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ERP Concept
IN today's competitive world many major companies have decided to use a popular tool that has evolved over the past few decades. ERP, the descendant of MRPII offers the "answer" to the economic and productivity troubles of manufacturing and service enterprises. Thus, the ERP system has become very popular as an enterprise management software tool. In order for a software system to be considered ERP, it must provide an organization with functionality for two or more systems. While some ERP packages exist that only cover two functions for an organization (QuickBooks: Payroll & Accounting), most ERP systems cover several functions. The term ERP originally referred to how a large organization planned to use organizational wide resources. In the past, ERP systems were used in larger more industrial types of companies. However, the use of ERP has changed and is extremely comprehensive, today the term can refer to any type of company, no matter what industry it falls in. In fact, ERP systems are used in almost any type of organization - large or small. ERP systems today can cover a wide range of functions and integrate them into one unified database. For instance, functions such as Human Resources, Supply Chain Management, Customer Relations Management, Financials, Manufacturing functions and Warehouse Management functions were all once stand alone software applications, usually housed with their own database and network, can now fit under one umbrella As in any integrated System or Unit, the performance of each one of the parts of an Enterprise has an impact in his cumulative performance results. Specifically, we can say that a 95% performance in independent vital enterprise elements (Item master, Bills of Materials, Production Master Schedule Adherence, Inventories Accuracy, Production Orders Accuracy and Purchase Orders Accuracy), will reflect a cumulative 75% in a ERP environment. This means a percentage of failure possible in productivity terms. Here is where we should support and combine this useful tool with a business strategy based on the desired administration tendency or theory. On this sense, it is vital to note the point on administration before deciding which ERP software is the one you will be using, you need to have solid administration principles (no matter which administration tendencies you decide to choose) and strong knowledge of ERP methodology. This will translate into synergy between areas that will allow organizations to have highly effective processes with a continuous success. Only by creating a deep understanding of this philosophy you will have the certainty of obtaining the best results, as well as being in position to face and take proactive actions for any obstacle you could find in the road. If you have not this reference point, your efforts will deliver the wrong results.

Basic ERP Features

COMPARING midmarket ERP packages is not exactly an apples-to-apples type of exercise. Each vendor wraps its midmarket offering with different functionality, tailored to the needs of the kinds of companies the solution is intended for and based on the vendor's particular areas of expertise. However, almost every midmarket ERP suite shares several common modules: BI, CRM, financial management, HCM, manufacturing operations and SCM. The differences among solutions tend to be

quite granular within these modules. Also, even if different packages offer the same feature - say, salesorder management - it might not be bundled in the same module; some vendors include sales-order management in their CRM suites while others package it in their SCM suites. Key to an ERP package is tight integration between modules, so that all of the core business modules are related. For instance, manufacturing operations are integrated with customer service, logistics and delivery. Business Intelligence One of the newer components of most modern midmarket ERP packages, BI shines a bright light into the heart of a company's performance. In general, an ERP suite's analytics or BI tools allow users to share and analyze the data that the ERP applications collect from across the enterprise from a unified repository. The end result is more informed decision making by everyone from executives to line managers to human-resources professionals to accountants. A variety of automated reporting and analysis tools can help streamline operations, as well as improve an organization's business performance. With greater control and visibility of data across the enterprise, business leaders can better align the company's operations with its overarching strategic goals. CRM (Customer Relationship Management) CRM has long been a core component of any ERP offering, giving manufacturers a way to improve customer service by pulling together tools to fulfill customers' orders, respond to customers' service needs, and often, create marketing campaigns to reach customers. Most vendors include sales tools to provide customers with sales quotes, process their orders and offer flexible pricing on their products. Another important CRM component is service management, which may arm customer-service agents with scripts for talking to customers, as well as allow them to authorize product returns and search a knowledge base of support information. The third main component is usually marketing, which may include tools to manage campaigns, create sales literature and develop a library of marketing collateral. Additionally, CRM often has tools for account management, SFA, and opportunity or lead management, as well as self-service tools for customers and an e-commerce storefront builder. Financial Management Of all the ERP modules, the financials applications tend to be the most frequently utilized. Across the board, these include general ledger, accounts receivable and accounts payable, billing, and fixed asset management. Because many midmarket companies deploy ERP to support efforts at breaking into global markets, it is imperative that their ERP packages support multiple currencies and languages. The financial-management applications may also include tools for creating and adhering to budgets, cash-flow management, expense management, risk management and tax management. HCM (Human Capital Management) For the most part, the HCM module includes tools for human-resources management, performance management, payroll, and time and labor tracking. Some vendors also provide functionality for administering benefits, managing compensation, dealing with salary taxes, recruiting new employees and planning workforce needs. Some also include self-service tools for managers and employees. Even though HCM is generally considered core ERP functionality, some vendors offer it as an add-on module. Manufacturing Operations The manufacturing module is where much product differentiation happens, including industry-specific functionality. In general, these applications are intended to make manufacturing operations more efficient and simple. Most vendors support different modes of manufacturing, include configurable product capabilities, perform different types of job costing and offer a BOM (bill of materials) tool.

Applications often include PDM (Product Data Management), CRP (Capacity Requirements Planning), MRP (Materials Requirements Planning), forecasting, MPS (Master Production Scheduling), work-order management and shop-floor control. SCM (Supply Chain Management) Of all the ERP modules, SCM has the greatest variability between vendors: It is vast and varied, yet often adapted to the needs of specific industries. In general, SCM improves the flow of materials through an organization's supply chain by "managing planning, scheduling, procurement, and fulfillment for optimum service levels and maximum profitability," according to Lawson Software. Some vendors segment their SCM into smaller modules. Oracle's JD Edwards, for instance, breaks it down into Supply Chain Planning, Supply Chain Execution (Logistics) and Supply Management (Procurement). SCM features tend to include also production scheduling, demand management, distribution management, inventory management, warehouse management,

ERP Benefits: ERP helps midmarket businesses

procurement, sourcing and order management. BUSINESSES all around the world are increasing their reliance on ERP systems as a cost efficient alternative to their software applications. However, high cost involved in deployment of this marvelous technology prevents the small/mid size organizations enjoy the tremendous benefits of ERP. Since the introduction of an affordable, low-cost ERP from eresource ERP, many of the midmarket organizations also started to administer their businesses effectively using this latest technology. An ERP package should provide an organization with a solid foundation, incorporating all of the fundamental aspects of running a business. Expectations run high when an organization deploys an ERP package - if the solution is a good fit for the company, the company stands to gain tremendous cost savings and service improvements across the enterprise. Manual processes are automated, production scheduling is more efficiently managed and inventory is more accurately assessed. Also, business performance can be measured in a much more holistic fashion than ever before. This gives executives real-time visibility into all business processes, enabling them to make better strategic decisions. In short, with the right ERP package, a midmarket company can compete more aggressively in global markets. According to a survey an ERP implementation can reduce costs in three primary categories: inventory costs, manufacturing operating costs and administrative costs. The survey's best-in-class respondents reported a 21 percent decrease in inventory costs, a 17 percent decrease in manufacturing operating costs and a 16 percent decrease in administrative costs. The average respondents' reductions were 11 percent, 8 percent and 9 percent, respectively. Because an ERP solution has its fingers in all aspects of running a business, its benefits are myriad and go beyond tangible cost reductions. It can improve an organization's customer service and response time when solving issues. It can solve issues of interoperability among multiple manufacturing locations. It can standardize and accelerate manufacturing processes in all of a company's manufacturing sites. It can streamline a manufacturer's order-fulfillment processes. It can facilitate connecting with partners' and suppliers' enterprise systems. ERP can even help an organization maintain compliance with government regulations, from hiring practices to environmental laws. Case studies done on specific ERP implementations reveal a variety of different business-specific benefits. One of the case studies revealed that by replacing legacy systems with an integrated ERP package, one travel-accessories manufacturer reduced its inventory levels by 30 percent, reduced its warehouse space requirements by 38 percent, improved its month-end close process by five days, reduced its DSO (Days Sales Outstanding) by 44 percent and increased sales by 100 percent without hiring new employees.

ERP system addresses challenges faced by pharmaceutical companies

Pharmaceutical companies in India have lately started realizing the importance of having an ERP system implemented in their organizations to address both their information and regulatory needs. These requirements helped improve product and process understanding. Challenges faced by pharmaceutical companies are best addressed by integrated approaches offered by ERP systems which not only provide better control over their business processes, but also help them in manufacturing products as per cGMP requirements. ERP products like web-based eresource ERP system provides full services for pharmaceutical products like vitamins, natural health and dietary supplement from raw materials to finished products. eresource has been recognized as a "one stop service provider" among its customers because it offers a complete range of services ranging from supply of raw material, production, manufacturing and packing etc. etc. Many companies used to work on spreadsheet like Microsoft Excel for keeping data to run the business which consisted of manufacturing hundreds of products. This method not only resulted a lot of time wasting but also caused lot of hardship in maintaining raw material inventory and in maintenance of records of lot numbers used in the finished products. This working hassles prompted pharmaceutical companies to look a system that will improve their business process and also could fetch a respectful return on their investment. Many companies have found the right answer to their problem in the ERP system which would provide real time access to all their business activities. Success stories of these companies are also attribute success story of ERP system providers like eresource ERP. The main advantage with a web-based ERP is information sharing. It is very important that organizations must provide customers, employees, suppliers, distributors and numerous other parties with the information they need, when they need it. As a result, business systems and processes can no longer remain isolated and disparate. Business success now requires better performance from easier application integration. ERP System like eresource shares information internally and externally through Web applications, business-to-business (B2B) exchanges and value-added networks. These exchanges and transactions are be real-time, on-line and immediate - i.e. conducted anytime, anywhere and without compromise to security or transaction integrity. Through the use of Web enabled services, the cycle time between buying and replenishment can be greatly reduced and the potential for errors virtually eliminated.

Importance of Sales and Marketing module in ERP system

It is important to know that the Sales module which also known as Customer Relation Management (CRM) in an ERP system is the most important and essential function for the existence of an organization. Sales module in an ERP system manages the functions of domestic and export sales of a company. This is the module that maintains the customer and product database. Functions of sales module also includes the interacting enquiries, order placement, order scheduling and then dispatching and invoicing form the broad steps of the sales cycle. Stock transfer between

warehouses is also covered by this module. Apart from all these functions Sales module also carry out the task of providing analysis reports to guide decision making and strategy planning. Organizations always wanted to have a good and fighting sales and marketing force to compete in the market. A comprehensive sales and marketing ERP module will help a company stay competitive and streamline their sales and marketing activities. Sales and marketing module in an ERP system allows activities such as contacting customers and tracking of each customer orders right from placing an order to dispatch of material for that particular order and customer. This module also helps allows sales executives to contact customers and follow-up each and every sales invoice and receive payments for such invoices. Another important aspect of sales module is it allows management to monitor sales target achieved by individual marketing personnel as per the target planner for each marketing personnel. This feature in of the sales module in the ERP system enhances the working of the marketing department and ensures personnel are not on the right direction. A good sales and marketing module also has features to track lost orders and identify the reasons for loosing those orders. Business partners and franchises are a common phenomenon in today's world. Latest ERP software will associate marketing personnel to their business partners and franchises and allow them to track and monitor their performance. ERP sales module can also track sales trends over different periods and prepare the report, Sales forecast can be made using this module as well as provide all over sales and marketing activities of the company. The ERP module offers an effective customer complaint management tool which also includes repairs processing and document management.

