enterprise resource planning

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VEL TECH VEL TECH MULTI TECH VEL TECH HIGH TECH

STUDY MATERIAL

ENTERPRICE RESOURCE PLANNING

DEPARTMENT OF IT

Vel Tech

Vel Tech Multi Tech Dr.Rangarajan Dr.Sakunthala Engineering

College

Vel Tech High Tech Dr. Rangarajan Dr.Sakunthala Engineering

College

VEL TECH VEL TECH MULTI TECH VEL TECH HIGH TECH 1


SEM - VIII

INDEX

UNITS PAGE NO.

I. Introduction 06

II. ERP Implementation 25

III. The Business Modules 40

IV. The ERP Market 64

V. ERP – Present and Future 89



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Phone : 044 26840603 email : [email protected] 26841601 website : www.vel-tech.org 26840766 www.veltechuniv.edu.in

Student Strength of Vel Tech increased from 413 to 10579, between 1997 and 2010.

Our heartfelt gratitude to AICTE for sanctioning highest number of seats and highest number of courses for the academic year 2009 – 2010 in Tamil Nadu, India.

Consistent success on academic performance by achieving 97% - 100% in University examination results during the past 4 academic years.

Tie-up with Oracle Corporation for conducting training programmes & qualifying our students for International Certifications.

Permission obtained to start Cisco Networking Academy Programmes in our College campus.

Satyam Ventures R&D Centre located in Vel Tech Engineering College premises.

Signed MOU with FL Smidth for placements, Project and Training.

Signed MOU with British Council for Promotion of High Proficiency in Business English, of the University of Cambridge, UK (BEC).

Signed MOU with NASSCOM.

Signed MOU with INVICTUS TECHNOLOGY for projects & Placements.

Signed MOU with SUTHERLAND GLOBAL SERVICES for Training & Placements.

Signed MOU with Tmi First for Training & Placements.

VELTECH, VEL TECH MULTI TECH engineering colleges Accredited by TCSVEL TECH, VEL TECH MULTI TECH, VEL TECH HIGH TECH, engineering colleges & VEL SRI RANGA SANKU (ARTS & SCIENCE) Accredited by CTS.

Companies Such as TCS, INFOSYS TECHNOLOGIES, IBM, WIPRO TECHNOLOGIES, KEANE SOFT-WARE & T INFOTECH, ACCENTURE, HCL TECHNOLOGIES, TCE Consulting Engineers, SIEMENS, BIRLASOFT, MPHASIS(EDS), APOLLO HOSPITALS, CLAYTON, ASHOK LEYLAND, IDEA AE & E, SATYAM VENTURES, UNITED ENGINEERS, ETA-ASCON, CARBORANDUM UNIVERSAL, CIPLA, FU-TURE GROUP, DELPHI-TVS DIESEL SYSTEMS, ICICI PRULIFE, ICICI LOMBARD, HWASHIN, HYUNDAI, TATA CHEMICAL LTD, RECKITT BENKIZER, MURUGAPPA GROUP, POLARIS, FOX-CONN, LIONBRIDGE, USHA FIRE SAFETY, MALCO, YOUTELECOM, HONEYWELL, MANDOBRAKES, DEXTERITY, HEXAWARE, TEMENOS, RBS, NAVIA MARKETS, EUREKHA FORBES, RELIANCE INFO-COMM, NUMERIC POWER SYSTEMS, ORCHID CHEMICALS, JEEVAN DIESEL, AMALGAMATION CLUTCH VALEO, SAINT GOBAIN, SONA GROUP, NOKIA, NICHOLAS PHARIMAL, SKH METALS, ASIA MOTOR WORKS, PEROT, BRITANNIA, YOKAGAWA FED BY, JEEVAN DIESEL visit our campus annually to recruit our final year Engineering, Diploma, Medical and Management Students.

Preface to the First Edition VEL TECH VEL TECH MULTI TECH VEL TECH HIGH TECH 3

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This edition is a sincere and co-ordinated effort which we hope has

made a great difference in the quality of the material. “Giving the best to

the students, making optimum use of available technical facilities &

intellectual strength” has always been the motto of our institutions. In

this edition the best staff across the group of colleges has been chosen to

develop specific units. Hence the material, as a whole is the merge of the

intellectual capacities of our faculties across the group of Institutions.

45 to 60, two mark questions and 15 to 20, sixteen mark questions for

each unit are available in this material.

Prepared By : Mr. Einstein. J.

Asst. Professor.

IT1006 ENTERPRISE RESOURCE PLANNING

UNIT 1 INTRODUCTION 9

ERP: An Overview, Enterprise – An Overview, Benefits of ERP, ERP and Related Technologies, Business Process Reengineering (BPR), Data Warehousing, Data



Mining, OLAP, SCM

UNIT II ERP IMPLEMENTATION 9

ERP Implementation Lifecycle, Implementation Methodology, Hidden Costs, Organizing the Implementation, Vendors, Consultants and Users, Contracts with Vendors, Consultants and Employees, Project Management and Monitoring

UNIT III THE BUSINESS MODULES 9

Business modules in an ERP Package, Finance, Manufacturing, Human Resources, Plant Maintenance, Materials Management, Quality Management, Sales and Distribution

UNIT IV THE ERP MARKET 9

ERP Market Place, SAP AG, Peoplesoft, Baan, JD Edwards, Oracle, QAD, SSA

UNIT V ERP – PRESENT AND FUTURE 9

Turbo Charge the ERP System, EIA, ERP and e-Commerce, ERP and Internet, Future Directions

TEXT BOOK1. Alexis Leon, “ERP Demystified”, Tata McGraw Hill, New Delhi, 2000

REFERENCES1. Joseph A Brady, Ellen F Monk, Bret Wagner, “Concepts in Enterprise Resource Planning”, Thompson Course Technology, USA, 2001.2. Vinod Kumar Garg and Venkitakrishnan N K, “Enterprise Resource Planning – Concepts and Practice”, PHI, New Delhi, 2003

UNIT – I

PART – A

1. What is ERP?

Enterprise Resource Planning (ERP) covers the techniques and concepts employed for the integrated management of businesses as a whole, from the viewpoint of the effective use of management resources, to improve the efficiency of



an enterprise. Ideally the data for various business functions are integrated.

2. Write the advantages of ERP.

Installing an ERP system has many advantages – both direct and indirect. The direct advantages include improved efficiency, information integration for better decision making, faster response time to customer queries, etc. The indirect benefits include better corporate image, improved customer goodwill, customer satisfaction, and so on.

3. Direct benefits of ERP.

The following are some of the direct benefits of an ERP system: Business Integration Flexibility Better analysis and planning capabilities Use of latest technology

4. Discuss evaluation of ERP.

As the department become large, they became closed & water tight. Each had their own set of procedures & hierarchy, each & every department maintain information separately which causes waste of resources.

Hence ERP is implemented to integrate all the department together and limit the waste of resources.

5. How business integration achieved by ERP system?

ERP packages are considered to be integrated, is the automatic data updation (automatic data exchange among applications) that is possible among the related business components.

6. Why are ERP systems said to be flexible?

Different languages, currencies, accounting standards and so on can be covered in one system, and functions that comprehensively manage multiple locations of a company can be packaged and implemented automatically.

7. Why do many ERP Implementation fails?Many a company fails in this because of a wrong product, incompetent and

haphazard implementation and inefficient or ineffective usage.

8. What are the reasons for the growth of the ERP market?

To enable, improved business performance



To support business growth requirements To provide flexible, integrated, real-time decision support To eliminate limitation in legacy systems To take advantage of the untapped mid – market (medium size organizations)

9. How do conventional application packages and ERP packages differ?

The first answer to this question is that ERP packages cannot only handle individual business functions such as accounts and inventory, but also the entire range of business functions necessary for the company’s operations.

The second difference is that ERP packages are targeted at everything from small businesses to the largest organizations, and that they can be composed of a highly flexible decentralised database and an information system cluster linked by a network.

The third difference is global adaptation, represented by ERP packages’ multilingual and multi-currency capacity. In the present day, when companies, irrespective of their size and market share, are manufacturing and selling in various areas of the world, the globalization of management platforms is being hastened, along with the global adaptation of enterprise information systems.

10. What is an integrated information system?

An information system is an open, purposive system that produces information using the ‘input – process – output’ cycle. The minimal information system consists of three elements – people, procedures and data. People follow procedures to manipulate data to produce information. In today’s computer world, the definition of information systems has undergone a slight change. Today, an information system is an organized combination of people, hardware, software, communication networks and data resources that collects, collates, transforms and disseminates in an organization.

11. What is MIS?

MIS or Management Information System is a computer – based system that optimises the collection, collation, transfer and presentation of information throughout an organization through an integrated structure of databases and information flow.

12. Why are the integrated information system important for the organization’s success?

ERP system that treats the organization as a single entity and caters to the information needs of the whole organization. If this is possible, and if the information that is generated is accurate, timely and relevant, then these systems will go a long way in helping the organization in realizing its goals.



13. What is business modeling?

In business modeling, we model the business as an integrated system, taking the processes managing its facilities and materials as resources. Information is a very important resource and is very critical in managing all the other resources.

Thus, the business model is a representation of the actual business – what are the various business functions of the organization, how are they related, what are their interdependencies, and so on. The business model is usually represented in the graphical form using flow charts and flow diagrams. From the business model, the data model of the system is created.

14. What is integrated data model?

It should clearly depict the organization; it should reflect the day-to-day transactions and it should be updated continuously. At any given time, the database should give a snapshot of the organization at that point in time. So if an order is entered, the sale is done and the goods are dispatched, then the database should reflect those changes. The inventory should be reduced and the account receivables should be increased. All these things have to happen instantaneously and automatically. That is the challenge and that is the advantage of the integrated database and the integrated data model.

15. What are the limitations of ERP?

1. Managers cannot generate custom reports or queries without help from a programmer and this inhibits them from obtaining information quickly, which is essential for maintaining a competitive advantage.

2. ERP systems provide current status only, such as open orders. Managers often need to look past the current status to find trends and patterns that aid better decision – making.

3. The data in the ERP application is not integrated with other enterprise or division systems and does not include external intelligence.

16. How to overcome the limitations of ERP?

Some of these technologies are:

Business Process Reengineering (BPR) Management Information System (MIS) Decision Support Systems (DSS) Executive Information Systems (EIS) Data Warehousing Data Mining On-line Analytical Processing (OLAP) Supply Chain Management



Customer Relationship Management (CRM)

17. What is BPR?

The fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service and speed.

18. What is data warehousing?

The primary concept of data warehousing is that the data stored for business analysis can be accessed most effectively by separating it from the data in operational systems. The most important reason for separating data for business analysis, from the operational data, has always been the potential performance degradation on the operational system that can result from the analysis processes.

19. What is Data mining?

Data mining is the process of identifying valid, novel, potentially useful and ultimately comprehensible information from databases that is used to make crucial business decisions.

20. What do you mean by OLAP?

OLAP can be defined in five words – Fast Analysis of Shared Multidimensional Information.

FAST means that the system is targeted to deliver most responses to users within about five seconds, with the simplest analysis taking no more than one second and very few taking more than 20 seconds. ANALYSIS means that the system can cope with any business logic and statistical analysis that is relevant for the application and the user, and keep it easy enough for the target user. SHARED means that the system implements all the security requirements for confidentiality (possibly down to cell level) and, if multiple write access is needed, concurrent update locking at an appropriate level. MULTIDIMENSIONAL means that the system must provide a multidimensional conceptual view of the data, including full support for hierarchies and multiple hierarchies. INFORMATION is refined data that is accurate, timely and relevant to the user.

21. Explain the concept of supply chain management?

A supply chain is a network of facilities and distribution options that performs the function of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and



firm to firm.

22. What is the use of common database?

The common database can allow every department of a business to store and retrieve information real time. The information should be reliable, accessible and easily shared.

23. List the Reasons for the growth of the ERP Market

To improve business performance To support business growth requirements To eliminate limitations in legacy system

PART – B

1. Describe the overview of ERP.

Enterprise Resource Planning (ERP) covers the techniques and concepts employed for the integrated management of business as a whole, from the viewpoint of the effective use of management resources, to improve the efficiency of an enterprise. ERP packages are integrated (covering all business functions) software packages that support the above ERP concepts.

Originally, ERP packages were targeted at the manufacturing industry, and consisted mainly of functions for planning and managing core businesses such as sales management, production management, accounting and financial affairs, etc. However, in recent years, adaptation not only to the manufacturing industry, but also to diverse types of industry has become possible and the expansion of implementation and use has been progressing on a global level.

ERP software is designed to model and automate many of the basic processes of a company, from finance to the shop floor, with the goal of integrating information across the compnayand eliminating complex, expensive links between computer systems that were never meant to talk to each other.

Figure shows how information is integrated within an organization using an ERP system.


ERPSystem

Strategic & Operational Planning

Finance

Human Resource

Logistics Management

Maintenance Management

Sales & Distribution

Manufacturing

Materials Management

Quality Management


Figure. Information integration through ERP systems.ERP software is a mirror image of the major business processes of an

organization, such as customer order fulfillment and manufacturing. Its success depends upon reach-a circumscribed ERP system isn’t much better than the legacy system it replaces. In many cases, it is worse, because the old code at least was written specifically for the company and the task. ERP systems’ set of generic processes, produce the dramatic improvements that they are capable of only, when used to connect parts of an organization and integrate its various processes seamlessly. When a warehouse in Noida enters a customer order, for example, the data flows automatically to others in the company who need to see it-to the finance department at the company headquarters in Mumbai and to the manufacturing plant in Chennai. The lure of information integration struck a chord with CEOs and CFOs and CFOs-ERP vendors’ primary targets-and sales of ERP took off in the early 1990s.

REASON FOR THE GROWTH OF THE ERP MARKET

The is no doubt that the market for Enterprise Resource Planning (ERP) systems is in great demand. Industry analysts are forecasting growth rates of more than 30% for at least the next five years. Why are so many companies replacing their key business systems? The answer is:

To enable improved business performance Cycle time reduction Increased business agility Inventory reduction Order fulfillment improvement

To support business growth requirements New products/product lines, new customers Global requirements including multiple languages and currencies

To eliminate limitation in legacy systems Century dating issues



Fragmentation of data and processing Inflexibility to change Insupportable technologies

To take advantage of the untapped mid-market (medium size organiza-tions)

Increased functionally at a reasonable cost Client server/open systems technology Vertical market solutions

These are some of the reasons for the explosive growth rate of the ERP markets and the ERP vendors. As more and more companies are joining the race, the ERP vendors are shifting their focus from big-Fortune 1000-companies to different market segments (medium size companies, small companies, etc). The future will see fierce battle for market share and mergers and acquisitions for strategic and competitive advantage. The ultimate winner in this race will be the customer, who will get better products and better service at affordable prices.

2. Benefits of ERP.

The Advantages of ERP

Installing an ERP system has many advantages-both direct and indirect. The direct advantages include improved efficiency, information integration for better decision making, faster response time to customer queries, etc. The indirect benefits include better corporate image, improved customer goodwill, customer satisfaction, and so on. The following are some of the direct benefits of an ERP system,

Business Integration Flexibility Better Analysis and Planning Capabilities Use of Latest Technology

Business Integration

The first and most important advantage lies in the promotion of integration. The reason why ERP packages are considered to be integrated, is the automatic data updation (automatic data exchange among applications) that is possible among the related business components. Since conventional company information systems were aimed at the optimization of independent business functions in business units, almost all were weak in terms of the communication and integration of information that transcended the different business functions. In the case of large companies in particular, the timing of system construction and directives differs for each product and department/functions and sometimes, they are disconnected. For this reason, it has become an obstacle in the shift to new product and business classification. In the case of ERP packages, the data of related business functions is also automatically



updated at the time a transaction occurs. For this reason, one is able to grasp business details in real time, and carry out various types of management decisions in a timely manner, based on that information.

Flexibility

The second advantage of ERP packages is their flexibility. Different languages, currencies, accounting standards and so on can be covered in one system, and functions that comprehensively manage multiple locations of a company can be packaged and implemented automatically. To cope with company globalization and system unification, this flexibility is essential, and one can say that it has major advantages, not simply for development and maintenance, but also in terms of management.

Better Analysis and Planning Capabilities

Yet another advantage is the boost to the planning functions. But enabling the comprehensive and unified management of related business and its data, it becomes possible to fully utilize many types of decision support systems and simulation functions. Furthermore, since it becomes possible to carry out, flexibly and in real time, the filling and analysis of data from a variety of dimensions, one is able to give the decision-makers the information they want; thus enabling them to make better and informed decisions.

Use of Latest Technology

The fourth advantage is the utilization of the latest development in Information Technology (IT). The ERP vendors were very quick to realize that in order to grow and to sustain that growth, they had to embrace the latest developments in the field of Information Technology. Therefore, they quickly adapted their systems to take advantage of the latest technologies like open systems, client/server technology, Internet/Intranet, CALS (Computer-Aided Acquisition and Logistics Support), electronic-commerce, etc. It is this quick adaptation to the latest changes in Information Technology that makes the flexible adaptation to changes in future business environments possible. It is this flexibility that makes the incorporation of the latest technology possible during systems customization; maintenance and expansion phases.

As has been stated above, ERP includes many of the functions that will be necessary for future systems. However, undertaking reforms to company structures and business processes, so as to enable the full use of these major features, is the greatest task for companies that will use them. It is necessary to take note that casually proceeding with the implementation of ERP, merely for reasons of system reconstruction or preparation for the year 2000, is likely to result in turning the above mentioned advantages into disadvantages.

3. Describe Integrated Management Information.



Integrated Management Information

An information system is an open, purposive system that produces information using the “input-process-output’ cycle. The minimal information system consists of three elements-people, procedures and data. People follow procedures to manipulate data to produce information. In today’s computer world, the definition of information systems has undergone a slight change. Today, an information system is an organized combination of people, hardware, software, communication networks and data resources that collects, collates, transforms and disseminates in an organization.

Management Information System(MIS) is a planned system of the collecting, processing, storing and disseminating data in the form of information needed to carry out the functions of management. Information system include systems that are not intended for decision making. But MIS intended for decision making also.

Figure. An enterprise where all departments know what the others are doing Management Information Systems, also called information-reporting systems,

were the original type of management support systems, and they still are a major category of information systems. MIS produce information products that support many of the day-to-day decision making needs of the management. Reports, charts, graphs, displays and responses produced by such systems provide information that VEL TECH VEL TECH MULTI TECH VEL TECH HIGH TECH 14


managers have specified in advance. Such predefined information satisfies the needs of managers at the operational levels of the organization who are faced with the structured type of decision-making.

But the problem with these information systems is that they only give information that has been predefined. So each department will have its own database and information systems. These systems will produce different reports of varying detail that were specified when the systems were built.

This method of information gathering has two major disadvantages. One, people in one department do not have any information about what is happening in the other departments. May be at the top management level the summary reports are being circulated to other departments also, but these summary reports often fail in capturing the real picture. The second drawback is that these systems give only the information that they were designed to produce at the time they were built. Suppose a manager wants some information which is not in the reports, then these systems are of no help.

These systems lack the integrated approach. There will be an accounting system for the finance department, a production planning system for the manufacturing department, an inventory management system for the stores department, and so on. All these systems will perform in isolation. So if a person wanted some information which has to be derived from any of these two systems, he has to get the necessary reports from both systems and then correlate and combine the data.

