Professional Documents
Culture Documents
in VIT
by
Ayyappan.R
Bhuvana.B
Kandaswamy.C
Kanu Priya
Mahendran.S
Mohammed Naufal
CONTENTS
1. INTRODUCTION 3
2. EVOLUTION OF ERP 7
3. TRENDS IN ERP 13
4. IMPLEMENTATION OF ERP IN VIT 15
5. PEOPLE SOFT 30
6. SOME RECOMMENDATIONS 35
7. CONCLUSION 38
8. REFERENCES 39
Introduction:
Human Resources:
Human Resources, Payroll, Training, Time & Attendance, Benefits.
Customer Relationship Management:
Sales and Marketing, Commissions, Service, Customer Contact and Call
Center support.
Data Warehouse:
and various Self-Service interfaces for Customers, Suppliers, and
Employees.
Why ERP?
Corporations go for ERP either to solve the existing problems or to
explore new opportunities. Actually these two approaches are negative &
positive approach respectively. One aspect of the negative approach forces some
corporations to go for ERP to solve their Y2K problem. This is particularly true
of those corporations that are heavily dependent on legacy systems running on
old main frames. The second aspect of the negative approach is to get over the
problems of islands of heterogeneous and incompatible information systems
that were developed over the past several years in many organizations.
Functional IS modules representing areas such as Finance, Marketing, HR, and
Production in these organizations would be running on diverse hardware and
software platforms leading to nearly insurmountable problems of reconciling
data locked up among the diverse systems. From a positive perspective many
organization look at the great opportunity provided by ERP software that lead to
almost instant access of transactional information across the corporation. Such
an information rich scenario permits organization to reduce inventory across
multiple units/ departments/ plants; reduce cycle times from weeks to hours;
and improve customer satisfaction by orders of magnitude. All these translate to
increased profitability or increase in market share and in turn much larger
market capitalization. However ERP is only means and not an end by itself.
ERP provides an opportunity for a corporation to operate as an agile entity to
improve production / operation, customer service and customer satisfaction. The
creative ingenuity of an organization to drive towards these corporate goals
determines the extent of success an ERP implementation can deliver.
Evolution of ERP
ERP
MRP II
CL MRP
MRP
BOMP
Beginning of
Hierarchical
Data Base
ERP (Enterprise Resource Planning) is the evolution of Manufacturing
Requirements Planning (MRP) II. From business perspective, ERP has
expanded from coordination of manufacturing processes to the integration of
enterprise-wide backend processes. From technological aspect, ERP has evolved
from legacy implementation to more flexible tiered client-server architecture.
1. Bills of material processor(BOMP):
BOMP is the combination of information technology and business
processes of maintaining the appropriate level of stock in a warehouse. The
activities of this processor include identifying inventory requirements, setting
targets, providing replenishment techniques and options, monitoring item
usages, reconciling the inventory balances, and reporting inventory status.
When there is much hype around it is also equally important to trace the
origin of ERP and its Predecessors.MRP1 the acronym of material resource
planning was the first business application that set foot in the ERP family. The
credit of computerizing the business processes solely goes to MRPI.MRP1
functioned with the objective of increasing the business profit by enriching the
business. It is important to know the problems faced by companies before
understanding how Material resource planning solved them. MRP software was
a boon to companies facing troubles in production. MRP planning facilitated the
functions of the software.
MRP1
Dr Joseph Orlicky invented MRP1 in the year 1960.This system
comprised a computer that helped to compute the exact quantum of raw
materials and sales. This point proved to be the start for integrating IT with
manufacturing Systems. Ever since they have become inseparable after
advancements in the name of MRPII and ERP while the latest one being
ERPII.MRP planning is the crux of MRP software.
Nature of functioning
MRP1 works like a simple mathematical formula. If all the inputs are fed
in one end and the calculations are applied the output is received at the other
end. Input here reefers to the quantity of raw materials and expected demand
along with minute details of resources like Period, optimum production
capacities and the current level of stocks. This will be processed by the system
.It will then let the user to know the steps that should be taken for achieving the
said production limits and there ends the troubles. MRP software solved all the
problems related to production. MRP planning was helpful to a great extent in
this aspect.
Applications
MRP's application in the working environment is wide in nature. It just
doesn't limit to production. It can calculate each and everything related to
production. The functioning of MRP1 is quiet diverse and it can be put to use in
many industries.
Key Elements
In addition MRP II boasts of the following four elements. These give the
added advantages and differentiate MRP I from MRP II.