ERP helps mid-market companies meet their objectives

At the midst of latest global business developments, ERP service providers are mainly focusing on MidMarket Companies with easy to use, rapid to deploy and cost-effective ERP solution. With the deployment these ERP systems, companies can now leverage the extended functionality of their international business requirements. ERP systems also help them respond to complex needs, from data analytics, reporting and financial accounting through to management control and operational management (production, purchasing, sales, inventory management, etc). Sage, a global leader in enterprise management solutions, is now offering Sage ERP X3, its international ERP solution for mid-market enterprises. And in India eresource ERP has also recently launched its Cloud ERP version with its SaaS (Software as a Service) model. Companies who have implemented these type of ERP solutions are highly benefited and they are grateful to its unique ability to factor in the international aspects of companies' business, especially by supporting a broad array of different legislative systems with just a single database. Exclusively developed for the mid-market, these systems cater to the every need their day to day business process. eresource's Cloud ERP model is a solution that adapts requirement of every small to mid-market companies in Indian industrial segment. Companies that have deployed the system find comfort in their operational mode and they feel with this system they can confidently go about meeting their objectives. Indian ERP systems like eresource is serving the Indian market for almost a decade now and its effective system is capable to address mid-market company's specific requirements and challenges in various industries from manufacturing, services to distribution and many more.

Small and medium scale industries are the one that could benefit maximum from the Cloud ERP system In India, they are in the stage of growing path. Unwanted expenses incurring in the way of investment in an exclusive IT departments and the executives to maintain and manage its successful operations will definitely make a hole in their pockets. With the usage of this cloud computing application method they will be able to divert the resource in other areas that could help them grow further. When mid-market companies plans to implement an ERP they must really must get into a long discussion and have a thorough evaluation of their requirement about the ERP system. All ERP consultants are always ready to clear any doubts pertaining to the ERP system in A continuous interaction between company executives and the consultants will clear the way to understand an ERP system more closely. The requirement of companies also varies. There are cases which needs only updates of few modules. In some cases companies may subscribe to a demand-planning module or a production-planning program for an overseas plant rather than going with a full ERP suite. Whatever the cases may be, all options are available in the ERP market today. What you need is the right advice from an efficient consultant.

Advantages of Web based ERP

Web based ERP software is an ERP system that runs on a web server and the user requires a webbrowser to work on it. A web based ERP software has to be hosted on a reliable web server so that the application is secure and always ready for use. A web based ERP system also requires lesser in house IT infrastructure as compared to a client server system. A web based ERP software has to be developed based on a three-tier design and the system should have a light weight user interface to minimize the data transfer during each cycle. The presentation layer should include all the web forms and the business layer contains all the business logic of all the modules of the web based ERP software. The data layer includes the sql server database. Web based ERP system has many benefits compared with a client server system. This is the reason why many companies are now opting for web based ERP system as compared to a client server system. The requirement of server management software and associated licensing is eliminated in a web based ERP software. The most important advantage of a web based ERP system is it can be used from anywhere and anytime. For example, data such as sales orders can be entered from any location. By having a web based ERP system, the need for IT staff to maintain an in house ERP infrastructure is eliminated to a large extent. Training the staff on a web based ERP system is much easier as any computer with an internet connection at any location can be used for conducting training sessions. Web-based ERP system permits organizations, especially SMEs who have limited infrastructure, to conduct its entire business though this medium. An effective web based ERP system automates all internal functions of an organization to ensure that benefits of e-commerce are delivered to the entire organization. As all the operations are performed through online, a lot of time can be saved by using a web based ERP system and also all dealings and transactions becomes transparent. There is no doubt web-based ERP system will surely do a lot of good for SMEs in their business process. It is the easiest and cheapest way they can find in extending their presence in the widely spread global market.

Key ERP modules at a glance

An ERP software consists of many modules with each module is integrated with the major functional area of an organization. In normal procedure, each module is designed to interact with each other with easy accessing of information concerning a particular branch, section or department. ERP modules are tightly protected with efficient security system and the staff is trained to handle the system effectively during the training session by the consultants. The following are some important modules that being included in major ERP packages. Finance Module The financial activities of an organization by the finance department are recorded using various user interfaces and these interface screens related to the finance department are grouped into a single menu option and these set of options are called the finance module. Financial module of an ERP system is used to record day to day transactions like receiving payments Customers, payments to vendors by raising cheques or through cash and journal entries. Over and above financial module records the data during Creation of a Customer Account Creating of a Vendor Account Creating a Bank Account.

Creating a General Ledger Account Enhancing Chart of Accounts (when major changes to be made for preparing the financial statements).

Financial application components of an ERP solution 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 resource to logistics. The financial module of ERP also provides financial functionality and analysis support to lot of medium and large scale enterprises in Indian and abroad. Manufacturing Module This module is used to record data related to the manufacturing department of the organization. Data is recorded in this module when Bill of Materials, Work Orders and WIP receipts are to be created for work orders. In modern manufacturing operations, information starts at the top and the bottom simultaneously. Data originates at the machines, the process and the workers. It indicates what is being made, how and where, when it will be done, and why it won't be on time. ERP allows companies to balance customer demands impacted by multiple interrelated items and multiple plant locations. ERP adds applications for financials, supply chain, and distribution and requirements planning for multiple sites. It facilitates intelligent resource planning in the face of rapidly changing constraints such as materials availability, market readiness, plant capacities, personnel certification and business costs per location. In short ERP systems will allow decision makers to champion 'an intelligent, agile and responsive organization in the global marketplace of the next century.' Sales and marketing Module This module comprises of Contact Management and Sales Order Processing Management. It is an integrated solution comprising of marketing and sales activities. Organization can act immediately to improve sales, service and marketing effectiveness by using this module. Sales and Marketing module also help to you getting your customer order management easier day by day. Use of this also includes maintaining customer information, quickly creating a quote or migrating them to sales order. Purchase Module ERP Purchasing module streamline procurement of required raw materials. It automates the processes of identifying potential suppliers, negotiating price, awarding purchase order to the supplier, and billing processes. Purchase module is tightly integrated with the inventory control and production planning modules. Purchasing module is often integrated with supply chain management software. Inventory Management Module ERP Inventory Management module facilitates recording of data in the inventory department. Activities of the Inventory department such as receipt of goods, delivery of goods, maintenance of material in the stock sections, classifying all the materials, issuing of materials to the manufacturing department, rejections from the suppliers are recorded with full details. Human Resource module

Human Resource (HR) module in ERP streamlines the management of human resources and human capitals. It comprises of four broad sections, mainly Training, Recruitment, Payroll and Attendance. HR module routinely maintains a complete employee database including contact information, salary details, attendance, performance evaluation and promotion of all employees.

Right time to implement ERP software

Recently, due to the economic slowdown, there was little concern whether investment in the ERP by companies may decrease and the number of implementation will drastically come down. But it has been proved that these are speculations without any ground and during the last year growth of ERP implementations have gone up tremendously and companies have realized that their decision to go with ERP has brought them a good return on investment (ROI). Though reasons to implement ERP system might vary depend on companies, there are some common reasons for many companies to implement an ERP system at this time. The primary reason is a slower economy that affords companies the opportunity to use their resources and implement the ERP system software successfully. The second reason is that many ERP software vendors are aggressively pricing their solutions in response to a slowing economy situation; clients are now able to procure an ERP solution at a lower cost than in years past. And the third reason is that some clients are continuing to grow despite, or as a result of, the current economy, and these companies are investing in enterprise software that can help them scale for growth. Whatever the reason may be, what we would like to emphasis is that implementation of an ERP system will definitely will improve business performance. Companies also must take initiative to replace an old ERP or legacy system to increase efficiency and to standardize global business operations. Choosing the right software is not the only criteria while implementing an ERP solution. You also must make it sure that ERP enables measurable improvements to your business. In choosing an ERP software package and planning for the overall project, executives need to make decisions based on objective, unbiased information rather than gut feel. Companies must be well prepared before going for an ERP implementation and must embark on a thorough ERP vendor assessment and selection process. Companies must also know before making a decision to implement an ERP system that what the company want to accomplish by taking on this challenge. ERP implementation should be carried out only after a study of impact of pros and cons that could bring to the company in its business process and return on investment. Success of an ERP module will also depend on it has been used. Proper training to the staff is very important when it comes success of an ERP system. In addition to training to employees to use the ERP system efficiently, executives should use the process of defining ERP business requirements as an opportunity to improve current operations, efficiency and effectiveness. The last thing a company should do is implement software to automate the same flawed business processes. Many companies implement ERP to automate their business process and this is where they fall flat. Las mentioned above companies must study the scope of the ERP system they implement well before implementation and must make use of all its operational methods and utilization properly to achieve a positive result along with automated operational methods.

Keep your ERP database fully protected

EVERY company has confidential information about its business strategies and other details which are considered be very highly important data. Therefore it is important to see that this database does not fall into the wrong hands which could pose severe consequences for the company. Many steps can be taken to enhance the security of a company's ERP database. Role-based IDs and passwords will ensure that users can access only the data they are authorized to view, based on their job function or position within the company. A practice of changing the password on regular basis by the users will be a good habit that could act as a ideal ERP data protection. And, data encryption, firewalls, and other measures can help you keep hackers, cyber-criminals, and other outsiders far away from your ERP database. As you know an ERP database is perhaps one of the most vital assets the company owns. Keeping that ERP database fully protected from threats such as security breaches, performance issues, and technical breakdowns is crucial to ensuring continuity and consistency in your most important business activities. When there is a threat to your ERP database all the major operations of your company such as human resources, production planning, procurement, accounting and finance and other critical back-office function could become standstill. But this kind of a security threat could be eliminated with advanced administration techniques. A good security backup could ensure that your ERP database is available and readily accessible at all times. By monitoring performance around-the-clock, system administrators can immediately identify and troubleshoot problems, to prevent productivity slowdowns caused by down time. Additionally, mirroring your ERP database using redundant servers can provide a much-needed backup that can be utilized in the event of a major system failure. Companies must also be prepared with other disaster recovery management. Today there are few companies that are prepared in the event of a major fire break out or a flooding situation. To face this kind of natural disaster the companies must be occupied with well-designed back-up plan in place. Loss of critical information and database could cost your company millions of rupees and will take your company back to years in terms of business growth. Today most of the companies see the opportunity to implement ERP system as to replace all of their old legacy business applications which can make their business operations more efficient with right security support. It is also to be remembered that when putting measures in place to protect your ERP environment is to not only safeguard the ERP database and related systems, but to secure all other systems that share information with it.