Because the systems work in isolation, collecting and analyzing the data needed for one department’s functioning, can be a difficult task, since, getting information about some aspect that is dependent on more than one department can be tedious. No business executive or decision-maker can take good decisions with the isolated data that he gets from the various reports produced by each department. Even if he collates the data and produces the information that he requires, he would have lost valuable time that could have been better spent in decision-making.

In reality, an organization cannot function as islands of different departments. The production planning data is required for the purchasing department. The purchasing details are required for the finance department and so on. So if all the information islands, which were functioning in isolation, were integrated into a single system, then the impact of that would be dramatic. For example, if the purchase department can see the production planning details, it can make the purchasing schedule accordingly. If the finance department can see the purchase details as soon as it is entered in the system, they can plan for the cash flow that will be necessary for the purchases.

We have seen that in today’s competitive business environment, the key resource of every organization is information. If the organization does not have an



efficient and effective mechanism that enables it to give the decision makers the right information at the right time, then the chances of that organization succeeding in the next millennium are very remote.

The three fundamental characteristics of information are accuracy, relevancy and timeliness. The information has to b e accurate, it must be relevant for the decision-maker and it must be available to the decision-maker when he needs it. Any organization that has the mechanism to collect, collate, analyze and present high quality information to its employees, thus enabling them to make better decisions, will always be one step ahead of the competition. Today, the time available for an organization to react to the changing market trends is very short. To survive, the organization must always be on its toes, gathering and analyzing the data – both internal and external. Any mechanism that will automate this information gathering and analysis process will enhance the chance of the organization to beat the competition.

So, what is needed is a system that treats the organization as a single entity and caters to the information needs of the whole organization. If this is possible, and if the information that is generated is accurate, timely and relevant, then these systems will go a long way in helping the organization in realizing its goals.

4. Describe Business Modeling in ERP.

Business Modeling:

Business modeling or creating a business model is one of the first activities in any ERP project. As said earlier, the ERP systems should mirror the business processes. A business model is not mathematical model, but it is a representation of the business as one large system showing the interconnections and interdependencies of the various subsystems and business processes as shown in figure.

Based on the organization’s goals, objectives and strategic plans, a business model consisting of the business processes is developed. These business processes are controlled by different individuals in the organization (the people) to achieve common goals. Based on the business model, the ERP system is developed with the aim of providing the required information and necessary assistance to the various individuals, to help them perform their business processes more effectively and efficiently.



Figure: Real world

Figure: Business Model

In business modeling, we model the business as an integrated system, taking the processes managing its facilities and materials as resources. Information is very important resources and is very critical in managing all the other resources.

Thus, the business model is a representation of the actual business – what are the various business functions of the organization, how are they related, what are their interdependencies, and so on. The business model is usually represented in the graphical form using flow charts and flow diagrams. Form the business mode, the data model of the system is created.

5. Describe Integrated Data Model.

Integrated Data Model:

One of the most critical steps in the ERP implementation is the creation of an Integrated Data Model. As we have seen earlier, one of the advantages of having an ERP system is that all employees from the different departments get access to the data – the integrated data. The company uses this integrated data for its analysis and decision-making.

With the implementation of ERP systems, the departmental information systems and the departmental databases will have to go. There can no longer be isolated databases, which cater to the needs of a particular department. All the data has to be from the integrated database. This approach will reduce data redundancy and provide updated information about the entire organization to all employees.

For the integrated database to be effective it should clearly depict the organization; it should reflect the day-to-day transactions and it should be updated continuously. At any given time, the database should give a snapshot of the organization at the point in time. so if an order is entered, the sale is done and the VEL TECH VEL TECH MULTI TECH VEL TECH HIGH TECH 17

Plant Material

Contract Invoice

Customer Order

Interrelationship &

Interdependencies

Processes


goods are dispatched, then the database should reflect those changes. The inventory should be reduced and the account receivables should be increased. All these things have to happen instantaneously and automatically. That is the challenge and that is the advantage of the integrated database and the integrated data mode. The integrated data model is derived from the business model as shown in figure.

So, when designing the data model for the ERP system, the most important thing that should be kept in mind is the information integration and the process/procedure automation. The data model should reflect the entire organization and it should successfully depict and integrate the data structures of the entire organization.

6. Describe Business Process Reengineering.

Business Process Reengineering (BPR)

BPR has been around for quite some time and a lot has been written about it in both, the practitioner trade press and the academic research journals. However, the controversy still remains about whether there is any accurate description of BPR, or BPR is just a fad – an appealing label to tag on to whatever your company is doing, to suggest that your latest and greatest work is ‘in vogue’. But if reengineering is to continue in the long run, then it must do more than advertise its considerable successes to date. It must become more proactive and inclusive with regard to human, organizational and motivational change issues.

Dr Michael Hammer defines BPR as “…… the fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in critical, contemporary measures of performance such as cost, quality, service and speed.” One of the main tools for making this change is the Information Technology (IT). Any BPR effort that fails to understand the importance of IT, and goes through the pre-BPR analysis and planning phases without considering the various IT options available, and the effect of the proposed IT solutions on the employees and the organization, is bound to crash during takeoff.

We have seen that the ERP systems help in integrating the various business processes of the organization with the help of modern developments in IT. With a good ERP package, the organization will have the capability of achieving dramatic improvements in critical areas such as cost, quality, speed and so on. So many BPR initiatives and up in the ERP implementation.

7. Describe Data Warehousing.

Data Warehousing:

If operational data is kept in the databases of the ERP system, it can create a lot of problems. As time passes, the amount of data will increase and this will affect



the performance of the ERP system. So it is better to archive the operational data once its use is over. When I say “the use is over’, it does not mean that the archived data is useless. On the contrary, it is one of the most valuable resource of the organization. However once the operational use of the data is over, it should be removed from the operational databases. For example, once the financial year is over, the daily transactional data can be archived. Figure shows what happens if the data is not archived.

Figure: Operational data vs. archive data

It is evident from the figure that even though the operational data volume is nearly the same each year, since the data is not archived, the total amount of data that is stored in the operational database will go on increasing. Figure shows the effect of keeping this huge amount of data in the operational database.

It is clear from the above graph that as the volume of the data in the database increases, the performance of the database and the related applications decreases.



Figure: Data volume vs. performance

From the above discussions, it is evident that we should separate the operational data from the non-operational data. I am not using the term archive data, because if the non-operational data is archived, there is little or no use for it. But this data is a very valuable resource and is too precious to be kept in some archive. It is in this situation that a data ware house comes in handy.

The primary concept of data warehousing is that the data stored for business analysis can be accessed most effectively by separating it from the data in operational systems. The most important reason for separating data for business analysis, from the operational data, has always been the potential performance degradation on the operational system that can result from the analysis process. High performance and quick response time is almost universally critical for operational systems. The reasons to separate the operational data from the analysis data have not significantly changed with evolution of the data warehousing systems, except that now they are considered more formally during the data warehouse building process. Advances in technology and changes in the nature of business have made many of the business analysis processes much more complex and sophisticated. In addition to producing standard reports, today’s data warehousing systems sup port very sophisticated online analysis, including multi-dimensional analysis.

8. Explain the concept of Data Mining.

Data Mining:

We are living in the information age. The importances of collecting data that reflects ones business, or of activities that achieve competitive advantage, are widely recognised now. Powerful systems for collecting data and managing it in large databases are available in most organizations. However, the major bottleneck of



converting this data into effective information is the difficulty faced in extracting knowledge about the system from the collected data. Modeling the investigated system discovering relations that connect variables in a database are the subjects of data mining.

Data mining is the process of identifying valid, novel, potentially useful and ultimately comprehensible information from databases that is used to make crucial business decisions. Modern data mining systems self learn from the previous history of the investigated system, formulating and testing hypotheses about the rules, which the system obeys. When concise and valuable knowledge about the system of interest has been discovered, it can and should be incorporated into some decision support system which helps the manager make wise and informed business decisions.

The main reason for needing automated computer systems for intelligent data analysis is the enormous volume of existing and newly appearing data that require processing. The amount of data accumulated each day by various businesses, scientific and governmental organizations around the world is daunting. Research organizations, academic institutions and commercial organizations create and store huge amounts of data each day. It becomes impossible for human analysts to cope with such overwhelming amounts of data.

The other problems that surface when human analysts process data are:

The inadequacy of the human brain when searching for complex multi-factorial dependencies in the data

The lack of objectiveness in analyzing the data

A human expert is always a hostage of the previous experience of investigating other systems. Sometimes this helps, sometimes this hurts, but it is almost impossible to get rid of this fact.

One additional benefit of using automated data mining systems is that this process has a much lower cost than hiring an army of highly trained (and paid) professional statisticians. While data mining does not eliminate human participation in solving the task completely, it significantly, it significantly simplifies the job and allows an analyst, who is not a professional in statistics and programming, to manage the process of extracting knowledge from data.

9. Describe OLAP.

On-Line Analytical Processing (OLAP):



According to Business Intelligence Ltd (http://www.OLAPReport.com), OLAP can be defined in five words – Fast Analysis of Shared Multidimensional Information.

FAST means that the system is targeted to deliver most responses to users within about five seconds, with the simplest analysis taking no more than one second and very few taking more than one second and very few taking more than 20 seconds. ANALYSIS means that the system can cope with any business logic and statistical analysis that is relevant for the application and the user, and keep it easy enough for the target user. SHARED means that the system implements all the security requirements for confidentiality (possibly down to cell level) and, if multiple write access is needed, concurrent update locking at an appropriate level. MULTIDIMENSIONAL means that the system must provide a multidimensional conceptual view of the data, including full support for hierarchies and multiple hierarchies. INFORMATION is refined data that is accurate, timely and relevant to the user.

Simply put, OLAP describes a class of technologies that are designed for live ad-hoc data access and analysis. While transaction processing (OLTP) generally relies solely on relational databases, OLAP has become synonymous with multidimensional views of business data. These multidimensional views are supported by multidimensional database technology and provide the technical basis for calculations and analysis required by Business Intelligence applications.

OLAP technology is being used in an increasingly wide range of applications. The most common are sales and marketing analysis; financial reporting and consolidation; and budgeting and planning. Increasingly however, OLAP is being used for applications such as product profitability and pricing analysis; activity based costing; manpower planning; and quality analysis, or for that matter any management system that requires a flexible, top down view of an organization.

10. Explain the concept of Supply Chain Management.

Supply Chain Management:

A supply chain is a network of facilities and distribution options that performs the function of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm.

Traditionally, marketing, distribution, planning, manufacturing, and the purchasing organizations along the supply chain operated independently. These organizations have their own objectives which are often conflicting. Marketing’s objective of high customer services and maximum sales revenue conflict with manufacturing and distribution goals. Many manufacturing operations are designed to maximize throughput and lower costs with little consideration for the impact on inventory levels and distribution capabilities. Purchasing contracts are often


http://www.OLAPReport.com/


negotiated with very little information beyond historical buying patterns. The result of these factors is that there is not a single, integrated plan for the organization- there are as many plans as businesses. Clearly, there is a need for a mechanism through which these different functions can be integrated together. Supply chain management is a strategy through which such integration can be achieved.

Lambest and cooper identified that SCM having the following management

components :

Planning and control

Work structure

Organization structure

Production flow facility structure

Information Flow facility structure

Management methods

Risk and reward structure

Culture and attitude

UNIT – II

PART – A

1. Write different phases of the ERP implementation.

The different phases of the ERP implementation are given below:

Pre-evaluation Screening Package Evaluation



Project Planning Phase Gap Analysis Reengineering Configuration Implementation Team Training Testing Going Live End – user Training Post – implementation

2. Define Pre – evaluation Screen.

The Company should do a pre-evaluation screening to limit the number of packages that are to be evaluated by the committee. Not all packages are equal – each has its own strengths and weakness. The pre-evaluation process should eliminate those packages that are not at all suitable for the company’s business processes.

3. Describe package evaluation.

The evaluation / selection process is one of the most important phases of the ERP implementation, because the package that you select will decide the success or failure of the project. Since ERP systems involve huge investments, once a package is purchased, it is not an easy task to switch to another one. So it is a ‘do it right the first time’ proposition.

4. Write the important points for evaluating ERP software.

Fundamental fit with the company’s business processes Degree of integration between the various components of the ERP system Flexibility and scalability Complexity User friendliness Quick implementation Ability to support multi – site planning and control Technology – client / server capabilities, database independence, security Availability of regular upgrades Amount of customization required Local support infrastructure Availability of reference sites Total costs, including cost of license, training, implementation, maintenance,

customization and hardware requirements.

5. Describe the project planning phase for ERP.

This is the phase that designs the implementation process. It is in this phase that the details of how to go about the implementation are decided. Time schedules,



deadlines, etc. for the project are arrived at. The project plan is developed. Roles are identified and responsibilities are assigned. The organizational resources that will be used for the implementation effort are decided and the people who are supposed to head the implementation are identified. The implementation team members are selected and task allocation is done. This phase will decide when to begin the project, how to do it and when the project is supposed to be completed. This is the phase which will plan the ‘what to do’ in case of contingencies; how to monitor the progress of the implementation; what control measures should be installed and what corrective actions should be taken when things get out of control. The project planning is usually done by a committee constituted by the team leaders of each implementation group. The committee will be headed by the ERP incharge (usually the CIO or COO). The committee will meet periodically (during the entire implementation lifecycle) to review the progress and chart the future course of actions.

6. Why is the pre-evaluation screening required?

There are hundreds of ERP vendors – of all sizes and shapes – all claiming to have the solution that is ideal for your company. Analyzing all the packages before reaching a decision is not a viable solution. It is also a very time consuming process. So it is better to limit the number of packages that are evaluated to less than 5. It is always better to do a through and detailed evaluation of a small number of packages, rather than doing a superficial analysis of dozens of packages. It is to identify these packages that we need the pre – evaluation screening.

7. What are the factors to be considered when selecting an ERP package?

When selecting an ERP package, the following factors should be considered: Functional fit with the company’s business processes Degree of integration between the various components of the ERP system Flexibility and scalability Complexity User friendliness Quick implementation Ability to support multi – site planning and control Technology – client / server capabilities, database independence, security Availability of regular upgrades Amount of customisation required Local support infrastructure Availability of reference sites Total costs, including cost of license, training, implementation, maintenance,

customisation and hardware requirements.

8. What is Gap analysis?

Gap analysis is a phase in the ERP implementation, where the organization tries to find out the gaps between the company’s existing business practices and



those supported by the ERP package. Put very simply, this is the process through which companies create a complete mode of where they are now and where they are heading. The trick is to design a model, which both anticipates and covers any functional gaps. It has been estimated that even the best ERP package, customer tailored to a company’s needs, meets only 80% of the company’s functional requirements.

9. How are the ‘gaps’, found out during the gap analysis phase filled?

This can be done in different ways. One of the most affordable, but most difficult, solutions entails altering the business to ‘fit’ the ERP package. Another solution is that the company can simply agree to live without a particular function (the cheap but annoying solution). Other solutions include:

Pinning your hopes on an upgrade (low cost but risky) Identifying a third – party product that might fill the gap (hopefully it also

partners with the ERP packages, keeping interfacing to a minimum) Designing a custom program Altering the ERP source code, (the most expensive alternative; usually

reserved for mission – critical installations)

10. Define Reengineering.

Reengineering Business Process Reengineering. The radical transformation of a business process to achieve orders of magnitude and improvement in one or more performance measures relating to fitness – for – purpose, quality, cycle – time and cost; usually requiring the application of technology enablers. Reengineering projects typically take a minimum of two years to complete.

11. Explain the main functional area of ERP implementation.

Rule of ERP implementation is, synchronising existing company practices with the ERP package rather than changing the source code and customising it to suit the company. In order to do so, business processes have to be understood and mapped in such a way that the arrived at solutions match up with the overall goals of the company.

12. Define Testing.

This is the phase where you try to break the system. You have reached a point where you are testing real case scenarios. The system is configured and now you must come up with extreme-case scenarios-system overloads, multiple users logging on at the same time with the same query, users entering invalid data, hackers trying to access restricted areas and so on. The test cases must be designed specifically to find the weak links in the system and these bugs should be fixed before going live.

13. Explain End User Training.



This phase starts much before the system goes live. The employees who are going to use the new system are identified. Their current skills are noted and based on the current skill levels, they are divided into groups. Then each group is given training on the new system. This training is very important as the success of the ERP system is in the hands of the end – users. So these training sessions should give the participants an overall view of the system and how individual actions would affect the entire system.

14. Explain Maintenance mode.

The post – ERP organization will need a different set of roles and skills than those with less integrated kinds of systems. At a minimum, everyone who uses these systems needs to be trained on how they work, how they relate to the business process and how a transaction ripples through the entire company whenever they press a key. The training will never end; it is an ongoing process; new people will always be coming in, and new functionality will always be entering the organization.

15. Who are ERP vendors?

Vendors are the people who have developed the ERP packages. They are the people who have invested a huge amount of time and effort in research and development, to create the packaged solutions. 16. Write important skills that ERP should possess.

Knowledge of how to organize and run a project of this magnitude Enough experience in handling problems and issues that arise during the

implementation Good people skills Good leadership skills Excellent training skills

17. Describe Vendors.

Vendors are the people who have developed the ERP packages. They are the people who have invested huge amounts of time and effort in research and development to create the packaged solutions. If one studies the history of the ERP packages and finds out how each package evolved, it soon becomes evident that every ERP package grew out of the experience or opportunity of a group of people, working in a specific business, who created systems that could deal with certain business segments.

18. Write the role of vendor.

The vendor should supply the product and its documentation as soon as the contract is signed. Only after the software is delivered, can the company develop the training and testing environment for the implementation team. The vendor is responsible for fixing any problems in the software that the implementation team encounters. So the vendor should have a liaison officer who should constantly



interact with the implementation team.

Another role the vendor has to play is that of the trainer – to provide the initial training for the company’s key users, people who will play lead roles in the implementation of the system.

19. Write briefly about consultants.

Business consultants are professional who specialize in developing techniques and methodologies for dealing with the implementation and with the various problems that will crop up during the implementation. They are experts in the administration, management and control of these types of projects. Each of them will have many man – years of implementation experience with various industries and would have time – tested methodologies and business practices that will ensure successful implementation. They will be good at all phases of the implementation lifecycle, right from package evaluation to end – user training.

20. Write the role of the consultant.

The consultants should guarantee the success of the project and should be able to show the results (quantifiable results like reduction in cycle time, increased response time, improved productivity and so on) to the satisfaction of the company management.

Consultants are responsible for administering each of the phases of the implementation, so that the required activities occur at the scheduled time and at the desired level of quality and with effective participation of all those who must participate.

21. Who is an end users and why are the so critical for the success of the ERP implementation?

End users are the people who will be using the ERP system once it is in place. These are the people who were doing the functions that are being automated or computerised by the ERP system. With the implementation of the ERP system, the old job descriptions will change, the nature of the job will undergo drastic transformation. It is human nature to resist change. When we are talking about implementing an ERP system we are talking about change in a very massive scale. Employees will fear that system will feat that system will replace existing jobs, as many functions will be automated. Also people will be afraid of the amount of training they have to undergo and learning they have to do to use the new system. Job profiles will change, job responsibilities will undergo drastic alterations, and people will be forced to develop new skill sets. If these fears are not addressed and alleviated well in advance, it will cause trouble for the organization.

