Material for all products up to any number of levels
 Planning based on customer wise production advice and sales forecast
 Material requirement planning: MRP based on machine capacity and availability,
machine efficiency, raw material availability, lead time: giving feasible quantity for
production
 Production plan for machines with optimum utilization of all available resources like
raw materials and machines
 Option to revoke production plan to change input parameters/ production priority/
quantity using fresh production advice
 Generation of the production schedule for machines detailing inputs and outputs
 Analysis of machine efficiency and utilization
 Automatic generation of MRS and purchase requisitions on finalization of the plan
 Generation of process requisition for processes that have to be subcontracted
 Reserving quantity for production
 Automatic generation of job orders for production
 Option to make daily plans for production

Production Planning helps an organization plan production with the optimum utilization of all
available resources. Material Requirement Planning is done based on the production advice
generated by the sales department. Feasibility of production is evaluated using details like
raw material availability and procurement time, machine availability and capacity. A
production schedule is generated for all machines where the scheduling is done in an
optimized fashion based on the priorities of production.

ERP Modules: Sales & Distribution

Sales and Distribution Module to keep pace with rapid changes in the business world,
companies need an integrated and flexible enterprise system that supports all aspects of their
business with state-of-the-art functionality. This innovative solution should upgrade
effortlessly and interface easily with third-party applications as well as have the ability to
incorporate existing systems while extending its reach to the Internet and e-commerce.

In today’s competitive business environment, companies are increasingly being forced to

streamline business processes. In a world where it is no longer enough to simply have the
best product, companies are focusing on core competencies and closer partnerships over the
whole supply chain.

Here, increased efficiency in sales and distribution is a key factor to ensure that companies
retain a competitive edge and improve both profit margins and customer service. In helping
business to ‘beat them on delivery’, the Sales and Distribution module of eresource ERP
systems offers a comprehensive set of best-of-bred component for both order and logistics
management.

Resource ERP system is tightly integrated with the Sales and Distribution module. This
integration enables the mapping and supply of single-site or multi-site organizations.
Developing precise logistics planning for just-in-time deliveries, this system can also
generate replenishment orders by using defined warehouse requirements.
 The following are the sales related business transactions:

 Sales queries, such as inquiries and quotations

 Sales orders
 Outline agreements, such as contracts and scheduling agreements
 Delivery/Shipment
 Invoicing/billing
 After sales support

During sales order-processing the following basic functions are carried out:

 Inquiry handling
 Quotation preparation and processing
 Contracts and contact management (order management)
 Monitoring the sales transaction
 Checking for availability
 Transferring requirements to materials planning (MRP)
 Scheduling the delivery
 Calculating pricing and taxes
 Checking credit limits
 Invoicing/billing
 Creating printed or electronically transmitted documents

Depending on how your particular system is configured, these functions may be completely
automated. The data that results from these basic functions is stored in the system where it
can be displayed. eresource ERP ‘s Sales and Distribution module very actively interacts with
the material management and financial accounting module for delivery and billing.

ERP Modules: Human

Resource Management
Human Resources is another widely implemented ERP module. ERP HR module
streamlines the management of human resources and human capitals.
 HR modules routinely maintain a complete employee database including contact
information, salary details, attendance, performance evaluation and promotion of all
employees.

Advanced HR module is integrated with knowledge management systems to optimally

utilize the expertise of all employees.

ERP HR modules refer to the systems and processes at the intersection between human
resource management (HRM) and information technology. On the whole, these ERP
systems have their origin on software that integrates information from different
applications into one universal database.

The linkage of its financial and human resource modules through one database is the
most important distinction to the individually and proprietary developed predecessors,
which makes this software application both rigid and flexible.

Submodules of ERP HR Module

1. Organizational Management
2. E-Recruitment
3. Time Management
4. Personal Administration
5. Payroll
6. Reporting
 The HR management module is a component covering many other HR aspects from
application to retirement. The system records basic demographic and address data,
selection, training and development, capabilities and skills management, compensation
planning records and other related activities.

Leading-edge systems provide the ability to “read” applications and enter relevant data
to applicable database fields, notify employers and provide position management and
position control.

Human resource management function involves the recruitment, placement, evaluation,

compensation, and development of the employees of an organization.

Initially, businesses used a computer-based information system for,

 Produce paychecks and payroll reports;

 Maintain personnel records;
 Pursue Talent Management.

In the transactions of the payroll module, the user is allowed entering the daily
attendance data of all the employees of the company on the payroll. The user can mark
the entire employee’s data as present or absent. Also if the operator of the company has
done any overtime then the user of the software can enter the data relating to the
operators over time.

Also, the processing of the payroll and the attendance can be done in this module. The
reports will correctly specify the leaves and the attendance is taken of the employee
after the processing of the attendance has been done.

The WorkTime gathers standardized time and work-related efforts. The most advanced
modules provide broad flexibility in data collection methods, labor distribution capabilities
and data analysis features. Cost analysis and efficiency metrics are the primary
functions.

The benefits-administration module provides a system for organizations to administer

and track employee participation in benefits programs. This typically includes insurance,
compensation, profit sharing, and retirement.

ERP Modules: Inventory

control Systems
ERP inventory management, short for enterprise resource planning inventory management,
refers to an integrated approach to business planning and operations. With an ERP inventory
management system, businesses can manage all their finances, logistics, operations, and
inventory in one place.

Typical features of an ERP inventory management system

 As you might expect, ERP inventory management systems are designed to empower
businesses to manage not just inventory, but all business operations from a single location.
Some of the standard features of an ERP inventory management system include:

 Stock tracking and management

 Sales and purchase order management
 Multi-channel order fulfillment
 Warehouse management and stock transfers
 B2B eCommerce functionality
 Payment gateway functionality
 Integrations with eCommerce, accounting, shipping and other operational tools
 Intelligence reports and analytics

And that’s just scratching the surface! No two ERP systems are exactly the same, but their
shared purpose is to centralize and streamline all facets of a business’ operations.

Benefits of ERP Inventory Management

The potential advantages of ERP inventory management are far-reaching:

Increased efficiency
There are huge time-saving implications of using an ERP inventory management system.
Managing operations using a centralized system not only cuts down on double-handling but
also allows for automation of daily tasks. This translates to increase production and more
accurate output in less time.

Cost savings
Every business owner knows that efficiency equals cost savings. Rather than paying for
segmented resources or systems to handle different parts of the business, ERP inventory
management systems handle many working parts simultaneously, reducing overall workload
and minimizing expenses.

Supply chain Transparency

A growing number of businesses are using shipping providers or 3PLs to outsource their
shipping and logistics requirements. An ERP inventory management system enables you to
integrate with external partners to ensure all systems communicate with each other. Stock,
order and shipping information is therefore synced across the entire supply chain.

Accurate Data Collection and Reporting

With key updates on stock, orders, and customers in a single location, ERP inventory
management enables quality data collection. Most systems will also allow you to create and
save custom inventory and sales reports to track business performance and plan for growth.

Enables Business expansion

ERP inventory management systems are designed to reduce manual labor, by automating and
streamlining processes – all of which goes hand-in-hand with growing a business. If scaling
up locally or expanding internationally is on your radar, an ERP inventory management
system can provide the space and freedom you need to grow.

ERP Modules in
Quality Management
 AKTUTHEINTACTONE6 AUG 2019 1 COMMENT
A quality management strategy requires certain details. Here are a few of the ways ERP can
gather that information.

Get the Right Data to Analyze

An effective quality management strategy relies on results and insights culled from good
data. While most managers realize this, only 3% of companies collect data that is up to
acceptable quality standards. This means that a lot of the quality control happening in
factories around the world amounts to little more than guesswork. Before procurement of raw
materials even begins, your company should have a quality baseline it is required to meet,
and should regularly refer to data to ensure that standard is met.

Data quality and collection is a key area where ERP can help. Using the latest technologies,
ERP logs data instantaneously in a user-friendly interface. This saves you the time and
trouble of collecting data across various partners, customers, and suppliers, empowering you
to instead focus your efforts on growing your business.

The ability to access real-time data is also essential. You wouldn’t base supply orders on
market demand from 2015, so why should your quality management strategy be based around
old, irrelevant information? ERP ensures that decision-makers have the most up-to-date data
at their fingertips.

Ensure Standardization
Standardizing materials, products, and procedures is key to running a successful business and
producing a consistent product. Regardless of your industry, most manufacturers have raw or
semi-processed materials coming in from an outside source. To ensure everything that passes
through your doors is of the same high standard, quality assurance can’t come down to mere
trust. ERP automates a system of inspections, allowing you and your managers to create a
quality checklist that raw materials must pass before they are approved and sent to the
production line. Every step of your supply chain should reach a common set of key
performance indicators (KPIs) and ERP will track this information and present it in a user-
friendly dashboard.

If any issue does occur, ERP data can help you track the origins of that product batch, sort
quality control issues using the information, and take steps to pull remaining product off the
 shelf. A single ERP solution across your company will break down any silos that exist and
ensure all departments and locations are meeting the same standards.  

Finally, standardization will also ensure that all workers, past and present, have the right
“recipe” to manufacture your products. This legacy is key to maintaining quality over
decades.

Be Compliant, Every Time

Quality management and compliance go hand-in-hand. Every industry has its own quality
standards that manufacturers adhere to, and many industries face strict regulatory
requirements. A robust ERP solution is built with compliance in mind, so meeting the desired
benchmarks is not an afterthought — it’s built into the process. If there is ever a problem, you
can turn to your ERP solution for the information you need to amend your process.

With ERP, quality assurance becomes an integrated, streamlined part of your company’s
operations. Remember that a quality management strategy means the production of a higher
quality product and, ultimately, a happier customer down the line.

Addressing the first requirement of every customer – Quality

Quality management includes customer-driven quality, top management leadership and
commitment, continuous improvement, fast response, actions based on facts, employee
participation and above all a quality management culture. Each part of the company is
involved in total quality, operating as a customer or supplier to one another.