Enterprise Resource Planning and Return on Investment

Though many organizations spend lot of time and money researching, analyzing and justifying an enterprise resource planning (ERP) purchase, they hardly spend any time to scrutinize whether the application performs satisfactorily and gives the required output. If organizations don't establish specific performance metrics, it will be very hard to gauge how well that product is working to meet their objectives, let alone correct any performance gaps. Given that ERP system is somewhat expensive, some might wonder why more organizations don't engage in a thorough, after-the-fact audit. Reasons range from a lack of involvement by senior management to anxieties about whether the project will live up to its promise-and whose feet will be

held to the fire if it doesn't. And somewhat surprisingly, after-the-fact audits are often skipped because no one agrees on what precisely constitutes a successful ERP program. When the majority of the people you ask not may not sure about what an ERP is, it makes little difficult for your to search for the people who may know it thoroughly. On a technology level, ERP software integrates a company's departments and functions into a single program running on one database, a valuable step forward for improving efficiencies, because integration speeds up business processes. For a HR manager ERP system is something different application from a production manager. For him it is a system for the employees to interact with each other. But getting bogged down in definitions is beside the point. The point is whatever methodology you use to measure your ERP, it should be applied consistently across the organization at specific points following the implementation. How often you measure your ERP system will depend on the size of your organization and the depth of your software change. Typically, an audit should occur halfway through the implementation, again at three-quarters of the way through the implementation, and when it's complete. Then, you should follow up every quarterly. There may be some further questions that how can the ERP application be measured up? Only a systematic, disciplined approach to measuring ROI can provide the answer. However, if the ERP audit focuses only on productivity gains, such as how many steps it takes to complete a shipping label, you won't get the clear of ROI. To get a clear picture the audit must take into account how well employees interact with the ERP system software. Whether the system empowers them to accomplish key tasks? How quickly do they adjust with its functioning methods? To get the actual result, user surveys should be conducted immediately after the training period and again six months later. A polite approach to the employees to enquire about the functioning of your ERP system could get you closer to the software and its functioning. It will help you understand any shortcomings in the system as well as the need of further training to the employees which could make them more comfortable with the system. A logical and systematic approach to the ERP system by the employees is a must for a good result that ultimately reflected in the organization's return on investment (ROI)

Web-based ERP can boost your business

Successful organizations are continuously modifying their methods in serving their clients which also increases their profit margin. To achieve this positive result, organizations have to intelligently integrate ERP system in their business management process. An effective ERP system gives the solid foundation to the supply chain which enables information; material and money automatically flow up and down the supply chain at high-speeds without any glitches. Of late many of the organization consider Web-enabled ERP as their most important and strategic platform because it provides a solid foundation and information backbone for eBusiness. When a business application like an ERP system is enhanced with the eBusiness capability, i.e. making it a webbased ebusiness enabled ERP, they supercharge each other. eBusiness is the best vehicle to share business information with partners for creating major B2B synergies. A fully integrated web-based ERP will capture and create accurate, consistent and timely relevant data, and assist in intelligent business decision-making. The impact of ERP/e-Business integration is substantial, ranging from reduced inventory and personnel level to improved order and cash management. It also results in improved customer responsiveness, reduced IT costs and the availability for value-added activities. A clear advantage of the web-based ERP solution is that remote users like executives and sales representatives can access the company system with any browser, which is much more convenient than going through a laptop configured for Terminal Services. A quick and on-time implementation of the

solution can be done on your existing configuration set up. That means you do not need to upgrade your network for Windows/Exchange Server and SQL Server database. As you would have come across more suggestions on ERP, selecting the right one is crucial. The term "Hosted Solution" is rapidly catching up, on account of its own benefits. A web-hosted solution ensures a lower outlay and predictive spread of cost over time. You have a substantial saving in cost (on both the software and hardware, licensing) that can be better invested in your business process. Web-based ERP removes your headache from the Investment made towards time and cost in the maintenance of the server & other hardware. When you go in for a web-based ERP, you can start using it from day one and can eliminate all trouble shooting and other related technical snags. Most of the hosted applications are like off-the-shelf software. The web-based ERP application is available to you anywhere and at anytime from a simple browser.

Is your ERP system ripe for replacement?

What is the need of an ERP system? Some may ask. The answer is not simple. Though we must understand that today there are lots of midsize companies face challenges specific to their industries. Businesses that make consumer product goods are concerned about regulations and reporting requirements, while public-sector organizations are worried about maintaining customer loyalty. Also, manufacturers are concerned about the commoditization of their products. A robust ERP package can help address these issues, as well. Though some companies have already implemented an ERP there are still many who don't have any of these systems. At the same time, it is also to be noted that many ERP implementations in the midmarket are quite mature and ripe for replacement. Many midmarket companies must now also choose an ERP system on which to standardize after multiple systems were installed, perhaps through mergers, across the enterprise. Although it's not necessary, midsize companies seem to prefer consolidating their business-management applications in one ERP package, at least in part to cut down on integration headaches. Vendors are aggressively vying for customers, launching new ERP solutions designed to meet needs particular to the midmarket and pricing them to meet a midmarket company's budget. To further entice midmarket customers, vendors are also developing vertical solutions that target certain industries, such as manufacturing, pharmaceuticals, fleet management and construction, with built-in functionality that cuts down on customization. In an effort to simplify the notoriously difficult implementation process, vendors are also developing ERP systems that can be delivered in ways friendly to organizations with limited IT resources. Webbased ERP solution has become an ideal system for many of these mid-sized organizations as it is very cost-effective with easy implementation process. There are some companies that may try to develop its own ERP system in-house. Since designing and implementing ERP systems is not the business of most companies, the systems developed by the team will never equal in quality, scope, functionality, or technology with those created by software firms. These software firms or ERP package vendors can produce sophisticated packages and provide their clients with products that allow them to maintain a focus on their own chief activities, thus improving revenues, profits and shareholder returns. Thus, it always better to buy ERP packages. ERP systems are getting better, bigger and have more features. Also, people who are specialized in developing such types of tools have developed them. Most

of the tools would be customized to suit your needs. So unless and until your project or organization has a need that cannot be fulfilled by the available tools, it is better to buy the tools rather than make them.

Make your business process more efficient

Organizations must realize that after the implementation of an effective ERP system all of its process becomes more efficient. ERP system will help all the major decision making including even retaining a client. However, the organization that plans to implement an ERP system must be well prepare to integrated the system effectively. Organizations are advised to seek the help of an external consultant to find out how suitable is the organizations when it comes to working with an ERP system. The external consultants are capable of evaluating and they identify the effective needs of the moment. It is a good idea if the decision about an ERP project could be carried out by a team of professionals from both internal and external for a more adequate design. This is because the main aim is not just about purchasing software, but to order all the pieces to match with it. In most cases some internal processes need to be redesigned before implementing an ERP. In addition to this, software is often modified to fit the ERP according to the enterprise objectives and activities. The combination must be as perfect as possible. In spite of its benefits one of the most important factor to be remembered is that ERP is not a just another software application in your organization. The system involves every internal process and must be preceded by a reevaluation of every section together with its functions. It is also important to note that an ERP will not change the management functioning on its own. You must keep in mind that it is an important and decisive tool, but in order to obtain a correct development you will have to decide carefully who is going to command it, as well as the way in which the data will be saved and how information will flow. Just implementing an ERP system alone won't help the organization make any success. Though the effectiveness of an ERP system could be measured by the improvement in the ROI, the goal of measurement is not to measure; rather, it is to improve performance and processes are the point at which this can be best accomplished. A well-performed ERP system can be maintained till about 15-20 years. In the later stages the package will have old architecture. It will become very difficult to make changes in the program code without inflicting hazardous damage to the system's stability. It is possible to give older systems a 'facelift' with modern tools. Though those 'facelift' can extend the life cycle of the package for some years, they will certainly speed up the appearance of the useless codes. If your ERP system is under-performing, it is better to go for an overhaul of the system. There are numerous efficient ERP systems available in the market. Do the right evaluation as per your requirement and implement a suitable ERP system that could take your business success to new heights. As the saying goes - It is better late than never.

ERP is an essential business application

THE latest reports shows that majority of the midsize organizations are using ERP to support a variety of business issues, including globalization, lean manufacturing, conducting e-business, consolidation, shared services, collaborating with suppliers and meeting the requirements of new customers. Further studies reveal that very few midsize companies that don't already have an ERP implemented are facing numerous problems in their production and sales departments. For those businesses, the reasons to take a leap into ERP, which is largely considered necessary infrastructure for midsize companies, are

many and compelling. Many midsize companies cited the availability of low-cost options; pressure from the parent company, suppliers or customers; "explosive" growth; compliance with regulatory requirements; and a "disastrous event" as factors convincing them of the value of ERP. Just implementing an ERP system alone wont' do any miracles. To get the most benefits from an ERP solution, an organization has to use it to its fullest capabilities. But surprisingly this is not happening with every case. Considering the expense of acquiring and deploying an ERP package, in most of the cases it is being underutilized. As per the available survey reports from the market, the average midsize company uses only about 11 out of 24 generic ERP modules, or approximately 72 percent of the available functionality. Today the ERP market is sufficiently occupied with some effective and efficient ERP products apart from the more popular Oracle and SAP, that are dominating the market among large global companies. But it's not an easy fight - several vendors that cater to the midmarket are entrenched, including Infor, Lawson Software, Epicor Software, QAD, Sage Software and Microsoft apart many others. On the other hand some of underplaying midmarket ERP vendors offers their business-management applications on a modular basis, so they usually can be deployed individually and integrated as more ERP modules are phased in. What is more important is the investment in ERP system which should be planned efficiently. ERP is somewhat expensive, and the cost is highly variable depending on the organization. Company size, number of ERP users, the depth and breadth of purchased functionality, and the business benefits gained from the ERP deployment all contribute to the TCO (total cost of ownership) of an ERP package. As midmarket companies extend their reach into markets around the world, they require increasingly sophisticated systems to support and run their business. With ERP, they can use enterprise-grade technology as a competitive weapon, managing costs, introducing efficiencies throughout the supply chain and manufacturing processes, and streamlining and automating business processes across the organization. For some companies, ERP can mean the difference between success and failure.

Selection of right ERP holds key to success

HOW to select the ERP brand perhaps become difficult today. Most of the time budget was the main criteria for elimination round and then companies used to see the live customer list of ERP vendor. We can very well say that the ERP buying decision is like any other procurement decision. For example, when a buyer purchases bearing, normally he analyzes quality, cost, service and response time to choose the particular vendor. All these parameters were applied in ERP buying also. In fact, a few ERP vendors have come up with industry specific solutions, which, in the true sense, Is more of a marketing strategy than an operations specificity. Secondly, because of the very competitive environment and market saturation, ERP vendors have decreased their prices and hence the SME segment is also aspiring for such world-class solutions. While selecting the ERP brand, the focus should be the availability of the best practices or the worldclass practices in the software. If we examine closely, we find various ERP products are strong in various functional modules. This strength could be in terms of availability of various planning opinions, tight control on orphan processes, excellent functions flow, easy and user-friendly reporting, graphical presentation, automatic routing through world-class valued added processes. The problem is how to know which ERP is strong where and how that will synergize the client's business results. To solve the first question, to some extent, we can refer literature in the form of reports and articles. The commercial presentation of the ERP vendor and later discussions may help further. The commercial presentation of ERP vendor and later discussions may help further. The main question is which strength one should look for. This problem has to be handled with a detailed case study of the

organization. From the strategic point of view, the organization has to understand the vital processes for the revenue impact as well as the bottomline. Thus efforts should be directed to find the thrust area with proper reasoning. Accordingly, one can match the requirement with the strengths of ERP to proceed further. It is also observed that some clients go for multiple ERP products to get equipped with all the strengths available. ERP packages have different architectures, concepts and sets of functionality and they are designed to address a variety of user requirement. The marketing literature from ERP vendors will no doubt give the impression that their tool is just as good as any other. Such literature is valuable for giving the reader an overview of functionality and a glimpse at the differentiator for that vendor's offering. But, if you compare the literature or listen to a vendor's presentation, it would be very difficult to evaluate which package is the best or which would be most suitable for your organization. So if you go by what is written in the product brochure or what the salespeople say, you will find it very difficult to make a decision and might end up with the wrong choice. So package selection is something that should be done on a systematic and scientific manner. While studying the history of ERP packages and finds out how each package evolved, it 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. It is generally accepted that most ERP packages are stronger in certain areas than in others and each one is trying hard to add functionality in areas where they have been lacking. So after the decision to go for an ERP package is taken, the company needs to develop the selection criteria that will permit 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, matches the business profile and 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.

ERP system supports new intelligence

ENTERPRISE Resource Planning (ERP) system is an effective tool that will help your organization grow and be highly competitive in today's business world. ERP system supports powerful analytic and new intelligence. Administrative performance scorecards and management by objective methods can help the decision makers to keep the organization synchronized with strategic goals, employee expectations and competitive offers. Job satisfaction and empowerment functions provide managers with the information on performance of employees and their jobs. This will help a greater employee empowerment and satisfaction. Applications such as cost simulation, forecasting and reporting support more effective decision making. The numerous reporting functional modules enable the compilation of statistics on employee groups and office-specific employees or requirements. Needless to say that ERP dramatically minimizes the time it takes to carry out routine tasks. This will give the staff more time to add greater value to your business by making better-informed decisions. The web-based ERP solution goes beyond the simple ability to upload or download information, and it can include much advanced features. Web-based ERP system is an easy to use solution for any type of business. From manufacturing to road haulage and charities all benefit from what a web-based ERP solution has to offer. The Personnel administration function in an ERP system is aimed personnel services of a company. This includes companies with several divisions or branches, as well as those with offices located at overseas countries or network of dealers and agents. Personnel records management and planning, generating of any staff- related reports can also be carried out using this module. Information on payroll accounting is also transmitted automatically using this module.

