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MCA V Sem ERP Domain

ERP DOMAIN
PAPER XXI

Unit I Enterprise Resource Planning: Introduction, What is ERP?, Need of ERP, Evolution of ERP,
Advantage of ERP, Growth of ERP, Risks of ERP.

Unit II ERP and Related Technologies: Business Process Re-Engineering (BPR), Management
Information System (MIS), Decision Support System (DSS), Executive Support System (ESS), Data
Warehousing, Data Mining, On-Line Analytical Processing (OLAP), Supply Chain Management (SCM),
Customer Relationship Management (CRM), Product Life Cycle Management (PLM).

Unit III ERP Modules and Vendors: Finance, Production, Human Resource Management, Plant
Maintenance, Materials Management, Marketing, Sales and Distribution, Quality Management. ERP
Market: SAP AG, Oracle Corporation, Sage Group, Microsoft Business Solutions, SSA Global,
PeopleSoft, JD Edwards, Baan.

Unit IV ERP Implementation Life Cycle: Evaluation and Selection of ERP Package, Project Planning,
Gap Analysis, Implementation Team Training, End User Training, Testing, Going Live, Evaluation and
Maintenance.

Unit V Case Studies: Post Implementation Review of ERP Packages in Manufacturing, Services and
Other Organizations.

Books:-

1. Alexis Leon, ERP Demystified, TMH.


2. V. K. Garg& N. K. Venkita Krishnan, ERP Ware: ERP Implementation Framework.
3. V. K. Garg& N. K. Venkita Krishnan, ERP Concepts & Planning.

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Unit I

Enterprise Resource Planning


Introduction

ERP is an abbreviation for Enterprise Resource Planning and means the techniques and concepts for
integrated management of businesses as a whole from the view point of the effective use of
management resources to improve the efficiency of enterprise management. ERP packages are
integrated (covering all business functions) software packages that support the above ERP concepts.

An enterprise is a group of people with a common goal which has certain resources at its disposal
to achieve that goal. The group has some key functions to perform in order to achieve its goal.
Resources include money, manpower, material and all other things that are required to run the
enterprise. Planning is done to ensure that nothing goes wrong. Therefore, ERP is a method of effective
planning of all the resources in an organization or enterprise.

Information technology has many roles to play in any enterprise. All organization and enterprises
have certain aims to achieve. For any organization to succeed all business units or departments should
work towards this common aim. But in addition to this common aim, each department of business in
the organization will have its own goals and proceed to achieve such individual goals. The individual
goals can sometimes be conflicting. For (example) the finance department might want to cut down the
advertising budget, whereas the marketing department might want more money for advertisement.
Similarly the production planning department might want to reduce the inventory level, but the
production people might want to have more stocks. The success of an enterprise rests in resolving the
conflicts between various business functions and making them do what is good for the organization as
a whole. For this purpose the information in each department is an important element. Everybody
should know as to what is happening in other parts of the organization. It is not enough that each
department manages its activities efficiently, but the important thing is all other departments should
also function efficiently.

For this global purpose to achieve, all the departments should stop to function in isolation or as
islands of information. Each and every employee should know what his counterparts are doing and how
his actions and decisions will affect the other departments. This kind of information sharing was
difficult in the early days. But now because of advanced information technology this has become
possible.

Information technology has an important and wide role to play both at the enterprise level and at
the departmental level. At the enterprise level, IT should help in specifying aims and strategies of the
enterprise as a whole. At the departmental level, IT must ensure a systematic flow of information
across many departments.

Evolution of ERP

When companies were small and all the different managerial functions were managed by a single
person, the decisions were made keeping in mind the overall company objectives. But as companies
grew managing the entire operations become impossible for a single person. More and more people
were appointed and the different functions were given to different individuals. The size of the

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individual departments began to increase as more and more people were required to do the job. In this
developing situation, each department had its own set of procedures. People, at most level within a
department, would just collect and pass information to the higher authority in the department and
departments share each others information only at the top level.

The following figure shows how in the early days all departments were working in isolation as
islands of information.

To draw real benefits from a technology as powerful as IT, one has to design a system. Such a
system has to work around the basic activities of the organization and should facilitate systematic flow
of information leaving aside the departmental barriers. Such systems can optimally plan and manage all
the resources of the organization and hence, they can be called as Enterprise Resource Planning (ERP)
Systems.

What is ERP?

ERP system is that system which establishes a sort of connectivity or link between the databases of
individual department of an enterprise. By virtue of which each individual department can flow its data
conveniently across other departments of the enterprise as a whole. Because of ERP system it becomes
possible to efficiently use management resources for the benefit of the enterprise as a whole.

ERP packages are those software packages that support all the principles and concepts of an ERP
system. Originally ERP packages were targeted at the manufacturing industries and consisted mainly
those functions which help in planning and managing core (basic) business such as sales management,
account and financial affairs, etc. But now the ERP system covers diverse types of industry on global
level.

ERP software is designed to model and automate many of the basic processes of a company, from
finance to capital to retail shop floor. The main goal of ERP software is integration of information across
the company as a whole and eliminating complex and expensive links between various computer
systems. The following diagram shows how information is integrated.

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ERP software is mirror image of the major business process of an enterprise. For (example) when a
warehouse in Aurangabad enters a customer order, that data should automatically flow to others in
the company who need to see it to the finance department at headquarters in Mumbai and to the
manufacturing department in Chennai.

Brief History of ERP

ERP (Enterprise Resource Planning) is the evolution of Manufacturing Resource 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.

The history of ERP can be traced back to the 1960s when the focus of systems was mainly towards
inventory control. Most of the systems software was designed to handle inventory based in traditional
inventory concepts. The 1970s witnessed a shift of focus towards MRP (Material Requirement
Planning). This system helped in translating the master production schedule into requirements for
individual units like sub-assemblies, components and other raw material planning and procurement.
This system was involved mainly in planning the raw material requirements.

Then in 1980s came the concept of MRP II (Manufacturing Resource Planning) which involved
optimizing the entire plant production process. Though MRP-II, in the beginning was an extension of
MRP to include shop floor and distribution management activities, during later years, MRP-II was
further extended to include areas like Finance, Human Resource, Engineering, Project Management,
etc. This gave birth to ERP (Enterprise Resource Planning) which covered the cross-functional
coordination and integration in support of the production process. The ERP as compared to its
ancestors included the entire range of a companys activities.

However it has been within the last decade that ERP has really taken off and seen record revenues
by the software companies. In the past, ERP software was used to number crunching application and
production planning processes. Management was not using ERP to its full potential. Today, ERP is the

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foundation of businesses domestically and globally. It is used as a management tool and gives
organization a great competitive advantage.

But the consulting firm Gartner that created the term claimed ERP was dead. They also recognized
that the need for an information backbone for an enterprise has gone away. As e-business becomes
business as usual, sharing accurate real-time information about orders and inventory is critical to
success. And not just across an enterprise. Now, business needs to move that information across a
supply chain. For that reason, Gartner has introduced a new term to describe the enterprise systems
for the 21st century ERP II.

ERP Advantages and Disadvantages

There are a number of powerful advantages of ERP. It has been used to solve number of problems
that have plagued large organizations in the past. At the same time, it is not without a number of
disadvantages. Being able to weigh the two will allow a company to decide if this solution will properly
meet their needs.

The foremost advantage of an ERP system is bringing down the costs and saving the valuable time
which would have otherwise been wasted in procedural maneuvers and unwanted delays. Different
software programs maintained in the departments were proving to be a great hurdle. Since ERP is a
uniform platform it ensures that there is no discrepancy in the information that is processed.

Installing an ERP system has many advantages both direct and indirect. The direct advantages
include improved efficiency, information integration for better decision making, faster response time to
customer queries, etc. The indirect benefits include better corporate image, improved customer
goodwill, customer satisfaction and so on.

Following are some of the direct benefits of an ERP system:

1. Business Integration In ERP packages, because of interface between various departments,


sharing of data by all departments, sharing of data by all departments is possible. Data is
updated instantly. As soon as a transaction for sales occurs, the remaining inventory balance
at inventory department is automatically updated. Because of this one is able to grasp
business details in real time and carry out various types of management decisions in a timely
manner, based on that information.

2. Flexibility The second advantage of ERP packages is their flexibility. Different languages,
currencies, accounting standards and so on can be covered in on system. In addition to it, it
contains methods that manage multiple locations of a company. To cope with globalization
and system unification, this unification is essential.

3. Better Analysis and Planning Capabilities By enabling the comprehensive and unified
management of related business and its data, it becomes possible to fully utilize many types
of decision support systems. Because of integration and flexibility the real time information
is provided to the decision makers and so they can better analyze and plan the business
activities.

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4. Use of Latest Technology The fourth advantage is the utilization of latest developments in
IT. The ERP system designers always keep an eye over the new developments and
technologies of information technology and try to exploit them. Therefore ERP systems
quickly embrace or adopt latest technologies like internet, electronic commerce, data
mining, etc.

The main advantages of ERP according to ERPwire.com are:

1. Since all information is available at a central location as soon as some transaction happens, no
one has to wait for some other department to provide the information.
2. ERP ensures quicker processing of information and reduces the burden of paperwork.
3. ERP helps in serving the customer efficiently by way of prompt response and follow up.
4. ERP helps in disposing queries immediately and facilitating the payment from customers with
ease and well ahead of the stipulated deadline.
5. ERP also helps in having a say over your competitor and adapting to the whims and fancies of
the market and business fluctuations.
6. ERP eliminates redundancy in data entry, minimized the errors and helps to do away with
unwanted ambiguity.
7. ERP is suitable for global operations as it encompasses all the domestic jargons, currency
conversions, diverse accounting standards, and multilingual facilities.
8. ERP helps to control data and facilitates the necessary contacts to acquire the same.