Ultimately whatever be the industry in which you’re present or the size, to survive and
succeed in the present scenario, it is imperative that you maintain a very high quality at all
stages of manufacturing and distribution

Quality Management module in ERP on Cloud addresses:

 Procurement & Subcontract process (for Goods or Services): During the Goods

receipt or on completion of Services, the quality parameters and attributes can be captured.
This serves as the basis for clearance, usage and supplier payment
 Inventory & Storage: During the storage of materials, a periodic quality check can
be done to assess the quality
 Production: During the start of a batch or a new product, or periodically – it would
be required to check and record the Quality at different stages based on which action
pertaining to re-work, recalibration, tool setting, etc would be undertaken
 Sales & Dispatch: Quality inspection can also be carried out before dispatch of goods
 Project Tasks: Quality check could be done for tasks being executed as part of a
project

Some of the specific features pertaining to quality include: 

 Facility for In-process Inspection and Quality Clearance

 Ability to define control points based on control factors like Warehouse, Master
Recipe, Supplier, Customer, etc
 Ability to define inspection plan for each control point
 Ability to have attribute / non-attribute based (check list) inspection plan
 Facility to define standard operating procedures
 Ability to capture Analysis methods for attributes
 Ability to specify attribute values for each inspection plan
 Ability to override sample result status
 Ability to suggest lot change / item change based on Quality Clearance Feedback

ERP in Customer
Relationship Management
 AKTUTHEINTACTONE6 AUG 2019 1 COMMENT

The Customer Relationship Management (CRM) software allows an organization to

manage its relations with the customer in a structured manner. Generally, CRM software
is divided into three main modules:

1. Marketing
2. Customer Service
3. Sales

While these three are the main modules, the CRM software is not restricted to them. The
CRM modules can and should be incorporated into the Enterprise Resource Planning
(ERP) software which provides the management of an organization with insightful
information by organizing data collected from the different levels of the business.

By incorporating the CRM module, the standard functions of the ERP software can be

enhanced. This will allow organizations to improve upon the components that they are
comprised of, such as, supply chain, finance, projects, human resource, etc. These
components ensure the functioning of an organization and improving them is likely to
have a positive impact on other fractions of the organization.

Most importantly, it will give a more clear cut picture of the customers who can now be
served in a more efficient manner. This is likely to lead to an increase in the rate of
customer retention as more lasting relationships can be built. Moreover, it will enable the
organization to maximize on any existing or upcoming opportunities. The integration of
CRM module into ERP will commission the organization to deliver more value-added
services, giving them an advantage over their competitors.

Therefore, as a result, a more comprehensive data set can be compiled which can be
used by the management to increase productivity levels while stimulating growth.

SAP ERP
  AKTUTHEINTACTONE6 AUG 2019 1 COMMENT
SAP ERP is an enterprise resource planning software developed by the German
company SAP SE. SAP ERP incorporates the key business functions of an organization.
The latest version (SAP ERP 6.0) was made available in 2006. The most recent
Enhancement Package (EHP8) for SAP ERP 6.0 was released in 2016.

Business Processes included in SAP ERP are Operations (Sales & Distribution,
Materials Management, Production Planning, Logistics Execution, and Quality
Management), Financials (Financial Accounting, Management Accounting, Financial
Supply Chain Management), Human Capital Management (Training, Payroll, e-
Recruiting) and Corporate Services (Travel Management, Environment, Health and
Safety, and Real-Estate Management).

Implementation

SAP ERP consists of several modules, including Financial Accounting (FI), Controlling
(CO), Asset Accounting (AA), Sales & Distribution (SD), Material Management (MM),
Production Planning (PP), Quality Management (QM), Project System (PS), Plant
Maintenance (PM), Human Resources (HR).[6] SAP ERP collects and combines data
from the separate modules to provide the company or organization with enterprise
resource planning.

Typical implementation phases:

Phase 1: Project Preparation

Phase 2: Business Blueprint

Phase 3: Realization

Phase 4: Final Preparation

Phase 5: Golive Support

Companies planning to implement or upgrade an SAP ERP system should pay strict
attention to system integration to save their SAP ERP implementation from failure. With
system integration in place, data flows move completely and correctly among various
SAP ERP components, thereby not only streamlining business processes but also
eliminating or minimizing redundant data entry efforts.

Advantages

 Allows easier global integration (barriers of currency exchange rates, language,

and culture can be bridged automatically)
 Updates only need to be done once to be implemented company-wide
 Provides real-time information, reducing the possibility of redundancy errors
 May create a more efficient work environment for employees
 Vendors have past knowledge and expertise on how to best build and implement
a system
 User interface is completely customizable allowing end users to dictate the
operational structure of the product

Disadvantages

 Locked into relationship by contract and manageability with vendor – a contract

can hold a company to the vendor until it expires and it can be unprofitable to switch
vendors if switching costs are too high
 Inflexibility – vendor packages may not fit a company’s business model well and
customization can be expensive and/or lead to version lock-in, since customized code
may not fit future versions and would then need to be redeveloped at great expense
 Return on Investment may take too long to be profitable
 Implementations have a risk of project failure

BAAN ERP
 Its core, the Baan software suite focused on corporate record keeping and
administrative services. Initially known as Triton, Baan was a modular software
suite, offering numerous small programs that companies could purchase to suit
their individual needs. Baan programs could aid in manufacturing and distribution,
financial calculation, project estimates and management applications.
 Features of the software varied across numerous versions and, in Baan’s early
days, the company’s programmers could even customize the software to suit the
needs of specific clients. However, one of the keys to Baan’s success was
creating an off-the-shelf, core version of Baan ERP software that could be used
on standard computing systems. This was initially powered by the Unix operating
system in the early 1980s, which helped make the software platform-
independent. Later, the software would become compatible with Windows
platforms, too.

Oracle ERP
 AKTUTHEINTACTONE6 AUG 2019 1 COMMENT
Oracle Enterprise Resource Planning Cloud is a cloud-based software application suite
introduced by Oracle Corporation in 2012. Oracle ERP Cloud manages enterprise functions
including accounting, financial management, project management, and procurement.

Oracle ERP Cloud is an end-to-end Software as a service suite that manages enterprise

operations. The suite runs on an Oracle technology stack in Oracle’s cloud centers. Oracle
 ERP Cloud is accessible through both public and private cloud implementation and supports
hybrid deployment. Oracle supplies updates to Oracle ERP Cloud at least twice annually.
According to the company’s website, there are seven different software modules that make up
the Oracle ERP Cloud suite.

In March 2017, Oracle ERP Cloud received HIPAA certification. The software suite is
designed to support international enterprise functions and includes multi-GAAP, multi-
currency, multi-language, and multi-subsidiary capabilities.

Certifications
Oracle offers certifications in Software as a Service (SaaS) specializations for Oracle ERP
Cloud.

Oracle Financials Cloud

 Oracle Accounting Hub Cloud 2017 Certified Implementation Specialist

 Oracle Financials Cloud: General Ledger 2017 Certified Implementation Specialist
 Oracle Financials Cloud: Payables 2017 Certified Implementation Specialist
 Oracle Financials Cloud: Receivables 2017 Certified Implementation Specialist
 Oracle Revenue Management Cloud Service 2017 Certified Implementation Specialist

Oracle Procurement Cloud

Oracle Procurement Cloud 2017 Certified Implementation Specialist

Oracle Project Portfolio Management Cloud

Oracle Project Portfolio Management Cloud 2017 Certified Implementation Specialist

Oracle Risk Management Cloud

Oracle Financial Reporting Compliance Cloud 2017 Certified Implementation Specialist

Impact of ERP on Value chain

(Porter’s Value chain Model)
 AKTUTHEINTACTONE30 AUG 2019 1 COMMENT

 Supply Chain Planning

 Supply chain planning is a process of selecting proper marketing channels, promotion, and
regulating the stock quantities and inventory required to ensure that production is able to keep
up with the consumer demands.  ERP systems thus offer a trouble-free and ductile way to
establish and change the limits within which the supply chain operates.

 Global Visibility

ERP software has always been known for the role-based or permission-based access to view
the SCM data. The ERP allows manufacturers to know how and where the inventory is
located throughout the chain management. This will allow the management of drafting a
well-planned production. This means they have data at their disposal regarding the inventory
levels, purchasing and production performance etc.

 Evaluate Vendor Performance

ERP systems make it easier for an organization to measure quantitative and qualitative
factors of respective vendors. This helps the management in making better decisions and
performance improvements in the current market. It helps the purchasing department to select
the supplier or vendor and facilitate continual monitoring. Data of this kind can help to better
negotiate at the time of switching vendors.

 Information Management and Integration

ERP is a natural extension and provides a comprehensive management system that integrates
and manages your transactions and other important data in one single system. Many
companies fail to cope up with the growing consumer demand due to discrete data which
delays the supply chain functions. ERP system keeps all your data in one system with
enterprise-wise visibility.

 Enhanced Collaboration

ERP systems help organizations to control all suppliers and distributors. This helps the
managers to understand who is doing what operations at all the given times. ERP also bridges
the gap between all the supply chain partners. Hence, it is possible for all the members of the
organization to share vital information about demand, forecasting, production status and
transportation plans in real time.

 Helps Decision Making

In the current business scenario, information is the key resource for any organization. If
organizations do not have sufficient mechanism that gives them the power to make effective
decisions then there are chances that their future will always be a mystery.  With the
implementation of ERP, an organization will be able to function as a single entity that will
improve the accuracy and integrity leading to a better decision-making process.
 Improved Supply Chain Network

ERP systems provide complete visibility throughout the supply chain network which isn’t
possible in the manual processes.  By implementing ERP, an organization can monitor all the
statuses and activities of suppliers, plants, warehouse and stores, and all other members
involved in the supply chain. This, in turn, helps in effective tracking and monitoring process
management.

 Decrease in Delays

Supply chains who did not implement an ERP already placed complaints about poor business
relationships with the loss of business. Many factors have negative impacts on businesses and
therefore results in negative impact with the customers who are the main force of attraction
for a supply chain. With the implementation of ERP, all the activities can be co-ordinated and
executed ensuring higher levels of on-time delivery across the chain.

 Manage Risk and Prevent Fraud

An intelligent ERP system not only prevents fraud and theft but also helps ensure compliance
with legal requirements and rules. A traditional ERP system facilitates user-based roles to
access and modify data that prevents theft.

 Automates Customer Service Process.

Enterprise resource planning comes to help too many organizations that look forward to
streamlining their customer service experience. ERP’s streamline customer service
experience that allows employees ensure that their customers are getting a consistent
experience and the back office process is not interrupted.  Automation of all other resources
helps organizations to respond to customers quickly and forecast new products.

The Value Chain activities

Porter’s Value Chain Analysis consists of a number of activities, namely primary activities
and support activities. Primary activities have an immediate effect on the production,
maintenance, sales and support of the products or services to be supplied. These activities
consist of the following elements:

Inbound Logistics

These are all processes that are involved in the receiving, storing, and internal distribution of
the raw materials or basic ingredients of a product or service. The relationship with the
suppliers is essential to the creation of value in this matter.

Production

These are all the activities (for example production floor or production line) that convert
inputs of products or services into semi-finished or finished products. Operational systems
are the guiding principle for the creation of value.

Outbound logistics

These are all activities that are related to delivering the products and services to the customer.
These include, for instance, storage, distribution (systems) and transport.

