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TABLE OF CONTENTS
Introduction
to ERP
The initials ERP originated as an extension of MRP
(material requirements planning; later manufacturing resource planning) and CIM
(Computer Integrated Manufacturing). It was introduced by research and analysis
firm Gartner in 1990. ERP systems now attempt to cover all core functions of an
enterprise, regardless of the organization's business or charter. These systems
can now be found in non-manufacturing businesses, non-profit organizations and
governments.
To be considered an ERP system, a software package must
provide the function of at least two systems. For example, a software package
that provides both payroll and accounting functions could technically be
considered an ERP software package
Examples of modules in an ERP which formerly would have
been stand-alone applications include: Product lifecycle management, Supply
chain management (e.g. Purchasing, Manufacturing and Distribution), Warehouse
Management, Customer Relationship Management (CRM), Sales Order Processing,
Online Sales, Financials, Human Resources, and Decision Support System.
Some organizations
— typically those with sufficient in-house IT skills to integrate
multiple software products — choose to implement only portions of an ERP system
and develop an external interface to other ERP or stand-alone systems for their
other application needs. For example, one may choose to use human resource
management system from one vendor, and perform the integration between the
systems themselves.
This is common to retailers, where even a mid-sized
retailer will have a discrete Point-of-Sale (POS) product and financials
application, then a series of specialized applications to handle business
requirements such as warehouse management, staff rostering, merchandising and
logistics.
Ideally, ERP delivers a single database that contains
all data for the software modules, which would include:
·
Manufacturing Engineering, bills of material, scheduling,
capacity, workflow management, quality control, cost management, manufacturing
process, manufacturing projects, manufacturing flow
·
Supply chain
management Order to cash, inventory, order
entry, purchasing, product configurator, supply chain planning, supplier
scheduling, inspection of goods, claim processing, commission calculation
"Core
system" Customization vs Configuration
Increasingly, ERP vendors have tried to reduce the need
for customization by providing built-in "configuration" tools to
address most customers' needs for changing how the out-of-the-box core system
works. Key differences between customization and configuration include:
Customization is always optional, whereas some degree
of configuration (e.g. setting up cost/profit centre structures, organisational
trees, purchase approval rules, etc.) may be needed before the software will
work at all.
Configuration is available to all customers, whereas
customization allows individual customer to implement proprietary
"market-beating" processes.
Configuration changes tend to be recorded as entries in
vendor-supplied data tables, whereas customization usually requires some
element of programming and/or changes to table structures or views.
The effect of configuration changes on the performance
of the system is relatively predictable and is largely the responsibility of
the ERP vendor. The effect of customization is unpredictable and may require
time-consuming stress testing by the implementation team.
Configuration changes are almost always guaranteed to
survive upgrades to new software versions. Some customizations (e.g. code that
uses pre-defined "hooks" that are called before/after displaying data
screens) will survive upgrades, though they will still need to be re-tested.
More extensive customizations (e.g. those involving changes to fundamental data
structures) will be overwritten during upgrades and must be re-implemented
manually.
Research
Methodology
For this study, the research was organized along key ownership experience criteria that allowed the research to capture quantitative and qualitative information across the major components of enterprise applications. The list of criteria was thoroughly defined to take into account the experience of not only the technical staff, but also end users who must accomplish specific business tasks with the application. The software versions that were compared included:
For this study, the research was organized along key ownership experience criteria that allowed the research to capture quantitative and qualitative information across the major components of enterprise applications. The list of criteria was thoroughly defined to take into account the experience of not only the technical staff, but also end users who must accomplish specific business tasks with the application. The software versions that were compared included:
ERP
Implementation Plan
An ERP implementation is a huge commitment
from the organization, causing millions of rupees and can take up to several years to complete.
However, when it is integrated successfully, the benefits can be
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