22. Explain the steps of data migration strategy.



Identifying the data to be migrated Determining the timing of data migration Generating data templates Freezing the tools for data migration Deciding on migration related steps Deciding on data arching

PART – B

1. Explain ERP implementation lifecycle.

The different phases of the ERP implementation are given below:

Pre-evaluation Screening Package Evaluation Project Planning Phase Gap Analysis Reengineering Configuration Implementation Team Training Testing Going Live End-user Training Post-implementation


Gap AnalysisGap Analysis

TestingTesting

ConfigurationConfiguration

Re- engineeringRe- engineering

ImplementationTram trainingImplementation

Tram training

End-user TrainingEnd-user Training

Vendors Pre-Selection ScreeningPre-Selection

Screening

Company Management

Package EvaluationPackage Evaluation

Project PlanningProject Planning

Going LiveGoing Live

Post Implementation PhasePost Implementation

Phase


Fig. ERP implementation lifecycle – different phases PRE - EVALUATION SCREENING

Once the company has decided to go in for the ERP system, the search for the perfect package starts. But there are hundreds of ERP vendors – of all sizes and shapes – all claiming to have the solution that is ideal for you. Analyzing all the packages before reaching a decision is not a viable solution. It is also a very time consuming process. So it is better to limit the number of packages that are evaluated to less than five. It is always better to do a thorough and detailed evaluation of a small number of packages, than doing a superficial analysis of dozens of packages. Hence, the company should do a pre-evaluation screening to limit the number of packages that are to be evaluated by the committee. Not all packages are equal – each has its own strengths and weakness. The pre-evaluation process should eliminate those packages that are not at all suitable for the company’s business processes. One can zero in on the few best packages by looking at the product literature of the vendors, getting help from external consultants and most importantly, by finding out what package is used by companies which are similar. It is always better to find out how the different packages are performing in environments similar to yours.

PACKAGE EVALUATION

The evaluation / section process is one of the most important phases of the ERP implementation, because the package that you select will decide the success or failure of the project. Since ERP systems involve huge investments, once a package is purchased, it is not an easy task to switch to another one. So it is a ‘do it right the first time’ proposition. There is little room for error.

The most important factor that should be kept in mind when analyzing the different packages is that none of them are perfect. The idea that there is no perfect package needs to be understood by everyone in the decision-making team. The objective of the selection process is not to identify a package that covers each and every requirement (a perfect fit). The objective is to find a package that is flexible enough to meet the company’s needs, or in other words, a software that could be customized to obtain a ‘good fit’.

Once the packages to be evaluated are identified, the company needs to develop a selection criteria that will permit the evaluation of all the available packages on the same scale. To choose the best system, the company should identify the system that meets the business needs, that matches the business profile and that



which identifies with the business practices of the company. It is impossible to get a system that will perform, exactly as the company does business, but the aim should be to get the system that has the least number of differences.

According to S. Shankaranarayanan, Senior Consultant with Baan Infosystems India Pvt. Ltd. (ERP Systems-Using IT to gain a competitive advantage), some important points to be kept in mind while evaluating ERP software include:

Functional fit with the company’s business processes. Degree of integration between the various components of the ERP sys-

tem. Flexibility and scalability Complexity User friendliness Quick implementation Ability to support multi-site planning and control Technology –client/server capabilities, database independence, security Availability of regular upgrades Amount of customization required Local support infrastructure Availability of reference sites Total costs, including cost of license, training, implementation, mainte-

nance, customization and hardware requirements.

2. Explain implementation Methodology.

IMPLEMENTATION TEAM TRAINING

Around the same time that the configuration is taking place, the implementation team is being trained, not so much how to use the system, but how to implement it. This is the phase where the company trains its employees to implement and later, run the system. The ERP vendors and the hired consultants will leave after the implementation is over. But for the company to be self-sufficient in running the ERP system, it should have a good in-house team that can handle the various situations. Thus, it is very vital that the company recognizes the importance of this phase and selects those employees who have the right attitude – people who are willing to change, learn new things and are not afraid of technology – and good functional knowledge.

TESTING

This is the phase where you try to break the system. You have reached a point where you are testing real case scenarios. The system is configured and now you must come up with extreme-case scenarios – system overloads, multiple users logging on at the same time with the same query, users entering invalid data, hackers trying to access restricted areas and so on. The test cases must be designed specifically to find the weak links in the system and these bugs should be fixed before going live.



GOING LIVE

This is it. Lights on, switches thrown, gloves off. On the technical side, the work is almost complete – data conversion is done, databases are up and running; and on the functional side, the prototype is fully configured and tested and ready to go operational. The system is officially proclaimed operational, even though the implementation team must have been testing it and running it successfully for some time. But once the system is ‘live’ the old system is removed, and the new system is used for doing business.

END-USER TRAINING

This is the phase where the actual users of the system will be given training on how to use the system. This phase starts much before the system goes live. The employees who are going to use the new system are identified. Their current skills are noted and based on the current skill levels, they are divided into groups. Then each group is given training on the new system. This training is very important as the success of the ERP system is in the hands of the end-users. So these training sessions should give the participants an overall view of the system and how individual actions would affect the entire system. In addition to these general topics, each employee is trained on the job or task that he/she is supposed to perform once the system goes live. It is human nature to resist change. Also many people are afraid of computers and other new technologies. So there will be resistance to change. Another factor is that not all people will be successful in making the changeover. The company management should address these concerns and take necessary actions to avoid failure. The end-user training is much more important and much more difficult (since most end-users are not thrilled at having to change) than the implementation, team training. Companies are beginning to take this phase seriously, as there is statistical evidence now, which shows that most implementations fail because of a lack of end-user training.

POST- IMPLEMENTATION (MAINTENANCE MODE)

One important factor that should be kept in mind is that the post-implementation phase is very critical. Once the implementation is over, the vendors and the hired consultants will go. To reap the full benefits of the ERP system, it is very important that the system should get enterprise-wide acceptance. There should be enough employees who are trained to handle the problems that might crop-up. There should be people, within the company, who have the technical prowess to make the necessary enhancements to the system as and when required. The system must be upgraded as and when new versions or new technologies are introduced. Here the organization should think in terms of the incremental benefits of the new enhancements. Because with any upgradation or enhancements, there will be a lot of other aspects like user training that have to be considered. So instead of going in for upgradation as and when a new version is announced by the vendor, the organization should first analyse the costs and benefits.



The post-ERP organization will need a different set of roles and skills than those with less integrated kinds of systems. At a minimum, everyone who uses these systems needs to be trained on how they work, how they relate to the business process and how a transaction ripples through the entire company whenever they press a key. The training will never end; it is an ongoing process; new people will always be coming in, and new functionality will always be entering the organization.

Just as courtships and honeymoons are different from marriages, living with ERP systems will be different from installing them. Projects for implementing the ERP systems get a lot of resources and attention. However, an organization can only get the maximum value of these inputs if it successfully adopts and effectively uses the system.

3. Who is an ERP vendors and what are his roles?

VENDORS

Vendors are the people who have developed the ERP packages. They are the people who have invested huge amounts of time and effort in research and development to create the packaged solutions. If one studies the history of the ERP packages and finds out how each package evolved, it soon becomes evident that every ERP package grew out of the experience or opportunity of a group of people, working in a specific business, who created systems that could deal with certain business segments. Now with the ERP market place becoming crowded with more and more players entering the market and the competition becoming hot, today’s ERP packages have features and functionality to cater to the needs of businesses in almost all sectors. The ERP vendors spent billions of rupees in research to come up with innovations that make the packages more efficient, flexible, and easy to implement and use. Also with the evolution of new technologies, the vendors have to constantly upgrade their product to be able to use the best and latest advancements in technology.

Role of the Vendor

First and foremost, the vendor should supply the product and its documentation as soon as the contract is signed. Only after the software is delivered, can the company develop the training and testing environment for the implementation team. The vendor is responsible for fixing any problems in the software that the implementation team encounters. So the vendor should have a liaison officer who should constantly interact with the implementation team.

Another role the vendor has to play is that of the trainer-to provide the initial training for the company’s key users, people who will play lead roles in the implementation of the system. These key users are the ones who will define, together with the consultants, how the software is to serve the company. In other words, it is these in-house functional experts who will decide how the functionalities are to be



implemented, as well as how to use or adapt the product to suit the company’s unique requirements. So it is very critical that these key users are given a thorough training on the features of the package. Vendor’s training should achieve the goal of showing the key users how the package works, what are the major components, how the data and information flows across the system, what is flexible and what is not, what can be configured and what cannot, what can be customized and what should not, what are the limitations, what are the strengths and weaknesses and so on.

Now some of you might ask: we are hiring consultants who are experts in the package so why can’t we get training from the consultants? This is true. Most of the consultants are capable of providing sound training for the packages. But we are hiring the consultants for implementing the system. The objective of the vendor training is to show how the system works, not to show how it should be implemented. This means that the vendor demonstrates the product as it exists and highlights what are the possible options available. The company’s employees who are participating in the vendor training should try to understand the characteristics of the package and the impact of the system on their business processes. The trainees should use these training sessions to question the vendor on all aspects of the system.

The consultants also have a role to play during this vendor training. They should participate in the training sessions to evaluate how the users react to the reality that is starting to take shape from the detailed presentations and demos. Consultants should also ask questions that the vendors are trying to avoid and the users are unaware of. This is the best way to present the real picture to the users and it will also prevent the vendors from making false claims.

The role of the package vendor does not end with the training. The vendor also plays an important project support function and must exercise the quality control with respect to how the product is implemented. It is the vendor who understands the finer details and subtleties of the product and can make valuable suggestions and improvements that could improve the performance of the system. It is also in the best interests of the vendor that this participation continues, because if the implementation fails, most of the blame will fall on the vendor. Also a successful implementation means another satisfied client, improved goodwill and good referrals and so on. So the vendor will continue to participate in all the phases of the implementation, mostly in an advisory capacity, addressing specific technical questions about the product and technology.

The vendor has other responsibilities also. There will be ‘gaps’ between the package and the actual business processes. The software might have to be customized to suit the company’s needs. Customizing means altering the product so that it is suited for the company’s purposes. The choice of whether to customize or not is the one that can have enormous impact on the project and it often constitutes a point of conflict between the consultants and users. But if the decision to customize has been taken, it is the vendor’s duty to carry out the necessary modifications. This is because only the vendor knows the product well enough to make the necessary changes without affecting the other parts. Moreover, the company should get a



guarantee (in writing) from the vendor that despite the customization, it will be able to benefit from the future software improvements introduced by the vendor.

4. Who are consultants and what are their roles?

CONSULTANTS

Business consultants are professional who specialize in developing techniques and methodologies for dealing with the implementation and with the various problems that will crop up during the implementation. They are experts in the administration, management and control of these types of projects. Each of them will have many man-ears of implementation experience with various industries and would have time-tested methodologies and business practices that will ensure successful implementation. They will be good at all phases of the implementation lifecycle, right from package evaluation to end-user training. The only problem with them is that they are expensive-very expensive. Many of the big consulting firms, having forecasted the ERP boom, invested a great deal of money in developing a range of consulting services in this field and assigned many of their professionals to become specialists in the various aspects of ERP-packages and their implementation. These firms researched the various products, developed an in depth understanding of each product’s strengths and weaknesses, worked by the side of the ERP vendors, confirmed that the vendor’s package worked and learned the tricks and techniques of the trade, found out the pitfalls and mistakes that should be avoided and thus created a pool of experts who could handle the ERP implementation without failure.

Thus, consultants are people who have made the business of ERP implementation their business and have invested huge amount, of money and manpower for that purpose. So when you want to get the services of these consultants, the first question that will be asked is –“Are they going to be expensive?” The answer is a definite YES. The consultants will be expensive, so the company will have to formulate a plan regarding best optimum utilization of the money spent on consultants. If we study the statistics, we can see that a well-selected, integrated system that was successfully implemented and which is successfully working usually pays for itself in a relatively short period – between 10 and 30 months. If you analyze the cost break-up, you will find that the most expensive part of the implementation was the consultation charges. For a typical ERP implementation, the cost of consultants is 1.5 to 3 times for every rupee invested in the software product. Sounds amazing; but it is true and it is also true that the software will pay for itself-the software cost, the consultant’s charges and other expenses incurred during implementation – in the above mentioned period (10-30 months). But the catch is that the product has to be the right one and the implementation has to be successful. That is why the expertise of the consultants becomes invaluable and the money spent on good consultation is never wasted. So finding the right consultants – people who have the necessary know-how, who will work well with the company personnel, people who will transfer their knowledge to the company’s employees and people who are available in case their services are required again – is very important.



Role of Consultants

The role of the consultants is very familiar to all of us because we have seen many of them in action. The company places its trust in the consultants, that its business objectives will be achieved. In fact, it is a better practice that the contract between the company and the consultants should have all the performance clauses in place. The consultants should guarantee the success of the project and should be able to show the results (quantifiable results like reduction in cycle time, increased response time, improved productivity and so on) to the satisfaction of the company management.

Consultants are responsible for administering each of the phases of the implementation, so that the required activities occur at the scheduled time and at the desired level of quality and with effective participation of all those who must participate. For keeping the promises that the consultants have made during the negotiations, they have to transform their approaches and methodologies into detailed work plans. The methodology will have to be converted into tasks and should be allocated to the right people. The time schedule for each phase and each task has to be determined and the project plan has to be finalized.

Consultants should add value to the project. They bring the know-how about the package and about the implementation-the know-how that is not included in the standard documentation. This know-how (also know as practical knowledge) is derived from their expertise which stems from practical experience. Because the consultants have seen many projects and have made or seen many mistakes, they can avoid the phenomenon of ‘reinventing the wheel’. They will know what will work and what will not. Thus by eliminating the trial-and-error method of implementation, and by doing it right the first time, the consultants help in saving huge amounts of money, time and effort .

Consultants should also know how to remain impartial while questioning current company processes in an effort to promote better businesses practices and better implementation results. They should strive to improve the company’s business processes so that the software package can be used as it was originally intended by its developers. Refining the company’s processes can only optimize the performance of the system and maximize future user satisfaction. The consultants are also responsible for analyzing and clearly addressing the customization issues. They must be able to distinguish between the ‘must have’ and ‘nice to have’ items and decide on the level of customization. This is an area where the consultants have to use their diplomatic skills, as the company people might want to customize all the aspects. It is the duty of the consultants to present the advantages and drawbacks of each area and reach a consensus decision, which should also be the right one. Consultants need to position themselves in such a way as to balance their loyalty to the client and the project, with that of defending the package vendor, when such defense is technically correct. This is indeed a very difficult job (like a tight-rope walk) and that is why consultants are being paid such huge amounts for their services.



It is the duty of the consultant to understand the total context and scope of the envisioned work and to know when to alert the company management about actions and decisions that must be undertaken so that the job will not be compromised and the implementation will not be jeopardized. Maintaining technical documentation on the project also falls within the duty of the consultant. The consultants will leave once the project is complete, but the knowledge of the project must stay within the organization. So the consultants should create a knowledge base and should train enough people so that the work they have started is continued.

5. Explain End users in detail.

End-Users:

End users are the people who will be using the ERP system once it is in place. These are the people who were doing the functions that are being automated or computerized by the ERP system. With the implementation of the ERP system, the old job descriptions will change, the nature of the job will undergo drastic transformation. It is human nature to resist change. When we are talking about implementing an ERP system we are talking about change in a very massive scale. Employees, will fear that system will replace existing jobs, as many functions will be automated. Also people will be afraid of the amount of training they have to undergo and learning they have to do to use the new system. Job profiles will change, job responsibilities will undergo drastic alterations, and people will be forced to develop new skill sets. If these fears are not addressed and alleviated well in advance, it will cause trouble for the organization.

It should be worth noting the fact, that while the ERP systems eliminate many existing jobs, it creates many new ones-ones with more responsibilities and value addition. It is easy to see that the automation of the business processes, through technology, can eliminate the jobs of many employees whose function it is to record, control, calculate, analyze, file or prepare reports. But it must be pointed out to the employees that the same automation creates many more opportunities for them, because they can get away from the monotonous clerical work and transform themselves into highly valued individuals, in a new and challenging working environment using modern technology. If the company can succeed in making its employees accept this fact and assist in making the transformation (by giving them training), then the major (and most critical) obstacle in the path of an ERP implementation is solved.

UNIT – III

PART – A

1. What are the modules available in ERP Package?

FinanceVEL TECH VEL TECH MULTI TECH VEL TECH HIGH TECH 37


Manufacturing and Production Planning Sales and Distribution Plant Maintenance, Quality Management Materials Management, etc.

2. What is financial data?

The entire concept of information technology is based on the premise that providing the right information, to the right people, at the right time can make a critical difference to the organization. Much of this key information could be taken from the financial data. But merely having the financial data is not enough. You need a set of processes and views of your data that provides up-to-the-minute financial information in exactly the form you need it to make that critical difference and help with that crucial decision. Accounting software needs access to information in each area of your organization, from R & D and market research through manufacturing, distribution and sales. Your financial solution must provide the management with information that can be leveraged for strategic decisions, in order to achieve competitive advantage.

3. Define financial module in ERP module.

The finance modules of most ERP systems provide financial functionality and analysis support to thousands of businesses in many countries across the globe. These ERP systems include not only financial application components, but also Human Resources, Logistics, Business Workflow and links to the Internet. Hundreds of business processes are covered in these systems.

4. Write the types of subsystem in financial module.

Financial Accounting (General Ledger, Accounts Receivable / Payable, Special Ledgers, Fixed Asset Accounting, Legal Consolidation)

Investment Management (Investment Planning/Budgeting/ controlling, Depreciation Forecast/ Simulation/ Calculation)

Controlling (Overhead Cost Controlling, Activity-Based Costing, product Cost Accounting, Profitability Analysis)

Treasury (Cash Management, Treasury Management, Market Risk Man-agement, Funds Management).

Enterprise Controlling (Executive Information System, Business Plan-ning and Budgeting, Profit Centre Accounting).

5. Describe financial accounting.

The objective of a good financial accounting system is to provide company wide control and integration of financial Accounting Module of an ERP system, gives you the ability to centrally track financial accounting data within an international framework of multiple companies, languages, currencies, and charts of accounts. For



example, when raw materials move from inventory into manufacturing, the system reduces quantity values in inventory and simultaneously, subtracts values for inventory accounts in the balance sheet. Most of the Financial Accounting modules comply with international accounting standards, such as GAAP and IAS. They also fulfill the local legal requirements of many countries.

6. Define Investment Management.

Investment Management provides extensive support for investment processes right from planning through settlement. Investment management facilitates investment planning and budgeting at a level higher than that needed for specific orders or projects.

7. Define Controlling.

The controlling system gathers the functions required for effective internal cost accounting. It offers a versatile information system, with standard reports and analysis paths for the most common questions. In addition, there are features for creating custom reports to supplement standard reports.

8. Define Treasury.

You can gain a significant competitive advantage by efficiently managing the short, medium, and long – term payment flows and the resulting risk exposure. Tasks such as short – term monitoring and concentration of bank account balances, medium – term planning, and forecasting of incoming and outgoing resources in accounts receivable and payable, to a long – term view of areas such as materials management and sales, underline the importance of inter-grating information from various company divisions. Linking these operating divisions to realised and planned financial transactions and positions in treasury, has a significant impact on the company’s success. Such integration also facilities management and control of cash flows, and risk positions through all the divisions in the company. The treasury component provides you with a basis for effective liquidity, portfolio and risk management.

9. Define Enterprise Controlling.

Enterprise controlling comprises of those functions that will optimise share holder value, while meeting internal objectives for growth and investment. This module usually include executive information system, business planning and Budgeting, Consolidation, and Profit Centre Accounting.