Marketing and Sales

These are all processes related to putting the products and services in the markets including
managing and generating customer relationships. The guiding principles are setting oneself
apart from the competition and creating advantages for the customer.

Service

This includes all activities that maintain the value of the products or service to customers as
soon as a relationship has developed based on the procurement of services and products.
The Service Profit Chain Model is an alternative model, specific designed for service
management and organizational growth.

Support activities of the Value Chain Analysis

Support activities within the Porter’s Value Chain Analysis assist the primary activities and
they form the basis of any organization. In the figure dotted lines represent linkages between
a support activity and a primary activity. A support activity such as human resource
management for example is of importance within the primary activity operation but also
supports other activities such as service and outbound logistics.

Firm infrastructure
 This concerns the support activities within the organization that enable the organization to
maintain its daily operations. Line management, administrative handling, financial
management are examples of activities that create value for the organization.

Human resource management

This includes the support activities in which the development of the workforce within an
organization is the key element. Examples of activities are recruiting staff, training and
coaching of staff and compensating and retaining staff.

Technology development

These activities relate to the development of the products and services of the organization,
both internally and externally. Examples are IT, technological innovations and improvements
and the development of new products based on new technologies. These activities create
value using innovation and optimization.

Procurement

These are all the support activities related to procurement to service the customer from the
organization. Examples of activities are entering into and managing relationships with
suppliers, negotiating to arrive at the best prices, making product purchase agreements with
suppliers and outsourcing agreements. Organizations use primary and support activities as
building blocks to create valuable products, services and distinctiveness.

Using the Porter’s Value Chain Analysis

Porter’s Value Chain Analysis: There are four basic steps that have to be followed if you
wish to use the Value Chain as an analysis model. By following these basic steps the
organization can be analyzed using the Value Chain.

Step 1: identify sub activities for each primary activity

For each primary activity, sub-activities can be determined that create a specific value for an
organization.

There are three categories of sub activities, namely:

 Direct activities (for instance online sales from Marketing& sales)

 Indirect activities (for instance keeping the CRM up-to-date from Marketing& sales
or organizing a golf tournament for customers)
 Quality assurance (Proofreading and editing advertisements from Marketing& sales).

Step 2: identify sub activities for each support activity

Here it concerns the idea how value support activities such as firm infrastructure, human
resource management, technology development and procurement can create value within the
 primary activities. Use the same distinction as in step 1 for direct and indirect activities and
quality assurance. For example, consider how human resource management can create value
to inbound logistics, marketing & sales and service. This will also have to be done for the
other support activities.

Step 3: identify links

This is a crucial and time-consuming step because this is about finding the links between the
added value you have identified. This part is of importance for an organization when it
concerns increasing competitive advantage from the value chain. For example, a development
within a CRM solution can have a link with increasing production and sales volumes through
certain investments. Another example is the link between the complaints that have been
recorded within the primary activity and the increase of unfilled vacancies (human resource
management) within the primary activity outbound logistics.

Step 4: look for opportunities/ solutions to optimize and create value

After you have completed the value chain analysis it is important to determine what activities
are to be optimized in order to create added value. This is about quantitative and qualitative
investments that can eventually contribute to increasing your customer base, competitive
advantage and profitability. Creating business cases will help you give priority and return on
investment (ROI) to the possibly required added value creation of a primary or support
activity.

Competitive advantage of ERP

Businesses today operate in an economy that is structured around being dynamic. We hear
technical terms such as “disruption”, “industry 4.0” and “platform economy” on a daily
basis.  Current market participants opt to play the isomorphism game (status quo), to
“innovate”, or to pave the way by extending the fuzzy boundaries.

However, is this really extending the continuum of business opportunity or simply a form of
reframing? Innovation is widely mistaken for any technology that changes how firms operate
or deliver their product or service. This type of innovation taking place at the early stages, is
considered to be inferior. Therefore, what exactly should innovation be and how can
companies create competitive advantages?

The answer is not straightforward but lies in a company asking itself three questions as a
starting point:

1. What business are we in?

2. How is the organizational ecology evolving?
3. Why do we want end users to utilize our firm?

If a business can adequately answer the above in three sentences, creating an advantage is

not far out of your reach. Let me unpack my view on what tenets a firm should adopt:
 The Two C’s: A firm needs to ensure resource Competence and Capability is geared
towards ensuring distinct competence
 Focus: A firm with alignment on the needs of its people and customers will never go
wrong
 Innovation: This is a process of making use of patterns and adaptive spaces by
identifying business opportunities and utilising distinct co-ordination of the business
capabilities and competence to create uncaged cognition and value
 Develop a Good “CV”: Businesses need to ensure effective Co-ordination of its
internal and external tangible and intangible structures. In addition, they should
always Validate every network of their structure and frameworks as complacency skews
value
 Strategy: This is where companies fail, as they do not differentiate good strategy
from bad strategy. Businesses need to adopt a unique position by aligning, co-ordinating,
validating and executing their strategy design by being inclusive and un-caging the cognitive
frames.

Companies need to understand that the sources of competitive advantage are changing in the
continuum of the economic boundary. Great value can be achieved by adopting a more
malleable view on defining processes, effective strategy, and this will lead to innovation and
untapped competitive advantages. So how can ERP aid a company in creating untapped
competitive advantages? By leveraging on the process capability of a business, ERP
transfers insights, which should trigger opportunity creations and thus allow for a constant
validation and adaptive ecosystem for a business to adopt an ambidextrous structure.

Let’s look at the advantages:

Shortened Cycle Times

ERP eliminates redundancies. Once information goes into the system, the system distributes
tasks to every department that might need that information. This removes duplicated
information, which in turn, reduces data errors. Because of this, you can expect to have a
shortened cycle time for all of your purchases; these purchases can then be automated to
avoid any delays.

Reduced Staff Needs

Inputting data manually can require almost an army of administration and staff, and of
course, with so many employees, the chance for human error heightens considerably. With an
implemented ERP solution, however, this information is easily accessible to your employees,
which means fewer mistakes and less down time. With the ERP solution also automating and
simplifying tasks, your employees have more time to focus on other necessary tasks.

Improved Productivity

Consistency is key! All work sequences follow the same model which means confusion and
frustration are eliminated. The ERP solution’s real-time data also allows your employees to
 access the information they need quickly from within the same integrated system. This means
your processes run more smoothly, and any modifications can be done so on the fly.

Better Customer Service

Happy customers mean better business! Many ERP software packages allow employees to
access customer information through a client screen. Employees can view past and present
billing information, purchase orders, past orders, etc. They will no longer need to seek out the
appropriate person to answer the question your client has. This also reduces the amount of
time the customer spends on hold–a big difference with customer satisfaction.

Future Directions in ERP: New

Trends in ERP
A recent survey showed that 70% of companies are actively working towards digital
transformation — so it’s not surprising that ERP remains one of the most important
technologies for businesses to have at their disposal.

ERP empowers companies to organize, analyze, and utilize the data that is quickly becoming
the lifeblood of their organization. As technology evolves in impressive and unexpected
ways, ERP is an essential business tool now more than it’s ever been.

2019 promises to be a watershed year for ERP. If you don’t have an ERP system in place,
you’re going to be overdue. If you’re already using ERP, you can look forward to exciting
advancements that will take your system to the next level.

No matter which camp you fall into, stay informed of the following trends to keep your
competitive edge in the manufacturing industry this year.

1. The Rise of Additive Manufacturing

Additive manufacturing — also known as 3D printing — is transforming how we

manufacture large-scale, high-volume and complex products. Bigger and faster printers make
it possible to cut costs, boost efficiency, and improve parts such as seat buckles and engines.
The challenge for manufacturers is managing the avalanche of data that comes with 3D
printing.

Additive manufacturing increases your volume of data at every step of the production
process, and your ERP system must be able to keep up. As manufacturers implement 3D
printers throughout 2019, they will need to carefully review the capabilities of their existing
ERP to be able to reap the rewards of this trend.
2. Built-In Analytics

Older ERP systems may excel at collecting and organizing data, but they are more limited
when it comes to analytics and reporting. Now that data-driven decision-making has become
every manufacturer’s priority, ERP solutions are improving their analytics capabilities to
meet manufacturers’ needs.

Modern ERP solutions allow users to run ad-hoc reports, access data visualizations or embed
analytics tools into their existing applications. This provides real-time information leaders
can use to make key decisions quickly.

Through 2019 and beyond, ERP will increasingly become an end-to-end data tool that
informs decision-making at all levels — from the executive suite to the factory floor. For
modern manufacturers, this means it will be critical to invest in a modern ERP solution in
order to keep up with your data-driven competitors.

3. Cloud Dominance

Cloud ERP is nothing new, but it’s quickly becoming industry standard for many
manufacturing sectors. The cloud ERP market is projected to grow from $18.5 billion in 2016
to $29.8 billion in 2021, as more companies look beyond on-premises solutions. The
forecasted growth makes sense considering the benefits of the cloud, which include lower
costs, broader access, easier management, and better security. An off-site ERP solution will
become especially advantageous as many manufacturers continue to expand their operations
across the globe.

As the cloud ERP market continues to diversify in 2019, we expect to see more features and
customization options to suit your manufacturing needs.

4. Direct Machine Integration

The Internet of Things (IoT) is making manufacturing more efficient and improving
transparency as we move into the new year — and further into Industry 4.0.

Internet-connected sensors create a direct link between an operational piece of machinery and
your ERP system. The ERP system automatically collects real-time data about machine
performance, so production can be tracked closely and improved precisely, with fewer human
technicians and less manual input.

This data can help manufacturers schedule routine maintenance to avoid sudden mechanical
breakdowns and costly downtime. Using IoT devices with ERP promotes communication
between all of your systems and increases visibility into your supply chain, keeping your
entire organization on the same page.

5. ERP as Part of a Broader Strategy

While ERP has a key role in digital transformation, it’s not the only factor that plays a part.
Digital transformation also requires evolving your company culture to embrace digital
change, training or hiring for new skills, and revising your workflows to fit new technologies.

In the past, most ERP implementations happened in isolation, but that will become rare in
2019. Most implementations will act as just one piece of a much broader change management
strategy and new ERP solutions will be implemented in conjunction with other tech upgrades.
That means it’s essential to have an ERP system that has been designed with your
manufacturing company’s unique needs and goals in mind

ERP to ERP II
Enterprise resource planning (ERP) is the integrated management of main business
processes, often in real-time and mediated by software and technology.

ERP is usually referred to as a category of business management software — typically a suite

of integrated applications—that an organization can use to collect, store, manage, and
interpret data from these many business activities.