Disadvantages of ERP are:

1. Huge investments in terms of time and money.


2. Slow benefit realization.
3. High risk implementation and operation.
4. Costly failures.

Growth of ERP

There is no question that the market for enterprise resource planning (ERP) systems is very hot.
Industry analysts are forecasting growth rates of more than 30% per year. Why are so many companies
replacing their key business systems? Here are some reasons:

Enable improved business performance


o Cycle time reduction
o Increased business agility
o Inventory reduction
o Order fulfillment improvement
Support business growth requirements
o New products / product lines, new customers
o Global requirements including multiple languages and currencies
Provide flexible, integrated, real-time decision support
o Improve responsiveness across the organization
Eliminate limitation in legacy systems
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o Century dating issues


o Fragmentation of data and processing
o Inflexibility to change
o Insupportable technologies
Take advantage of the untapped mid-market (medium-size organizations)
o Increased functionality at a reasonable cost
o Client-server / open systems technology
o Vertical market solutions

These are some of the reasons of the explosive growth rate of the ERP markets and ERP vendors. As
more and more companies are joining the race and as the ERP vendors are shifting their focus from big
Fortune 1000 companies to different market segments (medium-size companies, small companies,
etc.) the future will see fierce battle for market share and mergers and acquisitions for strategic and
competitive advantage. The ultimate winner in this race will be the customer, who will get better
products and better services at affordable prices.

Need of ERP

To be competitive organizations must deliver products of the highest quality on-time, as quickly as
possible and at the best possible price. The set of business processes known as enterprise resource
planning or ERP has proven to be effective tool in achieving these objectives.

ERP is a set of tools and processes that integrates departments and functions across a company into
one computer system. ERP runs off a single database, enabling various departments to share
information and communicate with each other. ERP is an enterprise reengineering solution that uses
new business computing paradigms to integrate IT processes across your companys division and
departments. ERP offers a means of effectively increasing and managing the required resources i.e.
materials, equipment, tools, labor, money, etc. For each of these resources ERP can identify what is
required, when it is needed and how much is needed, thus making the operation of the organization
efficient and effective.

The truth about ERP is that it unifies a company. ERP systems are transforming the way
organizations do business. An ERP system is important to an organization as it does the following:

1. ERP Affects Almost All Organizations ERP affects almost all organizations irrespective of their
size, industry segment and nature of business. It has changed the way organizations do business
by increasing efficiencies and competitiveness of organizations. It automates many business
processes, streamlined day-to-day operations and has helped organizations in serving
customers better. Organizations that do not have an efficient ERP system will find it very
difficult in this brutally competitive business environment.
2. ERP Forces Competition to Change ERP forces competitors to change their business strategies
and processes. It provides competitive advantage and creates value. A properly implemented
ERP system is a strategic weapon using which an organization can move ahead of its
competitors. So when one organization implements an ERP and becomes more efficient then
the competitors have no option than to follow suit.

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3. ERP Forces Business Partners to Become More Competitive When an organization adopts
ERP it becomes more efficient. The organization becomes more agile and the decision makers
take faster decisions as ERP system provided them with ready information of high quality. This
increase in speed puts pressure on organizations business partners to become more efficient
and fast. They too will be forced to implement an ERP system to become more efficient.
Further, these companies will want their suppliers to implement ERP systems so that the entire
supply chain becomes integrated and operates at peak efficiencies.
4. ERP Improves the Profits of the Consulting Firms Consulting firms offer a variety of ERP
related services. These services range from business process reengineering (BPR), selecting the
right ERP package, ERP implementation, end user training, post implementation support and so
on. ERP systems have been critically important to the growth of the major consulting
organizations that offer consultancy in ERP related areas. Consulting firms are growing because
if they implement an ERP successfully then the same firm and software will be implemented by
the competitors of their customers.
5. ERP is Most Important Tool for Business Process Reengineering Dr. Micheal Hammer defines
BPR as the fundamental rethinking and radical redesign of business processes to achieve
dramatic improvements in critical contemporary measures of performance such as cost, quality,
service and speed.

BPR is a management approach that examines aspects of a business and its interactions, and
attempts to improve the efficiency of the underlying processes. In majority of cases, IT powers
BPR. Previously information technology was used to help companies automate existing business
processes but now technology is being used to change those processes fundamentally. Today
information technology and business process reengineering go hand in hand. Most BPR
initiatives end up in implementation of an ERP system.

6. ERP Enforces Best Practice Business Processes in Organizations Best practice processes
deliver measurable, sustainable benefits over-time and improve business performance. They
are an operational imperative for any organization whose goal is achieving world-class
operations, characterized by the highest levels of service with the most cost effective
implementation. ERP systems are based on so-called best practice business processes the best
ways of doing business processes that have been tried to be successful in different business
environments around the world. For example, consider SAPs mySAP Business Suite it
incorporates over a thousand of best practices.
7. ERP Fully Utilizes the True Potential of Client-Server Computing to Deliver an Enterprise
Product Initially ERP packages were available only for the mainframe platform. This seriously
limited the number of organizations that could afford an ERP system and prevented ERP
systems from delivering their true potential. In the early 1990s client-server computing was an
available technology that offered many advantages over existing mainframe solutions. ERP
packages changed all that when it became one of the first dominant corporate applications of
client-server computing.
8. ERP has Changed the Nature of IS Function and IT Professionals Traditionally the job of the
information systems (IS) function was primarily one of designing, developing and implementing
software. Now with ERP systems the design and development functions are being outsourced.
ERP systems are replacing major portions of the software needs of most firms. This changes the
basic nature of information systems functions from one where systems analysts and
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programmers are needed to one where knowledge of existing software packages is critical. Not
only have needs changed, but personnel too have become more mobile. Historically,
information systems personnel would have knowledge only of firm-specific legacy applications.
With ERP software that changes, knowledge can now be used at more than one firm. The
professional actually becomes more and more valuable with each new implementation of the
software.
9. ERP has Changed the Nature of Jobs in All Functional Business Areas ERP has changed the
nature of jobs in functional areas, such as manufacturing. IT professionals in manufacturing say
ERP systems are blurring the lines between IT and users. There is a huge demand for users or
line-of-business personnel who also have professional level IT skills. But traditional IT types who
know only about technology and nothing about the business are not needed now, as they were
once.

Common ERP Myths

There are lot of myths that surround the concept, infrastructure, implementation and practice of
ERP. Very often people are not willing to adopt ERP because of these wrong notions. Following are
some of the common myths about ERP which are to be demystified:

1. ERP means More Work and Procedures ERP doesnt mean more work more procedures as it
will automate the various business processes thus meaning less work and less procedures. It is
only during the implementation and the transition period that the employees have to work
more and learn new things, but as the system is implemented and the user get used to the new
environment the work becomes easier.
2. ERP will Make Employees Redundant and Jobless This is a wrong notion about ERP. ERP
never says you to make employees jobless. Once you implement ERP as a result of total
automation the employees will become redundant but ERP also generates new job
opportunities. This same set of redundant employees can be relocated to newly created job
descriptions.
3. ERP is the Sole Responsibility of the Management The success and the failure of an ERP
system is in the hands of the end users i.e. the lower level employees. Management is having
the responsibility to provide support, finance, resources, etc. for the successful implementation
and usage of ERP system. Also to make sure everything is working fine and take corrective
measures wherever required. Overall ERP is not the sole responsibility of the management but
the employees also play a vital role in success of ERP.
4. ERP is just for the Managers / Decision-Makers No doubt, the managers and decision makers
of an organization are directly benefitted by ERP as it provides them with timely, relevant and
accurate information for taking high quality decisions. But at the same time the other low level
employees are also benefitted by ERP system. A stores clerk can check and verify the inventory
level, production supervisor can prepare the production schedule, employees can apply for
leave, get their loan approved, apply for travel reimbursement, etc.
5. ERP is just for Manufacturing Organizations This myth is due to the fact the ERP evolved from
MRP and MRP-II. Those two systems were for manufacturing organizations. As far as ERP
system goes it can be implemented for manufacturing and non-manufacturing organizations as
well.

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6. ERP is just for the ERP Implementation Team ERP implementation team consists of vendor
representatives, consultants and select group of employees. The employees are selected so that
they support the consultants in implementing the ERP and also to learn how to maintain and
manage the system once the vendors and consultants go away after implementation. Those
employees are selected who have basic computer knowledge and having a will to learn new
things and technology, and are willing to change. This does not mean that ERP is just for those
selected group of employees. ERP system will provided benefits to all the employees of the
organization as it is a people system made possible by computer hardware and software.
7. ERP Slows Down the Organization ERP doesnt slow down an organization, in fact it speeds up
the business processes. Everything will be automated once the ERP system is implemented. As
no manual process remains the organization becomes more efficient and fast.
8. ERP is just to Impress Customers With the implementation of ERP system the customers will
get better, improved and fast service. This will result in improved customer satisfaction and
goodwill thus increasing the customer base with impressed customers. But ERP system provides
many other benefits as well like improved profits, improved efficiency, reduced costs, reduced
cycle time, etc. So, ERP is not just to impress the customers.
9. ERP Package will Take Care of Everything If you think ERP package will take care of everything
then it is surely a recipe for disaster. ERP is just a system that will help an organization to take
timely and effective decisions by providing integrated and high quality information. The
decisions are to be taken by the people only, ERP will just assist the manager in the decision
making process and not replace the manager. Plus a major factor is success of ERP is how the
end users use the ERP system i.e. positively or negatively.
10. One ERP package will suit Everybody The requirements of each and every organization and
each and every person is different. If an ERP system is successful in one organization then it may
be a failure in the other one even though both organizations are in the same business, same
market and same scale of business, etc. One should select that ERP system which meets their
requirements not one which is successful.
11. ERP is Very Expensive Implementing and ERP is a costly affair, no doubt but if you compare
the implementation costs with after implementation benefits then its worth it. ERP helps you in
increasing profits, reducing costs, improved efficiency, improved productivity, etc. These
benefits are much more important than investments if an organization has to succeed in todays
competitive era. ERP will pay back for itself once used properly.
12. Organizations can Succeed without ERP Success depends on the common goal of the
organization. If the organization wants to succeed in the local market then it can succeed
without ERP. But it an organization wants to succeed in this 21 st Century then it has to expand
globally, capture new markets, capture new customers, diversify it, etc. To achieve this, an
organization has to make IT an ally and harness its full potential and what better than to
implement a system i.e. ERP that would optimize their business processes by making them
faster and more efficient; and provides high quality information to the decision makers.