10. Define Manufacturing Module in ERP Package.

A good manufacturing system should provide for multi – mode manufacturing applications that encompass full integration of resource management. These manufacturing applications should allow an easier exchange of information



throughout the entire global enterprise, or at a single site within a company.

11. How does manufacturing respond to the customer?

Manufacturers must respond quickly and effectively to customer demands. While agility is desirable, agility without an effective enterprise manufacturing system results in speed without purpose. The very heart of an enterprise manufacturing system centers on its integrated planning, business process and execution capabilities.

12. What are the major subsystem of the manufacturing module?

Material and Capacity Planning Shop floor control Quality Management JIT / Repetitive Manufacturing Cost Management Engineering Data Management Engineering Change Control Configuration Management Serialization / Lot Control Tooling

13. Define Material and capacity planning.

The planning systems of ERP packages are designed to provide the responsiveness your company needs to meet those customer requirements. With these systems, planners can simulate alternative plans; gaining the information they need to determine which parts and assemblies to make, which to buy and when to manufacture or purchase. Most packages have features to generate recommendations for purchases and production and, where necessary, recommend changes to current plans to prevent under or over – utilization of work centers.

14. Define quality management.

Elimination of defects in standard product designs and manufacturing methods, before production, is just as important as eliminating defects during production. In fact, to achieve quality levels, manufacturers must focus on identifying and correcting defects in underlying product designs and production methods and not simply inspect the incoming material and finished goods.

15. Define Bench Marking.

A method of measuring processes against those of recognized leaders. It helps establish priorities and targets, leading to process improvement. It is undertaken by identifying processes to be benchmark and their key characteristics; determining who to benchmark; collecting and analyzing data from direct contact, surveys, interviews, technical journals and advertisements; determining the ‘best of class’



from each benchmark item identified; and evaluating the process in terms of the benchmarks set and the improvement goals.

16. Define JIT.

JIT Just – in – Time: A policy calling for the delivery of materials products or services at the time they are needed in an activity or process. Used to reduce inventory, wait time and spoilage.

17. What are the subsystems in Human resources module?

The various subsystems under the HR module are:

Personnel Management (HR master data, Personnel administration, information systems, Recruitment, Travel management, Benefits administration, Salary ad-ministration) Organizational Management (Organizational structure, Staffing schedules, Job descriptions, Planning scenarios, Personnel cost planning)Payroll Accounting (Gross/net accounting, History functions, Dialog capability, Multi- currency capability, International solutions).Time Management (Shift Planning, Work schedules, Time recording Absence determination)Personnel Development (Career and succession Planning, Profile Comparisons, Qualifications assessments, Additional training determination, Training and event management).

18. Define personal management.

Personal management includes numerous software components, which allow you to deal with human resources tasks more quickly, accurately and efficiency. You can use these components not only as part of the company wide ERP solution, but also as stand – alone systems.

19. Define organizational management.

This module will assist you in maintaining an accurate picture of your organization’s structure, no matter how fast it changes. In many cases, graphical environments make it easy to review any moves, additions, or changes in employee positions.

20. What are the subsystems in plant maintenance module?

The major subsystems of a Plant Maintenance module are:

Preventive Maintenance ControlEquipment TrackingComponent Tracking



Plant Maintenance Calibration TrackingPlant Maintenance Warranty Claims Tracking

21. Write the functions of quality management.

Quality planning Quality Inspection Quality Control

22. Define CIQ.

The integration of Quality Management in the ERP systems provides considerable advantages because only an integrated system can support all the elements of a quality management system, according to ISO 9000. The integration allows the quality management functions to influence all processes within a company, thereby affecting all phases of a product’s life cycle.

23. What are the main modules of the material management?

Pre-purchasing Actives Purchasing Vendor Evaluation Inventory Management Invoice Verification and Material Inspection

24. Differentiate Capital Budget and Cash Budget.

Capital budget concerns fixed asset requirements for the next five years and how these will be financed.

Cash budget is basically a detailed plan that shows all expected sources and uses of cash to meet short term expenses.

25. What are the subsystems in sales and Distribution module?

Data Management Order Management Shipping Billing Pricing Transportation



PART - B

1. Explain Finance module and its sub system.

The entire concept of information technology is based on the premise that providing the right information, to the right people, at the right time can make a critical difference to the organization. Much of this key information could be taken from the financial data. But merely having the financial data is not enough. You need a set of processes and views of your data that provides up-to-the-minute financial information in exactly from you need it to make that critical difference and help with that crucial decision. Accounting software needs access to information in each area of your organization, from R&D and market research through manufacturing, distribution and sales. Your financial solution must provide the management with information that can be leveraged for strategic decisions, in order to achieve competitive advantage.

This section provides an overview of the financial solutions in most of the ERP packages, In today’s business enterprise, you need to know that your financial decisions are based on today’s data, not numbers from records closed a month ago, or even a week ago. And you need to know that this same ‘today’s’ data represents every segment of your organization’s activities, whether your enterprise stretches across a room or around the globe. This is essential, because the most efficient way to get your enterprise to where you want it tomorrow is to know exactly where it is today.

What ever be the financial goals of your organization, the financial application components of the ERP solutions work hand – in – hand to improve the bottom line. This is true because the financial functionality is tightly integrated across all business areas and all geographic areas. This tight integration includes all the other different modules, from materials management to human resources to logistics. Because the ERP system automatically links related areas, it eliminates the need to repeat procedures. You enter your data only once. Within the ERP system, all areas work in concert, creating a new level of efficiency in handling your financial data.

The finance modules of most ERP systems provide financial functionality and VEL TECH VEL TECH MULTI TECH VEL TECH HIGH TECH 43


analysis support to thousands of business in many countries across the globe. These ERP systems include not only financial application components, but also Human Resources, Logistics, Business Work flow and links to the Internet. Hundreds of business processes are covered in these systems.

The finance modules of most ERP systems will have the following sub-systems:

Financial Accounting (General Ledger, Accounts Receivable / Payable, Special Ledgers, Fixed Asset Accounting, Legal Consolidation)

Investment Management (Investment Planning/Budgeting/ controlling, Depreciation Forecast/ Simulation/ Calculation)

Controlling (Overhead Cost Controlling, Activity-Based Costing, product Cost Accounting, Profitability Analysis)

Treasury (Cash Management, Treasury Management, Market Risk Man-agement, Funds Management)

Enterprise Controlling (Executive information System, Business Planning and Budgeting, Profit Centre Associating).

2. Explain Financial Module Sub system in detail.

The objective of a good financial accounting system is to provide company wide control and integration of financial Accounting Module of an ERP system, gives you the ability to centrally track financial accounting data within an international framework of multiple companies, languages, currencies, and charts of accounts. For example, when raw materials move from inventory into manufacturing, the system reduces quantity values in inventory and simultaneously, subtracts values for inventory accounts in the balance sheet. Most of the Financial Accounting modules comply with international accounting standards, such as GAAP and IAS. They also fulfill the local legal requirements of many countries.

General Ledger

The General Ledger (GL) is essential both to the financial accounting system and to strategic decision – making. Through active integration with business processes in logistics and in the accounting sub – ledgers, the GL serves as a central pool of financial data for financial reporting as well as for other accounting areas. However, the origin of centrally stored data can still be traced at any time by drilling down on data from a given transaction.

The general Ledger supports all the functions needed in a financial accounting system. This includes flexible structuring of the chart of accounts at the group and company level, distributed application scenarios, real-time simultaneous update of sub – legers and the general ledger, elimination of time – consuming reconciliation, and parallel views of data, in both the general ledger and the managerial accounting applications. The GL provides document parking, posting, reporting, and an integrated financial calendar for automating periodic activities. A typical general ledger is shown in Fig. The system also provides summary information from other



components at a user – defined level of detail. By creating combinations of entered data, you generate data summaries, that can be used in planning, allocation, distribution and reporting.

Fig. Typical general ledger

Usually, the GL has features that allow you to take advantages of more functions in General Ledger and in Cost Centre Accounting. For example, you can create your own database tables and define non – standard fields, to suit specialized accounting or reporting requirements. Some ERP systems support features, like the option of grouping data selectively and then, updating it in only there ledgers which have been specified; provision for parallel charts of account and currencies; planning and allocation tools; direct data entry in special purpose ledgers for adjustment postings; user – defined reporting; etc.



Account Receivable and Payable

ERP systems offer a financial overview of global business partner relationships, in the Accounts Receivable and Payable functions. These sub-legers are integrated, both with the General Ledger and with, areas in Sales and Distribution and Materials Management, where financial data originates. Accounts Receivable and payable transactions are performed automatically, when related processes take place in other modules. This module uses standard business rules for procedures ranging from data entry and reporting, to processing payments and bank transactions. Accounts Receivable and Payable functions include Internet integration, document management, full support for EDI processing, including automatic integration with cash management and flexible reporting using customer and vendor information systems. The module also provides, enterprise-wide credit management with workflow integration, payment automation with EFT and check processing, and document parking with various approval procedures.

Asset Accounting

Asset accounting, manages the company’s fixed assets. With in the Financial Account system, Asset Accounting serves as a sub-ledger to the General Ledger, providing detailed information on asst – related transactions. Significant features include country-specific charts of depreciation complying with local legal requirements, full support throughout the asset life cycle from acquisition to retirement, depreciation simulation and interest calculation, and integration with project management and order accounting for management of capital assets. Asset Accounting also provides integration with Plant Maintenance for management of machinery and equipment, management of leased assets and assets under construction, mass processing with workflow integration, and interactive reporting.

Legal Consolidation

Consolidated financial statements need to be integrated effectively with operational data at the individual company level. By using different valuation methods, you can plan balance sheet strategies to suit the company’s requirements. The legal consolidation sub-system is closely linked to the financial Accounting system, permitting direct data transfer, from individual statements into the consolidated report. This cases the workload of the staff and reduces data entry errors. In addition to the consolidated statements required by law, Legal Consolidation also allows you, to create multiple views of you consolidation data. With these views you can generate reports about legal entities or segments of your business.

3. Explain Controlling in financial module.

The controlling system gathers the functions required for effective internal cost accounting. It offers a versatile information system, with standard reports and



analysis paths for the most common questions. In addition, there are features for creating custom reports to supplement standard reports. Overhead Cost Controlling

Many organizations experience a significant increase in the percentage of indirect costs, which cannot be directly assigned to either the products manufactured, or to the services rendered. While cost monitoring and optimization may be quite advanced in production areas, transparency is often lacking in over head cost areas. The overhead cost controlling sub system focuses on the monitoring and allocation of over heads.

Cost Centre Accounting

Cost centre accounting analyses where overheads occur within the organization. Costs are assigned to the sub – areas of the organization where they originated. The system offers a wide variety of methods for allocating posted amounts and quantities. In particular, activity accounting permits, the allocation of great many costs to products, based on cost sources and enabling assignments, which were not previously possible.

Overhead Orders

Overhead orders subsystem collects and analyses costs, based on individual internal measures. This system can monitor and automatically check budgets assigned to each measure.

Activity – Based Costing

The goals of the entire organization, should come before the goals of individual departments, when it comes to business process reengineering. The Activity-Based Costing module, is a response to the growing need for monitoring and controlling cross- departmental business processes, in addition to functions and products. Seeing costs from a new perspective, substantially enhances organization transparency in overhead areas. The system automatically determines the utilization of business processes by products, customers, and other cost objects based on the cost drivers taken from the integrated accounting environment. This, significantly reduces the effort involved in maintaining a business processes by products, customers, and other cost objects based on the cost drivers taken from the integrated accounting environment. This, significantly reduces the effort involved in maintaining a business process model in a separate system.

Product Cost Controlling

Product cost controlling module determines, the costs arising from manufacturing a product, or providing a service. Plan and standard values, serve in valuating war house stock and for contrasting revenues received with costs. In addition, the values in Product Cost Controlling, are crucial for determining the



lowest price limit for which a product is profitable. Simulations illustrate the effects of changes in production methods on the cost of goods manufactured.

Cost object controlling

Cost object controlling helps you monitor manufacturing orders. Integration with the logistics components results in a logistical quantity flow, that provides instant information on actual cost object costs, allowing ongoing costing calculations at any time. Follow-up calculations determine and analyze the variances between actual manufacturing, costs, and the plan costs resulting from Product Cost Planning.

Profitability Analysis

Profitability analysis subsystem examines the sources of returns. As part of sales controlling, Profitability Analysis is the last step in cost – based settlement, where revenues are assigned to costs according to the market segment. You can defined any market segment- - distinguishing, for example, between products, customers, orders, sales organizations, distribution channels and business areas – and evaluate it, according to contribution and revenue margins. Information from Profitability Analysis, frames important decisions in areas such as determining prices, selecting customers, developing conditions and choosing distribution channels.

4. Explain sales and distribution in ERP package.

In today’s global business environment, the one thing companies can count on is rapid change – and the new opportunities and challenges that change is sure to bring. New competition pushes businesses product life cycles and forces of service, while evolving technology compresses product life cycles and forces companies to adopt new technologies or risk losing market share. In this ever – changing environment, keeping a competitive edge means being able to anticipate and respond quickly to changing business conditions. To keep pace with these rapid changes, 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.

With today’s business environment characterized by growing competition, shrinking cycle times and the accelerating pace of technological innovation, companies are increasingly being forced to streamline business processes. In a world in which it is no longer enough to simply have the best product, these 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



modules of many ERP vendors offer a comprehensive set of best – of – bread components for both order and logistics management. Many of these systems are tightly integrated with the Distribution Requirements Planning (DRP) engine of the ‘for just –in time’ deliveries. This integration enables the mapping and supply of single – site or multi – site organizations and the definition of relationships in a company’s internal supply chains. Developing precise logistics management. Many of these systems are tightly integrated with the Distribution Requirements Planning (DRP) engine of the ‘ for just-in-time’ deliveries. This integration enables the mapping and supply of single – site or multi – site organizations and the definition or relationships in a company’s internal supply chains. 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 inquires 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 contract management ( order management) Monitoring the sales transactions 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 (confirmations, and

so on).

Depending on how your particular system is configured, these functions may be completely automated or may also require some natural processing. The data that results from these basic functions (for example: shipping dates, confirmed quantities, prices and discounts) is stored in the system where it can be displayed and, in some cases, changed manually during subsequent processing. The sales and distribution module very actively interacts with the Material Management and Financial Accounting modules for delivery and billing.

Figure shows sales and distribution and its associated processes.



Typically, a Sales and Distribution module will contain the following sub-systems:

Master Data ManagementOrder ManagementWarehouse Management Shipping Billing PricingSales SupportTransportation Foreign Trade

5. Explain manufacturing in ERP Package.

Competition in the next millennium places and increased emphasis upon time, as expressed by speed, quality, service and global focus. Agility is the watch word. Manufacturers are measured by their ability to react quickly to sudden, often unpredictable change in customer demand for their products and services. To compete successfully beyond the year 2000 requires manufacturing applications that are time and activity based and above all else, focused on the customer, increasingly, these manufacturing applications are a centre point within the spectrum of a supply chain, running from the customer to a suppliers and encompassing the entire enterprise.

A good manufacturing system should provide for multi – mode manufacturing applications that encompass full integration of resource management. These manufacturing applications should allow an easier exchange of information throughout the entire global enterprise, or at a single site within a company. Regardless of how bit or small an enterprise is, these applications should provide a wealth of feature / function, broad scope of coverage, operational stability and a platform-independent architecture. These capabilities empower an enterprise to achieve productivity gains, adopt forward – thinking technologies and implement process reengineering. As a company’s internal processes become more sophisticated or as market forces change, these solutions should be capable of meeting the challenge. The manufacturing system should be integrated with the other modules of the package.

A robust system of manufacturing planning business process, and execution must satisfy a variety of business practices and production methods. These business practices and production methods place stringent demands on the manufacturer. Regardless of how manufacturer view their internal operations, to the customer, it boils down to quick response to customer demand in two fundamental ways – Manufacturers either make products to stock prior to receipt of a customer order, or they make and ship the products upon receipt of a customer order. Manufacturers must accomplish this task quickly efficiently and cost effectively to remain profitable and competitive. These two fundamental ways of responding to customer demand are as shown in fig.



To day, companies must be able to deliver customer – specific products with the lead – time of standard, off – the – shelf products. To help manage product and market shifts, the Manufacturing module provides the freedom to change manufacturing and planning methods, as and when they need a change. The Manufacturing modules provides the freedom to change manufacturing and planning methods can be combined within the same operations, with unlimited flexibility to choose the best method – or combination of methods – for each product, at each stage throughout its life cycle.

Fig. Manufacturing process from raw materials (supplier to finished goods (customer))

In addition, this control and visibility comes without having to sacrifice the functionality needed to efficiently manage different types of production. These systems support the entire range of production strategies – only one system is needed to manage all manufacturing activities. Engineer –to- order products can be planned using the system, while the system’s forecasting and distribution planning features handle make – to – stock items. Products that are assembled – to – order can be planned using advanced features available in the Manufacturing module. All demands can be aggregated into user – definable plans at a detail or summary level.



Fig. Make – to – order and Make – to - stock

Enterprise requirements then flow into consolidated production schedules and material and capacity plans, and all production activity can be schedule and tracked through shop floor control systems.

The manufacturing module should enable an enterprise to marry technology with business processes to create an integrated solution. It must provide the information base upon which the entire operation should be run. It should contain the necessary business rules to manage the entire supply chain process, whether within a facility, between facilities, or across the entire supply chain. Control and execution can be performed at strategic, tactical and operational levels with in the business. These require effective planning to support contract commitments throughout the supply chain, control over intermediate range planning horizons and time fences, and execution over the short range of frozen scheduling required by the shop floor. Whether a single – site implementation, several sites with in one country, or hundreds covering the globe, the manufacturing system should provide the foundation for creating concurrent business processes across the supply chain and achieving Return on Assets (ROA) improvement.

6. Explain human Resource module.

Human resources management is an essential factor of any successful business. The competitive environment of the next millennium, with its economic and technological changes, will affect the HR department in the same way it will all the



other areas of your enterprise. In short, HR managers must continually review and optimize their business processes. The HR modules of most ERP systems have a set of rich features and will integrate seamlessly with the other modules and are thus, invaluable aids in improving productivity. They offer company – wide solutions for HR departments and make it possible for other departments to access specific employee data.

A human resource management system has to be adaptable to company specific requirements, and should constantly grow with increasing HR requirements. It should cover all the functions required in business practices, it should be flexible enough to allow you to optimize your business processes by tailoring the ERP solution to suit your organization’s needs. Today, many businesses cross boundaries. The system should support the organization’s international needs with country – specific versions of the HR components. A part from languages, currencies and legal requirements, accounting systems often vary from country to country as well, making this a vital features. A flexible structure enables quick and easy customization of the system to suit your requirements. When you log on in a particular language, screens, messages and documents appear in the language you specify. You then have access to the system’s complete functionality.

The different ERP systems offer many different subsystems under the HR umbrella. Listed below are some of the most common subsystems. Here again, the idea is not to be comprehensive but to give you an idea about the options available. The various subsystems under the HR module are:

Personnel Management (HR master data, Personnel administration, informa-tion systems, Recruitment, Travel management, Benefits administration, Salary administration)

Organizational Management (Organizational structure, Staffing schedules, Job descriptions, Planning scenarios, Personnel cost planning)

Payroll Accounting (Gross/net accounting, History functions, Dialog capability, Multi- currency capability, International solutions).

Time Management (Shift Planning, Work schedules, Time recording Absence determination)

Personnel Development (Career and succession Planning, Profile Comparisons, Qualifications assessments, Additional training determination, Training and event management).

