Your ERP package guide
Identifying the vital considerations in ERP package selection starts with a
clear articulation of the business problems being addressed, according to Larry
DeJarnett, a vice president at consultancy A.T. Kearney Inc. in Plano, Texas.
DeJarnett heads an integration practice that specializes in ERP packages.
In some cases, DeJarnett says, the reason a company is looking for an ERP
solution is that one of its three core corporate functions needs fixing. In
other words, its financial data is not integrated, or it needs to standardize
its manufacturing processes across several business units, or its human
resources area needs some heavy-duty reengineering. Depending upon which of the
three is the critical function, certain enterprise software offerings may be
better suited to meet those needs.
"Not all ERPs are created equal. Some do certain things better than others,"
says DeJarnett. For example, Pleasanton, Calif.-based PeopleSoft Inc.'s ERP
offering started out as an HR package.
According to SPEX, an enterprise software evaluation company based in Reston,
Va., PeopleSoft still offers the broadest HR functionality among ERP vendors.
For example, it has comprehensive pension administration features that no other
ERP vendor provides.
PeopleSoft began with HR and still excels in HR. Other ERP vendors began by
making manufacturing software. It's wise to take that into account—as well as
the specific business problem you're trying to address—when picking a package.
But that's only a starting place. The wise man does not choose a stool based on
its one sturdy leg. If a vendor is regarded as a specialist in one area, it
behooves users to scrutinize the other modules even more closely to make sure
their functionality is sufficient for the enterprise's needs
ERP packaged systems
software-driven process changes on manufacturing organizations. As packaged
systems, rather than those developed for an individual company, Enterprise
Resource Planning (ERP) systems demand more than ever before that organizational
subunits adapt their business processes to fit the imperatives of the software.
The best practice line of thinking suggests that this ERP-driven business
process change will yield positive organizational impacts. Thus, we present the
following: H1: ERP systems result in organizational subunits' changing their
business processes. H2: ERP-driven changes in business practices are associated
with positive impacts of using the software. Hypotheses are evaluated using a
test of mean difference and a Pearson correlation on data gathered from a
pencil-and-paper survey directed at subunits of manufacturing businesses.
Seventy-seven surveys were used. H1 was supported; H2 was not. The results call
into question prescriptions from the literature about the superiority of
so-called best practices as well as the blanket recommendations about the
modification of organizational business processes to fit the capabilities of an
ERP system. Results are also discussed in the context of several case studies
ERP package gains multiple enhancements
Version 2004 of abas Business Software (ERP, PPC, MRP, eBusiness) contains
many innovations and enhancements; in scheduling, for example, there are now
alternatives when setting deadlines, and products can be assigned to scheduling
groups.There are also substantial innovations in final costing, EDI as well as
in accounting.Many things were optimised in the basic technologies.Furthermore,
in Version 2004, the abas web applications were enhanced and now offer more
service quality.The abas Business Software contains an integrated EDI function
which is an important criterion when choosing a business software for automotive
component suppliers.With Version 2004, delivery schedule orders are created via
the fast entry screen in the dialog.The depiction of the delivery schedules
(delivery classification) also takes place in the dialog - the old delivery
schedules are constantly being compared to the new ones.Shipping planning from
JIT delivery schedules is equally supported as the clear listing of all blanket
orders in the dialog - including packing slip, price and call-up
history.Starting on January 1, 2005 it will be possible to electronically
transmit advance VAT returns to the Internal Revenue Services in Germany.The
Elster project of the regional tax office in Munich was created for this
purpose.In abas ERP the electronic data transfer to the Elster clearing location
is realised using the new print engine.In this way it is possible, for example,
to transfer advance VAT returns from the print dialog of the advance VAT return
form, or to transfer applications for permanent time limit extension from an
information system.To facilitate the connection of the abas web applications the
roles and users can be maintained in a new database.The web users' user rights
are defined by ERP passwords.The web users' identity results from the assignment
to a customer staff reference, vendor staff reference or employee.In Version
2004 it is possible to manage currencies, exchange rates and also exchange rate
histories.Per day each currency can be assigned to one exchange rate.The
previous exchange rate information will not be lost so that an exchange rate
history is always available.In addition to the system rates, buying rates and
selling rates can be managed.The previous exchange rate table in the systems
administration files is maintained as an interface for the complete abas ERP
system.All currency information is changed when an upgrade is carried out.
NTT Software to Release New-generation ERP Package
Tokyo, Dec 8, 2006 (JCN) - NTT Software has forged a business partnership
with Sumisho Computer Systems (SCS) to provide SCS's new-generation ERP package
dubbed ProActive E2.
Combined with the company's enterprise architecture (EA) consulting capability,
the mission-critical package enables NTT Software to offer its customers
comprehensive solutions ranging from consulting for information communications
technology management strategy to systems development and management.
To help companies prepare for the introduction of the Japanese SOX law and other
changing business environments, NTT Software plans to provide its ERP solutions
to various industries, aiming to achieve 300 million yen ($2.5 mil) in sales
over the next two years.
Big ERP Package Buyers Get Big System
ERP suite and you are looking at the various applications from the big,
name-brand ERP software providers in the OS/400 market, then IBM has a rebate
for you--provided you plan to buy a new System i5 or upgrade to one and buy
implementation services from the software providers.
Last week, IBM announced a rebate for System i5 purchases or upgrades when
companies are deploying the application suites provided by International
Business Systems, Infor Global Solutions, Intentia International, Lawson
Software, Oracle, SAP, and SSA Global. The deal has a lot of angles in it, such
as requiring that you have to migrate an application from a non-IBM system to
the i5 or buy a new set of licenses to the software for a new machine or incur
an upgrade fee for the application software if you are upgrading to a System i5.