The Personnel Management Module helps you to detect and include or delete additional payments for each position of the manning table and for a group. Apart from this, personnel information can also be stored. Using this module information for any division and for discharged employees is accessible. To meet external and internal needs, you will be able to prepare various references and manifold reports. ERP system also allows you to plan, record and monitor all kinds of holidays, including the generation of a planned yearly holiday schedule in compliance with the legislation and labor contracts. And regarding legislation, it makes it possible to track employee provisional appointments too. Everyone will agree that managing administration is not easy. But an ERP system can help you in big way. This is because an ERP system can provide you the chance of using a large number of batch operations, service options and administration functions. It can also rectify or check records and inform you of mistakes or incorrect data. Definitely ERP is an effective tool that will help your organization grow and grow and grow.

Benefits of ERP in manufacturing industry

INITIALLY Enterprise Resource Planning (ERP) solution was developed for the big organizations. It has also involved huge investment which was out of reach of small and medium sized industries (SMEs). However considering the benefits the ERP solutions have, the smaller organizations also explored the way to implemented it. This attitude has paved the way for many locally made ERP solution providers entering the market with very effective applications which have turned to be ideal for small and medium sized companies. As the local ERP vendors were targeting the SMEs, they also kept the price tag in mind, which ultimately resulted in existence of some effective and affordable ERP products in the market. Manufacturing was one of the sectors that have benefited most from ERP solution. It was due to timely implantation of ERP. Other sectors also followed suit. Today, all industry segments are taking advantage of ERP solution and it is becoming a necessity rather than a luxury to have ERP implemented in an organization for its successful business operation. Before the evolution of ERP, manufacturing sector were running on manufacturing resource planning system. The manufacturing resource planning included all the sources in relation to the manufacturing such as material, human resource, equipment and finances. When the competitive strategy changed from low price and great variety to speed, ERP found the right place to give profit to this new strategy. Contrary to the other applications, the ERP system connects to all the offices of a group of business throughout the entire world. ERP system allows the organizations to design products with the entrance of engineers all over the globe, installing factories in various areas to produce pieces and components for many countries, and the information of all the parties involved. ERP offers solution that enables manufacturers to compete in the prevailing market atmosphere. It has the capacity of both finite and infinite planning capabilities which assist manufacturers to develop original schedule. ERP solution can also transform the supply chain to achieve production plan with sales plan, manufacturing, finance and customers. ERP is changing the competitive landscape for SMB manufacturers. Small to midsize manufacturing companies can benefit from a fully integrated solution designed to reduce costs, improve customer service, increase margins and generate new revenue streams. Further, SMB manufacturers can improve business performance with a deeply functional, yet easily affordable, ERP solution. As the technology changed ERP solution also found its way to the web. Today web-enabled ERP solutions are the most effective solution available in the market. What is to be cautious about the selection of an ERP system is, before you commit to any ERP system, you should first evaluate the system such as what your organization needs and wants to accomplish with

its ERP strategy. The outcome of this evaluation will help you determine which applications and what kind of functionality your organization requires as well as go a long way toward easing the implementation

Live demo of ERP can give you a real picture

THE real picture of a proposed ERP product can become clear when the live demonstration of the product is given. The sincerely of the solution providers and efficiency of the product becomes evident in the live demonstration. The demo also makes it possible for the both parties to propose feasible modifications in the package. The credibility of the system can also be scrutinized here. Moreover, it acts as a cross check for the functionalities offered by the developers in the compliance of the product. What the top management and all the other people connected to an organization must realize that is whatever be the reason for the changeover to an ERP system, i.e. technical or strategic, it is impossible to separate them, since they affect each other. Live Demos are a better tool to understand the various integration/touch points and the participants could experience the different functionalities as well as they can also check for any shortcomings in the system which can be rectified as per their requirement. It is usually better to get a brief about the product before seeing the demo, which can be obtained through the website of its developers. The time and method of the demo could be finalized by the demonstrator and let set their own sequence. Any doubts about the product can also be cleared in the demo stage. Demo scripts in the form of brochure or function details through the website are a better tool to present the demo as there is uniformity in the flow of the demo and the various integration/touch points among the different functionalities can be checked. The workflow becomes clear during the demo, and users can have a feel of the proposed product at the demo itself. This will determine the acceptability of the product in the minds of the customer. The quality of the product also becomes clear at this stage. Based upon the markings obtained in all the above-mentioned points, those products that cross the threshold mark get qualified to be evaluated. Before finalizing one more important point to be considered is the cost factor. Though all the products have its own price line, all developers may be willing to for a negotiation considering the competitive mindset existing in the market today. However, some developers of the product won't alter the price tag, majority of them will agree to some climb down. Once it has been agreed on technical and the terms and conditions in the financial front, a suitable product can be finally selected for the ERP implementation.

Retaining customers makes perfect business sense

CUSTOMER loyalty has a powerful effect on the business bottom line. The dramatic economic power of customer retention is revealed when customers are viewed in terms of lifetime value. The value of retaining customers makes perfect business sense when one considers that a consumer retained for life is more cost-effective, requires less service, provides more business and contributes to new customer acquisition by offering positive referrals. For the average business, studies indicate that repeat customers account for 70 per cent of total revenues. Thus, customer retention, creating longitudinal investment in customers, guarantees significant current and future economic benefit.

ERP integration enables businesses to better comprehend and thereby, better serve customers with each and every interaction. The ERP integration is not an easy task. The good news is that there are a growing number of solutions available. Before adopting a course of action there are a few common rules to follow. One is, make sure you understand the problem before you undertake the solution. ERP integration is a corporate-level problem requiring a corporate level strategy. Enterprises must consider the use of an ERP as an obligation instead of an option in order to be competitive. With old systems the information that came from daily activities are difficult to handle. This will ultimately affect the relation the company has with its customers. Customer satisfaction is the most important element of a successful business and ERP plays an important role in fulfilling this commitment. Everybody knows that communication improves relationship. Therefore it is important to understand that ERP can bring data from one area to another without any extra effort, and with almost no chance of mistakes. In addition to this, the information becomes available in real time. Therefore, by the time an order is entered, it can be prepared and invoiced at the same time. This helps a lot with customers as they always expect a quick response. Organizations implementing ERP applications have to explore the areas of integrating these applications to the other enterprise applications. What approach to take will depend on the need for integration. Diverse tools and methods available in the market are evaluated and tested professionally before implementation. Organizations have to adopt very cautious approach while selecting these tools and methods to keep their leadership in the market. In small organizations every department has its own needs, and they ask technical department to provide software capable of matching them. Sometimes this is provided from the outside through vendors, and it might not even exist. This is a common mistake happening with many small and midsized organizations. For an effective business process and customer relation management, it is necessary to have an efficient ERP system deployed in the organization and it must be done professionally to achieve the expected result in the terms of functional, technical and economical.

Adopt global best business practices

BEST practice is the process of finding and using ideas and strategies from other companies and industries to improve performance in any given area. Business has used best practice benchmarking over the decades and realized billions in savings and revenues in all areas of business operations and sales. 'As-Is' best practice addresses or includes the present practice followed by the specific company which is planning to implement the changes required to keep itself in the league of other top companies in the industry. This is done in all functional areas like HR, Operations, Finance, and Maintenance. etc. 'To be' best practices are generally the best practices which exist in the industry and have been refined over a period of time. Companies should aim at adopting their industry specific best practices for their future benefit. Preventive maintenance, activity-based costing etc. are considered as best practices. 'To be' best practice includes some of the practices which are already adopted globally and are taken as industry standards for swiftly operating businesses in a competitive global scenario. Some of the best practices that can be adopted are as follows: Information Liquidity: Much like cash liquidity, the liquidity of information is a measure of business success. In a successful company, data flows smoothly and information is transformed into economic value. Information liquidity is obtained by integration of processes and systems at all levels. Integration should be the driving force behind design, methodology, development and deployment of all IT systems.

Availability: As most companies become more and more dependent on IT, it is very important to ensure the maximum availability of the eservices. This does not mean that all IT systems have to be absolutely flawless and foolproof, but good through has to be given to what could be the consequences for the company if all or part of the IT services are temporarily unavailable, and what can be done to minimize these consequences. Agility: Market changes constantly and so does legislation and technology. It is said that the product life cycles and their time to reach the market are getting shorter and shorter. As a consequence, IT systems have to be built for maximum agility. Cross-compatibility, reuse and lightweight functionality are the ideas to be considered. Costs: Especially in times of economic slowdown, the costs of IT are under constant scrutiny. Unfortunately, it is very difficult to quantify the benefits of IT in terms of money and it is relatively meaningless to approach IT investments singularly from an accountant's point of view. These costs also have to be related to non-quantifiable benefits for the company.

ERP growth is skyrocketing

DEMAND for Enterprise Resource Planning (ERP) solution growing day by day. Experts are forecasting a huge growth of demand for ERP mostly in mid-sized organizations. The demand is due to the specialty of an ERP system to manage the increased customer service, efficient distribution system and reduced operational costs, Majority of CEOs/Senior managers share the same view that ERP is an important tool to achieve competitive advantage. The number of employees in an organization using the ERP system is increasing and organizations that have started with the basic modules are now expanding their system with subsequent applications. This is also another reason for the growth of ERP. Another factor for the growth is many organizations replace customized system with standard application packages. Most of the medium ERP vendors are targeting the mid-sized organizations. This is because many of the mid sized organizations are working with applications which are non-integrated and on disparate technology architectures, built in-house. This has resulted redundant technology, loss of support, non availability of critical information at the right time resulting in overall business loss. ERP vendors in India have found it an ideal market by exploring the SME segment. There are lot of demand persisted in this market, which on the other hand helped to growth the ERP market in substantially. Knowing that majority of Indian manufacturers are small by global standards and requiring easy-to-use ERP solutions to meet their specific process requirements, ERP vendors in India have come out with ideal solutions which can not only match their needs but also their budget. Now almost all small and medium enterprises across industry verticals and micro verticals, such as pharmaceuticals, chemicals, fleet management, automotive, modular kitchen, construction, infrastructure, and textiles, are leveraging ERP solutions to gain sustainable competitive advantages. With the advent of on-demand deployment of ERP software and also web-enabled ERP solution, the user can access the software through license as a Web-based service. The increasing popularity of the Web-based applications account for the growth of ERP, as the enterprise resources are maintained by a service provider. Growth factor also includes the competition prevailing in Indian ERP market. With the entry of international companies in the local market, the local vendors also steadied their products which are going to be a good sign as far as mid-sized organizations are concerned. Now they can find a wider market with ERP product suitable to their needs also in their limited budget. As the market is getting

more competitive reliability and compatibility about the smaller players are unwanted. Today SME can choose the right ERP at their will with confidence. Indeed, a good sign.