7. Explain plant maintenance module.

Introduction

The achievement of world class performance demands delivery of quality products expeditiously and economically. Organizations simply cannot achieve excellence with unreliable equipment. The attitude towards maintenance management has changed as a result of quick response manufacturing, Just-in-Time reduction of work in process inventory and the elimination of wasteful manufacturing



practices. Machine breakdown and idle time for repair was once an accepted practice. Times have changed. Today when a machine breaks down, it can shunt down the production line and the customer’s entire plant. The preventive Maintenance module provides an integrated solution for supporting the operational needs of an enterprise-wide system. The Plant Maintenance module includes an entire family of products covering all aspects of plant/equipment maintenance and becomes integral to the achievement of process improvement. The major subsystems of a Plant Maintenance module are:

Preventive Maintenance ControlEquipment TrackingComponent TrackingPlant Maintenance Calibration TrackingPlant Maintenance Warranty Claims Tracking

Preventive Maintenance Control

Preventive Maintenance Control provides planning, scheduling and control of facilities and equipment. Equipment lubrication, component replacement and safety inspection can be planned scheduled, and monitored. Maintenance tasks can be tracked for each machine, or piece of equipment, by two user defined modes, as well as calendar day frequency. These modes could include tracking by hours of operation, units of production produced, gallons of fuel consumed, or the number of days in operation since the last service interval. Preventive Maintenance Control enables organizations to lower repair costs by avoiding downtime, machine breakage and process variability. Companies achieve higher machine utilization and improved machine reliability and tolerance control, along with higher production yields.

Equipment Tracking

Equipment is an asset that needs to be monitored and protected. In many situations, equipment maintenance costs constitute the single largest controllable expenditure of an organization. All facets of plant location history and utilization history are described and tracked. This history includes acquisition and disposition information and associations between different pieces of equipment to pinpoint operational dependencies. Running totals for operation units to date (miles, hours, days, units of production, etc.) are also provided. Each piece of equipment is defined by a model and serial number. User-defined data sheets can be developed which allow for the grouping of user data into formats that can be linked to equipment records. All of this detailed information for technical specialists working in equipment operations, maintenance and transportation control.Component Tracking

Components are, typically subsets of larger equipment and deserve the same amount of cost controlling scrutiny. Component tracking enables equipment managers to identify components with chronic repair problems. They can determine whether a repair or replacement should be covered by warranty. Planning



component replacements, rather than waiting for component failures to occur, reduces unscheduled equipment downtime. Component tracking includes repair/exchange history and component service life.

Plant Maintenance Calibration Tracking

Plant Maintenance Calibration Tracking allows organizations to leverage their investment in the Plant Maintenance module by providing for the tracking of equipment calibration in support of ISO 9000 requirements.

Plant Maintenance Warranty Claims Tracking

Plant maintenance Warranty Claims Tracking is an administrative system designed to provide control of all items covered by manufacturer and vendor warranties. It enables plant management to recover all of the warranty; re-imbursements to which they are entitled but have not been able to recover in the past. Features include the ability to establish the type and length of warranty, for example, elapsed day, months, mileage stipulation, or operating units. A complete history is performed for each item covered by the warranty, and complete information regarding the warranty service provider is generated.

8. Explain quality Management in ERP Package.

The ISO 9000 series of standards defines the functions of quality management and the elements of a quality management system. The functions in the Quality Management module support the essential elements of such a system. The other integrated modules in the system complement this functionality. The ISO standards require that quality management systems penetrate all processes within an organization. The task priorities, according to the quality loop, shift from production (implementation phase) to production planning and product development (planning phase), to procurement and sales and distribution, as well as into the entire usage phase. In the area of production, quality assurance is no longer viewed in terms of inspection and the elimination of defects alone. Instead, the production process itself becomes the focus of attention.

CAQ and CIQ

Just as the requirements for quality management systems have changed as a result of the ISO 9000 standards, the term Computer-Aided Quality Management (CAQ) must also be redefined. Computer-Integrated Quality Management (CIQ) is a more appropriate term because an isolated CAQ system cannot carry out the comprehensive tasks of a quality management system. The ERP system takes this into consideration by integrating the quality management functions into the affected applications themselves (for example, procurement, warehouse management, production and sales/distribution), instead of delegating them to isolated CAQ



systems. As a result of this approach, the processes described in the quality manual can be implemented and automated in the electronic data processing (EDP) system.

The representation of the elements of a quality management system within the ERP system is not only the responsibility of the Quality Management module. Instead, the ERP system must be considered as a whole, in which all integrated modules contribute their part. Within the framework of the system, for example, the Human Resources modules handles personnel-related matters, the Controlling module handles the management of quality related costs and the Plant Maintenance module handles the monitoring of test equipment. As a part of the Logistics application, the Quality Management module handles the traditional tasks of quality planning, quality in section and quality control. For example, it supports quality management in procurement, product verification, quality documentation and in the processing of problems.

The quality Management module’s internal functions do not directly interact with the data or processes of other modules.

Quality Management Module-Functions

The Quality Management module fulfills the following functions:

Quality planning (Management of basic data for quality planning and inspection planning, Material specifications, Inspection planning)

Quality Inspection (Trigger inspections, Inspection processing with inspection plan selection and sample calculation, Print shop papers for sampling and inspection, Record results and defects, Make the usage decision and trigger follow-up actions)

Quality Control (Dynamic sample determination on the basis of the quality level history, Application of statistical process control techniques using quality control charts, Quality scores for inspection lots, Quality notifications for processing internal or external problems and initiating corrective action to correct the problems, Inspection lot processing and problem processing, Quality Management Information System for inspections and inspection results and quality notifications).

Computer Integrated Quality Management (CIQ)

The integration of Quality Management in the ERP systems provides considerable advantages because only an integrated system can support all the elements of a quality management system, according to ISO 9000. The integration allows the quality management functions to influence all processes within a company, thereby affecting all phases of a product’s life cycle.

The Quality Management module uses the system’s integration to link the tasks of quality management with those of the other applications, such as materials management, production, sales/distribution and cost accounting. An inspection that



is triggered automatically upon goods receipt is an example of this. The Quality management module is integrated with the master data and processes of the following applications:

Materials management (purchasing, inventory management, warehouse management, material requirements planning) Production (work scheduling, shop floor control) Sales and distribution (delivery, creation of quality certificates)

The Quality Management module supports the exchange of data with other applications in order to prevent related data from being recorded and stored redundantly. For example, the information provided by a goods receipt posting relating to the material, vendor and lot size is automatically transferred to the inspection lot data record when an inspection is triggered.

9. Explain material management module in ERP package.

The Materials Management module optimizes all purchasing process with workflow-driven processing functions, enables automated supplier evaluation, lowers procurement and warehousing costs with accurate inventory and warehouse management and integrates invoice verification. The main modules of the Materials Management module are:

Pre-purchasing Actives Purchasing Vendor Evaluation Inventory Management Invoice Verification and Material Inspection

Pre-purchasing Activities

This system supports the complete cycle of bid invitation, award of contract and acceptance of service. The pre-purchasing activities include maintaining a service master database, in which the descriptions of all services that are to be procured can be stored. The system also keeps a separate set of service specifications that can be created for each concrete procurement project or proposed procurement in the purchasing document. Sets of service specifications may include both items with services and items with materials. When creating such specifications, the user does not have to list individual services manually. Instead, the data is simply copied from the master data. Use of this technique means that data only has to be entered once. The manual entry effort is reduced to a minimum.


RequirementsCalculation

Requisition forQuotations

Quotation Evaluation

Vendor Selection

Contracts

Vendor Ratings


Figure: The pre-purchasing activities module

There are two ways of entering service specifications-planned and unplanned.

Purchasing

Purchasing is a very important component of the Materials Management module. The Materials Management module is fully integrated with other modules in the system. It supports all phases of materials management: materials planning and control, purchasing, goods receiving, inventory management and invoice verification. Good communication between all participants in the procurement process is necessary for purchasing to function smoothly. Purchasing communications with other modules in the system to ensure a constant flow of information.

Vendor Evaluation

The vendor evaluation component has been completely integrated into the Materials Management module. Information such as delivery dates, prices and quantities can be taken from purchase orders. Vendor Evaluation also uses data from Quality Management, such as the results of incoming inspections or quality audits. It also accesses basic data in Materials Management, such as goods receipt data from Inventory Management.

The Vendor Evaluation System supports the optimization of the procurement processes in the case of the materials and service. In the case of procurement of materials, the system helps you select sources of supply and facilitates the continual monitoring of existing supply relationships. It provides you with accurate information on prices, and terms of payment and delivery. But evaluating vendors, you can improve your enterprise’s competitiveness. You can quickly determine and resolve any procurement problems that may arise on the basis of detailed information and in collaboration with the relevant vendors. In the case of procurement of services, you can check the reliability of the vendor’s form which you procure services on a plant by plant basis. You can determine whether the vendors



perform the services within the specified timeframes and appraise the quality of the work carried out.

Inventory Management

Inventory Management system allows you to manage your stocks on a quantity and value basis, plan, enter and check any goods movements and carry out physical inventory. In the Inventory Management system, the physical stocks reflect all transactions resulting in a change in stock and thus, in updated inventory levels. The user can easily obtain an overview of he current stocks of any given material. For each material, not only are the stocks in the warehouse shown, but also the stocks ordered but not yet delivered, reserved for production or for a customer, and the stocks in quality inspection can be monitored. If a further subdivision by lots is required for a material, one batch per lot is possible. These batches are then managed individually in the stock. Special from the vendor or from the customer (for example, consignment stocks) are managed separately from the company’s own stock.

The stocks are managed not only on a quantity basis but also by value-a prerequisite for cost accounting. With every goods movement, the following values are updated:

Stock value for inventory management Accounting assignment for cost accounting Corresponding G/L accounts for financial accounting via automatic account as-

signmentInvoice Verification and Material Inspection

The Invoice Verification component is part of the Materials Management system. It provides the link between the Materials Management component and the Financial Accounting, Controlling and Asset Accounting components. Invoice Verification in Materials Management serves the following purposes:

It completes the materials procurement process-which starts with the purchase requisition, continues with purchasing and goods receipt and ends with the in-voice receipt

It allows invoices that do not originate in materials procurement (for example, services, expenses, course cost, etc.) to be processed

It allows credit memos to be processed, either as invoice cancellations or dis-counts



UNIT – IV

PART – A

1. What are three primary factors for continued growth in ERP market?

ERP vendors are continuing to expand market presence by offering new applications such as supply chain management, sales force automation, customer support and human resources.

To sustain their rapid growth, ERP vendors will try to sell more licenses into their installed base. Currently, ERP vendors have a 10 – 20 per cent penetration (i.e. percentage of total employees currently using the RP system). This will grow to 40 – 60 per cent with in the next five years.

While ERP originated in the manufacturing market, ERP usage has spread to nearly every type of enterprise including retail, utilities, and the public sector and healthcare organizations. Most will purchase new ERP systems over the next five years, often for the first time.

2. Write briefly about SAP AG.

Founded in 1972, SAP (Systems, Applications and Products in Data Processing), based in Walldorf, Germany, is the leading global provider of client/server business application solutions. Today, SAP has installations in more than 107 countries.

3. What are two versions of SAP’s ERP package?VEL TECH VEL TECH MULTI TECH VEL TECH HIGH TECH 60


SAP’s ERP package comes in two versions: the mainframe version (SAP R/2) and the client/server version (SAP R/3).

4. Describe SAP.

The power of SAP software lies in real-time integration, linking a company’s business processes and applications, and supporting immediate responses to change throughout the organization on a departmental, divisional or global scale.

5. Describe R/3.

R/3 employs a three-tier client/server architecture widely recognized by SAP customers, technology partners and industry analysts as a winning approach to solving some of today’s most demanding information management challenges. The three-tiered architecture separates a system into three functional layers, each structured to support the demands of its function.

1. The Database layer resides on central servers or mainframe host computers.2. The Application layer holds the processing logic of the system, preparing and

formatting data for individual offices or departments.3. The Presentation layer, typically on personal computers, handles all the tasks

related to the presentation of data, including user interfaces that enable easy access to complex applications and data.

6. What is Intranet?

There is no technical difference between the Internet and the Intranet, except that not everybody is allowed to current to an intranet. Intranet is an application of the internet technology to a closed network. It provides a relatively cost efficient way to connect and manage corporate networks and distributed information. In-tranet uses Internet derived communication protocols (TCP/IP), networking (IP net-work) and user interface (Web browsers, e-mails etc.). The surprising speed with which intranets have grown among corporate users, demonstrates the strength of the Internet networking. Several surveys contend that corporate intranet expendi-ture far out-paces the level of spending on consumer – oriented Web businesses (Web stores). The compatibility of corporate intranets with the Internet will be a signifi-cant factor in the digital economy. In a sense, producer and seller information is readily accessible by outsiders, making it easy to manage and disseminate informa-tion to consumers.

7. Define R/3 module.

R/3’s applications are modules. They can either be used alone or in combina-tion with other solutions. From a process-oriented perspective, greater integration of applications increases the benefits derived.

8. What are the modules in R/3?



Financial Accounting Treasury Controlling Enterprise Controlling Investment Management Production Planning Material Management Plant Maintenance and Service Management Quality Management Project System Sales and Distribution Human Resources Management

9. Write briefly about BAAN.

Baan’s product line features multi-tiered architecture for maximum scalability environment, enabling support of new hardware, operating systems, databases, networks and user interfaces without any modification to the application code. Baan Company supports popular Unix platforms as well as Microsoft NT, and was the first solution provider in its class to earn the ‘Designed for Microsoft® BackOffice’ logo certification. Products also support major relational database systems (Oracle, Informix, DB2, Sybase and Microsoft SQL Server), and are Year 2000 compliant.

10. What are the BAAN series – based products?

The Baan Series-based product family includes Baan Enterprise Resource Planning (BaanERP); BaanFrontOffice; BaanCorporateOffice Solutions; and BaanSupplyChain Solutions.

11. Describe serving vertical industries.

Aerospace and Defense (A&D): Baan offers specific vertical industry solutions for aerospace and defense companies engaging in multi-level projects and contracts. Baan’s A&D offering includes BaanProject to enable the effective management of key functional business process areas. This unique, industry specific approach solves the problems faced by organizations engaged in large, extensive projects. Today, Baan is recognized as the leader in the Aerospace and Defense industry segment for ERP.

Automotive: Baan also offers specific vertical industry solutions for automotive companies. Many of the world’s leading automotive companies use Baan’s business applications to support worldwide manufacturing, distribution and financial operations. Baan’s product suite offers automotive companies next-generation information technology across manufacturing, supply chain and front office operations. With Baan, businesses choose best-of-breed components, add functionality without complex and costly upgrades and integrate Baan Company enterprise applications with existing and third-party applications. The BaanSeries-based family of products delivers real-time information across the entire value chain,



from engineering design to manufacturing, distribution and financial reporting.

12. What are the components in BAAN ERP?

BaanERP includes the following components: manufacturing, finance, project and distribution.

13. What are the features in Runtime tools?

Allows Baan application developers to focus on application – specific issues only

Removes the overhead of developing and generating a native application code for each combination of platform, operating system, database and so on.

Greatly reduces the complexity of providing and maintaining application product updates

Reduces the overhead of ensuring cross – platform compatibility by bundling and maintaining computer – environment – specific code separately from the BaanERP applications.

14. Define software configuration management.

Software configuration management offers the ability to create, modify and test BaanERP software components in a run-time environment that does not affect the live environment. It includes functionally for detailed tracking and version control of modifications.

15. Define Authorization Management system.

Authorization management system allows for the detailed management of user privileges, either per individual or per role.

16. Define Database Management system.

Database management system Enables a single environment to manage database related issues, regardless of the database(s) used.

17. Define Exchange control.

Exchange control A utility to exchange static or dynamic data between BaanERP installations or between BaanERP and third party products.

18. Define Dynamic form editor.

Dynamic Form Editor A Windows NT client used to create or modify BaanERP forms. The Dynamic Form Editor allows the dragging, and dropping, of form



elements and automates the process of consistent positioning of form elements.

19. Define 4GL Program Editor.

4GL Program Editor Developers can modify BaanERP or create add-ons using BaanERP’s 4GL development language, which is similar to C++ in syntax and structure. The 4GL environment automates many of the user interface and event handling issues, which allows the developer to focus on the required functionality.

20. What is “Three I” Philosophy?

1. Integrity: In its interactions with its customers, colleagues, partners and shareholders

2. Innovation: In what it builds and how it delivers.3. Initiative: In the speed and focus it brings to all aspects of its market

opportunity.

21. Define Baan Education.

Baan Education: As a partner in lifetime learning, Baan Education helps maximize the return on investment in people and technology. Baan Education addresses the education needs of every one in an organization, from newly hired employees to seasoned professionals who are maturing with technology. Bann Education offers new Internet – based learning called virtual Campus. With Baan Education, a partner can realize the company’s goals of profitability, productivity and competitive advantage. Baan Education’s process – based curriculum, addresses not only specific Baan Company’s enterprise applications, but also provides an in – depth under standing of the business processes that its applications automate. Thus, Baan Company extends education beyond simple functionality, taking into account the context within which its applications are used in their manufacturing, sales, financial, and technical environments. This lifetime learning approach means that a company’s workforce is always abreast with the latest technology and business developments.

22. Define Baan Consulting.

Baan Consulting: Baan Consulting is dedicated to implementing Baan Company enterprise applications around the globe. In addition to the thousands of customers served by its consulting partners, Baan Consulting has a successful track record with well over 1,000 customers worldwide, in almost every business environment. Baan consulting provides a wide range of services, such as Project Management, Business consulting, Applications Consulting and Technical Consulting. Throughout the implementation and after a company goes live, Baan Consulting is by its side with its Internet – based Baan Cyber Consult offering.

23. Describe oracle.



Oracle software runs on network computers, personal digital assistants, set top devices, PCs, workstations, minicomputers, mainframes and massively parallel computers. Oracle8i, the latest version of Oracle industry’s leading database,, is the database for Internet Computing. Oracle’s family of database, networking and gateway products enable corporations to access any data, on any server, over any network, from any client device.24. Describe oracle’s Warehouse Technology Initiative.

Oracle’s Warehouse Technology Initiative (WTI), one of the fastest growing and most comprehensive alliance programs in the data warehousing industry, provides customers with a complete data warehousing solution, based on the industry-leading Oracle database and more than 60 complimentary third-party software products and services. WTI is designed to increase the quantity and quality of Oracle-based data warehousing solutions, provide customers with greater choice, specialized tools, Oracle-optimized products and streamlined support as they build data warehouses.

25. Define OLAP.

OLAP On-Line Analytical Processing: A category of applications and technologies for collecting, managing, processing and presenting multidimensional data for analysis and management purposes.

26. Define OLAP Client.

OLAP Client End user applications that can request slices from OLAP servers and provide two – dimensional or multi – dimensional displays, user modifications, selections, ranking, calculations, etc. for visualization and navigation purposes. OLAP clients may be as simple as a spreadsheet program retrieving a slice for further work by a spread sheet – literate user or as high – functioned as a financial modeling or sales analysis application.

27. What is OLAP product?

OLAP Product A product capable of providing fast analysis of shared multidimensional information. Ad-hoc analysis must be possible either within the product itself or in a closely linked product.