Integrated Management Information

An information system is an open system that produces information using the input-process-output
cycle. An information system consists of a minimum 3 elements i.e.

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People,

Procedures, and

Data.

People follow procedures to manipulate data, to produce information. In todays computer world,
the definition of information systems has undergone a slight change. Today, an information system is
an organized combination of people, hardware, software, communication networks and data resources
that collects, collates (makes a careful comparison between), transforms & spreads the same in an
organization.

Management Information Systems (MIS) also called information reporting systems, were the
original type of management support systems and they still are a major category of information
systems. MIS produce information products that support many of day-to-day decision making needs of
the management reports, charts, graphs, displays and responses produced by such systems provide
information that managers have specified in advance. Such pre-defined information satisfies the needs
of managers at the operational levels of the organization. But the problem with these information
systems is that they operate at a departmental level and that they only give information that has been
predefined.

This method of information gathering has two major disadvantages such as:

1. People in one department do not have any information about what is happening in the other
departments. May be at the top management level the summary (brief) reports are being circulated
to other departments also, but such summary reports often fail in capturing the real picture of each
juncture.
2. The second drawback is that these systems give only the information that they were designed to
produce at the time they were built. Suppose the manager wants some information which is not in
the reports, then these systems are of no help.

The main problem with such systems is that, they lack integrated approach. There will be an
accounting system for the finance department, a production planning system for the manufacturing
department, an inventory management system for the stores department and so on. All the systems
will function in isolation. So if a person wants some information which has to be derived from any of
these two systems, he has to get the necessary reports from both systems, then correlate and combine
the data.

Because the systems work in isolation collecting and analyzing the data needed for one
departments functioning, can be a difficult task. No business executive or decision maker can take
good decisions with the isolated data. Even if he compares the data carefully and produces the
information that he requires, he would have lost valuable time that could have been better spent in
decision-making.

In reality, an organization cannot function as islands of different departments. The production


planning data is required for the purchasing department. The purchasing details are required for the
finance department and so on. So if all the information islands which were functioning in isolation were
integrated into a single system, then the impact would be dynamic.
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In todays competitive business environment, the key resource of every organization is information.
If the organization does not have an efficient and effective mechanism that enables it to give the
decision makers the right information at the right time, then the chances of success for that
organization are very remote.

The three fundamental characteristics of information are accuracy, relevancy and timeliness. The
information has to be accurate it must be relevant for the decision maker and it must be available to
the decision maker when he or she needs it. Any organization that has the mechanism to collect,
collate (compare carefully), analyze and present high quality information to its employees thus
enabling them to make better decisions, will always be one step ahead of the competition.

Today, the time available for an organization to react to the changing market trends is very short.
To survive, the organization must always be on its toes, gathering and analyzing data. Any mechanism
that will automate this information gathering and analysis process will increase the chances of the
organization to beat the competition.

So what is needed is an integrated system that treats the organization as a single entity and copes
with the information requirements of the whole organization.

Business Modeling

Business Modeling refers to creation of a business model. A business model is nothing but the basic
framework of business. That is the area of business where in all business activities are performed. The
basic elements of a business model are the nature of business, its scope and the various parts or
components of business. One of the first activities of any ERP project is to first study the basic
framework of business and depending upon the nature and framework, design a business model. A
business model is the prototype of business. In other words, it is the basic structure or skeleton of
business. A business model indicates the nature of business, the area of business and the overall life
cycle of a business. It precisely indicates the flow of all business activities.

A business model is not a mathematical model but it is a representation of the business as one large
system showing the interconnections and interdependencies, of the various subsystems and business
processes. The various subsystems are the different departments of a business like plant, inventory,
sales, purchase, etc. The relationships of all these subsystems with one another and their
interdependencies are illustrated and indicated by the business model. The business model is usually
represented in the graphical model using flow charts and flow diagrams. The following is an example of
a business model.

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Based on the organizations goals, objectives and strategic plans, a business model consisting of the
business processes is developed. These business processes are controlled by different individuals in the
organization i.e. people, to achieve common goals. Based on the business model, the ERP system is
developed with the aim of providing required information and necessary assistance to the various
individuals to help them perform their business process more effectively and efficiently.

In business modeling we are supposed to model the business as an integrated system taking the
processes, managing its facilities and materials as resources. Thus the business model is a
representation of the actual business that shows, what are the various business functions of the
organization, how are they related, what are their interdependencies, and so on.

Integrated Data Model

After the business model is created, the next step in any ERP project is to design an integrated data
model for the business as a whole. An ERP model never suggests having local databases at department
level; instead ERP uses a common or central database for the business as a whole. In such a central
database each department is allowed to have their own master files which contain departmental data.
All these files, by virtue of central database, will have some sort of interface that let these master files
share each others data, if required. Such a central database within which sharing of data is possible is
called an integrated data model.

The advantage of this integrated data is all the employees from different departments get access to
such integrated (shared) data. The enterprise uses this integrated data for its analysis and decision
making. After creating the integrated data model, the ERP system directs each and every element of
data through such integrated database only. By virtue of integrated data model the redundancy of data
is reduced. Redundancy of data refers to duplicate copies of the same data on various master files. If
one copy of data is updated and the other is left un-updated, then data inconsistency gets created
which leads to incorrect decisions. Because of integrated data model, at any given time, the database
can give a snapshot of the organization as a whole. In the integrated data model, data is updated
automatically.

For (example) if an order is entered, the sale is done and goods are dispatched, the database
reflects these changes automatically. The inventory gets reduced and the accounts receivables get
increased automatically and instantaneously.

While designing the integrated data model for the ERP system, the most important thing that
should be kept in mind is the information integration and the process or procedure automation. The
data model should reflect the entire organization and it should successfully indicate and integrate the
data structures of the entire organization.

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Unit II

ERP and Related Technologies


ERP systems serve an important function by integrating isolated business departments such as
sales, materials, distribution, planning, finance, accounting and various others into a single entity for
the sole purpose of information integration. However ERP systems have three limitations:

1. Managers cannot generate custom reports or queries without the help from a programmer and this
act as a main obstacle for them from getting quick information.
2. ERP systems provide current status only, such as open orders. Managers often need to look past
the current status to find trends and patterns that help in better decision making.
3. The data in the ERP system is not integrated with other enterprise and so does not include external
intelligence.

To overcome these limitations there are many other technologies available. These additional
technologies when used in conjunction with the ERP package help in overcoming the limitations of a
stand-alone ERP system. Some of these technologies are:

1. Business Process Re-Engineering (BPR)


2. Management Information System (MIS)
3. Decision Support System (DSS)
4. Executive Support System (ESS)
5. Data Warehousing
6. Data Mining
7. On-Line Analytical Processing (OLAP)
8. Supply Chain Management (SCM)
9. Customer Relationship Management (CRM)
10. Product Life Cycle Management (PLM)

Business Process Re-Engineering (BPR)

Dr. Micheal Hammer defines BPR as the fundamental rethinking and radical redesign of business
processes to achieve dramatic improvements in critical, contemporary measures of performance such
as cost, quality, service and speed.

Business process re-engineering is also known as business process redesign, business


transformation, or business process change management. Business process re-engineering is the
analysis and design of workflows and processes within an organization. A business process is a set of
logically related tasks performed to achieve a defined business outcome. Re-engineering is the basis for
many recent developments in management.

It is an approach for redesigning the way work is done to better support the organization's mission
and reduce costs. Reengineering starts with a high-level assessment of the organization's mission,
strategic goals, and customer needs. Basic questions are asked, such as "Does our mission need to be
redefined? Are our strategic goals aligned with our mission? Who are our customers?" An organization
may find that it is operating on questionable assumptions, particularly in terms of the wants and needs

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of its customers. Only after the organization rethinks what it should be doing, does it go on to decide
how best to do it.

Business process re-engineering (BPR) began as a private sector technique to help organizations
fundamentally rethink how they do their work in order to dramatically improve customer service, cut
operational costs, and become world-class competitors. A key stimulus for re-engineering has been the
continuing development and deployment of sophisticated information systems and networks. Leading
organizations are becoming bolder in using this technology to support innovative business processes,
rather than refining current ways of doing work.

In 1990, Michael Hammer, a former professor of computer science at the Massachusetts Institute
of Technology (MIT), published an article in the Harvard Business Review, in which he claimed that the
major challenge for managers is to eliminate non-value adding work, rather than using technology for
automating it. This statement implicitly accused managers of having focused on the wrong issues,
namely that technology in general, and more specifically information technology, has been used
primarily for automating existing processes rather than using it as an enabler for making non-value
adding work obsolete. Hammers claim was simple: Most of the work being done does not add any
value for customers, and this work should be removed, not accelerated through automation.