ERP: Need assessment is the first step

Lot of articles have been written about preparation, planning and implementation of ERP project. Still what is to be discussed is which organization needs an enterprise resource planning solution (ERP) and at which stage? Every organization which is planning to implement an ERP solution must perform an honest and thorough assessment of business needs and alternatives. This is an important factor of taking ownership in the ERP or any alternative solutions. Though there are plenty of good reasons to implement ERP including many "no brainers", in most organizations the decision is not so obvious and one must objectively evaluate the validity of the proposed business case and timing, It is therefore businessmen must ask the some questions before spending on ERP to bring some sanity to the decision-making process. Are the business and technical strategies that integrated in the new ERP system compatible with your business? What is the real problem you have with your existing software or your business processes? Would an ERP project be one of the top two priorities within the organization given other internal and external projects, initiatives, or probable events? The claims of the new ERP system actually result in better decision-making or make lousy managers more effective? Does anyone understand the data or capabilities of the current software? Can the new ERP system bring result-oriented performance so that the existing application which seems to be working fine could be discarded? Is the current application software gives you a sleepless nights? Is the current software is too old to be customized and no not supported by any vendor? Can a few purchased (and integrated) "bolt-on" applications do the trick vs. buying an entirely new package? Should a limited pilot project to be deployed to check the efficiency of the software before going to the full fledged implementation of new ERP system? Are the proposed operational benefits and cost savings of new ERP system authentic? Should all the implementation and support cost in the ROI be considered?

It is advisable to hire independent business consultant to analyze the situation comprehensively. A need assessment is the first step which will be followed by the ERP readiness assessment, which are two different things. So think right and act right. No doubt, success will follow you.

Go for maximum payback potential

TODAY organizations need demonstrable return on their investments before they invest in enterprise software. Customers are demanding that ROI analysis be a critical factor in their decisions to acquire new enterprise software. A decision to acquire new enterprise software that relies solely on quantifiable ROI factors would be limited in its ability to predict the ultimate success of the software.

That success would include, particularly in the long-term, payback factors that are harder to quantify and therefore, more often than not left out of the ROI equation. These non-quantifiable or intangible factors should be given as much importance as the quantifiable measures before making the decision to acquire a new ERP system and selecting a vendor/package. While almost all ERP vendors are providing enterprise resource payback to their customers, it is the right combination of technology, architecture, functionality and active customer support that provides maximum payback potential. By looking at how the ERP systems support payback in customer relations, it becomes obvious that these same payback parameters are involved in driving significant new business opportunities for the organization. The ability to model new processes that in turn manage new products or services can open up these new opportunities. When other features are added customers report that additional opportunities emerge. This is true for the direct e-commerce connections cited above as well. The link between customer support and service and new business opportunities is one of the cornerstones of enterprise resource payback. The flexibility and speed of the enterprise applications environment allow organizations to maximize their opportunities for both new and existing business. For example, the customer relationship management (CRM) software, now being offered by almost all ERP vendors as part of their systems, tightly integrates with warranty tracking and field service, thereby allowing companies to expand service offerings to their own customers and expand service revenues as a result. In a similar vein, the integrated functionality available in the collaborative planning and engineering functionality allows manufacturing partners to reduce design and production time and get products to market more quickly and efficiently.

Doing business at Internet speed

WHAT is the difference between E-commerce and E-Business? Surely, some of you might ask this question. E-commerce is buying and selling using an electronic medium. It is accepting credit and payments over the net, doing banking transactions using the Internet, selling commodities or information using the www and so on. E-business is the convergence and fusion and fusion of business process, enterprise applications, business infrastructure, technology, information and organizational structure necessary to create a high performance business. Better one must realize that it is not possible for an organization to execute Ecommerce transactions efficiently and effectively without first transforming to the E-Business model. During the last decade few concepts have revolutionized business more profoundly than E-commerce. E-commerce is here to stay and E-commerce are the key industry drivers in the world today. No company can survive in this brutally competitive environment if they ignore E-commerce. E-commerce, more specifically business-to-consumer has changed the way companies do business. It has changed the way consumers buy products and services. It has changed life for commission agents, brokers, dealmakers and the like. It has brought the consumers and manufacturers or service providers closer than ever before. It has created new distribution channels, new customers and new business opportunities. In the Internet parlance, the companies that operate in the traditional mode are called "brick and mortar companies". These brick and mortar companies do business in the old-fashioned way. They do not use web or Internet for their business operations, at least not in a major way. So, the big question is whether your organization is ready for E-commerce or is it still in the brick and mortar mode. Is your organization capable of doing business at Internet speed? In Order to do business in this digital marketplace, adopting E-commerce is not enough. The entire business operations have to be reengineered. The reengineering should be done keeping in mind that the end result is to do business at Internet speed. When an organization has geared itself, transformed

its business structures and cultures and is ready to do business in today's connected world, this organization can be called as an e-business. E-business is not just about E-commerce transactions; it's about re-defining old business models, with the aid of technology to maximize customer value. E-Business is the overall strategy and E-commerce is an extremely important facet of E-Business. This transformation includes both front and back-office applications that form the engine for modern Ecommerce. Thus e-business involves not merely setting up the company web site and being able to accept credit card payments or being able to sell products or services on time. It involves fundamental re-structuring and streamlining of the business using technology. Yes we are talking about enterprise resource planning (ERP) systems and its related applications. To transform a traditional organization to do E-Business involves using technology to the fullest. Technological advancements are making things better, bigger and bolder. Businesses are capable of doing things that were unimaginable a few years back. For example, an organization can now receive a purchase order and notify the customer within seconds after the customer has confirmed the order, customers can do the order cancellations without involving anybody from the company, and can track the order status of the shipment on-time over the Internet. With the advent of Internet and the WWW applications such as web-based ERP, world business scenario is making a drastic change. This is not the time to sit back and think. Act now and don't allow your organization fall under the "brick and mortar" category. That is entirely your responsibility.

Web-enabled ERP
ERP applications are an integral component of any information architecture and today's application system are required to address more than the processes taking place within the walls of an enterprise, they must be able to address the players and processes involved in an extended enterprise that reaches customers, partners, suppliers and employees worldwide. ERP vendors and developers must move to integration models, based on industry accepted standards and non-proprietary application programming interfaces (APIs). Web services promise to play a large role in this new integration model, enabling ERP functionality to be fully leveraged using industry standard technologies. Within almost every industry there are business requirements to lower costs, increase revenue and improve operation efficiencies. In order to achieve these goal companies must connect internal groups, extend processes to partners, expand business opportunities and reduce transaction costs. These business requirements can only be met by technologies that are cost-effective, flexible and agile. The technologies must support automated collaboration, real-time integration, secure interactions and low-cost coupling. The new business models are forcing organizations to accelerate the business reengineering initiatives they undertook when they first began to implement ERP systems decades ago. To maintain competitive advantage, almost all companies must now be able to conduct their business on-online as part of an increasingly internet-based global economic community. As we all know, the Web has improved performance and productivity, enabled collaboration, dismantled trade barriers and created an enormous range of global opportunities. As a result of the Web's burgeoning adoption and success as a means of conducting business, productivity has increased tremendously; however, the lack of interoperability has been frustrating to many. Organizations must provide customers, employees, suppliers, distributors and numerous other parties with the information they need, when they need it. As a result, business systems and processes can no

longer remain isolated and disparate. Business success now requires better performance from easier application integration. Systems must share information internally with other applications as well, externally through Web applications, business-to-business (B2B) exchanges and value-added networks. These exchanges and transactions must be real-time, on-line and immediate - i.e. conducted anytime, anywhere and without compromise to security or transaction integrity. Through the use of Web enabled services, the cycle time between buying and replenishment can be greatly reduced and the potential for errors virtually eliminated.

ERP project monitoring

BEFORE the ERP implementation starts the consultants and the company representatives will sit together and prepare a work plan. This plan details each and every activity that needs to be carried out and when they should be carried out. The consultants should lead the process of the work plan preparation, because they have the experience of implementing the same package in similar conditions. The in-house team should point out the issues that are specific to the company and help the constants in creating a realistic work plan. The work plan forms the basis for project tracking and monitoring. The project plan contains numerous activities, the man-hours required to complete them and the resources need perform the tasks. Usually the project plan is built using a project management package that permits one to focus on planned activities from various perspectives - the chronological sequence or timetable, specific activities and who is responsible for them. Preparing the project plan using such a tool helps in improving the quality of the plan and makes it easier for making changes and adjustments. Once the project is underway the plan can be updated on a regular basis and the planned vs actual reports can be produced in varying detail and in varying formats including graphical formats. The one thing that should be kept in mind is that, irrespective of whether the plan is created manually or using a software package, all the parties involved - the executive committee, the vendor, the consultants and the in-house team - should be in agreement with the contents of the plan. What should be the frequency of monitoring by the executive committee? It depends on the situation. If the company has really assigned its best personnel to do the job, then there will be a natural monitoring of the project's daily activities. The company professional assigned to serve as the project owner or sponsor is in an ideal position to evaluate how things are going. Since the ERP implementation project runs into months, it is quite adequate that the executive committee meets once in a week or once in two weeks. Another way is to setup milestones in the project plan and to have a meeting when the milestone's planning completion date is over. But there are no hard and fast rules regarding how frequently the executive committee should meet. During the final stages of the project, when the system is being tested the committee might need to meet more frequently to discuss the various issues that could arise. It is the task of the project management team to report to the executive committee and present the facts and figures. Since these meetings will be of a managerial nature, the project management team should prepare a presentation that describes the situation at a level of detail appropriate to the audience. Every technical topics can be considered and excessive use of jargon can be avoided. It is a good idea that the material used in the presentation should also serve to document in the status of the project till that date. This is important because, in order to track the progress at fugue meetings, it may become necessary to recall the issues presented in a previous meeting, so as to explain why the evolution of the work has taken a particular note.

So in an ERP implementation project, the work plan or the project plan is of paramount importance. Then the adherence to the plan, and constant monitoring and taking appropriate corrective actions before the project gets of out control will ensure the success of the project.

Case studies reveal impact of ERP

THERE are enough studies on the impact of ERP. Majority of these studies are research reports, case studies or collections of case studies and industry surveys. Most of these studies reported substantial performance improvement in several areas as a result of their ERP implementation, including their ability to provide information to customers, cycle times and on-time completion rates. The earlier studies carried out on the impact of ERP systems covering both adopters as well as nonadopters of ERP systems. The study reveals that ERP adopters are consistently higher in performance across a wide variety of productivity measures such as sales per employee, profit margins, return on assets, inventory turnover, asset utilization and accounts receivable turnover than non-adopters. The study results suggest that most of the gains occur during the implementation period, although there is some evidence of a reduction in business performance and productivity shortly after the implementation is complete. However, the financial market consistently rewards the adopters with higher market valuation both during and after the adoption, consistent with the presence of both shortterm and long-term benefits. A well-performed ERP system can be maintained till about 15-20 years. In the later stages the package will have old architecture. It will become very difficult to make changes in the program code without inflicting hazardous damage to the system's stability. It is possible to give older systems a 'facelift' with modern tools. Though those 'facelift' can extend the life cycle of the package for some years, they will certainly speed up the appearance of the useless codes. It is very important while selection of new ERP packages to suit the organization's needs. Ideal ERP packages be selected from a wide range of packages available in the market today. Organizations must take extra care that the remaining life for the package is satisfactory and most of the bugs are gone. The appearance of new system design and technology often means that new things can be done that would give users many advantages. There is no easy way to include new technology in older systems. Organizations must recognize the three most important aspect of ERP implementation. Project Management, Change Management and IT Management. An executive committee and steering committee were set up for the effective project management.

Business benefits of Enterprise Resource Planning

IMPLEMENTATION of Enterprise Resource Planning (ERP) requires a substantial investment of money and other organizational resources and is often fraught with a high risk of failure due to organizational change. Despite numerous attempts to quantify the contribution of ERP investment to firm performance in both theoretical and empirical studies, the major question frequently ask is 'what is the return on ERP investment?' The answer to this question is not simple. In fact there are three stakeholders of the ERP project, viz., Vendor, Implementation Partner and User Organization. The vendors and implementation Partners promise big business benefits such as enhanced enterprise productivity, more accurate business planning, improved customer services, increased value in stock market, etc. to the user organization.