28. Define OLAP/ROLAP.

OLAP/ ROLAP on-line Analytical Processing / Relational On-Line Analytical Processing (OLAP/ROLAP) are applications that a seek to verify complex hypotheses. An example of an OLAP query might be ‘Compare the costs of shipping to customers in the east to those in the west’.

29. Define supply chain management.



Supply Chain Management – People Soft has the industry’s only complete enterprise resource planning solution that is built around supply chain optimization. A Demand Planning module enables sophisticated forecasting, using real –time and historical information. peopleSoft’s complete suite of Supply Chain Management products provides comprehensive support for any organization that produces or markets a physical product.

30. Define service industry solution.

Service Industry Solutions – People Soft also provides a complete commercial support solution for service industries. The Service Revenue Management suit features modules supporting the tracking of time and labour, payroll processing. A suit of Procurement modules is also available supporting purchasing, inventory management, payable and expense processing, and asset management.

31. Define people tools.

People Tools is an integrated set of client / server business application development and customization tools from PeopleSoft. These tools enable customers to implement, tailor and maintain People Soft applications as well as to extract, analyze and manipulate data. People Tools includes several tools for reporting, customization and work flow.

32. What are different product modules available from JD Edwards?

Foundation Suite, Financial Suite, Logistics/Distribution Suite, Service suit, Manufacturing Suite, Architecture, Engineering, Construction, Mining and Real Es-tate Suite, Energy and Chemical Suite, Payroll suite, Human Resource Suite, Cus-tomer Service Management Suite, Government, Education, and Not-for-Profit Solu-tions, Utility and Energy Solutions.

PART - B



1. Describe SAPAG.

Company Profile

Founded in 1972, SAP (Systems, Applications and Products in Data Processing), based in Walldorf, Germany, is the leading global provider of client/server business application solutions. Today, SAP has installations in more than 107 countries.

SAP’s ERP package comes in two versions: the mainframe version (SAP R/2) and the client/server version (SAP R/3). Most prominent among SAP’s product range is the enterprise application suite R/3 for open client/server systems. With SAP Systems, customers can opt to install the core system and one or more of the functional components, or purchase the software as a complete package.

SAP customers have chosen to install SAP’s client/server suite in more than 19,750 sites worldwide. They System are accepted as the standard in key industries such as oil, chemicals, consumer products and high technology and electronics. The SAP group employs a work force of over 19,300 and has offices in more than 50 countries worldwide. SAP is the Most Successful vendor of standard business-application software and is the fourth-largest independent software supplier in the world. In its most recent fiscal year, ending December 31, 1998, SAP AG reported revenues of DM 847 billion, a 41% increase over 1997s revenues. In the same period, sales of R/3 rose by 31%.

Since 1998, SAP AG has been a publicly held corporation, with its shares being traded on the German and Swiss stock exchanges. In 1995, the company was added to the DAX, the index of German blue-chip companies. SAP listed its ADRs (American Depository Rights) on the NYSE (New York Stock Exchange) in August 1998.

Products and Technology

SAP products feature a sophistication and robustness unmatched by other business software solutions. SAP has developed an extensive library of more than 800 predefined business processes, spanning each functional software requirement. These processes may be selected from the SAP library and included with in installed SAP applications, after tailoring the application solution to suit the user’s exact requirements. New business processes and technologies become available regularly, enabling SAP customers to add state-of-the-art solutions to meet ever-changing business demands.

The power of SAP software lies in real-time integration, linking a company’s business processes and applications, and supporting immediate responses to change throughout the organization on a departmental, divisional or global scale. The international strength of the products extends to every aspect of the applications, VEL TECH VEL TECH MULTI TECH VEL TECH HIGH TECH 67


such as the support of multiple currencies simultaneously and the automatic handling of country-specific import/export, tax, legal and language requirements. The complete suite of R/3 applications is available in 24 languages, including Japanese (Kanji) and other double-byte character languages.

R/3-An Overview

R/3 employs a three-tier client/server architecture widely recognized by SAP customers, technology partners and industry analysts as a winning approach to solving some of today’s most demanding information management challenges. The three-tiered architecture separates a system into three functional layers, each structured to support the demands of its function.

1. The Database layer resides on central servers or mainframe host computers.2. The Application layer holds the processing logic of the system, preparing and

formatting data for individual offices or departments.3. The Presentation layer, typically on personal computers, handles all the tasks

related to the presentation of data, including user interfaces that enable easy access to complex applications and data.

SAP has also incorporated and integrated the intranet and Internet technologies into business solutions for its customers. Both internally and together with its partners, the company is defining and creating a number of Internet standards-based interfaces, applications and business processes that will extend the usefulness of SAP software in entirely new ways and to new classes of customers.

Through its Industry Business Units (IBUs) and its extensive development network, SAP works closely with its customers to develop new information technology, approaches, to meet the unique demands of a wide spectrum of industries. With this approach, customers become members of the SAP development team, sharing their best practices and solutions.

2. Explain R/3 modules.

R/3 Modules

R/3’s applications are modules. They can either be used alone or in combination with other solutions From a process-oriented perspective, greater integration of applications increases the benefits derived. The following are the R/3 modules:

Financial Accounting Collects all the data in your company relevant to account-ing, provides complete documentation and comprehensive information, and is at the same time an up-to-the-minute basis for enterprise-wide control and planning.

Treasury A complete solution for efficient financial management that ensures the liquidity of your company worldwide, structures financial assets profitably and minimizes risks.



Controlling A complete array of compatible planning and control instruments for company-wide controlling systems, with a uniform reporting system for co-ordinating the contents and procedures of your company’s internal processes.

Enterprise Controlling Continuously monitors your company’s success factors and performance indicators on the basis of specially prepared management in-formation.

Investment Management Offers integrated management and processing of in-vestment measures and projects form planning to settlement, including pre-in-vestment analysis and depreciation simulation.

Production Planning Provides comprehensive processes for all types of manu-facturing: from repetitive, make-to-order and assemble-to-order production, through process, lot and make-to-stock manufacturing, to integrated supply chain management with functions for extended MRP-II and electronic Kanban, plus optional interfaces for PDC, process control systems, CAD and PDM.

Material Management Optimizes all purchasing with workflow-driven process-ing functions, enables automated supplier evaluation, lower procurement and warehousing costs with accurate inventory and warehouse management and integrates invoice verification.

Plant Maintenance and Service Management provides planning, control and processing of scheduled maintenance, inspection, damage-related maintenance and service management to ensure availability of operational systems, includ-ing plants and equipment delivered to customers.

Quality Management Monitors, captures and manages all processes relevant to your quality assurance along the entire supply chain, coordinates inspection processing, initiate’s corrective measures and integrates laboratory informa-tion systems.

Project System Coordinates and controls all phases of a project, in direct coop-eration with Purchasing and Controlling, from quotation to design and ap-proval, to resource management and cost settlement.

Sales and Distribution Actively supports sales and distribution activities with outstanding functions for pricing, prompt order processing and on-time deliv-ery, interactive multilevel variant configuration and a direct interface to Prof-itability Analysis and Production.

Human Resources Management Provides solutions for planning and managing your company’s human resources, using integrated applications that cover all personnel management tasks and help simplify and speed the processes.

3. Explain BAAN.

Company Profile

Baan Company is a leading global provider of enterprise business software. Baan Company offers a comprehensive portfolio of best-in-class, component-based applications for front office, corporate office and back office automation. These applications are in use at over 7,000 customer sites worldwide. Baan Company products reduce complexity and cost, improve core business processes, are faster to



implement and use, are more flexible in adapting to business changes and optimize the management of information throughout the entire value chain.

Baan’s product line features multi-tiered architecture for maximum scalability environment, enabling support of new hardware, operating systems, databases, networks and user interfaces without any modification to the application code. Baan Company supports popular Unix platforms as well as Microsoft NT, and was the first solution provider in its class to earn the ‘Designed for Microsoft® BackOffice’ logo certification. Products also support major relational database systems (Oracle, Informix, DB2, Sybase and Microsoft SQL Server), and are Year 2000 compliant.

The Baan Series-based product family includes Baan Enterprise Resource Planning (BaanERP); BaanFrontOffice; BaanCorporateOffice Solutions; and BaanSupplyChain Solutions.

Serving Vertical Industries

Aerospace and Defense (A&D): Baan offers specific vertical industry solutions for aerospace and defense companies engaging in multi-level projects and contracts. Baan’s A&D offering includes BaanProject to enable the effective management of key functional business process areas. This unique, industry specific approach solves the problems faced by organizations engaged in large, extensive projects. Today, Baan is recognized as the leader in the Aerospace and Defense industry segment for ERP.

Automotive: Baan also offers specific vertical industry solutions for automotive companies. Many of the world’s leading automotive companies use Baan’s business applications to support worldwide manufacturing, distribution and financial operations. Baan’s product suite offers automotive companies next-generation information technology across manufacturing, supply chain and front office operations. With Baan, businesses choose best-of-breed components, add functionality without complex and costly upgrades and integrate Baan Company enterprise applications with existing and third-party applications. The BaanSeries-based family of products delivers real-time information across the entire value chain, from engineering design to manufacturing, distribution and financial reporting.

Manufacturing Module (includes Bills of Material, Cost price Calculation, Engi-neering Change Control, Engineering Data Management, Hours Accounting, product Classification, Product Configuration, Production Control, Production Planning, Project Budgeting, Project Control, Repetitive Manufacturing, Rout-ings, Shop Floor Control, Tool Requirements, Planning and Control, Capacity Requirements planning, Master production Scheduling and Material Require-ments planning)

Finance Module (includes Accounts payable, Accounts Receivable, Financial Budgets System, Cash Management, Financial Reporting System, Fixed Assets, General Ledger, Cost Accounting and Sales Invoicing)



Project Module (includes Project Budget, Project Definition, Project Estimating, Project Invoicing, Project Invoicing, Project Monitoring, Project Planning, Project Progress and Project Requirements Planning)

Distribution Module (includes Sales Management, Purchase Management and Warehouse Management)

BaanERP Tools

BaanERP Tools consists of a number of software components, which together form the technical foundation for all BaanERP components. The BaanERP Tools can be described as a computing platform that provides an independent, flexible, open and distributed computing and development environment. The open architecture of the BaanERP Tools makes it possible to:

Quickly react to new trends in the marketplace that require software or software configuration changes. Develop the Baan applications in such a way that they are kept independent of third party products such as hardware, operating systems and databases. Easily integrate with third-party products. Create customer-specific solutions.

Allows Baan application developers to focus on application-specific issues only. Removes the overhead of developing and generating a native application code for each combination of platform, operating system, database and so on. Greatly reduces the complexity of providing and maintaining application product updates.

Reduces the overhead of ensuring cross-platform compatibility by bundling and maintaining computer-environment-specific code separately from the BaanERP appli-cations.

Software configuration management Offers the ability to create, modify and test BaanERP software components in a run-time environment that does not affect the live environment. It includes functionality for detailed tracking and version control of modifications.

Authorisation management system Allows for the detailed management of user privileges, either per individual or per role.

Database management system Enables a single environment to manage database related issues, regardless of the database(s) used.

Exchange control A utility to exchange static or dynamic data between BaanERP installations or between BaanERP and third party products.



Dynamic Form Editor A Windows NT client used to create or modify BaanERP forms. The Dynamic Form Editor allows the dragging, and dropping, of form ele-ments and automates the process of consistent positioning of form elements.

4GL Program Editor Developers can modify BaanERP or create add-ons using BaanERP’s 4GL development language, which is similar to C++ in syntax and structure. The 4GL environment automates many of the user interface and event handling issues, which allows the developer to focus on the required functionality.

4. Explain Oracle Corporation.

Company Profile

Oracle Corp (founded in 1977) is the world’s second largest software company and the leading supplier of software form enterprise information management. With annual revenues exceeding $8.0 billion, the company offers its database,, tools and applications products, along with related consulting, education and support services. Oracle employs more than 41,000 people in more than 145 countries around the world. Headquartered in Redwood Shores, California, Oracle is the first software company to implement the Internet computing model for developing and deploying enterprise software across its entire product line databases and relational servers, application development and decision support tools and enterprise business applications.

Technology

Oracle software runs on network computers, personal digital assistants, set top devices, PCs, workstations, minicomputers, mainframes and massively parallel computers. Oracle8i, the latest version of Oracle industry’s leading database,, is the database for Internet Computing. Oracle’s family of database, networking and gateway products enable corporations to access any data, on any server, over any network, from any client device.

Oracle’s Warehouse Technology Initiative (WTI), one of the fastest growing and most comprehensive alliance programs in the data warehousing industry, provides customers with a complete data warehousing solution, based on the industry-leading Oracle database and more than 60 complimentary third-party software products and services. WTI is designed to increase the quantity and quality of Oracle-based data warehousing solutions, provide customers with greater choice, specialized tools, Oracle-optimized products and streamlined support as they build data warehouses.

Oracle’s integrated Business Intelligence solutions deliver powerful capabilities to users anywhere in the enterprise, at any time. End users benefit from intuitive tools that provide easy access to business data and fast answers to any question. Oracle’s Business Intelligence family of products includes integrated releases of Oracle Reports, Oracle’s enterprise reporting tool; Oracle Discoverer,



Oracle’s award-winning an-hoc query and analysis tool; and Oracle Express, Oracle’s industry-leading enterprise online analytical processing (OLAP) engine. Oralce also offers pre-build OLAP applications-Oracle Financial Analyser and Oracle sales Analyser-to further reduce implementation time and costs.

Oracle Applications is a leading provider of packaged and integrated front office and ERP solutions for the enterprise and a division of Oracle Corporation, the world’s second-largest software company and the largest supplier of software for information management. Oracle Application’s strategy is to offer all the enterprise solution components-proven applications, advanced technologies, business expertise and partnerships required-to enable customers to execute strategies quickly, manage the risk of change and lead their respective industries.

Oracle Applications is the only suite of enterprise business applications from a major Enterprise Resource Planning (ERP) vendor that follows the Internet Computing model. Each of the over 45 modules for financials, human resources, manufacturing, supply chain and front office automation is webenabled, allowing it to be deployed on corporate intranets with no software, other than a browser, required on users’ desktops. This architecture allows companies to shift the complexity of application management, maintenance and upgrading from users’ desktops onto centralized, professionally managed servers, thereby dramatically reducing the cost of deploying and administering software. By minimizing network traffic, this approach also makes it economical to deploy the applications over Wide Area Networks (WANs) to hundreds or thousands of users, making it possible to distribute critical business information much more broadly than is feasible in the client/server model.

Oracle Applications further exploit the low-cost and universal access inherent in the Internet Computing model, by providing a set of applications specifically designed for secure, self-service business transactions across the Internet and corporate intranets. These applications are integrated with Oracle Workflow to completely automate business processes.

Oracle Applications comprise of 45-plus software modules, which are divided into the following categories:

Oracle FinancialsOracle Human ResourcesOracle ProjectsOracle ManufacturingOracle Supply ChainOracle Front Office

More than 6,000 customers in 76 countries use Oracle Applications. Available in 29 languages, Oracle Applications lets companies operate in multiple currencies and languages, support local business practices and legal requirements, and handle



business-critical operations across borders. A brief overview of the Oracle Application categories is given below:

Financials Oracle Financial Applications can transform a finance organization into a strategic force. In today’s fast-moving corporate arena, organizations re-quire access to critical financial management functions. With Oracle Financial Applications, companies will be able to work globally, lower their administra-tive costs, close their books faster and improve cash management-while provid-ing the strategic information required for making timely and accurate deci-sions.

Projects Oracle Projects Applications improve operational efficiency by provid-ing an integrated project management environment that supports the full life-cycle of every project in your enterprise, increasing to-line revenue growth and bottom-line profitability. As the bridge between operations systems and corpo-rate finance, Oracle Projects Applications provide a central repository of vali-dated cost, revenue, billing and performance data associated with your busi-ness activities or projects.

Human Resources Well-managed human resources directly improve the bottom line and contribute to competitive advantage. The ability to hire, motivate and retain the most capable workforce; engage employees and line managers di-rectly in managing their skills and careers; and provide comprehensive and up-to-date workforce information for management-on a global basis-are a few of the characteristics important for success. The Oracle Human Resource Man-agement System (HRMS) provides comprehensive facilities for organizations to achieve such goals.

Manufacturing Oracle Manufacturing Applications are the industry leading mixed-mode manufacturing solution that enables companies to achieve market leadership by becoming more customer-responsive and efficient. This product family supports companies from small, single-facility environments to multi-plant, global manufacturers with complex requirements. Oracle Manufacturing Applications help companies increase revenue, profitability and customer loy-alty by universally capturing demand, planning the extended enterprise in one rapid step and by ensuring that the most efficient manufacturing process is used to produce each product.

Supply Chain oracle Supply Chain Management Applications simplify supply-chain processes by providing a single, integrated environment for managing the extended enterprise. From your suppliers’ suppliers to your customers’ customers, Oracle enables effective trading partner collaboration and supply-chain optimization capabilities that are vital to gaining and sustaining competi-tive advantage. Oracle Supply Chain Management Applications help in in-creasing market share while improving, customer service and minimizing costs across the networked supply chain.



Front Office Oracle Front Office Applications provide a true customer centric approach, allowing you to better understand your customer relationships, their value and profitability. Oracle Front Office Applications increase top-line rev-enues, decrease sales and service costs, and maintain customer retention and satisfaction. The sales, marketing and service solutions provide deep integra-tion with the entire enterprise suite of applications, and enable you to attract and retain profitable customers through a unified set of deployment channels, including Web mobile and call centre.

Vertical Solution

Oracle also provides vertical solutions with a full line of modular product components aimed at the unique requirements of many major industries, including automotive, aviation, aerospace and defense, communications, consumer packaged goods, energy downstream, energy upstream, financial service, high-tech, public sector and utilities.

5. Explain People soft.

People Soft solutions run on a variety of leading hardware and database platforms, including Compaq, Hewlett – Packard, IBM, Sun Microsystems, Informix, Microsoft SQL Server, Sybase, DB2 and others, People Soft delivers Web-enabled applications, workflow, online analytical processing (OLAP), etc.

People Soft has over 2,900 customers in nearly every industry and geographic region in the worked, including a large cross – section of the Fortune 1000.

The company’s products are sold through direct sales offices and distributors in the United States, Canada, Europe, Asia /Pacific, Latin America and Africa. With award – winning customer service, people Soft dedicates approximately 47 percent of its staff to customer service in the areas of account management, product support, professional services, education services and communication services.

The people Soft’s business management solutions are in the areas given below:

1. Human Resources Management 2. Accounting and Control3. Treasury Management 4. Performance Measurement5. Project Management 6. Sales and Logistics 7. Materials Management8. Supply Chain Planning 9. Service Revenue Management 10. Procurement

Commercial Solutions

Supply Chain Management – People Soft has the industry’s only complete VEL TECH VEL TECH MULTI TECH VEL TECH HIGH TECH 75


enterprise resource planning solution that is built around supply chain optimization. A Demand Planning module enables sophisticated forecasting, using both real –time and historical information. peopleSoft’s complete suite of Supply Chain Management products provides comprehensive support for any organization that produces or markets a physical product.

Service Industry Solutions – People Soft also provides a complete commercial support solution for service industries. The Service Revenue Management suit features modules supporting the tracking of time and labour, payroll processing. A suit of Procurement modules is also available supporting purchasing, inventory management, payable and expense processing, and asset management.

People Tools

People Tools is an integrated set of client / server business application development and customization tools from PeopleSoft. These tools enable customers to implement, tailor and maintain People Soft applications as well as to extract, analyze and manipulate data. People Tools includes several tools for reporting, customization and work flow.