Response
The significant feature of MRP II is the fact that the lay man in the
industry will be able to realize its effects and hence be able to comment on the
working. Any process is bound to achieve progress if and only it receives
valuable criticism from reliable sources and more so preferably from end user.
MRP II capitalizes on this advantage mainly .This response is not restricted to a
particular section of employees. Everybody will be asked to pass their opinion
.The response will therefore include all the views. This will help greatly in
correcting the progress from one process to another. This is deemed to be
effective as it gathers the response and the necessary corrections are made then
and there. Still the MRP Systems cannot out beat ERP Technology.
Allocating reserves
The system of MRP helps to maintain a neat agenda for the manner in
which the resources are to be allocated without any confusions and khais. This
means everybody will know what is expected from them within the stipulated
deadline. Any discrepancy between the actual time taken and the one allotted is
likely to affect the effectiveness of this operation.
Popularity
MRP II has not yet lost popularity inspite of the intervention of
ERP.Many organizations still consider it as a part of the manufacturing process.
MRP systems are still in vogue in many industries and the manufacturing sector
deserves special credit in this aspect.
The success of MRP 2 is to be determined by a set of factors. Firstly
there should be cent percentage accuracy in the calculations that are performed.
These calculations determine the success of MRP 2 so as its workings. The
technique adopted to follow the operations is another factor that decides the
success of MRP.
Advantages of ERP:
There are a number of powerful advantages to Enterprise Resource
Planning. It has been used to solve a number of problems that have plagued
large organizations in the past.
1. Efficiency:
It should first be noted that companies that fail to utilize systems
such as ERP may find themselves using various software packages that
may not function well with each other. In the long run, this could make
the company less efficient than it should be.
2. Design process
There are a number of processes that a company may need to
integrate together. One of these processes is called design engineering.
When a company is in the process of designing a product, the process of
actually creating it is just as important as the end result. ERP can be
useful in helping a company find the best design process.
3. Order tackling
Another area where ERP can be useful is order tracking. When a
company receives orders for a product, being able to properly track the
orders can allow the company to get detailed information on their
customers and marketing strategies. If different software packages are
being used, this data may not be consistent.
4. Accounting application:
Perhaps one of the most important advantages of ERP is its
accounting applications. It can integrate the cost, profit, and revenue
information of sales that are made, and it can be presented in a granular
way.
5. Manufacturing:
Enterprise Resource Planning can also be responsible for altering
how a product is manufactured. A dating structure can be set up which
can allow the company to be informed of when their product should be
updated. This is important, because it will allow the company to keep
better track of their products, and it can allow the products themselves to
be produced with a higher level of quality
6. Security:
Another area where ERP can be an indispensable tool is the area of
security. It can protect a company against crimes such as embezzlement
or industrial espionage.
Disadvantages of ERP:
However, with all the advantages that ERP offers, there are a number of
disadvantages as well.
1. High investment
One of the biggest disadvantages to this technology is the cost. At
this time, only large corporations can truly take advantage of the benefits
that are offered by this technology. This leaves most small and medium
sized businesses in the dark. A number of studies have shown that the
biggest challenges companies will face when trying to implement ERP
deals with investment.
2. Cost of training:
The success of the system is fully dependent on how the workers
utilize it. This means they must be properly trained, and a number of
companies have attempted to save money by reducing the cost of
training. Even if a company has enough money to implement ERP, they
may not be able to successfully use it if they do not have enough money
to train their workers on the process of using it.
3. Alteration:
Most ERP vendors will not allow the structure of the software to be
altered. One advantage to ERP is that making the necessary changes to
use it may actually make a company less competitive in the market. In
addition to the costs involved with implemented ERP and training
workers to use it, the ERP vendors may charge additional license fees,
putting a strain on companies that do not have enough resources to pay
for them.
Trends in ERP:
Flexible ERP:
First, the ERP software packages that were the mainstay of ERP
implementations in the 1990’s and were often criticized for their inflexibility,
have gradually been modified into more flexible products. Companies who
installed ERP systems pressured software vendors to adopt more open, flexible,
standards-based software architectures. This makes the software easier to
integrate with other application programs of business users, as well as making it
easier to make minor modifications to suit a company’s business processes.
Web-enabled ERP:
This is the second development in the evolution of ERP. The growth of
the internet and corporate intranets and extranets prompted software companies
to use internet technologies to build Web interfaces and networking capabilities
into ERP systems. These features make ERP systems easier to use and connect
to other internal applications as well as to the systems of a company’s business
partners.