This idea, to un-biasedly review a companys business processes, was rapidly adopted by a huge
number of firms, which were striving for renewed competitiveness, which they had lost due to the
market entrance of foreign competitors, their inability to satisfy customer needs, and their insufficient
cost structure. However, the critics were fast to claim that BPR was a way to dehumanize the work
place, increase managerial control, and to justify downsizing, i.e. major reductions of the work force.
Despite this critique, reengineering was adopted at an accelerating pace and by 1993, as many as 65%
of the Fortune 500 companies claimed to either have initiated reengineering efforts, or to have plans to
do so.

More recently, the concept of Business Process Management (BPM) has gained major attention in
the corporate world and can be considered as a successor to the BPR wave of the 1990s, as it is evenly
driven by a striving for process efficiency supported by information technology. Equivalently to the
critique brought forward against BPR, BPM is now accused of focusing on technology and disregarding
the people aspects of change.

Information technology (IT) has historically played an important role in the reengineering concept.
It is considered by some as a major enabler for new forms of working and collaborating within an
organization and across organizational borders. In the mid-1990s, especially workflow management
systems were considered as a significant contributor to improved process efficiency. Also ERP
(Enterprise Resource Planning) vendors, such as SAP, JD Edwards, Oracle, PeopleSoft, positioned their
solutions as vehicles for business process redesign and improvement.

Reengineering has earned a bad reputation because such projects have often resulted in massive
layoffs. This reputation is not altogether unwarranted, since companies have often downsized under
the banner of re-engineering. Other criticism brought forward against the BPR concept include

It never changed management thinking, actually the largest causes of failure in an organization
lack of management support for the initiative and thus poor acceptance in the organization

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exaggerated expectations regarding the potential benefits from a BPR initiative and
consequently failure to achieve the expected results
underestimation of the resistance to change within the organization
implementation of generic so-called best-practice processes that do not fit specific company
needs
over-trust in technology solutions
performing BPR as a one-off project with limited strategy alignment and long-term perspective
poor project management

Management Information System (MIS)

MIS is a combination of human and computer based resources that result in collection, storage,
retrieval, communication and use of data for the purpose of efficient management of operations and
for business planning.

T. Lucey in the book entitled Management Information Systems defines MIS as, a system to
convert data from internal and external sources into information and to communicate that information
in an appropriate form to managers at all levels in all functions to enable them to make timely and
effective decisions for planning, directing and controlling the activities for which they are responsible.

Business organizations need a system that helps in gathering and communicating the required
information. MIS deals with the information requirements of the business organization. Many
definitions of the term MIS have been put forth. Experts in the field do not agree on a single definition
that is acceptable to all. Recently the term MIS has become almost synonymous with computerized
systems. This approach of MIS concerns with data processing, database design, system analysis and
design and so on.

Opposed to transaction processing system, MIS are designed and implemented to provide
information for the management functions. The information produced by such system may or may not
be based on individual transactions. It may be a result of a group of transactions of different types; or
may be a result of processing of various transaction processing systems. The basic aim is to provide
information for management functions such as decision making in planning, control, etc.

The Management Information System is to produce information so that people within the firm can
use it in their decision-making. An MIS must manipulate great quantities of data in various ways, often
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with the aid of computers. Many kinds of manipulations and transfers of information support daily
operations and decision-making in a manufacturing company.

Gathering information, analyzing it and reporting it are the main jobs of MIS. To do so,
Management Information System collects raw data facts, statistics, opinions and predictions from both
inside and outside the company and then organizes them so that they can be stored. Not all of these
are useful to each manager; a lot may be too detailed or perhaps irrelevant. So the MIS must pull out
from the flood of data that pours in each day, only the selected piece of data that a particular manager
needs.

The main purpose of MIS is to provide the information support to the managerial functions within
an organization. MIS is designed and implemented with a view to provide the required information
support to undertake managerial activities such as planning, organizing, staffing, coordination, control,
decision making, etc.

Some of the common objectives of MIS are:

1. To provide right type of accurate information at the lowest cost and at the right time.
2. To ensure that managerial activities are provided adequate information support.
3. To avoid information overload and to avoid generating redundant information.

Decision Support System (DSS)

Scott Morton defines DSS as interactive computer-based systems, which help decision-makers
utilize data and models to solve unstructured problems.

Another classic definition by Keen and Scott Morton is, Decision Support Systems couple the
intellectual resources of individuals with the capabilities of the computer to improve the quality of
decisions. It is a computer-based support system for management decision makers who deal with semi-
structured problems.

A decision support system (DSS) is a computer-based information system that supports business or
organizational decision-making activities. DSSs serve the management, operations, and planning levels
of an organization and help to make decisions, which may be rapidly changing and not easily specified
in advance.

Typical information that a decision support application might gather and present are:

1. inventories of information assets (including legacy and relational data sources, cubes, data
warehouses, and data marts),
2. comparative sales figures between one period and the next,
3. projected revenue figures based on product sales assumptions.

DSSs include knowledge-based systems. A properly designed DSS is an interactive software-


based system intended to help decision makers compile useful information from a combination of raw
data, documents, personal knowledge, or business models to identify and solve problems and make
decisions.

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Three fundamental components of DSS architecture are:

1. the database (or knowledge base),


2. the model (i.e., the decision context and user criteria), and
3. the user interface.

The users themselves are also important components of the architecture.

There are several ways to classify DSS applications. Not every DSS fits neatly into one of the
categories, but may be a mix of two or more architectures. Holsapple and Whinston classify DSS into
the following six frameworks: Text-oriented DSS, Database-oriented DSS, Spreadsheet-oriented DSS,
Solver-oriented DSS, Rule-oriented DSS, and Compound DSS.A compound DSS is the most popular
classification for a DSS. It is a hybrid system that includes two or more of the five basic structures
described by Holsapple and Whinston. The support given by DSS can be separated into three distinct,
interrelated categories: Personal Support, Group Support, and Organizational Support.

DSSs which perform selected cognitive decision-making functions and are based on artificial
intelligence or intelligent agents technologies are called Intelligent Decision Support Systems (IDSS).
The nascent field of Decision engineering treats the decision itself as an engineered object, and applies
engineering principles such as Design and Quality assurance to an explicit representation of the
elements that make up a decision.

One example is the clinical decision support system for medical diagnosis. Other examples include a
bank loan officer verifying the credit of a loan applicant or an engineering firm that has bids on several
projects and wants to know if they can be competitive with their costs.

Benefits

1. Improves personal efficiency


2. Speed up the process of decision making
3. Increases organizational control
4. Encourages exploration and discovery on the part of the decision maker
5. Speeds up problem solving in an organization
6. Facilitates interpersonal communication
7. Promotes learning or training
8. Generates new evidence in support of a decision
9. Creates a competitive advantage over competition
10. Reveals new approaches to thinking about the problem space
11. Helps automate managerial processes

Executive Support Systems (ESS)

Executive Support System (ESS) is a reporting tool (software) that allows you to turn your
organization's data into useful summarized reports. These reports are generally used by executive level
managers for quick access to reports coming from all company levels and departments such as billing,
cost accounting, staffing, scheduling, and more.

ESS is defined as a computer-based system that serves the information needs of top executives. It
provides rapid access to timely information and direct access to management reports. It is user
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friendly, supports graphics, provides exceptions reporting and is connected to internet. Also includes
analysis support and business intelligence.

In addition to providing quick access to organized data from departments, some Executive Support
System tools also provide analysis tools that predict a series of performance outcomes over time using
the input data. This type of ESS is useful to executives as it provides possible outcomes and quick
reference to statistics and numbers needed for decision-making.

The exact reporting tools and outcome of an Executive Support System completely depends on the
ESS developer and its intended industry use. For example, Cambridge Systematics has ESS to support
the investment planning process for the Ministry of Transportation. The features and functions of this
Executive Support System are entirely different from the Executive Support System developed by
Meditech, which is useful to health care organizations. Several companies offer pre-designed Executive
Support System packages (usually suited to one particular industry), while others offer packages which
can be customized your organization's needs.

An Executive Information System (EIS) is a type of management information system intended to


facilitate and support the information and decision-making needs of senior executives by providing
easy access to both internal and external information relevant to meeting the strategic goals of the
organization. It is commonly considered as a specialized form of decision support system (DSS).

The emphasis of EIS is on graphical displays and easy-to-use user interfaces. They offer strong
reporting and drill-down capabilities. In general, EIS are enterprise-wide DSS that help top-level
executives analyze, compare, and highlight trends in important variables so that they can monitor
performance and identify opportunities and problems. EIS and data warehousing technologies are
converging in the marketplace.

Traditionally, executive information systems were developed as mainframe computer-based


programs. The purpose was to package a companys data and to provide sales performance or market
research statistics for decision makers, such as financial officers, marketing directors, and chief
executive officers, who were not necessarily well acquainted with computers. The objective was to
develop computer applications that would highlight information to satisfy senior executives needs.
Typically, an EIS provides data that would only need to support executive level decisions instead of the
data for all the company. Today, the application of EIS is not only in typical corporate hierarchies, but
also at personal computers on a local area network. EIS now cross computer hardware platforms and
integrate information stored on mainframes, personal computer systems, and minicomputers. As some
client service companies adopt the latest enterprise information systems, employees can use their
personal computers to get access to the companys data and decide which data are relevant for their
decision makings. This arrangement makes all users able to customize their access to the proper
companys data and provide relevant information to both upper and lower levels in companies.

The components of an EIS can typically be classified as:

Hardware - When talking about hardware for an EIS environment, we should focus on the hardware
that meet the executives needs. The executive must be put first and the executives needs must be
defined before the hardware can be selected. The basic computer hardware needed for a typical EIS
includes four components:

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1. Input data-entry devices. These devices allow the executive to enter, verify, and update data
immediately;
2. The central processing unit (CPU), which is the kernel because it controls the other computer
system components;
3. Data storage files. The executive can use this part to save useful business information, and this
part also help the executive to search historical business information easily;
4. Output devices, which provide a visual or permanent record for the executive to save or read.
This device refers to the visual output device such as monitor or printer.