6. Explain People Soft Technology.

Technology

People Soft Continually adds and refines technology to optimize their customers’ information systems. They help customers take advantage of new and emerging technologies, giving them more choices and freedom to develop their own innovative business processes. Some of them are given – below:

Self – Service Applications To improve productivity throughout the organization, People Soft focuses on providing the occasional user with easy access to infor-mation and functionality specific to their role. They have developed a set of self-service applications to help companies quickly and cost – effectively distribute functionality throughout the enterprise over the Internet, intranets and ex-tranets. Built with an intuitive interface based on a standard Web browser – such as Netscape Navigator or Microsoft Explorer – these Java – based, cross – platform applications enable employees, customers, suppliers and other occa-sional users to perform self – service administrative tasks easily. Self-service ap-plications are linked to People Soft core product lines, including PeopleSoft Ac-counting Control, Human Resources Management and Materials Management.

Web Client Self- service applications use the People Soft Web Client. The web Client is downloadable on demand and runs on a web browser across multiple platforms. Its affordability, open architecture and simplicity provides and ideal framework for delivering enterprise solutions , to a large number of people. Ap-plications, don’t need to be installed at every desktop; they are accessed easily through a browser. In addition to supporting self –service applications, the Peo-ple Soft Web Client has a Worklist and Query interface to help incorporate occa-



sional users in the flow of a company’s business processes and improve access to information. Furthermore, all data transmitted between the Web Client and the application server is encrypted for added security. Because the Web Client takes advantage of People Tools, self-service applications can be deployed across the Internet or existing corporate intranets – with common business rules workflow logic and security features.

Multitier Transaction Processing The ability to support large number of concur-rent users, while maintaining reliable and superior performance, is critical to enterprise – Wide data processing. Recognising that PeopleSoft works in a vari-ety of settings-over local area networks (LANs) and wide area networks (WANs), throughout organizations of varying sizes – there is an option of two – tier or three –tier processing. In the latter, the application logic runs on an applications server instead of the client. The application server is designed to relive the client from processing intense SQL transactions, thereby reducing LAN traffic and improving performance across WANs. A three – tier architecture also pro-vides increased scalability to accommodate high volumes of concurrent users while maintaining a consistent and reliable performance level. PeopleSoft con-tinues to support its traditional two – tier architecture as well.

Online Analytical Processing Companies must be able to quickly extract and an-alyze the information they require for effective decision making. OLAP, or online analytical processing, is a powerful method for interactively analyzing data on-line. PeopleSoft integrates popular OLAP stools – including Cognos Power play and Arbor Essbase –that enable users to easily ‘slice and dice’ multidimensional data stored in various locations. With the cube Manager, users can define the data they want to extract into an OLAP cube, enabling them to quickly view in-formation from all different angles to test conclusions, conduct what-if scenarios and compare alternative strategies. With multidimensional information pre-sented in quick-read formats, managers can make better decisions, react faster to competitive threats and identify inefficiencies.

Work flow An essential part of our solution, PeopleSoft workflow capabilities help communications companies achieve enterprise – wide integration of infor-mation, applications and people, Workflow enables a company to automate many time –consuming clerical tasks, while putting useful data into the hands of users. With workflow, the company’s PeopleSoft applications do more of the work. For example, if managerial approval is needed for a work order, the sys-tem automatically forwards the request. Workflow can also help the company track projects, by initiating a workflow message to the appropriate person when a project exceeds a predetermined cost. The company can even bring non-Peo-pleSoft users into the workflow process, using e-mail systems and the Internet for collecting and distributing data.

7. Explain JD Edwards World Solutions Company.

Company Profile



1977, Derver, Colorado. Three men left the accounting world to form a software company that would specialize in midrange computing solutions. Each of the three founders – Jack Thompson, Dan Gregory and EdMcVaney-lent a small portion of his name for the company name. On March 17, JD Edwards was formed.

In the early years, JD Edwards designed software for several small and medium-sized computers, eventually focusing on the IBM System/38 in the early 1980s. It was in this effort that JD Edwards pioneered the CASE software development and design tool, which lends consistency across the broad range of JD Edwards’ integrated applications. Technology

JD Edwards offers its solutions primarily for the AS/400 platform. JD Edwards’s two application suites, One World and WorldSoftware/WorldVision, provide comprehensive supply chain management functionality across the technology continuum, from host –centric, to thin –client, to network-centric computing. All three can run concurrently on the same AS/400, share data and interact with each other as a unified solution.

In the age of technology change, the popularity of many enterprise software solutions is fleeting. The resulting obsolescence is frustrating and costly. It is better to have a system that has the necessary functionality with built – in longevity. More than 4,000 customers have found this staying power in JD Edwards WorldSoftware. On its strength and the reliability of its host – centric IBM AS/400 foundation, WorldSoftware’s global popularity has endured in the ERP market place for over a decade.

Inherently flexible and easy to use, WorldSoftware readily adapt to your situation, letting you:

Selectively mix, match and integrate software applications from among its di-verse industry product suits.

Easily tailor it to ongoing business, local and organization – specific require-ments.

Add WorldVision, its advanced graphical user interface, to gain client/server benefits.

Optionally run it alongside OneWorld, JD Edwawrds’ network-centric solution, to gradually incorporate other computing platforms into your network.

JD Edwards WorldVision is a thin – client bridge that provides the graphical user interface (GUI) with a look and feel common to the PC, while protecting your investment in WorldSoftware and the AS/400. WorldVision also allows you to:

Maximise productivity by shrinking the amount of training users need.



Make a safe move to client / server by leveraging your ex-isting host centric WorldSoftware applications.

And like WorldSoftware, WorldVision is continually enhanced for the future. For example, you can have WorldVision as a windows 95/NT style GUI for a PC and as Java – based interface for use across the Internet, intranets, or extranets.

Modules The different product modules available form JD Edwards are: Foundation Suite (Black Office, CASE Foundation, Environment/ Tool-

kit, financial Analysis Spreadsheet Tool and Report Writer, WorldVision GUI, Electronic Burst & Bind).

Financial Suite (General Accounting, Accounts Payable, Accounts Re-ceivable, Fixed Assets, Financial Modeling and Budgeting, Multi-cur-rency Processing, Cash Basis Accounting, Time Accounting)

Logistics/Distribution Suite (Forecasting, Requirements Planning, En-terprise Facilities Planning), Sales Order Management, Advanced Pric-ing Procurement, Work Order Management, Inventory Management, Bulk Stock Management, Quality Management, Advanced ‘Warehouse Management, Equipment Management, Transportation Management, Job Cost. Service Billing)

Service suit (Contract Billing, Subcontract Management, Change Man-agement, Property Management)

Manufacturing Suite (Configuration Management, Cost Management, Product Data Management, Capacity Planning, Shop Floor Management, Advanced Maintenance Management)

Architecture, Engineering, Construction, Mining and Real Estate Suite (Procurement, Inventory Management, Equipment Management, Job Cost, Work Order Management, Subcontract Management, change Management, Contract Management, Contract Billing, Service Billing, Homebuilder Management, Property Management)

Energy and Chemical Suite (Agreement Management, Advanced Stock Valuation, sales Order Management, Bulk Stock Management, Load and Delivery Management)

Payroll suite Human Resource Suite Customer Service Management Suite

Government, Education, and Not-for-Profit Solutions (Financial Ad-ministration and Reporting, Budget Administration, Fund and Encum-brance Accounting, Grant and Endowment Management, Purchasing and Material Management, Warehousing and Central Stores Management,



Human Resources Management, Service and Work Order Management, Capital Project Construction Management, Contract Management, Plant, Equipment, and Fleet Maintenance.

Utility and Energy Solutions (Customer information System, Human Resources Management, Work Management, Regulatory Reporting, Sup-ply Chain Management, Project Management, Enterprise Maintenance Management)

8. Explain System Software Associates.

Company Profile:

SSA was founded in December 1981 and has its headquarters in Chicago, USA. SSA has its presence in 91 countries and employees more than 2000 employees. The 1998 revenues of the company was $venues of the company was $ 420.8 Million. The Company’s product line, BPCS Client/Server V6, is currently live or being implemented in more than 1,000 major industrial sector firms in over 4,000 sites world wide.

SSA’s vision is to be the global partner to the world’s industrial sector companies. SSA’s mission statement, which has been the same since SSA was founded in December 1981, is to provide competitive advantage for Clients through the implementation of their business enterprise information system. This mission statement is underwritten by six key goals:

1. Best Client Satisfaction. This means that the company wants their clients to achieve the greatest possible business benefit from their-relationship with SSA.

2. Single Image Worldwide Means that the clients get the same high level of support and expertise all around the world.

3. Enterprise Solutions Leadership It means that the company is focused on building and delivering solutions, which bring together the entire enter-prise.

4. Proven Leading Technology This means that every piece of technology ap-plied by SSA will already be proven for high transaction volume enterprise-wide applications.

5. Highly skilled and motivated professionals It means that SSA is committed to having the best professionals and resources in the application software business.

6. Strong Financial Results This means that SSA can continue to invest in the improvement of its software and professionals, and will be a stable partner in the long run.



BPCS Client / Server:

BPCS Client/Server is a comprehensive set of integrated client / server applications that addresses the core system needs of industrial sector enterprises on a global scale. BPCS Client / Server coves Configurable Enterprise Financials applications, Supply Chain Management applications, Multi-Mode Manufacturing and CIM applications, as well as Electronic Commerce applications such as EDI. BPCS Client/Server is based on SSA’s proven object technology foundation that ensures that it operates identically from an end-user’s perspective across any supported server, be it HP 9000, AS/400, or Windows NT.

BPCSClient/Server products offer numerous full function applications with capabilities to support solutions needed by the industrial sector. Major objectives of industrial managers have been to improve customer satisfaction, improve product quality, remain cost competitive, and reduce the time in launching a product in the market. SSA’s BPCS Client/Server products provide a wealth of features and functions enabling industrial managers to achieve these objectives.

The Microsoft Desktop is the BPCS Client /Server Desktop: the BPCS Client/Server user interface is graphically and fully compliant with Microsoft Windows 95. The look and feel is the same as other Microsoft desktop applications, resulting in a system that is easy to learn and use. Examples of Microsoft desktop functions include full use of hypertext and other point-of-demand education, such as field sensitive help text, bookmarks, annotations and other Windows help text functions. BPCS Client/Server also includes hypertext linking related topics.

The BPCS Client/Server graphical user interface icons, messages, scroll bars, tool bars, pull-down menus, radio buttons, check boxes and other Microsoft desktop features. In addition, the BPCS Client/Server applications are interoperable with other windows compliant applications through the windows cut-and-paste feature.

BPCS Client/Server is used worldwide by more than 8500 companies, at 25,000 sites, and by 3,000,000 end users, representing various vertical markets-automotive, chemical, consumer goods, electronics, fabrication and assembly, food and beverage, forest products and pharmaceuticals. SSA and its strategic partners provide full implementation support for BPCS Client/Server in over 90 countries worldwide.

The BPCS Client/Server solution delivers unparalleled agility and re-configurability to meet changing market demands, through a quantum leap forward in ERP technology that delivers significant business benefits, including century dating.

With BPCS Client/Server version 6.0, SSA has successfully addressed the most crucial issues facing the ERP market place, the implementation and integration of package applications. SSA has reduced time-to-benefit implementation cycles to 6-12 months, down from an industry average of 12-24 months. At the core of BPCS Client/Server is its object-based architecture, called DOCA (Distributed Object



Computing Architecture), which is specifically designed for enterprise-wide application in industrial sector companies. DOCA is optimized to support high transaction volumes in a functionally rich, distributed data processing, client/server environment. DOCA’s object-based architecture provides inherent flexibility, enabling the rapid reconfiguration of BPCS Client/Server applications. This allows organizations to quickly and easily alter the solutions in response to new business and market challenges.9. Explain QAD.

Company Profile:

QAD was founded in 1979 and now has a presence in 21 countries and employs more than 1100 people. The company’s products include MFG/PRO, On/Q, Service / Support Management, Decision Support, and Qwizard. The company’s flagship product is its ERP solution – MFG/PRO. It is available in 26 languages and has more than 4,000 installed sites in over 80 countries. The company got the ISO certification in 1995.

Products:

QAD offers a variety of supply chain and Enterprise Resource Planning (ERP) sort ware products to manufacturing industries within the automotive, consumer products, electronics, food and beverage, industrial products and medical sectors. QAD soft ware optimizes your enterprise by increasing the speed of internal processes and by synchronizing distributed operations.

QAD’s flagship product, MRG/PRO software, provides multinational organizations with an integrated Global Supply Chain Management solution that includes manufacturing, distribution, financial, service/support management applications within an open system environment. Internet-Enabled MFG-PRO allows you to share information and conduct commercial transactions over the Internet.

QAD’s On/Q Extended Supply Chain Applications manage the complex demand and fulfillment transactions of large multinational corporations with dynamic, collaborative relationship spanning multiple enterprises. Service/Support Management is designed for companies who not only manufacture and sell their products but also offer after-sales service and support. QAD’s Decision Support is a tool designed to provide manufacturers with access to information necessary for informed decision-making. Qwizard, QAD’s interactive mentor for users of MFG/PRO software, is a value-added tool that provides easy-to-use business modeling, implementation and interactive learning tools.

QAD had currently developed a number of business arrangements with Product Alliance Partners to enhance the effective functionality of QAD’s products.

10. Explain MFG/PRO.



MFG/PRO software is one of the successful client/server ERP applications as it dramatically increases the internal efficiencies of distributed operations within months of purchase. The software is comprehensive, open, flexible, scalable, interactive, and designed to address the operations requirements of today’s manufacturers. It is available in 26 languages, is year-2000 compliant, and supports multiple currencies including the Euro.

MFG/PRO includes an extensive set of solution components for manufacturing, distribution, financial, supply chain, and service/support management. Configurable and interoperable, it is open to best-of-breed components, uses either Oracle or Progress databases, and runs in UNIX, Windows, and Windows NT environments.

MFG/PRO can be implemented at multiple sites and it easily scales to meet the changing business requirements. MFT/PRO’s user interface is an ultra thin Java browser. MFG/PRO is also available with a Windows graphical user interface (GUI) or a character user interface.

Manufacturers need a solid strategy for achieving and maintaining competitive advantage. MFG/PRO soft ware quickly synchronizes distributed operations within your enterprise, enabling you to balance supply and demand across multiple sites. MFG/PRO’s supply chain functions include centralized order processing, centralized purchasing, enterprise operations planning, distribution requirements planning and enterprise materials transfer. By using MFG/PRO’s enterprise-level supply chain functions, you can manage supplies within your enterprise far more effectively, no matter how widely distributed your sites are. This means you will be able to respond to customer needs much more rapidly.

MFG/PRO is a fully integrated soft ware package available on a module by module basis. MFG/PRO addresses the entire manufacturing spectrum from repetitive to configure-to-order. It is appropriate for process, batch process, make –to – stock, configure-to-order and repetitive manufacturing environments. With world class supply chain management tools, it is particularly useful for multinational companies. The various modules of MFG/PRO are:

Distribution : The Distribution Modules of MFG / PRO are used to monitor in-ventory balances and manage purchasing and sales order entry activities.

Manufacturing : The Manufacturing Modules are used to regulate all manufac-turing activity within the various types of production environments.

Financials : The Financial modules interface with the Distribution, Planning and Manufacturing modules to report the financial implications of the com-pany’s activities.

Service/Support : Service / Support Modules are designed for companies which not only manufacture and sell their products, but also offer after-sales service and support.



Supply Chain : Supply Chain Management is the control of goods and informa-tion from supplier to customer.

Master Files functions provide access to series of foundation modules that are used by the rest of the MFG/PRO applications. These master files include: Items / Sites, Addresses / Taxes, Inventory Control Settings, Physical Inventory, Multiple Database configurations and Manager Functions.

UNIT – V

PART - A1. Define E-Commerce.

Most companies will conduct at least part of their business operations through e-commerce, that is, on the Internet. When people think of e-commerce, they often think of retail e-commerce, typified by companies like Amazon.com. Most of the sales growth on the Internet, however, has been in the area of business-to business (B to B) e-commerce, rather than in retail business – to – consumer (B to C) e-commerce.

2. Define Business to Business ecommerce.

Business –to – business e-commerce is defined as buying and selling between two companies over the World Web. The companies might be manufacturers, suppliers, wholesalers, or retailers.

3. Define EDI.

Companies electronically transferred purchase orders through a system known as Electronic Data Interchange (EDI). EDI is an electronic computer-to-computer transfer of standard business documents.

4. What are the Benefits of EDI?

Costs of paper, printing, and postage have almost disappeared from ordering system.

Errors have been brought to a minimum because orders do not have to be rekeyed into a supplier’s system.

Ordering is fast and efficient. As s result, large companies have forced their smaller supplier’s to use EDI, via a VAN if necessary. The supplier pays the VAN per amount of information sent and received.

Suppliers and buyers are “locked” into business relationships: Once a com-pany sets up an EDI system with its supplier, it takes effort to change suppli-



ers, and most do not, hence locking in the relationship. This is an advantage as long as both suppliers and buyers remain satisfied.

5. Why companies are morning from EDI to Internet Based Procurement?

The following reasons:

1. The Internet is a lower-cost network than private EDI networks.2. Purchasing costs are further reduced as suppliers compete for orders on the

buyer’s Web site.

6. Define back-office processing.

When a company receives an order through its Web site, the company can’t merely file or print orders for later handling, like e-mail updates and order tracking. The orders must be efficiently fed into the company’s marketing, manufacturing, shipping, and accounting systems – a series of steps sometimes called back-office processing.

7. Define ASP.

An Application Service Provider (ASP) is a company that delivers software applications to a company over a network. Usually that network is the Internet. 8. What are the advantages of using an ASP?

Affordability – Companies that once thought they couldn’t afford an ERP system can now pay for it on a monthly basis. Gaining access to an ERP sys-tem through the Internet is even cheaper than using private leased lines. ASP services can be received through an Internet connection using a regu-lar browser and the SAP graphical user interface.

Shorter implementation times – The time for implementation is shorter for those who choose to implement ERP through an ASP. ASPs already have similar systems running and are experienced in software delivery. They have servers, telecommunications, and highly trained personnel already in place.

Expertise – ASPs are experts in delivering IS applications. They do all the maintenance, including backups, training, and customizing of the system. That lets their customers eliminate. IT headcount to focus on their business. ASPs can also run information systems more efficiently because they do it on a large scale. ASPs can spread fixed costs over many users, thus achiev-ing economies of scale that might translate into low lease rates. And, in this tight IS labor market, an ASP may have a better chance of attracting and re-taining a talented work force.

9. What are the disadvantages of using an ASP? VEL TECH VEL TECH MULTI TECH VEL TECH HIGH TECH 85


Security – Companies using ASPs are turning their information systems over to a third party; therefore, they must be confident that the ASP has a high level of security. How hardware will be shared is also a security con-cern: The ASP will have multiple users on a single piece of hardware. Each customer’s data must be shielded from other customers. An ASP might have better security, however, technology than a small company can obtain.

Bandwidth/response time – The telecommunications channel from the ASP to its customers must be fast enough to handle multiple users. An ASPs servers must be sufficient in terms of processing capabilities.

Flexibility – An ASP should be flexible in working with its users and satisfy-ing their requests for processing modifications.

No frills – An ASP can usually provide basic systems well, but asking for unusual configurations may cause problems. An ASP might not allow for third-party add-ons either. Further, the ASP might not want to do much cus-tomization using the SAP R/3 programming language, ABAP.