While the implementation issues of ERP have been extensively studied and published worldwide, there is not much study reported and published on the business impact of ERP adoption. Although some research reports and case studies on the business impact of ERP have been published, majority of them were focused on larger firms. The majority of these studies revealed that the ERP adopted company gives greater performance in terms of sales per employee, profit as well as operating margins, return on assets, inventory turnover, assets utilization, working capital turnover, accounts receivable turnover, etc. The studies further reveal that it takes about eight months to realize the benefits of the new system. However, some of the studies found little or no improvement in business performance contributing to ERP investments. The causes for these contradictory outcomes were further examined and it was found that ERP implementation results into business performance improvement only when they are associated with organizational improvement efforts such as business process re-engineering, corporate restructuring, and creating strategic business units and so on. It is now quite clear that merely acquiring and installing ERP does not provide any benefits to an organization. However, its proper implementation along with organization maturity and business process transformation can have a dramatic impact.

Measure the ERP system to improve performance

ERP performance studies are undertaken by organizations to know the effectiveness or benefit of ERP. Evaluation is an important step that helps in analyzing the contribution of ERP to an organization. However, this process of assessment itself poses many problems. Normally, organizations have tendency to perform this process in a professional manner so that it would yield results. They tend to lose focus as the whole process gets into action. It is geared with great enthusiasm but confusions develop and mar things. The success of an ERP project cannot be judged on the basis of unscientific evidence. Measuring its effectiveness and the improvement it has provided establishes ROI, justifies costs and lays the foundation for a continuous improvement model. But the goal of measurement is not to measure; rather, it is to improve performance and processes are the point at which this can be best accomplished. A recently survey shows the proposition that ERP systems support business process and the measureable success of these system is dependent on the continuous examination and improvement of those processes. Metrics are the evidence upon which success can best be judged. For a metric to be of any use to an organization, it needs to measure one of three different aspects of a process: cycle time (the percent of acceptable products produced during one cycle). All three metrics types are required to provide balanced improvement to a process. Many companies get everything done at the right time with regards to ERP right from software selection to customization to training and implementation. They take all measures to provide the necessary impetus and invest in huge volumes even if it is pinching monetarily. They are more particular about the benefits and are hence unmindful of the costs and investments. What happens thereafter is something to be worried about and corrected. After going all the way and that too in the right manner, companies do not bother to review the working pattern of ERP. Unless they understand this it is not possible to achieve the benefit of ERP.

Continuous ERP training is a must

Organizations must realize that there is a need for continuous training programs and refresher courses for the ERP success. There will be occasional new recruitments of employees and these employees should be properly trained in the basics of ERP and how to use the ERP system before they can be allotted to different departments. So there must be an induction, orientation and training program that is conducted on a regular basis. It is very important that new employees undergo these programs before start work as they will have an opportunity to imbibe the correct work culture and learn the correct work practices, so that they will be doing things in the correct way from day one. Once the ERP system is introduced, the way in which the companies conduct business will change. With the ERP systems will come, automation and new technologies. The company should make it a point to familiarize users with these technologies and find ways to motivate them to use these technologies. It is also a good idea to conduct refresher programs for the employees to reinforce the basics, correct working practices and also to update them on the latest developments. When a new module or a system upgrade is done new capabilities and features become available and the employees should be trained on these new features so that they will be a position to make the best use of them and their capabilities. For example, most ERP systems have the facilities to send automatic notifications to managers regarding some issues as and when it arises. The company managers have the facility to see the details of the problems and then query the ERP database to analyze its implications. So the managers can communicate with their peers to resolve the issues as soon as possible. But for this to happen, the managers should make use of these technologies. One member abstaining from this process can delay the problem resolution. The company should therefore, have a plan to train and then motivate its employees to get the best out of the new features and facilities that are available to them. Most systems can be configured to have an escalation mechanism - a mechanism that can escalate the issue to a higher authority if something does not happen within a specified period of time. For example, the system could be configured to send a mail notification to the superior of a manager if that manager has not taken an action regarding an issue within a specified period. In such cases, senior managers should find out why the person is not using the technology and take the steps necessary to get him involved. Many people are dazzled by the technology or are afraid to use it. These fears should be alleviated for the proper functioning of the ERP system and to get the maximum benefit from the system.

Common ERP Myths

Common ERP Myths

There are a lot of myths that surround the concept, infrastructure, implementation and practice of enterprise resource planning. Very often people are not willing to adopt ERP because of these wrong notions. In this section we will see some of the most common myths about ERP and will try to demystify them. ERP means more work and procedures ERP is the sole responsibility of the management ERP is just for the Managers/Decision-makers ERP is just for Manufacturing Organizations ERP is just for the ERP implementation team ERP slows down the organization ERP is just to impress customers ERP package will take care of everything One ERP Package will suit everybody ERP is very expensive Organization can succeed without ERP

ERP means more work and procedures

Properly implementing and managing an ERP system is not an easy task. The transition period from the traditional system or manual processing to ERP is difficult as new skills have to be learned; new procedures and processes have to be followed, and so on. Many employees think that ERP will add more work, make the work more difficult and will force unnecessary procedures. Transformation from the old system to the ERP system is a difficult process. However, if the management and the implementation team do their job properly, ensuring that the employees are told what to expect and given proper training, then the transition can be smooth. Once the employees get used to the new system, they will understand the potential benefits and the effort saved through automation of talks and jobs. Today's ERP tools automate many of the repetitive, monotonous and tedious procedures, tasks and processes thus making the life of the employees a lot easier.

ERP will make many employees redundant and jobless

Another popular misconception about ERP system is that its implementation will make many jobs redundant (because of the automation) and hence, many employees will lose their jobs. A properly implemented ERP system will automate many tasks in the organization. This does not mean that the ERP system will make people redundant. Yes, there will be changes in job descriptions and in the activities people used to do. Many tasks will be automated and this will make the people who were doing those jobs unnecessary. But ERP system also create new job opportunities and they very same people whose jobs were automated could be used to fill the new positions after giving them proper training on the new tasks. Hence, the amount of planning that goes into re-location and re-training of the employees by the management and the implementation team can go a long way in reducing the anxieties of the employees. ERP is a people system made possible by computer software and hardware.

ERP is the sole responsibility of the management

Making an ERP system work is the responsibility of all the employees. It involves virtually every department and every person within the company. The company management is not responsible for the day-to-day operation of the ERP system. Their main job is to create an organizational environment in which ERP can thrive - give ERP the full backing of the management. They should also be involved in the development of ERP policies, usage guidelines, allocation of budget, package selection and appointment of competent professionals to implement and manage the ERP system. Only when the ERP team has the full backing and support of the management, they will be able to implement the system smoothly. The management should monitor the implementation and operation of the system, review the progress and status periodically and should take necessary corrective action, if required. The management should also ensure that the ERP implementation team gets the support and co-operation of all the departments, But, thinking that the ERP system will succeed just because the management is fully committed to its implementation and operation is one of the biggest mistakes that an organization can make. In fact, it is the employees - the day-to-day users of the system - who will decide the fate of the ERP system. If the employees are not fully appraised, trained, satisfied and are not happy with the system and are not using it properly, then the ERP system will be a failure.

ERP is just for the Managers/Decision-makers

The managers and decision-makers are the major users of the ERP system. They are the people who benefit the most from the properly implemented ERP system. They will have all the information they need at their fingertips for making informed decisions. The quality of the decisions and the speed with which the decisions are made are dramatically improved as the ERP systems provide high-quality, timely and relevant information. But every employee in an organization benefits from the ERP system. An ERP system gives the store clerk access to the inventory record and enables him to find out the exact quality of an item. It allows the production supervisor to plan his activities. It allows all employees to apply for leave, get loads approved, gets the travel expenses reimbursed and so on. But for making the best use of the information processing power of an ERP system the users should be trained on how to make the best use of the various features available. If people are ignorant about these, they will find it useless and if they are not properly trained, they will find the experience frustrating and tedious. These people will not use the ERP system or if forced will use it but not to its fullest potential. They will see ERP as a waste of time and do it just because they are forced to do it. This hostility towards ERP can be eliminated if the users are properly educated and make aware of the benefits of the ERP system.

ERP is just for Manufacturing Organizations

This assumption is basically due to the way in which ERP was historically developed from the methods of Material Requirement Planning (MRP) and Manufacturing Resource Planning (MRP II), which are relevant to manufacturing organizations. In the manufacturing industry, MRP became the fundamental concept of production management and control in mid 1970s. At this stage BoM (Bill of Materials), which is purchase order management that utilizes parts list management and parts development, was the prevailing trend. And this concept unfolded from order inventory management of materials to plant and personnel planning and distribution planning, which in turn became MRP II. This incorporated financial account, human resource management functions, distribution management functions and management accounting functions and came to globally cover all areas of enterprise mainstay business and eventually came to be called ERP. But in reality the concept of enterprise-wide planning of resource is not limited to any particular segment of industry.

ERP is just to impress customers

It is true that a properly implemented ERP system can help in serving the customers better as it helps the organizations to react faster, respond better and deliver high-quality products and services at astonishing speeds. This improved efficiency and quality will go a long way in improving customer goodwill and customer relations. So with an ERP system you get more satisfied customers, but that is only one of the advantages of an ERP system.

ERP is just for the ERP implementation team

The ERP implementation team usually consists of outside consultants, vendor representatives and select group of employees. But once the implementation and under training is over, the consultants and vendor representatives will leave. Then it is the responsibility of each and every employee of the company to use the ERP system properly and to make the best use of the new features and facilities.

ERP package will take care of everything

ERP is not a silver bullet or a cure-all. Yes, a properly implemented, operated and maintained ERP system can dramatically improve productivity, automate tasks, reduce wastage and improve profits. But an ERP system needs people to operate, use and maintain it. If the employees are not interested in using the ERP system or are using it improperly, if managers are not making use of the decision-making capabilities of the system or if the system is not maintained properly, then the ERP will not deliver it promises. It is a fact that the ERP tools have evolved over-time and have now become very sophisticated. Today's ERP tools automate most business function and processes thus making the lives of the users a lot easier. But thinking that the ERP tools will take care of everything can be a recipe for disaster. There are many business activities that need human intervention and judgment. While the ERP tools make these jobs easier, there is no substitute for human intelligence and decision-making.

One ERP package will suit everybody

There are hundreds of ERP tools available in the marketplace. These tools differ in features, capabilities, size, functionality, price, technical support, customizability, scalability etc. The organizations are also different from one another. Each has its own characteristics and identity. Assuming that one tool will be suitable for all organization is wrong. Selecting and purchasing an ERP tool without analyzing whether it is suited for the organization will have disastrous consequences. For an ERP implementation to be successful, the tool that is implemented should be compatible with organizational culture, practices and procedures. So when purchasing an ERP package proper attention should be given to the selection of a tool that is best suited for the organization.

ERP is very expensive

ERP packages come in all shapes and sizes. The sophisticated and high-end ERP tools are very expensive. ERP system needs people to manage it. Thus implementing and managing an ERP system is an expensive affair. But these expenses should be weighed against the benefits of the ERP system. An efficient ERP system will increase the productivity of the human resources, shorten development and change cycles, streamline the production process, reduce errors by automating the monotonous and repetitive tasks, enable the better management of projects by providing quality information, improve customer satisfaction by resolving problems quickly and so on. When the benefits of the ERP system are considered, it becomes evident that the money spend on ERP is well spent and the ERP system will pay for itself.