In addition, with the advent of local area networks (LAN), several EIS products for networked
workstations became available. These systems require less support and less expensive computer
hardware. They also increase access of the EIS information to many more users within a company.

Software - Choosing the appropriate software is vital to design an effective EIS. Therefore, the software
components and how they integrate the data into one system are very important. The basic software
needed for a typical EIS includes four components:

1. Text base software. The most common form of text are probably documents;
2. Database. Heterogeneous databases residing on a range of vendor-specific and open computer
platforms help executives access both internal and external data;
3. Graphic base. Graphics can turn volumes of text and statistics into visual information for
executives. Typical graphic types are: time series charts, scatter diagrams, maps, motion
graphics, sequence charts, and comparison-oriented graphs (i.e., bar charts);
4. Model base. The EIS models contain routine and special statistical, financial, and other
quantitative analysis.

User interface - An EIS needs to be efficient to retrieve relevant data for decision makers, so the user
interface is very important. Several types of interfaces can be available to the EIS structure, such as
scheduled reports, questions/answers, menu driven, command language, natural language, and
input/output.

Telecommunication - As decentralizing is becoming the current trend in companies,


telecommunications will play a pivotal role in networked information systems. Transmitting data from
one place to another has become crucial for establishing a reliable network. In addition,
telecommunications within an EIS can accelerate the need for access to distributed data.

EIS enables executives to find those data according to user-defined criteria and promote
information-based insight and understanding. Unlike a traditional management information system
presentation, EIS can distinguish between vital and seldom-used data, and track different key critical
activities for executives, both which are helpful in evaluating if the company is meeting its corporate
objectives. After realizing its advantages, people have applied EIS in many areas, especially, in
manufacturing, marketing, and finance areas.

Advantages of EIS

1. Easy for upper-level executives to use, extensive computer experience is not required in
operations
2. Provides timely delivery of company summary information

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3. Information that is provided is better understood


4. Filters data for management
5. Improves tracking information
6. Offers efficiency to decision makers

Disadvantages of EIS

1. System dependent
2. Limited functionality, by design
3. Information overload for some managers
4. Benefits hard to quantify
5. High implementation costs
6. System may become slow, large, and hard to manage
7. Need good internal processes for data management
8. May lead to less reliable and less secure data

Data Warehousing (DW)

Abbreviated DW, a collection of data designed to support management decision making.


Data warehouses contain a wide variety of data that present a coherent picture of business
conditions at a single point in time. Development of a data warehouse includes development of
systems to extract data from operating systems plus installation of a warehouse database system
that provides managers flexible access to the data. The term data warehousing generally refers to
the combination of many different databases across an entire enterprise. Contrast with data mart.

The concept of data warehousing dates back to the late 1980s when IBM researchers Barry
Devlin and Paul Murphy developed the "business data warehouse". If operational data is kept in the
databases of the ERP system, it can create a lot of problems. As time passes, the amount of data
will increase and this will affect the performance of the ERP system. So it is better to archive the
operational data once its use is over. When I say the use is over it does not mean that the archived
data is useless. On the contrary, it is one of the most valuable resources of the organization.
However once the operational use of the data is over, it should be removed from the operational
databases. For example, once the financial year is over, the daily transactional data can be archived.

It is evident that even though the operational data volume is nearly the same each year,
since the data is not archived the total amount of data that is stored in the operational database
will go on increasing. As the volume of the data in the database increases, the performance of the
database and the related application decreases.

From the above discussions it is evident that we should separate the operational data from
the non-operational data. I am not using the term archive data, because if the non-operational data
is archived there is little or no use for it. But this data is a very valuable resource and is too precious
to be kept in some archive. It is in this situation that a data warehouse comes in handy.

The primary concept of data warehousing is that the data stored for business analysis can be
accessed most effectively by separating it from the data in operational systems. The most
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important reason for separating data for business analysis, from the operational data, has always
been the potential performance degradation on the operational system that can result from the
analysis processes. High performance and quick response time is almost universally critical for
operational systems. The reasons to separate the operational data from the analysis data have not
significantly changed with the evolution of the data warehousing systems, except that now they are
considered more formally during the data warehouse building process. Advances in technology and
changes in the nature of business have made many of the business analysis processes much more
complex and sophisticated. In addition to producing standard reports, todays data warehousing
systems support very sophisticated online analysis, including multi-dimensional analysis.

Benefits of a data warehouse


A data warehouse maintains a copy of information from the source transaction systems.
This architectural complexity provides the opportunity to:
1. Maintain data history, even if the source transaction systems do not.
2. Integrate data from multiple source systems, enabling a central view across the enterprise.
This benefit is always valuable, but particularly so when the organization has grown by
merger.
3. Improve data, by providing consistent codes and descriptions, flagging or even fixing bad
data.
4. Present the organization's information consistently.
5. Provide a single common data model for all data of interest regardless of the data's source.
6. Restructure the data so that it makes sense to the business users.
7. Restructure the data so that it delivers excellent query performance, even for complex
analytic queries, without impacting the operational systems.
8. Add value to operational business applications, notably customer relationship management
(CRM) systems.

Data Mining

We are living in the information age. The importance of collecting data that reflects ones
business, or of activities that achieve competitive advantage, are widely recognized now. Powerful
systems for collecting data and managing it in large databases are available in most organizations.
However, the major bottleneck of converting this data into effective information is the difficulty
faced in extracting knowledge about the system from the collected data. Modeling the investigated
system discovering relations that connect variables in a database are the subjects of data mining.

Data mining, the extraction of hidden predictive information from large databases, is a
powerful new technology with great potential to help companies focus on the most important
information in their data warehouses. Data mining tools predict future trends and behaviors,
allowing businesses to make proactive, knowledge-driven decisions. The automated, prospective
analyses offered by data mining move beyond the analyses of past events provided by retrospective
tools typical of decision support systems. Data mining tools can answer business questions that
traditionally were too time consuming to resolve. They scour databases for hidden patterns, finding
predictive information that experts may miss because it lies outside their expectations.

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Most companies already collect and refine massive quantities of data. Data mining
techniques can be implemented rapidly on existing software and hardware platforms to enhance
the value of existing information resources, and can be integrated with new products and systems
as they are brought on-line. When implemented on high performance client/server or parallel
processing computers, data mining tools can analyze massive databases to deliver answers to
questions such as, "Which clients are most likely to respond to my next promotional mailing, and
why?"

Data mining is the process of identifying valid, novel, potentially useful and ultimately
comprehensible information from databases that is used to make crucial business decisions.
Modern data mining systems self-learn from the previous history of the investigated system,
formulating and testing hypotheses about the rules, which the system obeys. When concise and
valuable should be incorporated into some decision support system which helps the manager
makes wise and informed business decisions.

The main reason for needing automated computer systems for intelligent data analysis is
the enormous volume of existing and newly appearing data that require processing. The amount of
data accumulated each day by various businesses, scientific and governmental organizations
around the world is daunting. Research organizations, academic institutions and commercial
organizations create and store huge amounts of data each day. It becomes impossible for human
analysts to cope with such overwhelming amounts of data.

Two other problems that surface when human analysts process data are:
1. The inadequacy of the human brain when searching for complex multifactorial
dependencies in the data.
2. The lack of objectiveness in analyzing the data.

A human expert is always a hostage of the previous experience of investigating other


systems. Sometimes this helps, sometimes this hurts, but it is almost impossible to get rid of this
fact.

One additional benefit of using automated data mining systems is that this process has a
much lower cost than hiring an army of highly trained (an paid) professional statisticians. While
data mining does not eliminate human participation in solving the task completely, it significantly
simplifies the job and allows an analyst, who is not a professional in statistics and programming, to
manage the process of extracting knowledge from the data.

On-line Analytical Processing (OLAP)

According to Business Intelligence Ltd (www.OLAPReport.com), OLAP can be defined in five


words Fast Analysis of Shared Multidimensional Information.

Fast means the system is targeted to deliver most responses to users within about five
seconds with the simplest analysis taking no more than one second and very few taking more than
20 seconds. Analysis means that the system can cope with any business logic and statistical
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analysis that is relevant for the application and the user, and keep it easy enough for the target
user. Shared means that the systems implements all the security requirements for confidentiality
(possibly down to cell level) and if multiple write access is needed, concurrent update locking at an
appropriate level. Multidimensional means that the system must provide a multidimensional
conceptual view of the data, including full support for hierarchies and multiple hierarchies.
Information is refined data that is accurate, timely and relevant to the user.

The first product that performed OLAP queries was Express, which was released in 1970
(and acquired by Oracle in 1995 from Information Resources). However, the term did not appear
until 1993 when it was coined by Edgar F. Codd, who has been described as "the father of the
relational database".

OLAP tools enable users to interactively analyze multidimensional data from multiple
perspectives. OLAP consists of three basic analytical operations: consolidation, drill-down, and
slicing and dicing. Consolidation involves the aggregation of data that can be accumulated and
computed in one or more dimensions. For example, all sales offices are rolled up to the sales
department or sales division to anticipate sales trends. In contrast, the drill-down is a technique
that allows users to navigate through the details. For instance, users can access to the sales by
individual products that make up a regions sales. Slicing and dicing is a feature whereby users can
take out (slicing) a specific set of data of the cube and view (dicing) the slices from different
viewpoints.