ERP provides an integrated and continuously updated view of core business processes using
common databases maintained by a database management system. ERP systems track
business resources—cash, raw materials, production capacity—and the status of business
commitments: orders, purchase orders, and payroll. The applications that make up the system
share data across various departments (manufacturing, purchasing, sales, accounting, etc.)
that provide the data. ERP facilitates information flow between all business functions and
manages connections to outside stakeholders.

Enterprise system software is a multibillion-dollar industry that produces components

supporting a variety of business functions. IT investments have become the largest category
of capital expenditure in United States-based businesses over the past[which?] decade.
Though early ERP systems focused on large enterprises, smaller enterprises increasingly use
ERP systems.
 The ERP system integrates varied organizational systems and facilitates error-free
transactions and production, thereby enhancing the organization’s efficiency. However,
developing an ERP system differs from traditional system development. ERP systems run on
a variety of computer hardware and network configurations, typically using a database as an
information repository.

Two-tier ERP software and hardware lets companies run the equivalent of two ERP systems
at once: one at the corporate level and one at the division or subsidiary level. For example, a
manufacturing company could use an ERP system to manage across the organization using
independent global or regional distribution, production or sales centers, and service providers
to support the main company’s customers. Each independent center (or) subsidiary may have
its own business models, workflows, and business processes.

Given the realities of globalization, enterprises continuously evaluate how to optimize their
regional, divisional, and product or manufacturing strategies to support strategic goals and
reduce time-to-market while increasing profitability and delivering value. With two-tier ERP,
the regional distribution, production, or sales centers and service providers continue operating
under their own business model—separate from the main company, using their own ERP
systems. Since these smaller companies’ processes and workflows are not tied to main
company’s processes and workflows, they can respond to local business requirements in
multiple locations.

Factors that affect enterprises’ adoption of two-tier ERP systems include:

 Manufacturing globalization, the economics of sourcing in emerging economies

 Potential for quicker, less costly ERP implementations at subsidiaries, based on
selecting software more suited to smaller companies
 Extra effort, (often involving the use of Enterprise application integration) is required
where data must pass between two ERP systems Two-tier ERP strategies give enterprises
agility in responding to market demands and in aligning IT systems at a corporate level while
inevitably resulting in more systems as compared to one ERP system used throughout the
organization.

Customization

ERP systems are theoretically based on industry best practices, and their makers intend that
organizations deploy them “as is”. ERP vendors do offer customers configuration options that
let organizations incorporate their own business rules, but gaps in features often remain even
after configuration is complete.

ERP customers have several options to reconcile feature gaps, each with their own pros/cons.
Technical solutions include rewriting part of the delivered software, writing a homegrown
module to work within the ERP system, or interfacing to an external system. These three
options constitute varying degrees of system customization—with the first being the most
invasive and costly to maintain. Alternatively, there are non-technical options such as
changing business practices or organizational policies to better match the delivered ERP
feature set. Key differences between customization and configuration include:
 Customization is always optional, whereas the software must always be configured
before use (e.g., setting up cost/profit center structures, organizational trees, purchase
approval rules, etc.).
 The software is designed to handle various configurations, and behaves predictably in
any allowed configuration.
 The effect of configuration changes on system behavior and performance is
predictable and is the responsibility of the ERP vendor. The effect of customization is less
predictable. It is the customer’s responsibility, and increases testing activities.
 Configuration changes survive upgrades to new software versions. Some
customizations (e.g., code that uses pre–defined “hooks” that are called before/after
displaying data screens) survive upgrades, though they require retesting. Other
customizations (e.g., those involving changes to fundamental data structures) are overwritten
during upgrades and must be re-implemented.

Customization advantages include that it:

 Improves user acceptance

 Offers the potential to obtain competitive advantage vis-à-vis companies using only
standard features

Customization disadvantages include that it may:

 Increase time and resources required to implement and maintain

 Hinder seamless interfacing/integration between suppliers and customers due to the
differences between systems
 Limit the company’s ability to upgrade the ERP software in the future
 Create over reliance on customization, undermining the principles of ERP as a
standardizing software platform

Extensions

ERP systems can be extended with third–party software, often via vendor-supplied interfaces.
Extensions offer features such as:

 Product data management

 Product life cycle management
 Customer relations management
 Data mining
 e-procuremen

SOA Factors in ERP

 AKTUTHEINTACTONE30 AUG 2019 1 COMMENT
 Today businesses are changing faster than ever. Business models are evolving and
being transformed every day. There are greater expectations in terms of innovation,
business performance, results, and effective use of resources. All this is putting greater
pressure on the organizations to find new ways to streamline their processes and share
information effectively and seamlessly. In other words businesses today need to be
more flexible and responsive than ever before to their customers, suppliers, partners,
vendors, and most importantly changing business models. 
As ERP systems are at the center of enterprise business model, they need to provide a
way for the business processes to participate and collaborate with external applications,
partners, and information. Enterprise applications are moving from being monolithic and
self-contained to the being more and more flexible and collaborative.

Whats Wrong with Traditional EAI?

Traditional integration focused on solving some of the above-mentioned requirements by

enabling data flow between silos and external applications. It helped to a certain extent
but over the time the complexity and of the integrations started posing serious concerns.
The issues were proprietary technology used for integrating applications was a gridlock
and it was not easy to easily orchestrate business processes between the disparate
applications using the traditional eai. 
What is Service Oriented Architecture? 
SOA as it relates to software paradigm is an agile architecture approach that is based on
service-oriented principles of composition, abstraction, loose coupling, discoverability,
and amalgamation. SOA inherently empowers scalability, evolution of services,
interoperability, re-usability, and modularity.

Do we need SOA based Integrations?

Using SOA principles while designing application integrations results in SOA based
application integration. Simplicity is desired for the traditional and complex world of
integrations. Better and common sense approaches such as Service interactions and
amalgamation supported by Open Standards should be enabled. SOA is needed for the
following main reasons: 

 To provide seamless agility to business 

 To improve business process visibility 
 To simplify the current rigid and complex state of IT 
 To enhance efficiency and provide cost-effectiveness 
 To enable re-usability factor 
 To provide better quality of service

But you are still doing integration?

Yes. Besides the obvious advantages enumerated by everyone, the key advantage of
this approach is that you are contributing to the future of the SOA of your enterprise. The
integrations with service-oriented approach are loosely coupled with the infrastructure
components and more flexible and refactorable. Logical end-points for integration
services provide far more decoupling and is implementation agnostic. The components
and integration services can be used for creating a composite application or business
process later. The benefits of adopting SOA grow with time. Once you have these
reusable components from across applications, application modules, and other
enterprise software components, creating a new application is relatively easy and thats
when the full potential of SOA is realized.

Design your SOA Integrations

Most of the design depends on the requirements. But before applying the very same
approach you took for your earlier integration project, you need to keep in mind is that
the goal here is to come up with integration components that are designed for
interoperability, re-usability, and modularity. The key to designing your SOA integrations
is remembering that they are SOA based. Using and adopting SOA principles is the key.
Always try to apply SOA principles composition, abstraction, loose coupling,
discoverability, and amalgamation to your services and integrations.

Architecture Perspective: Guidelines for SOA based Integrations

Based on my experience, considering the following guidelines can help you realize the
SOA vision for integrations with EBS. Most of the following guidelines are generic and
can and have been applied to other ERP integrations as well. 
Use standards: Using standards based technologies for your service-oriented
integrations will help eliminate lock-down with products and companies. This is one of
the biggest challenges with traditional EAI. This will enhance easy evolution,
enhancement, and composition of business processes that may use services related to
integrations.

Classify Integration Requirements:

Categorize requirements into data integration and business process integration. Identify
message exchange patterns and use ESB functions (transportation, mediation, and
routing) to model data integration processes. Use BPEL for modeling your processes
that involve anything more than what can be satisfied with ESB functions. Many times it
is hard to classify and try to fit a particular integration process in one of the two buckets.
In such cases it will be a good idea to use layered approach and use ESB functions for
data integration and use BPEL for future extensions to the business integration process.

Introduce Extensibility:

To deliver on the high hopes for soa based integration architecture solution, it is very
important to do some forward thinking for the desired flexibility and agility in your
integration architecture. To deliver on that, think hard early on ways to introduce
extensibility and forward compatibility into the architecture and all the components
including individual integrations and messages.

Service Enable Enterprise Application Functions:

Enterprise applications have many business functions and technology components that
are application specific and depend on proprietary technologies. These components or
functions should be service enabled before they can participate in the service oriented
integration architecture. Using resource adapters is a way of connecting and interacting
with the application specific components. It is important that the resource adapter is
implemented using industry standards such as J2CA, WSIF, and WSDL and can provide
a web service interface to the application specific functions.

Inject Resiliency:

Build resiliency into the individual integration processes. This may be easy to miss as
even with the best architecture in place. Always think about all the what if scenarios and
try to inject process level resiliency into the individual integration processes.

Exception Handling:

Despite all the forward thinking there are things that might and will go wrong. Define
reusable, extensible, and agile approach to handle exceptions at process level and other
unknown exceptions. Using a common exception handler service with extensible
interface can provide the flexibility, re-usability, and extensibility.

Simplify Support Functions:

Any one who has worked with application integration can relate to the great deal of time
and energy waste involved when troubleshooting integration issues. With asynchronous
messaging and multiple services, the idea should be to ease the pains of traditional EAI
support functions. This can be done by thinking ahead about how can support functions
be empowered with better ways to provide information visibility and take actions.
Notifications and human work-flow are some of the ways to empower your support team.

Human interaction and intervention:

Business processes inevitably will involve human interaction in some or other form. If
your integration process involves such role based people interaction, plan ahead and
use standards based mechanisms to have human work-flows.

Separate Business Rules:

The integration process probably is not a good place to embed and hard codes the
business rules. Identify the rules and provide loosely coupling between your process and
rules. This would provide the flexibility to change business rules dynamically without
modifying or redeploying your integration services or processes.

Business Process Visibility:

Plan for providing visibility into your so integration or business process. This is very
important because today enterprises have heterogeneous systems and applications and
with integrations spanning multiple systems, it becomes very hard to have visibility in run
time. Users (IT and Business) should be able to monitor and have visibility into your
business processes and integrations.

Service Composition:
 Provide the capability to provide business functionality that is composed of disparate
and/or independent services. The composite solution may cater to an integration solution
or a new future business process. Service composite architecture is the relevant
standard that addresses service composition. It provides the specifications to describe
the model for building applications and systems using a Service-Oriented Architecture
(SOA).

SOA Governance:

In simple terms, plan for the capability to manage and apply policies for the services
within the service portfolio of your integration services. This is critical for SOA and needs
to be planned well to ensure better management and control of services.