(Meaning, you can't just move from an iSeries box to an i5 and stay in the same
software tier. You have to pay the ISV some dough, too.) By the way, if you are
thinking about using this rebate to put Oracle 10g databases on AIX partitions,
forget it. That's a no-no.
If you meet the criteria, IBM will give you a rebate that scales with the size
of the iron you buy or upgrade to. For new machines, the rebate ranges from
$1,750 on the smallest i5 520 to $140,000 on the biggest i5 595. Those upgrading
Model 8XX boxes can also get rebates, which range from $1,200 on an upgrade to a
Model 810 to $38,400 on an upgrade on a Model 890. Rebates on upgraded i5 520
machines start at $525 and go as high as $42,000 on a big i5 595 machine.
The ERP-related rebate deal is retroactive to February 14, which is when the
revamped System i5 line using Power5+ chips or, in the case of the i5 595, a
faster Power5 chip, first started shipping
How to buy ERP software - Step 2, The test pack
If, like most people, you don't test a prospective accounts or ERP package
at all, you deserve everything you get. If the public sector organisation that
featured as a cautionary example in the introductory article had tested SAP R/3
before buying it, it would have identified the VAT problem that subsequently
bedevilled the implementation.
So how do you go about testing an accounts/ERP package? You need to assemble a
test pack of typical transactions and get the supplier to enter them into the
computer and show you the results on the screen. This may seem daunting because
these packages are bewilderingly complex, but the key point to grasp is that all
the different modules are integrated in order to process a customer's order
through the organisation.
This is where the acronym ERP kicks in. ERP stands for 'Enterprise Resource
Planning'. It is a mouthful, but you only really need to pay attention to the
first word. A customer order is handled by different departments ' by sales
admin and operations in the early stages, and by accounts in the later stages
after it has been invoiced. ERP packages have been designed to handle all the
stages of an order from order entry to delivery to invoice through to final
payment.
An ERP package extends across multiple departments in the enterprise, as opposed
to the traditional accounts package, which is designed for only one department.
If you intend to buy a new accounts package, you should stop to consider the
benefits of an ERP solution that handles both the operational and the accounting
sides of the business, from initial receipt of the order through to final
payment.
The elements of ERP
The unifying thread within an ERP system is the order cycle. Each piece of work
the company does for any customer goes through an order cycle.
A customer places an order on you for certain products that you supply. In order
to fulfil that order, you may need in turn to buy some products from outside.
For this you will raise purchase orders. If you manufacture your products
in-house, you will raise works orders on the production department.
After the invoice has been sent, credit control will then monitor that the
customer pays the bill on time. Finally, the accounts department will pull
together a summary of all the costs and income over the month and give
management a financial report such as Profit and Loss account to determine
whether the company has made a profit.
ERP systems come with a multitude of functional modules, some including HR and
customer relationship management functions. Not every organisation will require
all these modules. For the sake of this brevity, this article concentrates on
the financial requirements of a trading company that buys in and sells on items.
Different organisations will have different order cycles dependent on their
customers and the products they supply. A service-based organisation such as an
engineer or architect working on different projects will have different needs,
such as knowing what expenses have been incurred, and where, and what profit was
made on each job. For service organisations, the job costing and reporting
abilities of a system will be more crucial. The best way to determine whether a
package is going to be any good at costing is to examine the purchase invoice
entry screen to see if it supports the right level of detail, as most costs are
entered via purchase invoices.
Since sales and purchase orders processing are the engine-room of any ERP
package (along with works orders in manufacturing organisations) because they
work so closely together. So, your test pack needs to be built around orders '
sales orders, purchase orders or both.
Collecting the test pack
In the case of sales orders, you should have on file somewhere all the orders
received from your customers in recent months. From this file you need to choose
a representative sample of all the orders that the new package will have to
handle.
Start with a simple order ' one item ordered, standard pricing. Then find a more
complex one ' several items ordered and maybe with special prices or discounts
just for this customer. Now find a part-delivery where there were several
invoices for the one order. Then maybe an export order in foreign currency.
Maybe an order where the goods were supplied direct from the supplier rather
than your own warehouse. And make sure you don't forget to include an order with
a credit note. Because everything is interconnected, raising credits in an ERP
package can be very tricky.
Once you've selected your sample orders, then collect together all the other
documents relating to each one ' the delivery note, the sales invoice, any
purchase orders, etc. Once this is done, photocopy everything and staple
together all the documents relating to each order. If you have selected six
orders, at the end you should have six sets of documents, with the customer's
order on the top backed by all the related documents.
If you are interested in purchases and costs, go through a similar process with
purchase orders. Find half a dozen typical purchase orders and attach any
related delivery notes and supplier invoices. Accounts department don't get very
much involved on the sales side, but purchases and cost analysis is very much
their area, so ask them to include any type of transaction that goes into the
accounting system including credit notes, time sheets, cheque receipts, BACS
payments etc.
In addition to the test transaction set, you also need to assemble a set of test
reports. Get hold of the reports that people find useful and photocopy them too.
There will probably be a mix of reports ' some standard reports from your
current package, some put together as spreadsheets in Excel.
Collect them all together, take photocopies, then write the name of the user on
them and what they are used for. By the end of this exercise you should have got
together your test pack ' a big, thick pile of photocopies. Take them to the
software supplier, dump them on the table and say: 'See that lot? I want you to
put them through your package and show me what comes out the other end. If I
like what I see, maybe I'll buy it.'
Feeling more confident? Now you're definitely in charge, but you are not quite
ready yet to start talking to suppliers. There are a couple of other things we
have to sort out first, such as choosing the project team to manage the tests
and make the final selection. We'll cover those issues in the next article |
