Enterprise Resource Planning - Essay Example

SAP (Enterprise Resource Planning) Introduction to ERP What is the purpose of Enterprise Resource Planning The Enterprise Resource Planning system integrates all the processes and systems of an organization into one system. It uses many hardware and software components to make this integration possible. 2. Who are the vendors of Enterprise Resource Planning Vendors are consultants or specialists who can help a company introduce this system within their firm. The vendors for this ERP system are SAP, Oracle Applications, The Sage Group, Microsoft Dynamics and SSA Global Technologies. These are the top five vendors in the ERP system software. These vendors provide the company with help in three areas: consulting, customization and support. 3. How are companies typically organized before moving to an Enterprise Resource Planning product Companies are asked to standardize their procedures before the implementation of an ERP system. This makes the transition much easier. The company has to perform a business analysis so that they can map their processes; this eventually helps in deciding which vendor to go for. 4. How are companies organized after implementing an Enterprise Resource Planning product The ERP system enables the company to communicate with its customers, suppliers and business partners easily through the system. There is standardization of every procedure and employees throughout the organization can easily communicate with each other. Also, because of standardization the processes become simpler and easier to understand. 5. What is a best practice Every vendor had its own practice of implementing an ERP system. The software developers have introduced some practices, through their experience that are the best. These are then known as the best practices. These best practices maximize efficiency and help the ERP Company carry out a transaction in the best possible manner. 6. How are best practices used These best practices are mainly beneficial for the larger organizations or when the process is a commodity or also when there are compliance requirements. The best practice modification is one of the options that are given to the customer when he installs the system. 7. What are the basic four functional areas of ERP systems After the Enterprise Resource Planning system has been implemented, the organizations usually have four functional departments, mainly, advertising and sales, human resources, accounting and finance and supply chain management. These are the four basic functional areas of the ERP system. Within a company, the ERP system is mainly utilized by these four departments. These four departments are vertically and horizontally integrated because of the ERP system. 8. What is management's role regarding ERP systems The management's role in the ERP system is to comply with the process and to be willing to share information. The management should not regard this as a threat. They should lead their employees to adopt the system as soon as possible and integrate it into their everyday use. As the ERP system is useful for the company and a move towards the future, the management in no way should hinder the process. The managers should take a horizontal view of the company this would help them be comfortable with the integration achieved from the system. 9. Why do some companies have more success with ERP than others Some companies are more successful at implementing the system because they are motivated from the beginning. These companies want to improve efficiency and maintain a competitive advantage. The companies which fail in implementing the system do so because, the employees don't see the need for the new system and are comfortable with the system that is currently being used. Sometimes companies have very high expectations and when the ERP system does not fulfill these they are disappointed. Lack of training and knowledge hinders them to accept the system. There may also be technical difficulties and the basic data input into the system may be inaccurate. L2 ERP Functional Units and Development 1. What is SAP SAP is basically a company which was formed by five former IBM system analysts. The objective of the company was to make a standard business software product that can help integrate the whole system. 2. What does SAP stand for currently The translation is what SAP stands for today, which is Systems Applications and Products. 3. What did SAP stand for initially SAP initially was an abbreviation for Systeme, Anwendungen und Produkte which was German for Systems Applications and Products. 4. What are the major SAP modules The major SAP module is logistics but the new SAP R/3 has many modules which are the sales and distribution module, the materials management module, the production planning module, the quality management module, the plant maintenance module, the asset management, the human resource, the financial accounting, the controlling module, the project-system and the work flow module. 5. What is a process A process is a written document on how a specific function is performed. Training is given so that quality documents can be generated which proves that the process is being performed and followed. 6. What is the SAP R/3 architecture (basic configuration) The SAP R/3 is a client server system and has an open architecture system thus other software companies could develop compatible products. The software can operate on a number of computers and can easily be scaled up. 7. What is SAP R/2 architecture (basic configuration) The SAP R/2 was an integrated software package but was a mainframe computer package. 8. How can we rollout an Enterprise Resource Planning product An ERP product can be rolled out or implemented in four phases: the chartering phase, the project phase, the shake-down phase and the onward and upward phase. 9. Who is the Enterprise Resource Planning sponsor and his role The ERP system sponsors are the top management or the board of directors or the CEO of a company. Their role is to ensure that the right vendor is chosen and to over look the entire project. 10. What is MRP II MRP II stands for Material Requirement Planning. It allows companies to forecast their sales and develop production and raw material plans accordingly. 11. How has EDI been beneficial to ERP systems Electronic Data Interchange or EDI has helped companies electronically order material and communicate their purchase requirements. 12. What is the best of Breed Solution The Best of Breed Solution is when companies implement different modules from different vendors. They do this on the basis of the perceived or actual advantages. 13. What brought about accelerated SAP Accelerated SAP was brought about by the implantation challenges. The Accelerated SAP is an implantation methodology and a set of tools to help with the implementation process. 14. What should you consider when choosing ERP modules for your company When choosing ERP modules for your company you should keep in mind that they are from one vendor, this way it is easier to integrate the business processes. Software accuracy is very important and can be problematic when there are different systems. The budget for the system and how flexible do you want the system to be. Also make sure if the company is ready to adopt this new system. Forecast the changes that your organization will go through and see the need for change in the ERP modules that you require. Service reputation, level of research and development and consistent version updating also play a part. 15. What is the cost range for a large company to install ERP Assuming that a large company is one which has more than 1000 employees may incur costs between $50 million and $500 million depending on the complexity of the system. 16. What areas does cost cover for installing ERP The areas that the cost covers for installing an ERP system are: hardware to run the system, consultant and business analyst fees, time period for implementation and training costs. 17. What items should be considered when working with a consultant to steer an ERP implementation The items that should be considered when working with a consultant to steer an ERP implementation are: a team is needed to select the best ERP system because they are so complex to understand and consultants and company experts are needed so that they can figure out how to configure the system properly. 18. What makes the ROI on ERP systems difficult to determine The ROI on ERP systems are difficult to determine because there are many intangible costs and benefits. Also for some companies the return can be seen immediately while there are some companies for which the return was not very forthcoming. 19. Does SAP support decision support systems, web interfaces, and mobile sales group SAP supports decision support systems and web interfaces, but does not support mobile sales group. 20. Is ERP Software Packages good for every company The ERP software is not necessarily for everybody. This decision has to be made by the company itself by analyzing their business strategy. If a company is not ready and will not standardize and improve the efficiency of their processes they will not be able to benefit from the advantages of the software. 21. Is ERP software inflexible The ERP software is designed around best practices so companies have to adapt to the system, thus in a way you can say that the system is inflexible. The system can be customized according to the needs of the company. 22. Can SAP interface with Personal Digital Assistants, Global Information Systems and cell phones SAP can not interface with Personal Digital Assistants, Global Information Systems and cell phones. 23. What type of database does SAP support SAP supports a common database and real time data sharing. Sap supports the databases of different vendors in the industry. 24. Do SAP support databases of several well know vendors in the database industry Yes, SAP does support all of the vendors of the database industry as it can operate on any common database 25. What are some of the Hardware and Software advances that lead to the development of ERP systems Some of the Hardware and Software advances that lead to the development of ERP systems are: cheaper, smaller and faster hardware, the power of the computers today has made the use of ERP possible, client server systems which are most cost effective in the long run. These systems provided scalability that is the capacity could be increased without having to redo the whole system. Relational databases have made it easier to locate information which is one of the requirements of the ERP system. Bibliography SAP. Accessed on June 30, 2008 from http://www.sap.com/about/index.epx Read More