Evaluation and Selection of

 

ERP Package
 AKTUTHEINTACTONE30 AUG 2019 1 COMMENT
Evaluation and selection of ERP package is an essential criterion for successful ERP
implementation. Quality of selection will have a long term impact on the processes of the
organization. It is also not easy to switch to another product with concomitant scale of
investment and complexities. This evaluation and selection process should be properly
directed and normally comprises of following activities:

Formation of an evaluation committee: An ERP implementation is not an IT project but a

business oriented development. Therefore, in addition to Chief Information Officer, this
committee should comprise of all functional heads and driven by a top management
representative. Since all business functions are represented in selection process, the chosen
package would have wide acceptance subsequently.

Requirement Analysis: This analysis should outline functional expectations of various

business divisions, such as warehouse, finance, procurement, from potential ERP package.
Vital requirements specific to the company should be highlighted e.g.

 Must have Distribution Requirement Planning (DRP) functionality.

 In transit inventory and pallet tracking, as a part of shipping requirement.
 Multiple purchase orders linked to one bill of lading.
 Multi currency and multi locations functionality.

Requirement analysis forms a base for preparing a Request for Proposal (RFP), where
important technical and commercial perquisites are incorporated. Common examples of
technical perquisites: flexibility, Upgradability, User friendliness, field level security,
Operating system and database compatibility. Common examples of commercial perquisites:
cost, reference sites, high level project plan, resumes of consultants, post implementation
support, financial health of the company, local presence, number of installation and upgrade.
 Selection Criteria: A pre-determined selection Criteria should be ready before actual
selection process commences. Selection criteria are normally in the form of questionnaire and
point system, where each question represents a business or technical need. Weightage for
each point or a group of points are predetermined which varies according to criticality of the
issue. These processes help in making the selection process objective and transparent.

Selection Process: Selection process constitutes various stages as mentioned below:

1. Short listing of vendors: Hundreds of ERP packages are available in the market,

which have different concept, architecture and sets of functionalities. Analyzing all the
packages is not feasible. Organization need to identify a few best suited packages by looking
at product literatures of vendor, finding out which product is being used by their peer
organizations and getting help from external consultants. Once a few packages are short
listed, respective vendors should be asked to respond to the RFP, as per its format.
2. Demo and Presentation: Responses from shortlisted vendors are evaluated by the
selection committee after collating scores obtained by them and a consensus is reached about
their final ranking. Anyone not fulfilling a predetermined vital requirement is eliminated at
this stage. Top two or three vendors, are then invited for demo and presentation. Mode of
presentation should be carefully scripted and send to the vendors in advance. They should be
asked to walkthrough a particular business cycle through their vanilla software. They should
be specifically asked to clarify any area of concern about their proposal, which may expose
weak/ problem area of their offer.
3. Site visit and contract negotiations: After the committee has reached a decision on
best suited package, visits to reference sites are imperative. The vendor should provide
reference sites of similar size and industry, identical version and belonging to same
geographical location. Team members should have look and feel of the systems operating at
reference sites and ask pertinent questions covering overall satisfaction, functionality, cost/
time over run, support concerns etc. After site visit, if the committee members feel that their
selection is right, they proceed with final negotiation and procurement. Negotiations are
normally held on license and annual maintenance cost, payment plan including a leasing
option, support issues and other commercial and legal terms.

Project Planning, Testing & End

User’s Training
 AKTUTHEINTACTONE30 AUG 2019 1 COMMENT
Like any other project, ERP implementation goes through various interconnected phases.
These phases may be sequential but at occasions overlap. Normally, every phase has entry
criteria, which needs to be fulfilled before the commencement of the phase. A phase is
deemed to have completed when pre-determined deliverables are achieved.

Various phases of ERP implementation, for a typical ERP project, are mentioned below:

1. Project Establishment

Project Establishment will comprise of the following activities:

 Mobilisation
 Project teams formation
 Project plan detailing and fine tuning

For a successful implementation, several types of skills are required. To ensure that the
requisite expertises are available to the project, different teams are formed, consisting of
members from the organization and vendor.

 Project board
 Competence center team, mostly represented by IT personnel of the organization.
 Key users team.
 Consultants’ team.
 Project Implementation Committee.

Entry Criteria

 Vendor Project Team on site.

 Organizations implementation team tentatively identified.

Deliverables

 Project Administration Plan.

 Project standards document.
 Project board formation.
 Project Implementation Committee formation.
 Competency Centre Team formation.
 Key Users Team formation.
 Delivery and Installation of vanilla ERP Application.

2. Procedure Development

In this phase, key users and competence center team map the existing functional processes
with the functions available in the vanilla ERP application, in conjunction with the vendor
team. The following activities will occur in an iterative manner.

 Process mapping
 Gap detection
 Work-around identification
 Organizational impact analysis

Deliverables

 Business Model through flow chart.

 Customization Design Specification document for identified modifications.
 Draft Procedure Manual
 Acceptance Test Plan and Data
3. Application Software Customisation

This phase includes program development for all modules using the Customization Design
Specification Document, unit testing and system testing of all modules. The individual
programs will be unit tested, based on test plans developed by the vendor. This phase may be
carried out at offshore.

Next, the developed and unit tested application software will be system tested during this
phase. The system testing will be based on the acceptance test plan and test data provided by
the organization. Thereafter it will be installed on the Designated Computed System.

Entry Criteria

 Acceptance Test Plan and Test Data

 Customization Design Specification Document for identified modifications

Deliverables

Customized unit and system tested application software.

4. Acceptance Testing

The focus of user acceptance testing is to exhibit that the system works. From the user’s point
of view, acceptance testing is the final quality control procedure to determine whether the
software product is performing as expected.

Entry Criteria

Availability of customized unit and system tested application.

Deliverables

 Tested Application Software

 Updated procedure manual

5. End User Training

All identified end users will be trained in the specific functions they are required to work.
The training will be conducted by vendor.

Entry Criteria

 Tested Application Software

 Updated procedure manual

Deliverables
 End users trained as per training plan

6. Conference room trial

This phase deals on the simulation of the actual business environment. The following
activities will occur iteratively during this phase:

 Identification and entry of representative data

 Simulation of the business model
 Business Model enhancement
 Finalization of procedure manual

As the team reviews the data model, the business model that is prepared in the Procedure
Development stage may undergo some changes.

Entry Criteria

 Tested Application Software

 Updated procedure manual

Deliverables

 Final Procedure Manual

 Final Business Model

7. Data Loading

This is the migration phase where data from existing manual/legacy operations are transferred
to System’s database using interface programs or utilities available within the ERP package.
The following activities will occur:

 Data conversion & loading

 Establishment of Access Rights and Passwords

Entry Criteria

 Final Procedure Manual.

 Final Business Model

Deliverables

 Data Loading Completed

8. Live Trial

Once the Final Business Model is ready and database is loaded, the system is ready to go live.
This phase will allow users to work on the application software with real time data.
 Entry Criteria

 Data Loading Completed

 Trained End Users.

Deliverables

 Live Trial completed

Post Evaluation and Maintenance

 As you consider your ERP post-implementation activities, remember that almost
everyone focuses on the go-live event and at that time considers the implementation
complete. However, the real return on investment from the ERP comes from the post-
implementation activities that occur within the first year. It is a sad fact that most ERP
teams disband after the go-live. Ideally, the team remains, if even for on a part-time
basis to continue the excellent work that led to the successful go-live.  Many books,
blogs, articles, and other resources focus on the Technology aspects of the Post ERP
Implementation activities. They fail to address the People and Process aspects of
ERP after the go-live.
 The first year after the ERP implementation is imperative in determining the long-
term success of the system. Many post-go-live activities need to be both planned and
executed after the launch. Performing a post-implementation review, transitioning the
consultants, determining the governance strategy, continued training, and other
activities ensure on-going success of the ERP solution.
 Ideally, around the time you are running your User Acceptance Testing (UAT), or
earlier, you should be putting together your post-implementation strategy. Don’t wait
until the week of go-live to ask “Now what?” Just as you had a project plan to execute
on the design, build, test and roll-out of the ERP Project, you must put in place a post-
go-live plan. The plan should address the People, Processes, and Technology of the
operational ERP environment. Let’s discuss some significant ERP activities in those
domains:
 People:

 Post-implementation review – capture the wins, learns and

changes

 After the go-live event, ensure that the core team meets to discuss what was
successful about the implementation, what did we learn from the project, and what
would you change going forward? The team must document theses “wins”, “learns”,
and “changes” (WLC). Include a WLCs review session when planning out future
initiatives. Develop a practice of incorporating this knowledge of your projects into
the future project planning activities.  It is our experience that these sessions provide
valuable insights into not only how the project executed, but the perceptions of the
team members on what worked and what didn’t work.  Writing down these discussion
points will help you on future projects.
 Transition the consultants

 You likely had a team of advisers from your implementation partner involved in the
ERP deployment. Once you are live on the new system, request their updated
implementation documentation. Key documents such as a solution design or technical
design need to be updated and delivered to you as a reference document for future
changes or troubleshooting issues.
 Additionally, in your contract with your consultants, did you include any post-go-live
support hours? Is the internal team who will support the ERP system adequately
trained and able to assist the users with technical or process questions? Use some of
these hours to ensure that there is a skill and knowledge transfer.
 Quarterly review training

 A fundamental way to make sure that you get the adoption you desire from the ERP
system is to initiate quarterly refresher training classes. In the first quarter after go-
live, it should be simply a refresher course. But as you continue, you should dive into
deeper functionality that will help the users in their tasks and expand their knowledge
of the software.  Always communicate the “What’s in it for me” benefits to the users
before go-live.  If you didn’t do that, this is a perfect time to remind them why they
should be using the system to the fullest and how it will help them with their jobs.
 These refresher classes may be in person, but many companies are now using online
training courses.  Allowing users to view videos of the classes or take self-guided
training are excellent ways of providing system reinforcement training.  Keep these
training classes going and archive them.  As there is turnover in your organization,
new users will appreciate the catalog of past courses they can reference.
 Processes:

 Capture the knowledge

 As mentioned above, it is important to capture the system expertise of the consultants,

but it is equally important to ensure that you have sufficiently documented the new
processes in all areas of the implemented system.  Typical processes you should
include in your documentation are the Order-to-Cash cycle and the Procure to Pay
cycle.  But even the GL Posting process and the inventory cycle counting methods
should be documented.  Capture decisions made during the project so that in six
months to a year when everyone has forgotten the implementation cycle, that you
have a reference as to “why” you expect people to operate in a particular fashion.
 Many ERP systems have a useful life of 5 years or so because the people who
implemented the system have typically moved on to other departments or have left the
company.  That leaves a knowledge gap, so arbitrary decisions get executed without
understanding the initial considerations of “why” the system was setup the way it was.
Documenting the processes and significant decisions will help extend the life of the
ERP solution.  Yes, the system will evolve, but as you grow the system, you should
create a written knowledge of the how and why considerations.  Future decision
makers will be more informed and will have an understanding of the original vision
for the system.
 Documenting the processes and decisions points may seem like a lot of extra work,
but in the scope of a million dollar or 50 million dollar investment, it ensures that that
investment will continue to provide a return.
 Post-implementation process review