Organization can succeed without ERP

Before the advent of ERP, organizations were run manually. So, do we need ERP in order to succeed? If an organization is very small in size, caters to the niche market and has very limited scope, then it can sometimes succeed without ERP. But today's organizations are becoming large and the products are becoming more and more complex in size, sophistication and technologies used. Also, a single group does not necessarily build the different components of a product. This is the era of multi-site, distributed production, where different groups situated in different parts of the world develop the components of a system. In such a scenario, managing the activities of an organization is a very complex task. If proper control mechanisms and procedures are not in place, very soon the operations can get out of control and products and organizations can fail.

Other myths ERP is the sole responsibility of the management ERP is just for the Managers/Decision-makers ERP is just for Manufacturing Organizations ERP is just for the ERP implementation team ERP slows down the organization ERP is just to impress customers ERP package will take care of everything One ERP Package will suit everybody ERP is very expensive Organization can succeed without ERP

Top ERP Vendors

Listed here are some of the top ERP solution providers with their web site URLs. Please go to our ERP Help Center and fill the RFP form to find suitable ERP solution provider for your organization.

AremisSoft Corp. www.aremissoft.com Syspro Group www.sysprousa.com ProfitKey International www.profitkey.com Solomon Software www.solomon.com Macola www.macola.com Made2Manage www.made2manage.com Visibility www.visibility.com PowerCerv www.powercerv.com Clarus Corp www.claruscorp.com Friedman Corp www.friedmancorp.com ROI Systems www.roisysinc.com Ramco www.ramco.com Intuitive Manufacturing www.mrp9000.com Ceecom, Inc. www.ceecom.com Technology Group Intl. www.techgroupintl.com

SAP Oracle PeopleSoft invensys ABB Automation i2 SSA Global Technologies Intentia International Epicor Lawson Software QAD IFS Mapics Mincom eresource ERP American Software Great Plains Ross Systems SCT Cincom Computer Associates GEAC Sage Navison Scala Deltek Fourthshift Lilly Software Flexi Int'l Glovia International

www.sap.com www.oracle.com www.peoplesoft.com www.invensys.com www.abb.com/automation www.i2.com www.ssagt.com www.intentia.com www.epicor.com www.lawson.com www.qad.com www.ifsab.com www.mapics.com www.mincom.com www.eresourceerp.com www.amsoftware.com www.greatplains.com www.rossinc.com www.sctcorp.com www.cincom.com www.interbiz.cai.com www.geac.com www.sage.com www.navision.com/us/ www.scala-na.com www.deltek.com www.fs.com www.lillysoftware.com www.flexi.com www.glovia.com

ERP Implementation Life Cycle

THE process of ERP implementation is referred as d as "ERP Implementation Life Cycle". The following are the steps involved in completing the lifecycle. Shortlist on the basis of observation Selecting an ERP package for the company can nevertheless be compared with the process of "Selecting the right Person for the Right Job". This exercise will involve choosing few applications suitable for the company from the whole many. Assessing the chosen packages A team of Experts with specialized knowledge in their respective field will be asked to make the study on the basis of various parameters. Each expert will not only test and certify if the package is apt for the range of application in their field but also confirm the level of coordination that the software will help to achieve in working with other departments. In simple terms they will verify if the synergy of the various departments due to the advent of ERP will lead to an increased output. A choice is to be made from ERP implementation models. Preparing for the venture This stage is aimed at defining the implementation of ERP in all measures. It will lay down the stipulations and criteria to be met. A team of officers will take care of this, who will report to the person of the highest hierarchy in the organization. Gap Analysis This stage helps the company to identify the gaps that has to be bridged, so that the company practice becomes akin to ERP environment. This has been reported as an expensive procedure but it is inevitable. The conglomerate will decide to restructure the business or make any other alterations as suggested by GAP analysis in order to make ERP user friendly. Click here for a detailed study on GAP analysis. A choice is to be made from ERP implementation models. Business process reengineering Changes in employee rolls, business process and technical details find place in this phase of restructuring most popularly referred as business process engineering. For more details on BPR click here. Designing the System This step requires lot of meticulous planning and deliberate action. This step helps to decide and conclude the areas where restructuring have to be carried on. A choice is to be made from ERP implementation models. In-house Guidance This is regarded as a very important step in ERP implementation. The employees in the company are trained to face crisis and make minor corrections as well because the company can neither be at liberty nor afford the bounty to avail the services of an ERP vendor at all times. Checking This stage observes and tests the authenticity of the use. The system is subjected to the wildest tests possible so that it ensures proper usage and justifies the costs incurred. This is seen as a test for ERP implementation. Preparing the employees to use ERP The employees in the organization will be taught to make use of the system in the day to day and regular basis so as to make sure that it becomes a part of the system in the organization.

Post Implementation The process of implementation will find meaning only when there is regular follow up and proper instruction flow thereafter and through the lifetime of ERP. This will include all efforts and steps taken to update and attain better benefits once the system is implemented. Hence an organization has to perform ERP implementation safely and correctly. Errors in ERP implementation ERP implementation failure is a major concern for companies. ERP implementation needs to be done without allowing any scope for limitations and mistakes. If it is not done perfectly then the success of ERP system will remain a question mark. The first and foremost factor that discourages ERP in an organization is the exorbitant costs and investment. The second one is the drafting of an ERP implementation plan to ensure ERP implementation success.

Issues
Some more issues that arise during and after the course of ERP implementation is discussed below: Enhancement of ERP'S functions Erg's scope gets wider as it is implemented in an organization. There is a call for including many tasks under the purview. This dilutes the ERP Existing system after modifying it a couple of times. Repeated change in configurations and systems will only add to the confusions. When the functions are operated by a machine it becomes increasingly difficult to make the necessary changes. These troubles arise when they are not foreseen and addressed in the implementation stage. They have to be given a place in ERP implementation plan. Organizational reaction to change Changes do happen quickly and immediately in the organization after ERP is implemented. But if there is no proper understanding of the process or mishandling of information, it will result in questioning the ERP process. If updating is not done in the machine it will only affect the business process and create unnecessary confusions. The changes don't happen all on a sudden in an organization and expecting it immediately will only cause needless disappointments. In spite of all this expecting every member in the organization to respond proactively will not happen. If that happens the chances of ERP implementation success are great. Inflating resources for ERP implementation The implementation time and money always exceeds the promises and stipulated deadline and amount. This makes companies to lose faith on ERP and ERP vendors. They think that ERP vendors overplay on the costs and time required but it is not so. In fact they are aware of it in the very beginning stage itself but have a different reason for concealing. They don't disclose it in the beginning because it would look like exaggerating. In fact no one would like to lose a prospective business and vendors are equally aware of the fact that "Truths are always bitter"! However many people mistake this to be the cause for ERP implementation failure. Organizations non adherence to the stated principles Organizations largely experience a wide gap between practices and preaching .In fact this has a negative effect on the entire business scenario itself. The voracity and impact of loss could be greater and more devastating when this turns out to be true even in the case of ERP. Since ERP successful functioning is purely based on following the laid down procedures the lag could throw a serious challenge on ERP'S potential right from the stage of its implementation. Problem of Transformation due to ERP Employees find it hard to digest the transformations that place in an organization all on a sudden due to ERP implementation. In fact employees exhibit positive signs as everything goes right in the first place. But as one progresses he finds difficult to work as it gets more complex. The initial interest and expectation turns into apprehensiveness in due course of time. There is another category of people who

did not encourage ERP right from the conceptualization stage. Their state of mind during these circumstances deserves no special mention.

Successful ERP Implementation the First Time

Management is getting its hoped-for results from ERP less often than not, and this begs an explanation for ERP's often-poor performance. What many manufacturers fail to realize is that extensive supply chain improvement requires that management begin to redefine its business in terms of strategic opportunities. The purpose of ERP technology is to support the business processes that support the company's strategic opportunities. There are some basic tenets of ERP that should guide management's actions and decisions. 1. There is no magic in ERP software. ERP's benefits are a direct result of effective preparation and implementation, and appropriate use. This seems obvious, but nine out of 10 companies don't get it right the first time around. Expecting a quick fix, silver-bullet solution is a dangerous mindset. 2. No amount of advanced information technology can offset the problem of a flawed business strategy and poorly performing business processes. This area, in particular, is something that ERP software implementers may not fully address because it can slow system deployment. 3. Define a business strategy that will give you a competitive advantage or, at the very least, make you competitively equal. Then, analyze your current business processes and develop your objectives. Once this step is done, the following steps for preparation, ERP software selection and implementation can support your strategic and process objectives better. 4. Acquire flexible ERP information technology that can accommodate rapidly changing business conditions. The high-velocity flow of information needed to support action up and down the supply chain is a major step forward for most manufacturers. It will be mandatory in the future just to compete, much less stay ahead of, the competition. 5. Have the implementation led by a senior executive who has the authority to make changes happen and happen quickly. Make sure there is a sense of urgency and true accountability for completing preparation and implementation activities on time. Moving away from functional silos and creating effective cross-functional processes that are truly integrated via an ERP system is not an easy task. When ERP is not fully integrated into day-to-day business operations, however, it is not likely to be very beneficial. If enterprise integration or more advanced supply chain management strategies are to have any chance of complete success it will be due, to a large extent, to the removal of traditional cross-functional barriers. These silos comprise the organizational boundaries where information flow, and often cooperation, stop. You must ask, "How will we use the ERP system?" Some not-so-obvious issues will surface as you try to answer that question. For example, will you combine demand-based flow and lean manufacturing techniques, which will negate the need for some traditional ERP functionality? Focus on your business strategy and not just software selection and implementation. Many problems are reinforced by contradictory objectives and performance measures that actually create inconsistent value and belief systems, to the company's detriment. No amount of information technology will correct these problems. Management must aggressively remove them once and for all through business process redesign. Assess your skills and prepare Management too often plunges into ERP less than fully informed, with limited knowledge of what to expect. Often, there is a misconception that the skills necessary to select and implement ERP already exist in the organization. That may be partly true, but few organizations have the skills they need to implement ERP effectively within a reasonable timeframe. Consultants may be able to fill some of the skills gap, but given the high risk involved, it's important to make sure they're genuinely qualified. Another commonly overlooked area is the issue of information technology change. Often, the IT infrastructure changes required to implement a new ERP system are not given the high priority these technology issues deserve.

Certainly, implementing ERP should be driven by business issues, not technology. But it is IT's understanding and skills that support the technology that improves business processes. Ignoring the preparation and education new information technology requires is asking for trouble. Further, IT personnel often must make the technology transition quickly. If the technology and infrastructure transition are not done well, the project, at the very least, will be delayed. One of the biggest problems with implementing ERP is misunderstanding what ERP is all about and underestimating what it takes to implement it effectively. Senior operating management cannot relegate critical decisions to personnel who may not have the background or the temperament for this type of decision-making. Companies need a well thought-out, comprehensive process to help plan, guide and control the entire ERP implementation effort. Starting an implementation with an undocumented, skimpy or untailored implementation methodology is an open invitation to disaster or, best case, a long, drawn-out implementation. Everyone from the boardroom to the stockroom needs to understand his role and responsibilities for implementation. Implementation leaders should encourage dialogue to get people focused on business objectives and early identification and correction of any problems. Who will be accountable for results, and when, must be an integral part of this understanding. An implementation that's going astray becomes recognizable when repeated schedule slippages surface. As time moves on, the missed schedule problems start affecting implementation quality as the almost-inevitable response is to start taking shortcuts and bypassing critical business issues. The slam-and-cram method of an ERP software transplant is now in high gear.