Databases configured for OLAP use a multidimensional data model, allowing for complex
analytical and ad-hoc queries with a rapid execution time. They borrow aspects of navigational
databases, hierarchical databases and relational databases.
Multidimensional structure is defined as a variation of the relational model that uses
multidimensional structures to organize data and express the relationships between data. The
structure is broken into cubes and the cubes are able to store and access data within the confines
of each cube. Each cell within a multidimensional structure contains aggregated data related to
elements along each of its dimensions. Even when data is manipulated it remains easy to access
and continues to constitute a compact database format. The data still remains interrelated.
Multidimensional structure is quite popular for analytical databases that use online analytical
processing (OLAP) applications. Analytical databases use these databases because of their ability
to deliver answers to complex business queries swiftly. Data can be viewed from different angles,
which gives a broader perspective of a problem unlike other models.

OLAP technology is being used in an increasingly wide range of applications. The most
common are sales and marketing analysis; financial reporting and consolidation; and budgeting
and planning. Increasingly however, OLAP is being used for applications such as product
profitability and pricing analysis; activity based costing; manpower planning; and quality analysis,
or for that matter any management system that requires a flexible, top down view of an
organization.

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Unit III

ERP Modules and Vendors


ERP Modules (ERP Domain)

The domain or ERP refers to the activity area of an ERP, the ingredients of ERP or in other words the
different modules that an ERP contains in its domain. All ERP packages contain many modules. The number
and features of the modules vary with the ERP package. Some of the most common modules available in
the domain of almost all ERP packages are as under:

1. Finance
2. Production
3. Human Resource Management
4. Plant Maintenance
5. Materials Management
6. Marketing
7. Sales and Distribution
8. Quality Management

1. Finance
Whatever the financial goals of the organization are, the financial application components of the ERP
solutions work hand in- hand to improve bottom line. The finance module of most ERP systems will have
the following sub systems:

Financial Accounting: For companywide control and integration of financial information that is
essential to strategic decision making. It provides ability to centrally track financial accounting
within an international framework of multiple companies, languages, currencies and charts of
accounts. For example, when raw materials from inventory into manufacturing, the system reduces
quantity values in inventory and simultaneously subtracts values for inventory accounts in balance
sheet. Most financial accounting modules comply with international accounting standards such as
GAAP and IAS. They also fulfill local requirements of many countries.
General Ledger: The GL is essential both to financial accounting system and to strategic decision
making. Through active integration with business processes in logistics and in the accounting sub
ledgers, the GL serves as central pool of financial data for financial reporting as well as for other
accounting areas; however the origin of centrally stored data can still be traced at any time by
drilling down on data from a given transaction. The GL supports all the functions needed in a
financial accounting system. This includes flexible structuring of the chart of accounts at group and
company level, distributed application scenarios, real time simultaneous update of sub ledgers and
the GL, elimination of time consuming reconciliation , and parallel views of data in both GL and
managerial accounting applications.
Accounts Receivables & Payables: These sub ledgers are integrated both with the GL and with
areas in sales and distribution and materials management, where financial data originates. The sub
module functions include internet integration, document management, and full support for EDI
processing including automatic integration with cash management, and flexible reporting using
customer and vendor information systems. The module also provides enterprise wide credit
management with work flow integration, payment automation with EFT and check processing and
document parking with various approval procedures.

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Asset Accounting: for companys fixed assets management. It is sub ledger to GL, providing detailed
information on asset related transactions. Significant features include country specific charts of
depreciation complying with local legal requirements. Asset accounting also provides integration
with plant maintenance for management of machinery and equipment, management of leased
assets and assets under construction, mass processing with work flow integration and interactive
reporting.
Legal Consolidation: Using different valuation methods, company can plan balance sheet strategies
to suit its requirements. The sub system is closely linked to the financial accounting system,
permitting direct data transfer from individual statements into the consolidated statements
required by the law.
Controlling: controlling system gathers the functions required for effective internal cost accounting.
It offers a versatile information system with standard reports and analysis path for the most
common questions. In addition there are features for creating custom reports to supplement
standard reports.
Overhead cost Controlling: While cost monitoring and optimization may be quite advanced in
production areas, transparency is often lacking in overhead cost areas. The sub system focuses on
monitoring and allocation of the overheads.
Cost center accounting: It analyses where overhead occurs within the organization. Costs are
assigned to the sub areas of the organization where they originated. In particular, activity
accounting permits the allocation of great many costs to products based on cost sources enabling
assignments, which were not previously possible.
Activity based costing: the module is a response to the growing need for monitoring and control of
cross departmental business processes in addition to functions and products.
Product cost controlling: It determines the costs arising from manufacturing a product or providing
a service.
Profitability analysis: is the last step in cost based settlement where revenues are assigned to costs
according to market segment.
Investment management: It facilitates investment planning and budgeting at a level higher than
specific orders or projects
Treasury module: To manage companys short, medium and long term payment flows, and
resulting risk exposure.
Cash management: The sub system allows analyzing financial transactions for a given period.
Treasury management: this component offers functions for managing financial deals and positions,
from trading through to transferring data to financial accounting.

2. Production (Manufacturing)
The term production or operation is often used interchangeably with manufacturing. If you view
production as process , even services such as dry cleaning begin with resources-cleaning fluid, machines,
presses and people-and end up with a product clean clothes. So, all business firms are involved in some
type of production. The key concept in operations management is transformation or conversion of
input(resources) into output (goods or services).Competition in next millennium places increased emphasis
upon time as expressed by speed, quality, service and global focus. Agility is the watchword.

The manufacturing modules of most ERP vendors do not limit business to a single manufacturing method
such as make to stock or make to order. Instead, many manufacturing and planning methods can be
combined within the same operation with unlimited flexibility to choose the best method-or combination
of methods-for each product at each stage throughout its life cycle. The manufacturing system should
provide the foundation for creating concurrent business processes across the supply chain and achieving

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return on assets (ROA) improvement. The materials procurement sub system provides tools for
implementing TQM programs within an organization.

Original manufacturers may be defined independently from vendors so that the businesses can strictly
adhere to quality assurance and control functions without preventing their buyers from seeking best
possible price and delivery terms. ERP packages provide extensive cost information at several levels that
helps businesses to identifying cost drivers and reduce product cost. They support multiple inventory
valuation methods so you can choose the costing method that best reflects your companys business.

3. Human Resource Management


In todays organizations employees are viewed as human resources that need to be carefully nurtured,
accommodated and developed. The various sub systems under HR module are following:
Personnel Management
Personnel administration
Employee master data: most systems have the facility to scan the original documents for optical
storage. The HR IS displays graphical information such as organization charts or employees data.
Recruitment management for hiring right people with the right skills. These requirements are
fulfilled only through effective automation of the entire recruitment process.
Travel management to process the travel expenses, business trip from start to finish. It provides
with self-explanatory forms, statements, and an electronic approval process.
Benefits Administration provides capabilities and flexibility to effectively manage benefits programs
for diverse employee populations. These systems can maintain an unlimited number of benefit
types and individual plans that are offered to the employees.
Salary Administration module assists in the salary review process also, by taking into account
standard salary changes within the company as well as individual compensation exceptions.
Organizational management for accurate picture of organizations structure, no matter how fast it
changes. You can also create multiple simulations for your organization as you explore your options
for making adjustments in personnel. Accurately forecasting personnel costs provides your
management team with a more complete cost picture to assist them in making informed decision.
Time Management: is a powerful tool to administer and evaluate data related to the time that
employees spend working. It manages work schedules efficiently and effectively.
Shift Planning
Personnel development
Training and Event management

4. Plant Maintenance
Plant maintenance supports various options for structuring technical systems with its object, type, and
functional related views, and enables flexible data navigation. Data concerning the planning, processing
and history of maintenance tasks is documented in the system and compiles with business verification
requirements. It also forms basis for defining an optimum maintenance strategy in the sense of Total
Productive Maintenance. The major sub systems are as follows:
Preventive maintenance control: provides planning, scheduling, and control facilities and
equipment. Maintenance tasks can be tracked for each machine or piece of equipment by two user
defined modes, as well as calendar day frequency. PM control enables organizations to lower repair
costs by avoiding down time, machine breakage and process variability.
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Equipment Tracking: This history includes acquisition and disposition information and associations
between different pieces of equipment to pin point operational dependencies.
Component Tracking: The components are typically sub sets of larger equipment and deserve same
amount of cost controlling scrutiny. It enables equipment managers to identify components with
chronic repair problems. Planning component replacements, rather than waiting for component
failures to occur reduce unscheduled down time. It includes repair/ exchange history and
component service life.
Plant maintenance calibration tracking: It allows organizations to leverage their investment in the
plant maintenance module by providing for tracking of equipment calibration in support of
ISO9000requirements.
Plant maintenance warranty claims tracking: It allows the organizations to address various issues
related to claiming warranties related to various equipment and components.

5. Materials Management
The MM module optimizes all purchasing processes with workflow driven processing functions, enables
automated supplier evaluation, lowers procurement and warehousing costs with accurate inventory and
warehouse management, and integrates invoice verification. The sub modules are
Pre-purchasing activities: It supports the complete cycle of bid invitation, award of contract and
acceptance of the services. Activities include maintaining a service master-database in which the
description of all services are to be procured can be stored. The system also keeps a separate set of
service specifications that can be created for each concrete procurement project or proposed
procurement in the purchasing department. Set of service specifications may include both items with
services and items with material. There are two ways of entering service specifications planned and
unplanned.
Purchasing: This module is fully integrated with other modules in the system and supports all phases of
MM. It works side by side with cost accounting system, financial accounting, sales and distribution.
Vendor evaluation: Information such as delivery dates, prices and quantities can be taken from
purchase order and data from quality management such as result of incoming inspections or quantity
audits. Most of the vendor evaluation system offers a point based evaluation system based on certain
selection criteria. The main criteria that are used are price, quality, delivery, service and support,
replacement of returns, lead time, and so on.
Inventory Management: to manage stock on a quantity and value basis and plan, enter, and check any
goods movement and carry on physical inventory. With every goods movement, the following values
are updated:
Stock value for inventory management
Account assignment for cost accounting
Corresponding GL accounts for financial accounting via automatic account assignment.
Invoice Verification and material inspection: it provides link between the materials management
component and financial accounting, controlling and asset accounting components.