 Performing a post-implementation process evaluation provides a checkpoint and

validation to your original implementation assumptions.  One or two months after go-
live, the implementation team (or a key subset) should work with the users who are
using the system to ensure that the setup for the system matches with the end-users
expectations and that there are no bottlenecks for the users to get their work done.
Often, the initial ERP implementation team includes a representative who makes
process decisions based on his/her understanding of their business unit’s methods.  As
much as they may try during the implementation, they may miss key process
requirements from other similar business units.  An example is having a person
representing the purchasing group in the United States, miss the requirements his/her
colleague has in the United Kingdom.  They may have made some assumptions about
a common process, but missed the detailed requirements for the partner business unit.
This misalignment should be remedied as soon as possible.  If there are gaps in the
alignment between processes and the system, a user story (an agile user requirement)
should be documented and added to the backlog for system enhancement.
 Providing a post-implementation review, provides users with a feedback mechanism
and also provides a way of catching issues early, before they lead to significant
adoption issues, such as abandonment by the affected users.  On a continuing basis, a
business analyst should work with the user community to ensure that there is a
perpetual alignment of the system to current processes.
 Technology:

 Post-implementation backlog review

 During the implementation, requirements are captured, but often there are some user
requests are not fulfilled during the initial deployment.  These may be out of scope,
nice-to-have requests, or items that are not feasible within the timeline defined.  As
such, a request backlog is collected.  The backlog of requests should be reviewed
post-go-live to determine the appropriate time frame in with which to deliver.  In
some cases, the requests are deprioritized.  Alternatively, some user stories are put
into the next release cycle.  Many companies today are working with an agile process
for delivering on these requirements.  In addition to user requests, there may be
additional systems to integrate with, other, non-critical data to load, or even standard
software maintenance releases to apply.  All of these should be planned for and put
into a structure that allows for on-going innovation of the ERP system.  This delivery
is often part of a governance plan.
 Establish your system governance structure

 Do you have a process in place for managing changes to the ERP system? How will
you capture ongoing user feedback and requests for enhancements? How will you
adjudicate the priorities and conflicts in requests? How will you manage your backlog
of user requests?
 Many IT departments have processes in place to solve users issues. But these
traditional IT tools and methods do not necessarily handle the request backlog for an
ERP system. Most importantly, they do not always tie back the functionality to the
original request (or “user story”).  There is a class of software that is used to manage
these issues called Application Lifecycle Management (ALM) software.  Using a
quality ALM, your IT team can both manage and document the user stories
 (requirements) and provide traceability from system functionality to the original
request.
 Aligning user requests is a major component of a governance structure.  Think
through how you may harmonize conflicting enhancement requests. For example, one
division may want to rename a set of fields to accommodate the way they do business,
but in doing so, it may break another groups’ way of operating. When establishing a
governance structure, initiate a method of judging and aligning requests.  Sort out
how to break logjams of conflicting priorities.  All-in-all, it is necessary to plan out
how you manage, harmonize, build and deploy changes to the system.
 Begin execution of an on-going maintenance plan

 ERP systems need care and feeding.  As mentioned above, there are usually quarterly
or semi-annual releases of software updates.  These need to be scheduled and
deployed appropriately, without significant user interruption.  Along with vendor
updates, new functionality developed internally needs to be prepared and released.  A
release cycle needs to be developed.  How often and when will you release new
features to the user community?  More importantly, how will you communicate the
new features and will any of the new software capabilities require user training?  Can
this be timed with the quarterly update training, or will special sessions need to be
scheduled?  Keep an eye on development capacity.  You may only have a handful of
resources who can implement the ERP changes.  They may already have their hands
full managing the system and preparing for vendor enhancements.  IT must provide
feedback on capacity back to the business stakeholders.   Clear, open
communication should be part of any governance plan.
 System evolution planning

 Lastly, keeping the ERP system fresh and evolving will continue to allow the business
to operate at peak performance.  Re-orgs, acquisitions, divestitures, and other business
management activities will add new complexity or challenges to the ERP software
maintenance.  Where possible, have regularly scheduled executive meetings focused
on system direction.  When you began your deployment, you likely had a functional
team working on the details of the system and process alignment, and you had an
executive steering committee providing guidance and direction.  These groups ideally
should remain and continue to offer improvements and directions for the evolution of
the ERP system.
 ERP Post-implementation activities summary

 We have defined here a high-level list of activities that a medium-to-large

organization may wish to focus on post-implementation.  This is not an exhaustive
list, but should start the conversation about what to consider and plan for after the
ERP go-live.  Please comment below if you have other activities  that should be
included after the launch of an ERP system.

 Issues and Challenges in

ERP Implementation
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 The day e-businesses have started to rise and businesses are following the paths
to be more productive, ERP systems have started gaining an immense amount of
interest from entrepreneurs.
 An ERP system lets an organization to establish a completely synchronized
configuration that connects all the business processes together.
 It enables an enterprise in gaining an advantage over competitors by saving
resources and responding to an ever-changing business environment.
 But, there are some challenges that one needs to take into account before
implementing an ERP system.
 ERP Vendors
 In this competitive environment, the selection of the perfect product is necessary
to achieve productivity gains. There are over 500 ERP applications in the market.
While selecting the perfect ERP application for a business, one should know the
vendor’s previous projects, industry vertical and experience.
 Commitment From The Top Management
 Senior managers play a crucial role in any ERP implementation. Their
involvement is extremely necessary for the success of a project. Any form of
ignorance may cause ineffective decisions and delayed operations.
 Adequate Training
 After the implementation of an ERP system, resentment from employees is
common. This could heavily degrade the productivity of processes. Special
training and motivation before the implementation are very helpful. This would
give the teams,  some time to get familiar with the software.
 Implementation Time
 Many companies don’t realize the time consumption of an ERP implementation
process. An ERP system is implemented step by step and because it is very
standard, it needs to be designed to a particular business, to handle the
processes just the way the company needs them.
 Proper Project Management
 Companies who want to implement the ERP system, need to assign their best
employees for successful implementation. Generally, companies appoint external
help as well but internal employees are preferred.
 Implementation Cost
 The entire cost of an ERP implementation is much greater than the initial costs.
The total cost depends on the customization cost. Greater the customization,
higher will be the final implementation cost.
 Employee Retention
 It’s been observed that despite of training, many employees leave the
organization after the implementation of ERP system. This can immensely affect
the growth rate of a company.
 Sufficient Testing
 Testing of ERP system doesn’t mean whether it’s working smoothly or not, but to
be delighted by it’s performance and to see whether it’s up to your needs.
Insufficient testing of the system can attract costly unplanned updating.
 Maintenance Cost
 An ERP system has maintenance costs attached to it. If managed casually, it has
the power to fracture an organization. It requires time to time maintenance which
adds up to the recurring cost.
 Investment In Internal Hardware
  Working on a slow system can be very unproductive and frustrating. ERP
applications require sufficient storage and high work performance. Low
investment in internal hardware may result in various software issues.
 ERP has gained recognition because of competitive factors, such as an ever-
increasing number of mergers and globally aggressive rivals. A successfully
planned and managed ERP system can increase customer satisfaction and
enhance employee productivity. It can adequately increase the company profits
with minimum resources.

Latest ERP
Implementation Methodologies
1. Traditional Method

Project planning

Normally when the decision for a particular ERP system has to be made, a rough plan of
procedure already exists It now has to be refined and worked out in concrete terms: Dates,
budgets, project team composition, task packages and responsibilities are best written down.

Process analysis

Now comes the “As is analysis” of the business processes and the target definition for the
collaborative ERP project. The adopted specifications serve as a template. Your ERP
manager now gets to know your workflows in detail and works with your team in a common
language.

Process organization

After the “As is analysis”, the processes are “translated” into the standard of the selected ERP
system and, if necessary, workflows and / or data quality are meaningfully optimized.

Configuration

Parallel to the defined work packages from step 3, the vendor begins with the installation of a
test environment on the server and the implementation of the individual subsections. Data is
prepared for migration, forms and interfaces are customized, software extensions are
programmed, and users and roles are set up.

Training

Once the first areas in the new ERP system are ready for launch, the project team is trained
by the software vendor, after which the project team organizes department-specific training
for the end users in the company.
 Testing

Extensive tests take place before the Go Live. Real company data is imported into the test
environment and all relevant business processes and functions are simulated.

Go live

Even after such extensive tests, experience has shown that there is still room for improvement
after the go live under full load. Functional gaps or malfunctions are remedied by the vendor,
only after that does the final acceptance take place.

With the introduction method “Global Implementation Method” (GIM), which has proven its
worth since 1999, abas ERP guarantees consistent quality all over the world. To ensure the
highest level of security and ROI during the introduction of abas ERP, we have developed a
worldwide ERP implementation methodology over 40 years of project experience. Your ERP
introduction related goals are at the heart of this 7-step approach. GIM makes it possible to
achieve these goals in line with your available resources and within the given budget and
time frame. Even with international projects, you can be sure that this ERP implementation
methodology will apply to all your locations. In addition, a holistic project organization
ensures the holistic aspect of a multi-site project. Goals, communication and action are
synchronized and coordinated around the globe.

2. The Turnkey Method

The second methodology is the Turnkey methodology because it is clearly a vendor-led

method. This methodology uses the following phases:

 Planning: The activities are the same in this phase as the traditional methodology,
with the vendor consultant taking a bigger role in the construction of the plan. Also, the
vendor project manager is planning the vendor consultants’ time since they are involved
full-time in the next four phases of the project.
 Discovery/Setup/Configuration: Here we see the major difference between the two
methodologies. In this phase, the vendor consultants review the current process,
design/configure/setup new processes, and perform an initial test with minimal
involvement of the customer team. The customer implementation team is only involved in
discovery by providing input on current processes. In essence, the vendor team is providing
a “turnkey” approach to system design and the setup of the new system.
 Prototype Review/Education: In this phase, the vendor team delivers the new
system to the customer implementation team and begins to educate the customer team
through prototype demonstration workshops. In these reviews, the customer team is
getting educated on the new system and the capabilities of the product. The vendor team
identifies issues and adjusts the new system as needed. At the end of this phase, the
customer team accepts the design of the new system.
 Conference Room Pilot: In this phase, the vendor team leads the customer team
through several phases of a conference room pilot (CRP). The last CRP becomes a simulated
“go-live”. When this CRP is completed, the customer team accepts the new system and is
ready to go live.
 Cutover Activities: The implementation team plans the cutover process, and trains
the rest of the end-users on the new system. The implementation team performs the
training and the vendor consultants support the team.
 Go-Live Support: The implementation team supports the end-user in the use of the
new system. The implementation team provides real-time support. The vendor consultants
are also on-site during the first month to support the quick resolution of new problems as
they arise.