Software selection is not easy

BEFORE the nitty-gritty of software selection begins, it is a good idea for management to know how current strategy, processes and supporting systems compare to what they could be with the new system. In fact, this discovery process should be performed every couple of years so management will know where the company is, compared to a previous stake in the ground. This is a basis from which to evaluate opportunities. Many people avoid examining strategy and business processes and jump right into looking at software functions and features. Software vendors often encourage this because they want to move you along quickly in the sales cycle and get you closer to licensing their product. Be particularly wary of so-called proof of concept offers wherein the vendor implements its software at your site and offers various guarantees. This practice adds confusion to the software selection process, especially for the uninitiated. Obviously, ERP software vendors are in the business of selling their products (just as your company is) and they have their very best people work the sales cycle to guide your organization to their obvious best solution for all of your problems. Start defining software needs by examining current processes that govern your flow of information and material throughout the order-to-delivery process and ultimately the entire supply chain. There is a common tendency to shortcut this very important activity, but you will pay - sometimes dearly - in time and money for avoiding this essential step. Evaluating and selecting ERP software is a complex task. It should be a fact-based process that brings you to a point where you can make a comfortable, wellinformed decision. The process requires an objective and comprehensive methodology to guide you through the selection process. This does not mean you should use voluminous predetermined questionnaires that do not recognize your specific needs. Rather, it means your evaluation and selection process should be based on your own strategy and business process model. A comprehensive methodology to plan, guide and control the effort has the potential for dramatic savings, not to mention the most important benefit: avoiding big mistakes. At some companies, management is so preoccupied with other, seemingly more important activities that ERP is delegated completely to the IT department. The idea that this is strictly a technology project because software is involved is wrong and, in fact, is one of the leading causes of ERP failure. The IT function is not well-positioned to evaluate the business implications of various tradeoffs or to determine

their impact on day-to-day operating results versus strategic intent. Certainly, this shouldn't be the case as operating decisions belong with senior operating management and not IT. Once an ERP system has been selected, it's rare for a company to cut its losses and scrap the project until many years have passed. The political fallout is often the biggest obstacle. No one wants to tell upper management that an ERP investment of millions of dollars was a mistake and the process should be restarted. When a company lives for many years with a poor ERP decision and/or implementation, however, the costs continue to escalate and the benefits do not come. The cost of lost opportunities could be massive. The ERP software search, evaluation and selection process must be done right to minimize this risk. The clean-sheet-of-paper approach, although alluring in concept, has been a big bust for many companies. The clean-sheet business process redesign and the subsequent ERP system configuration is complex, costly and time-consuming. Consequently, most companies have come to accept the compromises and trade-offs that industry-specific, best-practice templates require. Preconfigured templates allow faster system deployment and faster benefits. Processes can be refined at a later date. This is not to say that it is okay to just slam and cram predetermined processes into place. On the contrary, selected template processes must still be verified for appropriateness, at least for the near-term, before going forward. The demand for rapid ERP implementation is high. This was the primary driver for the development of off-the-shelf templates designed to speed up and simplify the software personalization process. But templates, by their very nature, incorporate specific best practices that support cross-functional business processes. On the surface this may sound like nirvana, but very few organizations take the time to rethink how they should and could run their businesses. By taking the easy way out, these companies end up with generic, albeit industry-specific, functionality.

Plan to succeed
Successfully implementing ERP the first time requires a structured methodology that is strategy-, people and process-focused. This is the only way to manage the risk effectively. A good methodology covers all the bases, but when the unexpected pops up, as it usually does, you will be prepared to handle these exceptions without severe negative consequences. One very common mistake is not having your employees prepared to use the new system. The consequence here can range all the way to total failure, but they are avoidable. Evaluate your business strategy and ERP plan before you commit to software acquisition and installation. Doing it right the first time is the only cost-effective way to go. Many people out there wish they had paused to evaluate their direction. The following questions do not cover every possible contingency, but should be helpful to stimulate thought and discussion. How do we want to run our business? What business problems need to be solved? Do we know and understand our priorities? Do we fully understand our as-is condition versus our could-be/should be processes? Have we carefully defined an action plan for pre-implementation preparation activities? What tasks will be accomplished and when? What are the missing links in our current system and our software of choice? What are the real costs, benefits and timetable going to be? Do we have an executive-level ERP champion to provide the necessary link to top management? Who will implement ERP and make it work?

ERP and supply chain management systems implementations are, in fact, projects without an end. After all, the supply chain is, to a large extent, the very life blood of a manufacturing company. For the wellprepared, new supply chain management systems based on ERP have become significant competitive

differentiators. Implementing ERP can become a mind-altering experience for those involved. Following a sound methodology will greatly increase your likelihood of success the first time. Yet, it will not guarantee your success. Only you can do that. Conclusion ERP vendor has to address all these issues in order to ensure that there is ERP implementation success. If everything goes as per the plan then there are no chances of a ERP implementation failure.

The term ERP originally referred to how a large organization planned to use organizational wide resources. In the past, ERP systems were used in larger more industrial types of companies. However, the use of ERP has changed and is extremely comprehensive, today the term can refer to any type of company, no matter what industry it falls in. In fact, ERP systems are used in almost any type of organization - large or small.

An ERP package should provide an organization with a solid foundation, incorporating all of the fundamental aspects of running a business. Expectations run high when an organization deploys an ERP package - if the solution is a good fit for the company, the company stands to gain tremendous cost savings and service improvements across the enterprise.

ERP packages come in all shapes and sizes. The sophisticated and high-end ERP tools are very expensive. ERP system needs people to manage it. Thus implementing and managing an ERP system is an expensive affair. But these expenses should be weighed against the benefits of the ERP system.

An ERP system also enables companies to maximize the utilization of both human and financial resources, better track vendor managed inventory and other off-site or remote stock, and significantly improve workflow management by better planning, mapping, and executing key processes across the business.

ERP Review
AN ERP package can streamline and automate an unlimited number of important functions such as accounts payable, accounts receivable, activity management, benefits administration, and billing, invoicing and cost tracking (for project-based businesses). With ERP, companies can also improve cash management, while manufacturing firms can practice more effective capacity planning and cost containment. Additionally, many ERP packages on the market today provide robust and comprehensive business intelligence and decision support capabilities, leveraging a data warehouse or operational data store to make centralized, timely business information readily available to all those who need it. There are variety of ERP modules for businesses to choose from, including engineering, finance (which includes powerful forecasting and general ledger functionality), and human resources/human capital management. Each of these ERP components is designed to improve the way these vital back office departments operate, collaborate, and share information. Manufacturing was the very first industry to benefit from the use of ERP applications, implementing the world's first ERP systems more than forty years ago. For the past few decades, these companies have been utilizing ERP to improve production processes and reduce related costs with enhanced inventory management, intellectual property tracking, and input/output control, which enables more effective implementation of popular and proven best practices such as just-in-time manufacturing models and kaizen techniques, which are the Japanese processes of continuous improvement using problem-solving and analysis. Companies can also optimize labour utilization, eliminate lag times in production schedules, and improve the effectiveness of materials management through the use of ERP manufacturing applications. At the core of many of today's most popular ERP applications lies powerful and complete financial management, which allows accounting staff members to more effectively track net cash flow, accelerate and manage order to cash cycles, and better negotiate and execute purchasing agreements. An ERP system can also deliver significant improvements in other areas, enhancing many non-financial processes such as payroll, quality control, resource allocation and scheduling for project management teams, supplier relationship management for purchasing and procurement departments, and training and time and attendance tracking for human resources groups. An ERP system also enables companies to maximize the utilization of both human and financial resources, better track vendor managed inventory and other off-site or remote stock, and significantly improve workflow management by better planning, mapping, and executing key processes across the business. With ERP companies can achieve and maintain a solid competitive edge, reaching the zenith of productivity and cost-efficiency.

ERP in India

SOME of the first Indian companies to have adopted ERP practices are HLL, ONGC, ESSAR, Godrej Soaps, Cadburys, BASF, Telco, Maruti Udyog Ltd., Century Rayon, Citibank, ACC, ANZ Grindlays, German Remedies, Blue Star, Mahindra & Mahindra, Rallis India, Sony India Pvt. Ltd., Ceat Ltd., Indal, Ford Motors, Kirloskar, Knoll Pharmaceuticals, and Glaxo. First tier companies (those with a turnover greater than Rs.10 billion) implement ERP to increase internal efficiency and external competitiveness. Once ERP is established at this level, these large companies begin to desire similarly increased efficiency from their suppliers. Hence, second tier companies are pressured to implement ERP, and a trickle-down effect ensues. Powered by the axiom that a chain is only as strong as its weakest link, Indian industry quickly has recognized that in order to work at maximum efficiency, ERP must be implemented at all levels. Initially, the majority of ERP solutions have been marketed to companies with greater than Rs. 2 billion, and generally, according to industry reports, the total cost of deploying ERP has ranged between 1 and 2 percent of companies' gross sales. Lower cost solutions are available for comparatively smaller sized companies. Though the market seems to be very encouraging for ERP implementation, the time-frame for deployment may be an issue. However, since many companies that have not yet implemented ERP are leaders in their markets, it reasonably can be assumed that they will go for it within next five years. In fact, the ERP market should grow at a rate somewhere near the industrial growth rate. Some industry categories, such as Automotive, Steel, Consumer Durables, Engineering, and Textiles have shown a very high ERP penetration. This means that these categories represent the greatest potential markets in next two years - other industries will follow. Figure 1 illustrates the market across various industries. Survey of Industry ERP Implementations ERP implementations completed between 1995 and 1998 in India can give a sense of specific hurdles that companies may encounter in ERP deployment. Several companies were surveyed, and numerous ERP professionals were interviewed in order to assess the state of ERP in India. The results indicate that Indian companies are moving forward with ERP implementation primarily in response to thrusts from parent collaborators, to revamp in order to meet increased load, or to reduce lead times and inventory levels, and improve customer satisfaction. Resistance to change - in the form of fear of the unknown, reluctance to learn new techniques, or IT department reluctance to change due to attachment to its product - was a major hurdle faced during many ERP implementations. Additionally, the duplication required in the initial stage, and the intense pressure exerted on manpower proved to be problematic, as did the level of customization necessitated by disparities between company requirements and solutions offered by ERP software. This problem is diminishing due to advances in the software facility models. Cost overruns also proved to be a pervasive problem with ERP implementations. Since most consultants charge on a man-hour basis, project time overruns substantially inflate incurred costs. To avoid this problem, top management must develop the necessary commitment to ERP, and all employees should be prepared for the change before the ERP implementation process is started. This model should help to eliminate needless project time and cost ballooning. ERP in the Service Sector Transportation, medical care, hospitality, courier service, telecommunication, banking and financial services, and entertainment represent the major components of India's service sector, and on probing into the various needs of these groups, it becomes apparent that the courier, transportation, and entertainment industries do not have specific current needs for ERP. Banking and telecommunication each have very specialized requirements that the manufacturing-inclined software solutions on the market would not effectively address. The same holds true for the medical care and hospitality industries. The service sector has the potential to become an important ERP market within a few years. At this time ERP implementation in the services sector is very limited - only a few hospitals and banks have done small-scale experiments. New software and processes will need to be developed to meet the

specific demands of the service industries, so ERP players should begin now to prepare themselves for the tremendous potential of this future market. Assessment The Indian economy has reached a level of maturity that demands advanced technology. Although the Indian agricultural sector has not yet mechanized and there is little potential need for agriculture-based ERP in the foreseeable future, the services sector offers a largely untapped potential. With the pace of developments in the services sector continuing at 7 percent, there is a large scope for ERP in these markets. Many Indian industries already have realized the need for ERP solutions, and the industry-related market growth should match the expansion of the sector as a whole. The maximum potential growth of the ERP market rests with companies that have a greater than Rs. 2 billion turnover, with smaller companies positioned to follow directly. India is developing its infrastructure, ERP manpower requirements can be met, and the Indian mindset is changing with the times. Certainly, if the national railways could computerize operations, ERP does not seem an insurmountable challenge. In fact, the Indian ERP market looks very much like a $7.5 billion opportunity that has decided to take the plunge.