Interenterprise ERP:
The Internet connectivity has led to the development of interenterprise
ERP systems that provide Web-enabled links between key business systems of a
company and its customers, suppliers, distributors and others. These external
links signaled a move towards the integration of internal-facing ERP
applications of supply chain management and company’s supply chain partners.
E-business suites:
All the developments have provided the business and technological
momentum for the integration of ERP functions into e-business suites. The
major ERP software companies have developed modular, Web-enabled software
suites that integrate ERP, customer relationship management, supply chain
management, procurement, decision support, enterprise portals, and other
business applications and functions. Examples include Oracle’s e-Business
Suite and SAP’s my SAP.
Reengineering
43%
One-Time Costs
Software:
The cost of an ERP software package varies widely, ranging from
Rs.15,00,000 for micro-based packages to several million rupees for some
mainframe packages. The number of concurrent users generally drives the
software cost, so that smaller systems cost less. In addition to the ERP software
package, one-time costs may include systems software, development of
customized software, or integration with other applications.
Hardware:
Hardware selection is driven by the firm’s choice of an ERP software
package. The ERP software vendor generally certifies which hardware must be
used to run the ERP system. Hardware may need to be replaced or upgraded. As
a general rule, small-to medium size manufacturers already have
microcomputers and a local area network, so that a micro-based ERP system
build standards which requires a little additional investment in hardware.
External Assistance:
External assistance includes the consulting and training costs to
implement the ERP package. The software vendor, reseller, or independent
consulting group may provide external assistance. The amount of external
assistance required is dependent on several factors, such as the complexity of
the ERP package, the experience and knowledge of internal personnel, and the
extend to which external personnel are used in place of internal personnel to
implement the system.
Internal personnel:
Internal personnel time reflects the time commitments for the
implementation project team, the executive steering committee, the users in
various functional areas and MIS personnel. The time commitments include
training classes, development of internal procedures for using the system,
developing customized reports and applications, preparation of the data,
meetings with external consultant and team meetings. A general guideline for
internal personnel costs can also be expressed as a ratio with the ERP software
costs, where a typical ratio is 0.5 to 1.0.
The one-time costs for implementing an ERP system can be simplistically
estimated using typical ratios with ERP software costs.
Ongoing Annual Costs:
Software:
Ongoing software costs should include the annual customer support
agreement with the ERP software vendor. This customer support typically
provides telephone assistance and software upgrades and is priced around 15
percent to 20 percent of the software price. Upgrades to software releases are
also required.
The upgrade path for new releases of the ERP software package is
critical. New releases contain enhancements for functionality and bug fixes, and
ensure that the software runs on the latest technology platform. From the user’s
point of view, the upgrade path enables the manufacturer to take advantage of
hundreds of labor-years of development efforts undertaken by the ERP software
vendor with minimal investment. From the vendor point of view, it is much
easier to support users to the latest releases. However, user changes to sources
code and other user customizations can make it very expensive or even
impossible to upgrade.
Hardware:
Ongoing hardware cost will reflect new requirements specified by the
ERP vendor to run the software.
External assistance:
External assistance should be used as part of a continuous improvement
program to effectively use an ERP system application for running the company.
Training and consulting can focus on improved business processes, new or
poorly used software functionality, and training of new personnel. A phased
implementation approach requires additional assistance at each phase.
Additional customizations may be required, especially with evolving user
sophistication.
Internal personnel:
The implementation project team does not necessarily end its
responsibilities at time of system cut over. A phased implementation approach
and continuous improvement efforts will require ongoing time commitments.
Employee turnover and job rotation will also require ongoing training efforts.
The nature of the ERP software package typically mandates the number and
expertise of MIS personnel needed for ongoing support. This support may range
from a part-time clerical person to aa large group of MIS experts.
Replacing or Reimplementing an ERP system:
An investment analysis focusing on ERP benefits frequently applies to
those firms initially justifying an ERP implementation. It can also used to justify
a reimplementation when the initial efforts have failed to produce desired
results. The breakout box describing classifications of ERP success identifies
situations where the ERP implementation falls short of producing desired
benefits.
ERP in VIT
Student
Marks Attendance
records
Campus Solutions @ VIT
ACADEMIC ADMINI-
STRAT ION
EXTERNAL
FINANCIALS
ASSOCIATION
1.Convincing people:
One of the most difficult challenge in ERP implementation is to convince
people of the change process .some people might feel insecure about their job in
order to make a successful ERP implementation we must convince people . This
can be done only when there is proper sharing and sharing of ERP vision.