UNIT-5

ERP Project Team: Composition

An ERP implementation requires an investment in human and financial resources, regardless
of size or scope of the project. Assembling a highly productive team is absolutely essential
for the success of any ERP project, which requires building a healthy team structure and
choosing the right team members. This blog’s focus is on the most common team structures
and three guiding principles to follow when assembling the team for your ERP
implementation project.

Team Structures
There are typically three team structures within an ERP implementation team:

 The Executive Steering Team (EST) makes up the highest level of management for
the project. The EST consists of senior managers who head the various departments impacted
by the project. One of the key responsibilities of this team is to define the scope in terms of
time and budget. Team members may include the Chief Implementation Officer,
implementation partners from outside consulting firms, and the other department heads such
as the Sales or Accounting Manager.
 The Project Management Team (PM) reports directly the EST. Experts in the field
recommend that project managers are not recruited directly from the IT department because
 ERP implementations should not be confused with IT projects; they are a much more
collaborative and dynamic and therefore should not be led by the IT team, although the PM
team should most definitely include an IT Project Lead. The PM team should also include a
Consulting Project Manager, as well as a Site Manager if the implementation is a multi-site
project.
 The Core Team takes on the actual execution of the project, including business
analysis, consulting, and development. As head of the Core Team, the Team Lead is in
charge of communicating with the PM team. Other team members consist of one or more
Application Consultants, Functional Analysts, and Internal Developers. The combination of
these roles depend on the size of the project. A Site Coordinator will also be necessary if the
project involves multiple sites.

Three guiding principles for selecting an effective team

Principle #1: Choose people based on their competencies, not on their job title. There are
several reasons for this. First of all, companies usually choose individuals at the managerial
level because they assume that managers are more knowledgeable about the project. This can
be true; however, these individuals are usually quite busy, which could result in the project
taking longer than intended. Second, choosing non-management employees who understand
the process could be used as a motivational tool. They are likely to be more dedicated to the
project because they see that you recognize their abilities.

Principle #2: Empower your team to make decisions. Some employees may have a much
clearer picture of how to improve the process. It often takes courage to say it out loud.
Empowering the team helps these individuals step out of their comfort zone and express their
own ideas and could help increase productivity and efficiency.

Principle #3: Keep communication between all levels smooth. Keeping everyone on the
same page is essential for an ongoing project. A daily meeting (called a “standup” if your
implementation partner uses the agile approach to project management like ArcherPoint),
whether in person or using a tool like Skype, is necessary, especially when it comes to
reviewing what the team has achieved, what they are going to achieve, and what obstacles
may become problems if not addressed.

There is a lot of planning required before an ERP project is launched. Choosing the right
people for your implementation team can not only make the process more productive, but can
also save your company money and time

Organization and working of ERP

implementation Team
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An effective ERP implementation team with clear goals is the foundation of a successful
implementation project.  It’s important to build an internal team that includes the people who
 helped select the ERP, along with an executive sponsor and representation from across the
enterprise, as well as other senior management and internal leaders.

We’ve found that effective ERP implementations start with a team fully engaged in the
process. This means pulling together a talented Project Manager and user champions from the
main area of the manufacturing organization including finance, purchasing, quality,
production, logistics, engineering, etc.

5 ERP Implementation Keys to Success

Over the years, we’ve noted these key success factors when it comes to the ERP selection
team.

1. An Emphasis on Project Management: Due to the complex nature of an ERP

implementation, the team must be led by a person experienced in project management. A
dedicated, experienced project manager can make the difference between success and failure.
More than a part-time task master, the project manager provides leadership for accountability,
transparency, and decisiveness. We advise our clients that the entire ERP implementation
team should keep a focus on excellent project management techniques.
2. A Commitment to Apply the Appropriate Resources: Manufacturing companies
must apply significant internal and external resources for ERP implementation. From data
migration to user training, from a phased pilot to “go live” deployment, the correct vendor,
consultant and internal business user resources are critical. We see many companies
underestimate the required resources especially during critical phases of the project. We
advise our clients to never trivialize the scope and scale of an ERP implementation. Success
follows when a company allocates the proper amount of time and resources.
3. Collaboration with IT: As we noted earlier in the post, an ERP implementation
affects the whole enterprise, including the extended supply chain. However, the IT team
needs to be at the center of it all. The project team must build in collaboration,
communication and coordination with the IT department.
4. A Focus on Change Management: An ERP implementation brings with it drastic
change for the entire enterprise.  A previous post on ERP and change management noted that
it’s important for the ERP implementation team to know how the work force will react to a
new ERP system, how to gain consensus from all team members, and how sponsors can lead
their people to success. The team sets the pace in implementing ERP for lasting business
change within an organization.
5. A Focus on Education: This point can’t be stressed enough. An ERP implementation
is only be as good as an end-user’s ability to operate it. The team must design workshops and
instruction to teach all business users how to utilize the system to its full potential. Our
implementation experts often suggest short, targeted training sessions. This allows users the
time to try what they have learned and to develop ideas for process modifications and system
optimization
 Success and Failure factors in
ERP Project
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Success and Failure Reasons in ERP Implementation

 Realistic Development of Project Schedule and Plan

ERP implementations can fail because organizations underestimate the magnitude of the
undertaking and develop a project plan with an unrealistic timeline that leaves no flexibility
to accommodate delays due to even minor unforeseen circumstances. In fact, these
“unknowns” can result in significant project delays, as the dependencies between activities
tend to affect project schedule and resource costs because team members are not effectively
utilized. Planning and managing milestones are critical success factors for the execution of a
successful ERP project schedule. While it’s important to give consideration to resource
loading to ensure the team is equipped to handle the project, it’s extraordinarily difficult to
maintain a fully resource-balanced plan at the task level for a large ERP implementation.

 Appropriate Business Involvement 

Another potential risk area during the ERP implementation process is lack of appropriate
involvement from the functional areas of the business. Each business process (e.g., Order to
Cash, Record to Report and Requisition to Payment) on a large implementation should have a
process owner whose full-time job is the success of the ERP implementation. Process owners
should be empowered to make functional decisions about the “to-be” business processes, as
well as for scoping, testing and issue resolution. In large organizations, the process owner
role may become permanent, continuing on after implementation to provide global decision-
making, issue resolution and governance for units conducting business within the same ERP
system.

 Organizational Change Management 

The impact the user community has on the overall success of an ERP system implementation
should not be ignored. An ERP solution will change the way people work in the organization,
making their activities much more connected and transparent. Existing business processes are
likely to change or even become unnecessary, as might the responsibilities of individual
employees.

Change management – a planned approach to change in an organization – is vital to

providing structure for the workforce’s transition and acceptance of the ERP system. A
common mistake is to think of change management as simply “training.” A formal change
management plan should be developed and a change management team gathered to work
throughout the ERP project life cycle to support change management issues related to the
system’s implementation.

 Project Management and Executive Sponsorship

 ERP systems are supposed to promote the flow of information throughout the organization,
and enhance communication and decision-making. Yet one of the most significant and
frequently identified risks to project success is lack of communication and slow decision-
making among key stakeholders – such as executive management, the IT organization,
business process owners, and compliance. The view that an ERP implementation is simply an
“IT project” affects lack of engagement by stakeholders. Quite often, core business process
owners are assigned responsibility for managing all aspects of the process, from overseeing
system design to go-live, even if they have little or no experience as project managers or
understanding of ERP systems.

 Technical Infrastructure and Custom Development

There is a wide range of technical issues – some anticipated in a formal risk assessment,
some not – which can result in delay or failure in an ERP implementation. Common issues
include: 

 Insufficient knowledge transfer from the system integrator to the long-term support
team 
 Network and service-level issues associated with upgrading or outsourcing of data
centers 
 Insufficient system resources allocated for high demand on middleware and interface
architectures 
 Stressed network or insufficient bandwidth, especially at remote sites, due to
inadequate volume and stress testing of the infrastructure 
 Ineffective technical change management processes 
 Inadequate or unproven business continuity and disaster recovery plans

Post ERP Implementation:

Organizational change Management
 AKTUTHEINTACTONE31 AUG 2019 1 COMMENT

Change is the law of life and resistance to change is the truth. To balance both these
aspects, change management is essential. Implementing ERP in your organization
implies change and there is bound to be some resistance. To manage the change, it is
essential to have a change management strategy that will ensure a smooth transition
throughout the organization.

Change management works on the relationship between people, processes, and

systems. It ensures people understand the business process change and accept and
use the new system. The Kubler-Ross Curve is an effective change management
strategy to understand how people deal with change.

In an article on selecting and implementing an ERP system in CIO, Matt Thompson, Vice
President of Professional Services, Estes Group says on change management,
“Organizational change management is pivotal to the success of your project. Typical
ERP projects facilitate massive change in organizations that can include changing of day
to day job descriptions or eliminating job descriptions in total. [These] changes impact
the culture of your company and without careful control and communication plans and
workshops you can create an adverse reaction to ERP [resulting in] barriers [to]
implementation and adoption.” (Source: Cio)

So the importance of change management in ERP implementation cannot be

undermined. This blog will describe three steps for effective change management.

3 Steps for Effective Change Management

Step 1: Communication

Communication is important because people cannot accept what they do not

understand. Early, frequent, and progressive communication much before the ERP
system is implemented should explain the need for change.

Employees need to know the reasons for adopting the new ERP system and how it will
help the organization. They need to be educated on the features of the new system and
how it will benefit them.

The nature of tasks or even job roles of employees change when ERP is implemented.
Employees need to know what the transition from a functional oriented to a process
oriented organization involves, its benefits, and how their tasks will change once the
system goes live.

It is necessary to have a communication strategy as part of change management. It can

be either one-way communication or two-way communication. Mitel Corporation, a
manufacturer of semi-conductors and business communication systems decided to
implement ERP in their organization. They used both these communication methods to
get the buy-in from employees.

 In one-way communication, the project was announced and its status was updated
regularly through the Intranet, posters, newsletters, town hall meetings, and integration
test demonstrations.

Mitel focused more on two way communication. Conversations and discussions in

meetings, workshops, and Q&A sessions on the Intranet helped employees understand
the change. This is important to gain the confidence of employees and their buy-in for
the change. It also helps resolve misunderstandings. Employees accept and commit to
the changes. They identify with the new way of working and their help can be enlisted to
convince other employees.