Technical, not business – An ASP knows the technical aspect of the soft-ware, but it will need the customer to define the business processes and make the configuration decisions.

10. What is NPV?

Net Present Value (NPV) is a way to figure out whether an investment is profitable, or in this case, compare outlay of funds from one method to another. NPV can be calculated over a number of years; in our case, a five-year outlay of funds for the ERP project. The syntax of NPV is = NPV (hurdle rate %, range of values) within an Excel spreadsheet. The values in the range can be positive or negative numbers. 11. Define Hurdle rate.

The hurdle rate (written in the spreadsheet as a decimal, not a percentage) is the rate of discount over the period. The hurdle rate is the minimum acceptable rate of return on a project that a company will accept.

12. What are the advantages of connectivity?

Efficiency – For the traveling representative, connectivity means faster re-sponse time to a customer’s order or request.Productivity – More time is productive since access to the system can be made from virtually any where.Data Collection – The user can easily collect data in the field and transmit it to the office, which can mean connecting to the company’s back-office system.Profits – Profits may eventually rise with the increased efficiency and produc-tivity.



13. What are the perceived benefits of ERP for a company like yours?

Business in the past 10 years has gotten more complex and now has many dimensions ERP can help our company in two major areas:

1. Globalization: Different countries have different ways of doing business. ERP can replace those global differences.

2. Regulatory environment: In our business, there are strict regulatory rules, and they are different in different markets. ERP can help manage company –wide compliance with all those complex regulations.

ERP is basically using system to coordinate the flow of information to maximize profits. You need to strike a balance, how ever, between total integration and nonintegration.

There can be problems with total integration. The complexity of business is so high that implementing a total ERP system for a large multinational company is very difficult. One needs to approach ERP with reality in mind. For example, one of our factories in Brazil had an ERP system in place. It worked well and the factory was profitable. It was not a good business decision for them to change their non – SAP system to our headquarter’s SAP system, so an interface was written to bridge the two systems.

14. Why is ERP an easy sell to top management?

There is a one – word answer to that question: control. All upper-level managers want to control their organization. They often do not have access to proper information at the proper time. Any system that can give them accurate, timely information is fantastic. In fact, years ago, we implemented the old SAP system, R/2, just for that purpose. The workers in our factory were incredulous because we went from a Windows-based graphical user interface to a text – based interface with R/2, To them, it seemed like a step back in technology, but that new system could give upper-level management the information they needed to control the company’s operations.

15. Are there any unusual concerns for ERP in the pharmaceutical industry?

In the pharmaceutical industry, certain forces lead to fragmented systems, not integrated systems. For example, an individual Customer’s genetic code is one type of information that would not be widely available on an integrated system due to privacy concerns. Also, in this regulated business, ERP systems have different flows than that seen in the traditional paper-based system that the FDA [Food and Drug Administration] still uses. The FDA is moving into the electronic age, but government regulators don’t move at the same pace as industry.

16. How is ecommerce changing the face of ERP in your industry?



E-commerce is forcing business into an environment that is faster than ever and more uncertain than ever. One interesting part of the e-commerce puzzle in our industry is the area of electronic medical records. The concept of integrated information for medical records has appeal for all healthcare practitioners, insurance companies, and pharmaceutical companies. Freely available electronic patient records, however, are the last thing the public wants. So although the concept of a fully integrated system for medical records is appealing to the industry, it is not now possible due to privacy concerns.

For example, assume that all clinical trial data were in an ERP system, accessibly by many type of users such as pharmaceutical companies, doctors, and researchers. Cost savings and research advances would result. Many users would like this, but the patients in the clinical trials would be concerned their privacy was being invaded.

17. What is the future of ERP?

It is true that the back – office systems need to be in place for e- commerce to take place successfully, E-commerce is impossible without the infrastructure ERP provides. ERP faces risks in the new electronic environment, however, because of the Web’s research, speed, and lack of time to retract errors. Time is now compressed and mistakes that happen can be big. So there in uncertainty in the future of ERP and for all businesses, Business people will have to work hard to respond to the speed at which ERP and the Web can deliver information.

18. Define Business to consumer e-commerce.

Business – to – consumer e-commerce can stream – line a company’s ordering operations are record information about customers, making the company more competitive.

19. What is wireless connectivity?

Wireless connectivity is rapidly gaining popularity globally, and ERP systems are becoming connected to those wireless devices. Access to better information can provide a competitive edge.

20. Write the benefits of E-Commerce.

The electronic commerce gives the possibility of facing the storage in real time in order to reach clients through the web. It combines the product information with the multimedia information and manages the sales process from beginning to the end.

21. What is EIA?



Enterprise Integration Applications (EIA) is a tool which is used to integrate the data of one enterprise with other enterprises or Divisions. It is also used to link the external systems with the ERP system.

PART – B

1. Describe ERP & e-commerce.

E-Commerce and ERP

E-Commerce ERPWeb Store FinancialsWeb site InventoryCustomer portal

Payroll

Vendor portal Purchasing

You might ask yourself, what does e-commerce have to do with ERP? The answer is that each technology complements the other, and each is necessary for total success. Without e-commerce, a company cannot compete with companies offering similar goods. Without ERP a company cannot fill Web orders expeditiously. Here’s why.

When a company receives an order through its Web site, the company can’t merely file or print orders for later handling, like c-mail updates and order tracking. The must be efficiently fed into the company’s marketing, manufacturing, shipping, VEL TECH VEL TECH MULTI TECH VEL TECH HIGH TECH 89


and accounting systems-a series of steps sometimes called back-office processing.

An efficient back-office operation is crucial for any company’s success E-commerce often exacerbates problems and reveals weaknesses in current back-office systems. For example, Amazon.com invests its cash flow back into warehouses and other support that the company needs to keep its back office in order, so it can continue its success. Some Web only businesses are frightened that companies like Wal-Mart will enter the Web market. Why? Because those companies already have well-established, integrated back-office and distribution systems.

Some companies with unintegrated information systems have built Web sites before creating an integrated back-office system. As a result, those companies often can’t fill orders in a timely fashion, as was apparent with many e-commerce businesses during the 1999 holiday season. One large toy company announced less than a week before Christmas that it would not be able to fill all its Web orders. Surprisingly enough, all the toys were in the warehouse, but the company couldn’t organize basic functions-like picking, packing, and shipping-to get toys to consumers on time. So integrating the Internet front-office operation and the ERP back-office operation is fundamental in today’s business environment.

2. Explain ERP and internet.

Internet-Based Procurement

Even though EDI has been useful, companies are moving from EDI to Internet-based procurement for the following reasons:

1. The Internet is a lower-cost network than private EDI networks.2. Purchasing costs are further reduced as suppliers compete for orders on the

buyer’s Web site.

Thus, locking in suppliers is not the same and may not take place at all in Internet-based procurement. Suppliers that cannot compete on price may fall by the wayside, leaving the buyer with relationships with only viable suppliers. Here are three recent examples of this phenomenon:

In 2000 Ford Motor Company and General Motors announced that they are putting together an enormous Web site called a “B-to-B automotive trading ex-change. ”This venture is in conjunction with Commerce One and Oracle, which is providing the necessary software. Each company, along with its suppliers, can buy and sell automotive parts on this Web site. Purchasing auto parts will be fast and efficient, and auto manufacturers can maintain a low inventory. These savings could translate to more than 10% of the purchase price of a car. Other industries, in addition to the auto industry, are setting up exchanges.



ERP companies like SAP have also entered the B-to-B- e-commerce market. SAP has proposed a joint effort with Stat oil, the world’s second-largest sup-plier of crude oil, to develop a vertical market place for oil and gas services. SAP’s mySAP.com supports exchanges in buying and selling raw materials with large companies like Stat oil as partners. Stat oil is linking with SAP and offer-ing a Web site to find all types of equipment and services for the oil and gas in-dustry. SAP hosts the marketplace, which will provide sources for services, equipment, and maintenance to the oil and gas industry. Stat oil expects large savings by using a single marketplace. Other companies are expected to use the marketplace as well. As the long-established oil and gas industry has ma-tured, pricing has become highly competitive. Any product that makes the in-dustry more efficient it welcomed.

The World Chemical Exchange allows companies to buy, sell, and trade chemi-cals at chemconnect.com. The Web site claims the following advantages:

1. Best prices without traditional negotiations2. Faster contracts3. Access to new worldwide and new trading partners4. Instant market information

Internet Auctions and Reverse Auctions

B-to-B e-commerce also features online bidding through auctions and reverse auctions. In a standard auction, a company might put up for bid its products or even its obsolete equipment. In a reverse auction, a company might ask for bids to supply it with goods, services, or even telecommunications capacity. Here’s how a reverse auction works. Let’s go back to our example company, Fitter Smacker. The company needs raw materials such as oats and wheat germ, which for FS are essentially commodities. The company can go to a “bidding” Web site and set up a program to run overnight. The program uses the Internet to solicit bids to supply those raw materials. In the morning, FS’s purchasing agent can choose the lowest price offered for the oats and wheat germ.

Internet-based auctions are changing the way in which commodities are purchased. A few years ago, commodities would have been purchased through a supplier, or middleman, who negotiated prices of raw materials with suppliers. Now, the Internet and its bidding programs have threatened the middleman’s role and made the buying process more efficient-in a sense, the Internet has become the middleman. Pricing is dynamic and open.

In fact, dynamic pricing is not only forcing out middlemen, but it is also putting pressure on sellers. Sellers must be nimble and flexible to participate in this fast-paced market. This requires a seller’s accounting and logistics operations to be in excellent shape before trying to sell in the auction market.

3. Write future direction of ERP.



New Markets

As larger enterprises become saturated with new-generation client/server ERP systems, vendors are being forced to find new markets for their product suites in order to grow. This pressure is causing ERP vendors to increase their appeal to small business clients through a number of initiatives. These initiatives include the following:

Supplementing their direct sales force with reseller channels Lowering the entry price point of their software to make it financially viable Stratifying their software offerings to appeal on the basis of reduced function-

ality Improving the implementation methodologies for faster deployment Porting the products to platforms such as Microsoft Windows NT.

New Channels

Vendors such as SAP AG Inc., Oracle Corporation, and Baan Co. have been building reseller channels-both in the US and worldwide-o reach the smaller businesses that are looking for the complete-one-stop shopping for their ERP solutions. The ERP software is made more financially attractive by lowering the entry price point for each module and by ramping up the total costs by basing price on user licenses.

Oracle is being particularly aggressive in this respect with software pricing comparing favorably with middle-market client/server offering from companies such as Platinum Software and Great Plains Software. Although JD Edwards ventured in these waters by complementing its One World suite with a lower-cost line called Genesis, most of the vendors have avoided producing loss-expensive ‘lite’ versions of their software. SAP abandoned its SAP Lite project some time ago and it looks as if the lite versions will have to wait for some more time.

Faster Implementation Methodologies

All ERP vendors have suffered from the perception that their software is difficult and costly to implement. This perception has provided huge profits to the ‘Big 6’ accounting firms (now Big 5 with the merger of Price Waterhouse and Coppers & Lay brand) that have generated billions in fees from their ERP software implementation ‘practices.’ Even though only 10-15% of the implementations have taken years to complete and have eaten up millions of dollars of consulting costs, the fact remains that implementing ERP packages is difficult.

As ERP system may consist of dozens of modules that are deployed on a multinational basis to service hundreds of users from many different business departments. There may also be a complete change of IS infrastructure-say from a mainframe to a UNIX platform-while a number of core business processes are being simultaneously reengineered. ERP vendors have thus begun to focus their effort on



making the implementation process easier by providing more effective tools and methodologies to speed up the process, creating elite consulting teams to intensify resources when required, and using model-based approaches and opening up their systems for easier integration.

For example, SAP has introduced a program called Accelerated SAP (ASAP) that takes the knowledge gained from thousands of R/3 implementations to date and consolidates this expertise in a product called the Business Engineer. This product helps implementation teams configure the SAP modules to conform to the processing style of some 100 business operating scenarios. Methodologies such as ASAP help reduce SAP implementation times to less than six months in many cases. Oracle recently introduced a similar program called Fast Forward, to help speed up implementations of Oracle Applications suites and nail down the costs up-front.

Despite the availability of new channel partners and implementation methodologies of the major consulting firms, ERP systems have often been difficult to implement because of a dearth of skilled consultants. As a result, initiative such as Oracle’s Oracle One or SAP’s Platinum consulting services are leading the way in creating highly skilled consulting teams and are charged with delivering fully trained and experienced consultants on a worldwide basis to push implementations through faster.

Business Models And BAPIs

Using products such as Intellicorp Inc.’s Live Model, implementation teams can review and simulate changes to the SAP R/3 applications Reference Model that provides views of R/3 processes, data models and functions. The Reference Model and any changes made to it are stored in the Live Model repository and can thus be audited and changed on demand. Furthermore, because Live Model is OLE complaint, the R/3 models can be manipulated and documented through desktop OLE applications such as Microsoft Word.

SAP has attacked the notion that the R/3 system is not open by releasing the specifications for some 170 business application programming interfaces (BAPIs), which help third-party applications interact with R/3 directly. BAPIs are simply, sets of methods that allow external applications to collaborate with specific R/3 business objects, such as customers, accounts, or employees. The fact that the R/3 data is addressable through these callable methods, (BAPIs) gives the third party application vendors a lot of flexibility to build supporting applications for the R/3 system.

In a similar manner, Baan provides an offering called OrgWare that is based on the use of a tightly integrated business-modeling tool, combined with business-specific templates that help to automatically configure the software to suit specific operational needs. Baan is currently in the process of enhancing this tool with new setup wizards to accelerate software implementation on the Windows NT platform.

Convergence on Windows NT



The growing popularity of Windows NT has forced almost all ERP vendors to offer products that cater or this segment SAP R/3 has been available since April 1994 on NT and since October 1995 on SQL Server-while Baan, Oracle, and PeopleSoft have announced the general availability of their applications on the BackOffice platform in 1997.

SAP claims to have over 2,000 R/3 installations on NT and holds Microsoft itself as the company’s best customer. Baan sports the ‘Designed for Microsoft BackOffice certification. Oracle touts its support for its own NT-based clustering technology, and people Soft shown off its recent switch to BackOffice as its primary development and initial rollout platform. As Microsoft scales up its enterprise versions of NT and SQL Server to support more processors as well as failover clustering and row-level locking, BackOffice is simply becoming amore viable platform for running demanding ERP applications. The BackOffice platform is already the platform of choice among the middle market vendors of accounting and distribution software, with the NT/SQL Server combination grabbing nmarket share form the popular Novell/Btrieve platform.

Application Platforms

ERP vendors already deliver comprehensive suites of application modules that support multinational deployment, Year 2000 compliance, and the Euro (European single currency). But each vendor is trying to extend the reach of its software and make it more like an application platform than a suite of modules. SAP is already ahead in this race; its R/3 product is one of the fex that can be managed, centrally using popular platform management tools from vendors such as Computer Associates (UniCenter TNG) and Tivoli (TME)

New Business Segments

All the ERP vendors are now capable of delivering specialized variants of their applications to service vertical markets such as government, healthcare, financial service, or retail environments. Some vendors are also moving into more specialized areas, such as supply chain management and demand forecasting or sales automation and marketing.

PeopleSoft bought Red Pepper Software to enhance its supply chain offering, while Baan recently acquired Aurum Software for its Aurum Customer Enterprise suite of customer relationship management tools. To strengthen its financial modules, Baan also teamed up with Hyperion Software to link Hyperion’s financial accounting, budgeting and reporting solutions to Baan’s distribution and manufacturing modules.

More Features

Improving decision support has been another focus of almost all the ERP vendors. Baan is linking its applications to the Gentia product (from Gentia Software



Inc.) to provide OLAP capabilities, and for the setup and monitoring of key performance indicators. JD Edwards teamed up with Information Builders to deliver a data mart, based on Information Builders Inc.’s Smart Mart suite of database access middleware, data transformation, reporting, and OLAP tools. Oracle provides a data mart designer and builder tool for creating data marts, and Oracle also offers Oracle Discoverer, and end-user tool for querying, charting and reporting data from Oracle’s Applications suite. The next version of PeopleSoft will include closer integration between PeopleSoft applications and both, the client-based Cognos Corp. Power Play multidimensional OLAP tool and Arbor Software Corp.’s multidimensional Essbase server. SAP has also previewed its own Business Information Warehouse product for synchronizing the R/3 transaction system with a data warehouse that can manage both R/3 and non-R/3 data, through use of a metadata repository and a front-end OLAP engine.

Web Enabling

A with every other software market, ERP vendors are being forced to move from a client/server to browser/server architecture to Web-enable their software and thus, deliver self-service and electronic commerce capabilities. Baan is working to deliver a java-based Web interface to all its products. The company is also focusing on the automation of supply-chain relationships via the Internet, on e-commerce via the Microsoft Merchant Server (now known as Site Server), and on using Hyperion Software Corp.’s Spider-Man technology for report and alert distribution across the Web. PeopleSoft is set to deliver its Universal Applications-Java-based self-service applets-with its PeopleSoft 7. JD Edwards is also using Java to allow its One World functionality to be available either through a Windows client or a Web browser, while Oracle has used Java to deliver its Oracle Web Employees, Oracle Web Customers, and Oracle Web Suppliers modules. In 1997, SAP released 25 Web applications for version 3.1 of the R/3 and recently previewed links to online catalogs for Web-based procurement. Unlike the Microsoft-centric middle market applications, the ERP vendors are all using java, rather than Microsoft’s ActiveX, for their first generation of Web-enabled applications.

The move by the ERP vendors to embrace Java as a means to deliver and deploy their web functionality is the first move away from proprietary technologies to more open tools. One reason why implementing solutions from SAP and PeopleSoft can be expensive is because the tools for customizing their products-ABAP4 and People Tools-are proprietary. Whereas many lower-tier software vendors have built their application front ends using popular-the ERP vendors have not taken this route. As a result, the customer will have to pay a premium for ABAP4 and people Tools programmers, instead of leveraging the Power Script of Visual Basic expertise that they may already have in-house. Because Oracle is already a tool vendor, the company uses Oracle Forms, Developer 2000, and Designer 2000 to develop its Oracle Applications.

Market Snapshot



Even with zero growth at SAP, it would still take any competitor a couple of years of triple-digit growth to overtake the German giant. PeopleSoft has not made a wrong move so far, and Baan is also showing that it has the mentality and results to become a top-three player. Oracle has lately, focused more attention on its applications business as a growth engine and seem to be reaching, most aggressively, into the territory targeted by the middle-market client/server accounting players. JD Edwards seem to be in the most vulner able position, with their continued reliance on the momentum of IBM’s AS/400 line, coupled with their need for transition to new product lines and platforms, where their previous market-leading positioning was less than clear cut.

ERP vendors are definitely extending their reach as they fight to maintain their growth momentum, during the transition from client/server through browser/server to the promised land of distributed components. We can expect to see many more acquisitions along the lines of the Baan/Aurum deal, an increasing focus on the Microsoft BackOffice platform, and ERP packages turning up more and more in businesses that previously, could just envy functionality available to those with deeper pockets.

One thing is clear, no one wants just ‘ERP’ anymore. The emerging trends in the enterprise packaged application industry are its integration with new cutting-edge technologies, such as sales force automation (SFA) and customer management. Driven in part by the huge impact of Internet-based commerce, these new applications are leading to a seeming divergence between so-called Back. Office and Front Office functionalities.

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