2.Techno stress:
It is the technological term which means there is stress among the
employees due to the technology . the technology get updated now and then,
people must be aware it .so there is lot of stress among the people because of
technology . another form of techno stress is the drawbacks in a technology that
causes . so the management and organization must cop up with technostress.
3.High cost :
The implementation involves high cost . There is high risk involved in it
so a organization must be prepared to invast heavily and there must be prepared
commitment to the top management.
There is high risk in ERP implementation will cost an organization
heavily if it fails.
4.Return on Investment:
Critical success factor for ERP including readiness to invest in high risk ,
high reward project.
In the other words , a company must implement ERP only if it brings
high return . Therefore a company must seek high renewal process.
5. Downsizing:
Downsizing literally means to reduce the number of people who work in
a company. Depending on the requirement in a department , the number of
people can be reduced or increased . then leads to low morale among the
workers.
PEOPLESOFT
History
Founded in 1987 by David Duffield and Ken Morris, originally
headquartered in Walnut Creek, California, and eventually Pleasanton,
California, PeopleSoft's roots began with an idea Duffield had about a "Client-
Server" version of Integral Systems popular mainframe HRMS package. Once
Integral declined development and released Duffield to pursue this endeavor on
his own, PeopleSoft was born. In 2003, when the company acquired J.D.
Edwards, it decided to differentiate its former product line with those of
Edwards by renaming both products. In January 2005, PeopleSoft was acquired
in a hostile takeover by Oracle Corporation. This takeover was resisted, but
Oracle overcame the legal challenge and PeopleSoft ceased to be an
independent company, although its products continue to be used.
Product design
The whole software suite of PeopleSoft moved from the traditional client-
server based design to web-centric design, called PeopleSoft Internet
Architecture (PIA) with their version 8 releases. The end result was that all of a
company's business functions could be accessed and run on a web client. A
small number of security and system setup functions, though, still needed to be
performed on a fat client machine. The inherent nature of Internet-based
applications allowed for a straightforward transition from a client-server model .
One important feature of PeopleSoft's PIA is that no code is required on the
client - there is no need for additional downloads of plugins, or JVMs such as
the Jinitiator required for Oracle Applications.
The architecture is built around PeopleSoft’s own PeopleTools
technology. PeopleTools is a proprietary development platform (similar to a
4GL) created by PeopleSoft. This platform includes many different components
a developer theoretically needs to create an application including a scripting
language, design tools to define various types of metadata, standard security
structure, and batch processing tools. The metadata describes data for user
interfaces, tables, messages, security, navigation, portals, and so forth. The
benefit of creating their own development platform allowed PeopleSoft
applications to run on top of many different operating systems and database
platforms, It is not tied to a single database platform (though with the Oracle
takeover, it is possible this could change in the future). PeopleSoft
implementations exist or have existed on Oracle, Microsoft SQL Server,
Informix, Sybase, IBM DB2 (including its z/OS, Unix and OS/400 variants),
Oracle Rdb and HP AllBase/SQL.
All of PeopleSoft’s modules (Human Resources, Supply Chain,
Financials, CRM, etc.) are built with the PeopleTools technology. A benefit of
the technology is that all the code which makes up a module can be customized
to suit the owner’s business needs. An auxiliary product, PeopleCode, is an (ool)
object-oriented proprietary language used to express business logic for
PeopleSoft applications.
J.D. Edwards
In 2003, PeopleSoft performed a friendly merger with smaller rival J.D.
Edwards software. The former rival's similar product line was differentiated by
its target audience; mid-sized companies who could not hope to afford the
original PeopleSoft applications. J.D. Edwards product lines, formerly J.D.
Edwards World on the AS/400 and OneWorld was and continues to be
differentiated by its Configurable Network Architecture or CNC Architecture.
This architecture is designed to shield applications from both the operating
system of the database backend servers as long as some flavour of the SQL
language is used. Thus, IBM's DB2/UDB, Microsoft's SQL 2000 and Oracle's
databases are supported. J.D. Edwards also continued to support thousands of
customers on AS/400s running its original J.D. Edwards World or WorldSoft"
product.
Likewise servers can run on a host of operating systems including Linux,
Windows and IBM's AS/400 operating system. In addition, PeopleSoft remains
committed to supporting J.D. Edwards's original AS/400-based World software,
also called WorldSoft, the old-style "green screen" application — the same
application which drove Duffield to branch out and create PeopleSoft in the first
place.