Step 2: Stakeholder Analysis

This step will define who will be affected by the ERP implementation. Analysis will help
know the level of involvement of each stakeholder and will determine the amount of
training they will require.

 This analysis will help document the roles and responsibilities of each stakeholder. The
roles that will be defined at this stage are:
 Leader – Provides direction and alignment
 Super Users – SMEs within departments, understand the business process of
their departments
 Power Users – Users with advanced knowledge of certain applications who will
monitor the day-to-day transactions of end users
 End Users – Everyone who uses the system, they feed the system with data

In this stage, the perceived advantages and disadvantages, job roles, and
responsibilities for each stakeholder after the restructuring of the organization will be
analyzed. To enable stakeholders commit and own the change, an assessment of each
one’s level of involvement is necessary. The results of the stakeholder analysis are used
to identify the training requirements.

Step 3: End-User Training

Training employees on skills and knowledge is necessary to execute the ERP system.
Training must be customized for each process in the organization so that the users
understand how relevant it is to them.

Training requires an investment of time, money, and effort, but the results are worth it
because it will help employees learn about their roles, and consequently reduce their
resistance to the change. In fact, a report on how top organizations deploy ERP training
by The Aberdeen Group published in 2014 says that Best-in Class organizations (top
20% of companies based on performance) are likely to combine ERP training with day-
to-day business processes so that they learn as they work. (Source: Aberdeen)

End user training will provide employees the knowledge of the software fundamentals
and the benefits it will provide. Organization-wide training is necessary for this – from
management to executive teams, IT project teams to end users.

End user training must be ongoing and should include classes, workshops, and practical
sessions right through the implementation process. It should not be a ‘one and done’
program but a continuous process. Employees typically will not be able to remember all
the different tasks involved in using the new software. So a combination of classroom
training and online learning will work best.
 As the above image shows, the process of change management involving the above
three steps should ideally provide employees the skills and knowledge (through end user
training) so that they enter a state of readiness that will convert them into high-
performance end users.

The change management strategy will ensure employees adopt change quickly so that
organizations can adopt the new technology faster with the least impact on productivity.

Post Implementation Review

A good time to start thinking about the Post Implementation Review is when members of
the project team remember the most – shortly after the project has been delivered, and
when most of the problems have been ironed out. Start to list ideas and observations
while they are still fresh in people’s minds.

However, to adequately assess the quality of the implementation and complete this
process, you’ll need to wait long enough for the changes caused by the project to truly
take effect.

There will probably be a period of adjustment before you can finally review the solution
as it was intended to operate: you’ll likely need to overcome some of the usual
resistance to change, hold people’s hands while they operate new systems, and
eliminate technical problems that didn’t emerge when deliverables were tested. You
should therefore typically allow a few weeks, or even a few months, before doing the full
PIR. Where possible, allow for at least one, full, successful cycle of business before
reviewing lessons learned.

What to Review
Here are some tips for conducting the PIR:

 Ask for openness: Emphasize the importance of being open and honest in your
assessment, and make sure that people aren’t in any way punished for being open.
 Be objective: Describe what has happened in objective terms, and then focus on
improvements.
 Document success: Document practices and procedures that led to project
successes, and make recommendations for applying them to similar future projects.
 Look with hindsight: Pay attention to the “unknowns” (now known!) that may
have increased implementation risks. Develop a way of looking out for these in future
projects.
 Be future-focused: Remember, the purpose is to focus on the future, not to
assign blame for what happened in the past. This is not the time to focus on any one
person or team.
 Look at both positives and negatives: Identify positive as well as negative
lessons.

When conducting the review, include the following activities:

 Conduct a gap analysis.
o Review the project charter to evaluate how closely the project results
match the original objectives.
o Review the expected deliverables (including documentation) and ensure
either that these have been delivered to an acceptable level of quality, or that an
acceptable substitute is in place.
o If there are gaps, how will these be closed?
 Determine whether the project goals were achieved.
o Is the deliverable functioning as expected?
o Are error rates low enough, and is it fit for purpose?
o Is it functioning well, and in a way that will adjust smoothly to future
operating demands?
o Are users adequately trained and supported? And are there sufficiently
enough confident, skilled people in place?
o Are the necessary controls and systems in place, and are they working
properly?
o What routine activities are needed to support the project’s success?
o If there are problems here, how will these be addressed?
o How does the end result compare with the original project plan, in terms of
quality, schedule and budget?
 Determine the satisfaction of stakeholders.
o Were the end users’ needs met?
o Is the project sponsor satisfied?
o What are the effects on the client or end user?
o If key individuals aren’t satisfied, how should this be addressed?
 Determine the project’s costs and benefits.
o What were the final costs?
o What will it cost to operate the solution?
o What will it cost to support the solution in the future?
o How do the costs compare with the benefits achieved?
o If the project hasn’t delivered a sufficiently large return, how can this be
improved?
 Identify areas for further development.
o Have all of the expected benefits been achieved? If not, what is needed to
achieve them?
o Are there opportunities for further training and coaching that will maximize
results?
o Could you make further changes, which would deliver even more value?
o Are there any other additional benefits that can be achieved?
 Identify lessons learned.
o How well were the project’s deliverables assessed, and how well were
timescales and costs assessed?
o What went wrong, why did these things go wrong, and how could these
problems be avoided next time?
o What went well, and needs to be learned from?
 Report findings and recommendations.
o What have you learned from this review?
o Do you need corrective action to get the benefits you want?
o What lessons have you learned that need to be carried forward to future
projects?
o Does this project naturally lead on to future projects, which will build on
the success and benefits already achieved?

How to Review
As you perform the post-implementation review, certain methods and practices will help
you obtain the best possible information:

 Define the scope of the review beforehand: The last thing you want to do is to
create a political problem. Given the number of people often involved in a project, it’s
easy to hurt someone’s feelings when reviewing the project’s success. Clarify your
objectives for the review, and make your intentions clear – this will better ensure that
people share their experiences openly and honestly. Then make absolutely sure that you
stick to these intentions, and that people’s egos aren’t unnecessarily bruised by the
process!
 Review key documents: Gather together the key project documents. This will
help you assess the project planning process, as well as the actual benefits achieved
through the project.
 Consider using independent reviewers: Where possible, use outside people in
your review process to get an objective, unclouded view of the project. Some people
recommend using only independent people in the review, however, you can learn a lot
from the perspectives of those who were directly involved in the project – this is why the
best strategy is probably to have a balance.
 Use appropriate data collection: Collect information in the most appropriate
way, for example, by using interviews and surveys. Also, test the deliverable yourself, to
make sure you get firsthand information.
 Deliver appropriate reports: Report your findings, and publicize the results.
Remember that the PIR is designed to help project managers conduct more effective
projects in the future, as well as to measure and optimize the benefits of the specific
project being reviewed.
 Present recommendations: Present the detailed recommendations to the
organization and the project leaders, as well as to customers and other stakeholders.
Include as many people as necessary so that you keep – and apply – the best-practice
information in the future.

Post Implementation Support

 AKTUTHEINTACTONE31 AUG 2019 1 COMMENT
Post Implementation Support Services are the last cornerstone in the foundation of
your successful solution and the project fail-safe mechanism. Once training is
completed, our involvement with your company does not end. As we have all
experienced – “Stuff happens!”
 Staff sometimes forgets how an infrequently used feature is to be employed.
 A staff member may be substituting for someone and be somewhat unfamiliar
with their normal processes.
 Process changes may generate a question as to how to most effectively utilize
system capabilities
 No solution involving software or hardware is 100% perfect and error or bug free.

Whatever situation arises, our friendly experienced support staff is available to help with
your staff’s problems and answer their questions.

Support services are available to you and your staff via

 Phone
 Remote connection
 Onsite visits
 Email

ERP Security
 AKTUTHEINTACTONE31 AUG 2019 1 COMMENT
ERP Security is a wide range of measures aimed at protecting Enterprise resource
planning (ERP) systems from illicit access ensuring accessibility and integrity of system
data. ERP system is a computer software that serves to unify the information intended to
manage the company including Production, Supply Chain Management, Financial
Management, Human Resource Management, Customer Relationship Management,
Enterprise Performance Management, etc. Common ERP systems are SAP, Oracle E-
Business Suite, Microsoft Dynamics.

Causes for vulnerabilities in ERP systems

Complexity

ERP systems process transactions and implement procedures to ensure that users have
different access privileges. There are hundreds of authorization objects in SAP
permitting users to perform actions in the system. In case of 200 users of the company,
there are approximately 800,000 (100*2*20*200) ways to customize security settings of
ERP systems. With the growth of complexity, the possibility of errors and segregation of
duties conflicts increases.

Specificity

Vendors fix vulnerabilities on the regular basis since hackers monitor business
applications to find and exploit security issues. SAP releases patches monthly on Patch
Tuesday, Oracle issues security fixes every quarter in Oracle Critical Patch Update.
Business applications are becoming more exposed to the Internet or migrate to the
cloud.
 Lack of competent specialists

ERP Cybersecurity survey revealed that organizations running ERP systems “lack both
awareness and actions taken towards ERP security”. ISACA states that “there is a
shortage of staff members trained in ERP security”[10] and security services have the
superficial understanding of risks and threats associated with ERP systems.
Consequently, security vulnerabilities complicate undertakings such as detecting and
subsequent fixing.

Lack of security auditing tools

ERP security audit is done manually as various tools with ERP packages do not provide
means for system security auditing. Manual auditing is a complex and time-consuming
process that increases the possibility of making a mistake.

Large number of customized settings

The system includes thousands of parameters and fine settings including segregation of
duties for transactions and tables, and the security parameters are set for every single
system. ERP system settings are customized according to customers’ requirements.

Security issues in ERP systems

Security issues occur in ERP systems at different levels.

Network layer

Traffic interception and modification

 Absence of data encryption

In 2011, Sensepost specialists analyzed DIAG protocol used in SAP ERP system for
transferring data from the client to the SAP server. Two utilities were published that
allowed to intercept, decrypt, and modify client-server requests containing critical
information. This made attacks possible including Man-in-the-middle attack. The second
utility operates like a Proxy and was created to identify new vulnerabilities. It allowed
modifying requests coming to client and server.[13]

 sending password in cleartext (SAP J2EE Telnet / Oracle listener old versions)

In the SAP ERP system, it is possible to perform administering functions via Telnet
protocol, which encrypts passwords.

Vulnerabilities in encryption or authentication protocols’

 Authentification by hash
 XOR password encryption (SAP DIAG)
 imposing the use of outdated authentication protocols
 Incorrect authentication protocols