6. Marketing
The marketing module enables organizations to maximize the efficiencies of marketing resources and
empowers marketers to acquire and develop long term customer relationship. Marketers can analyze,
plan, execute and measure all marketing activities. The marketing module supports critical marketing
processes like:
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Marketing resource management to analyze, plan, develop, implement and measure all marketing
activities to maximize the efficiencies of your available resources and gain visibility and control into
your marketing processes.
Segment and list management sub-system helps you in managing enterprise customer and prospect
data without the need of IT support.
Campaign management: It is used to make the most dialog marketing by marketing by
implementing inbound and outbound campaigns that are both multi-channel and multi-wave. You
can develop and execute the best marketing strategy, using constraint based optimization
techniques to determine the optimum marketing mix.
E-mail marketing: Innovative thinking will uncover dozens of areas where e mail marketing
programs can be used to drive revenues, improve customer satisfaction and streamline internal
processes. It enables to drive efficiency and gain true ROI on campaigns, shorten campaign cycles,
target right people with the right message, swiftly build personalized and content rich messages
without being web guru, obtain immediately feedback, allowing tracking campaign activity as soon
as the campaign is launched and track customer behaviors such as when they opened the e mail,
how many times they viewed it and whether they logged in to the corresponding web site.
Trade Promotion management: To increase brand equity and achieve sales objectives, to lower
costs for managing promotion processes and budgets. This sub system delivers powerful
connectivity. The application enables a closed loop process that adds value to each of the five major
steps in the trade promotion process: headquarter planning, field accounts planning, sell-inland
negotiation, retail execution, and validation, and pre and post evaluation and analysis.
Lead Management: enables you to align marketing and sales organizations and extend lead
management process to partner organizations in order to increase conversion rates.
Marketing analytics: to leverage a wide range of analytics, such as customer values, churn scores
and satisfaction scores, to make profitable decisions. The application also helps to identify business
challenges and opportunities and predict customer behavior, anticipate their needs, and create
more relevant, targeted messages.
Web-based Marketing Surveys: the survey sub-system enables better communication between you
and your customers. To capture information on the opinions and behavior of the people that
matter to their business such as employees, customers, business partners and suppliers.
o On line surveys this sub system manages the entire survey cycle from building individual
survey questions, to launching the survey either on a web site or via an e mail. It also minimizes
the time spent collating and tabulating results into meaningful data.
o Getting the right information at the right time- with on line surveys the results are available as
soon as the respondents complete the survey. This allows reacting to mission critical responses
decisively and immediately.
o Multiple deployment options: the survey sub system creates each survey a separate hyperlink
that can be placed on any web site to help drive traffic to the survey. You can also upload
contact lists and data bases and send them a direct and unique link to the survey and track their
individual response details.. Furthermore, via integration with e marketing you can actually
place the survey an e mail so that your respondent never even has to leave his e mail
application to answer your question.
o Instant results-Easy to understand reports are available and all results data can be downloaded
to excel for further analysis if necessary.

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Self Service Portal: The self-service portal form helps to meet the demands of todays customer by
allowing them with access to information and answer s to their questions at their convenience. The
robust, integrated application works with common internet browsers to give enterprises in the
small to mid-market a global support presence.

The FAQ feature, an on-line store of answer to your customers most frequently asked questions, allow
customers to help themselves to information at any time of the day and from anywhere in the world.

7. Sales and Distribution


Companies are focusing on core competencies and closer partnership and close partnerships over the
whole supply chain. Increased efficiency in sales and distribution is a key factor to ensure that companies
retain a competitive edge and improve both profit margins and customer service. Many vendors offer
comprehensive set of best of- breed components for both order and logistics management. Typically as
ales and distribution module will contain following sub systems:
Master data management(data of products, customers, raw materials, suppliers)
Order management (sales and purchase order management)
Warehouse management (real time information about inventory levels and tools to manage the
daily operational needs of single or multiple sites)
Shipping (The delivery is central shipping document)
Billing (ERP system supports the billing functions like issuing invoice on the basis of goods and
services)
Pricing (the module keeps the information about the prices of various items etc.)
Sales support (field sales people and the staff in sales office can contribute to and access valuable
information about customers, sales prospects competitors and their products and contact people)
Transportation (inward and outward movement of goods, to provide basic functions like
transportation planning and processing, freight calculation, freight settlement, customer freight
calculation and freight invoicing, service agent selection etc.)
Foreign trade (entire logistics chain from import of raw material, finished and unfinished goods,
tithe sales of goods and the transfer of data to materials management and financial accounts)

8. Quality Management
The ISO 9000 series and a host of other international standards define the functions of quality
management and the elements of a quality management system. In the area of production, quality
assurance is no longer viewed in terms of inspection and the elimination of defects alone. Instead, the
production process itself becomes focus of attention. The integration of quality management in the ERP
systems provide considerable advantages because only an integrated system can support all of the
elements of a quality management system according to international standard. The module supports
fulfills functions like
Quality planning (management of basic data for quality planning and inspection planning, material
specifications, inspection planning).
Quality inspection(trigger inspections, inspection processing with inspection plan selection and
sample selection, print shop papers for sampling, record results and defects, make the usage
decision, and trigger the follow up actions).
Quality control (dynamic sample determination on the basis of the quality level history, application
of statistical process control techniques using quality control charts, quality scores for the
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inspection lot, quality notifications for processing internal or external problems and initiating
corrective actions to correct the problems, inspection lot processing and problem processing,
quality management information system for inspections and inspection results and quality
notification) Computer integrated Quality management (CIQ) has following functions.
Materials management (purchasing, inventory management, warehouse management, material
requirement planning).
Production (work scheduling, shop floor control)
Sales and distribution (delivery, creation of quality certificates)

ERP Market
The ERP market is a very competitive and fast growing, average rate @10% over next five years. SAP
continues to be biggest player in the market with an estimated 43% of the market share, or about
$12.5billion in revenue in 2006, Oracle was second with 23.5% market share, or $ 6.7 Billion, third was
Sage Group with 5% share, fourth Microsoft @4%, and fifth SSA Global @3%.

AMR sees the continuation of the movement away from big-bang implementations toward a more tactical
and piecemeal approach. ERP companies continue to focus much of their sales efforts on small (less
than$50 million i.e. Rs 70 Cr) and mid-size ($50m to $1 billion) companies. Revenue sources for ERP
companies are License, Maintenance and Services. Share of License was $6.2 b out of total
$21billion.Maintenance @7%per year has been growth engine of this market.

The popular operating systems for ERP software are Windows and UNIX. Windows at $3.1 b had 43%share.
Oracle dominated as most preferred database. As the technologies of eBusiness and ERP converge,
effective ERP system will be critical component to an enterprises success.

In Indian scenario small and medium sized businesses are major force that pushes growth. Inflexibility of
earlier ERP systems from SAP, Oracle and PeopleSoft pushed the customization drive. Customers are
moving from a best-of-breed to a best-for-business approach, implying that they prefer extension of their
existing ERP for applications like planning and optimization, business intelligence and knowledge
management. This has resulted in ERP vendors introducing new technologies.

ERP vendors needed to tailor their software to the need of specific industry verticals, such as textiles, auto
ancillary, process foods, pharmacy, BFSI , Telecom While new trends spell money for Indian ERP companies
like Ramco, 3i Infotech, Godrej Infotech, Eastern software Systems and Base Information, there are other
drivers too. Over next five years, the ERP market is expected to reach Rs 1550 Cr($341m) as per IDC. Of
this, the SMB potential in India for enterprise class is projected to be Rs 728 Cr, i.e. 47% of market share of
Indian vendors? They have adopted a micro vertical focus to gain market share. Plus Indian players have
products that are cheap, can be implemented quickly, are flexible and need lower IT dependence and
support. For one, 3i Infotechs, Orion Advantage , comes with all requisite hardware and software for less
than Rs 10 Lakh. The computing resources required will be much less compared to that for other ERPs,
primarily MNC products. RAMCO claims 12-15% market share in India. In 2006, 60SMBs deployed ERP
systems. Of this SAP bagged 35 customers, with rest being cornered by Indian vendors.

ERP industry watchers are agreed at least on one point one size does not fit all; each organization is
different and should have specific needs and requirements. So vendors must offer customized products if
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they want to survive. As larger enterpris4es become saturated with new generation client/ server ERP
systems, vendors are being forced to find new markets for their product suites to continue to drive their
growth, focusing to small business clients, through a number of initiatives:
Supplementing their direct sales force with re-seller channels
Lowering the entry price point of their software to make it financially viable
Stratifying their software offerings to appeal on the basis of reduced functionality
Improving the implementation methodologies for faster deployment
Porting the products to platforms such as Microsoft Windows

ERP Vendors

Vendors are the people (companies) who have developed the ERP packages. They are the people who have
invested huge amount of time and effort in research and development, to create the packaged solutions. If
one studies the history of ERP packages and finds out how each package evolved, then it soon 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. Now with the ERP
marketplace become more crowded with more and more players entering the market and the competition
increasing, todays ERP packages have features and functionality to cater to the needs of businesses in
almost all sectors. ERP vendors spend crores of rupees in research and come up with innovations that
make the packages more efficient, flexible and easy to implement and use. Also, with the evolution of new
technologies the vendors have to constant upgrade their products to use the best and latest advancements
in technology.