Oracle Corporation
Beginning in 2003, PeopleSoft battled with Oracle over control of the
PeopleSoft company. In June 2003, Oracle made a $7 billion bid ($19.50/share)
in a hostile corporate takeover attempt. In February 2004, Oracle increased their
bid to approximately $9.4 billion ($26/share), a 33% increase; this offer was
also rejected forthwith by PeopleSoft's board of directors. Later that month, the
U.S. Department of Justice filed suit to block Oracle, on the grounds that the
acquisition would break anti-trust laws; however, in September 2004, the suit
was rejected by a U.S. Federal judge, who found that the Justice Department
had not proven its anti-trust case; in October, the same decision was handed
down by the European Commission. Though Oracle had reduced its offer to
$7.7 billion ($21/share) in May, it again raised its bid in November to $9.4
billion ($24/share), marking a 14% increase.
In December 2004, Oracle announced that it signed a definitive merger
agreement to acquire PeopleSoft for approximately $10.3 billion ($26.50/share).
In January 2005, Oracle made drastic cuts to the PeopleSoft ranks. Although
these cuts affected approximately 9% of the 55,000 staff of the combined
companies, they have maintained at least 90% of PeopleSoft's product
development and support staff.
After its acquisition of PeopleSoft, Oracle rebranded the original J.D.
Edwards products to once again include the J.D. Edwards name in order to
capitalize on the strong brand loyalty that was perceived to exist within the J.D.
Edwards user community. Thus, PeopleSoft EnterpriseOne was rebranded JD
Edwards EnterpriseOne and PeopleSoft World was rebranded JD Edwards
World.
PeopleSoft has merged with Oracle and a new product Fusion is to be
released by Oracle in the near future. Oracle says Fusion will take the best
aspects of the PeopleSoft, JD Edwards and Oracle Applications and merge them
into a new product suite.
Oracle is, however, offering to maintain support for the existing Oracle
and PeopleSoft product lines for customers who wish to continue with what
they have. The line they are taking appears to be an attempt to prevent customer
defections to rival ERP vendors by making it attractive to retain current
applications or move to Fusion when appropriate.
PeopleSoft in use
PeopleSoft software has been successfully implemented by many of its
customers. However there have been several instances of litigation. As with any
ERP software, the implementation process (including analysis, planning and
development), performance (load) testing and various other types of software
testing is absolutely critical towards the success of the project.
Although Student Administration and Higher Education systems make up
only a small proportion of the company's user base, they seem to have attracted
a degree of adverse comment.
In 1997, Cleveland State University licensed PeopleSoft's software for
tracking student records. They initially had an implementation partner, Kaludis
Consulting Group Inc. After seven years of difficulties, CSU sued - initially
naming Kaludis, but later (after Kaludis countersued) naming PeopleSoft as the
main defendant and including Kaludis. The suit was for $510 million, claiming
breach of contract, fraud, negligent misrepresentation and four other counts. The
university claimed that software developed by PeopleSoft was missing specified
features, and as a result caused disruption to their admissions process.
PeopleSoft claimed that they had followed industry best practices. Court
documents available online show the case was settled in 2005. The settlement
agreement mentions a payment from Kaludis to CSU, as part of the settlement.
There is no mention of any payment by PeopleSoft.
In December 1999, seven of the eight "Big Ten" Midwestern universities
which licensed PeopleSoft's software wrote a joint, open letter to the PeopleSoft
CEO complaining about quality and performance issues.
The California State University system adopted PeopleSoft in the early
2000s. The university spent $500 million on this system in a process so
deficient that it resulted in an investigation and a rebuke by the state legislature.
The Report of the California State Auditor criticised the University, amongst
other things, for not having a business case for the implementation. When asked
why it never conducted a formal return-on investment analysis on the CMS
project, the university explained that the magnitude of potential savings
estimated by its consultants, IBM and Pacific Partners Consulting Group
(Pacific Partners), led them to believe that such a formal analysis was
unnecessary.
Arizona State University, one of the largest universities in the western
region, recently migrated to an Oracle database and PeopleSoft solution.
PeopleSoft timeline
• 1987: PeopleSoft, Inc. founded by David Duffield and Ken Morris in
Walnut Creek, CA, USA.
• 1988: PeopleSoft HRMS released.
• 1991: Begins opening international offices.
Some Recommendations
References