Following are some of the top ERP vendors of all time:


1. SAP AG
2. Oracle Corporation
3. Sage Group
4. Microsoft Business Solutions
5. SSA Global
6. PeopleSoft
7. JD Edwards
8. Baan

1. SAP AG

SAP is the third-largest software company in the world. It ranks after Microsoft and Oracle in terms of
market capitalization. SAP is the largest business application and Enterprise Resource Planning (ERP)
solution software provider in terms of revenue. By using SAP solutions organizations of all sizes can reduce
costs, improve performance and gain agility to respond to changing needs.

Today, SAP has more than 32,000 customer organizations, in 120+ countries, 100,800 + installations and
more than 12 million users; with more than 36,600 employees and offices in 50 + countries worldwide. SAP
is the leader in the ERP market with a market capitalization of 43% and revenue of $ 12.5 Billion. Of the
total revenue ERP solutions acquire 42%, of this while the remaining portion is made up of supply chain
management (18%), customer relationship management (22%), product life cycle management (6%),
supplier relationship management (6%), etc.
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In 1972, five former IBM employees DietmarHopp, Hans-Werner Hector, HassoPlattner, Klaus Tschira,
and Claus Wellenreuther launched a company called Systems, Applications and Products in Data
Processing (SAP) in Mannheim, Germany with a vision to develop standard application software for real-
time business processing.

SAP launched its first product SAP R/1 solution in the year 1973. After 6 years 1979 SAP R/2 was launched.
R/2 was mainframe bases system with support for multiple languages and multiple currencies. This was
designed keeping in mind the needs of the multinational companies. 1992 SAP R/3 was released. This
system was having many advantages over the other produces in the market like client-server platform,
graphical user interface (GUI), use of RDBMS, hardware independency, etc. The alphabet R means real time
data processing and the numbers 1, 2, 3 denote the architecture like one-tier, two-tier or three-tier.

SAP AG became the company's official name after the 2005 annual general meeting. AG is short for
Aktiengesellschaft (corporation).

Following are the major products SAP has to offer:

mySAP ERP
mySAP Customer Relationship Management (mySAP CRM)
mySAP Product Life Cycle Management (mySAP PLM)
mySAP Supplier Relationship Management (mySAP SRM)
mySAP Supply Chain Management (mySAP SCM)
SAP Business One
mySAP All-in-One

Following are the major modules in SAP ERP:

FI Financial Accounting Module


CO Controlling Module
AM Asset Management Module
PS Project Systems Module
HR Human Resource Module
PM Plant Maintenance Module
MM Materials Management Module
QM Quality Management Module
PP Production Planning Module
SD Sales & Distribution Module
CA Cross Application Module that lies on top of the individual modules and manages the work
flow, business information warehouse, office and workplace, industry solutions and new dimension
products.

Programming for SAP is done in its own language named ABAP/4 (Advanced Business Application
Programming), 4 means it is a fourth generation programming language. SAP currently offers the following
industry solutions: Banking, Insurance, Defense & Security, Healthcare, Higher Education & Research,
Public Sector, Media, Postal Services, Retail, Professional Services, Railways, Telecommunications,
Aerospace, Automotive, Chemicals, Consumer Products, Mining, Oil & Gas, Life Sciences, etc.

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2. Oracle Corporation
The Oracle Corporation established in 1977 is an American multinational computer technology corporation
that specializes in developing and marketing enterprise software products particularly database
management systems. Headquartered in Redwood Shores, California, United States and employing
approximately 108,000 people worldwide as of 31 May 2011, it has enlarged its share of the software
market through organic growth and through a number of high-profile acquisitions. By 2007 Oracle had the
third-largest software revenue, after Microsoft and IBM.

The company also builds tools for database development and systems of middle-tier software, enterprise
resource planning software (ERP), customer relationship management software (CRM) and supply chain
management (SCM) software. Larry Ellison, a co-founder of Oracle Corporation, has served as Oracle's CEO
throughout its history. He also served as the Chairman of the Board until his replacement by Jeffrey O.
Henley in 2004. On August 22, 2008 the Associated Press ranked Ellison as the top-paid chief executive in
the world.

Besides databases, Oracle also sells a suite of business applications. The Oracle E-Business Suite includes
software to perform financial- (Oracle Financials), manufacturing-, enterprise resource planning and HR-
(Human Resource Management Systems) -related functions (Oracle HR). Users can access these facilities
through a browser interface over the Internet or via a corporate intranet.

Following a number of high-value acquisitions beginning in 2003, especially in the area of applications,
Oracle Corporation currently maintains a number of product lines:
Oracle E-Business Suite
Oracle Corporation's E-Business Suite (also known as Applications/Apps or EB-Suite/EBS) consists of
a collection of enterprise resource planning (ERP), customer relationship management (CRM), and
supply-chain management (SCM) computer applications either developed by or acquired by Oracle.
The software utilizes Oracle's core Oracle relational database management system technology. The
E-Business Suite (current version: 12.1) contains several product lines, including:
o Oracle CRM
o Oracle Financials
o Oracle HRMS
o Oracle Mobile Supply Chain Applications
o Oracle Order Management
o Oracle Procurement
o Oracle Project Portfolio Management
o Oracle Quotes
o Oracle Transportation Management
o Oracle Warehouse Management Systems
o Oracle Inventory
o Oracle Enterprise Asset Management
Each product comprises several modules, each separately licensed.
PeopleSoft Enterprise
Siebel
Siebel CRM Systems, Inc. was a software company principally engaged in the design, development,
marketing, and support of customer relationship management (CRM) applications. The company
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was founded by Thomas Siebel in 1993. At first known mainly for its sales force automation
products, the company expanded into the broader CRM market. By the late 1990s, Siebel Systems
was the dominant CRM vendor, peaking at 45% market share in 2002. On September 12, 2005,
Oracle Corporation announced it had agreed to buy Siebel Systems for $5.8 billion. Siebel is now a
brand name owned by Oracle Corporation.
JD Edwards EnterpriseOne
JD Edwards World

Development of applications commonly takes place in Java (using Oracle JDeveloper) or through PL/SQL
(using, for example, Oracle Forms and Oracle Reports). Oracle Corporation has started drive toward
"wizard"-driven environments with a view to enabling non-programmers to produce simple data-driven
applications.

3. Sage Group

The Sage Group commonly known as Sage; is a global enterprise software company headquartered in
Newcastle, United Kingdom. It is the world's third-largest supplier of enterprise resource planning software
(behind Oracle and SAP), the largest supplier to small businesses, and has 6.1 million customers worldwide.
It has offices in 24 countries and its products and services are available in more than 160 countries. It is
listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.

The Company was founded by David Goldman together with Paul Muller and Graham Wylie in 1981 in
Newcastle to develop estimating and accounting software for small businesses. A student at Newcastle
University, Graham Wylie, took a summer job with an accountancy firm funded by a government small
business grant to write software to help their record keeping. This became the basis for Sage Line 50. Next,
hired by David Goldman to write some estimating software for his printing company, Campbell Graphics,
Graham used the same accounting software to produce the first version of Sage Accounts. David was so
impressed he hired Graham and academic Paul Muller to form Sage, selling their software first to printing
companies, but then to a wider market through a network of resellers.

In 1984 the Company launched Sage software, a product for the Amstrad PCW word processor, which used
the CP/M operating system. Sage software sales escalated in that year from 30 copies a month to over 300.
The Company was first listed on the London Stock Exchange in 1989.

In 2000 Sage shares were named best performing share of the 90s in the UK business press. In 2001 Sage
acquired Interact Commerce Inc. and entered the CRM/contact management market and in 2002 Sage won
'Business of The Year' in National Business Awards. Also that year Sage sponsored the new Music Centre in
Gateshead for 6m - now known as The Sage Gateshead - the largest ever UK arts/business sponsorship. By
2003 Sage was the only remaining technology stock in the FTSE 100 Index. In 2003 Graham Wylie retired
with 108.5 million shares in Sage worth 146m. He was rated Britain's 109th richest person in the 2002
Sunday Times' rich list.

Sage has 6.1 million customers and 13,400 employees across the world. Key industry focus includes:
Healthcare; HR & Payroll; Construction/ Real-Estate; Transport/ Distribution; Payment Processing;
Accountancy; Not-for-Profit; Manufacturing; Retail; Automotive Distribution.

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MCA V Sem ERP Domain

The company's product set can be divided into: Accounting; Payroll; Customer Relationship Management
(CRM); Financial forecasting; Payment processing; Job costing; Human Resources; Business intelligence;
Taxation and other products for accountants; Business stationery; Development platforms; E-business;
Enterprise Resource Planning (ERP).

4. Microsoft Business Solutions


Microsoft Dynamics is a line of enterprise resource planning (ERP) and customer relationship management
(CRM) software applications developed by Microsoft. Microsoft Dynamics applications are delivered
through a network of reselling partners who provide specialized services. There are 300,000 businesses
that use Microsoft Dynamics applications and 10,000 Microsoft Dynamics reselling partners worldwide.

Microsoft Dynamics ERP is an enterprise resource planning application primarily geared toward midsize
organizations as well as subsidiaries and divisions of larger organizations. Microsoft Dynamics ERP includes
five primary products:

Microsoft Dynamics AX (formerly Axapta)


Microsoft Dynamics GP (formerly Great Plains Software)
Microsoft Dynamics NAV (formerly Navision)
Microsoft Dynamics SL (formerly Solomon IV)
Microsoft Dynamics C5 (formerly Concorde C5)

Also included are retail solutions: Microsoft Dynamics CRM is a multi-lingual customer relationship
management application from Microsoft that provides sales, service, and marketing capabilities, and
includes Microsoft Dynamics CRM Online. Microsoft Dynamics offers ERP and CRM solutions for a range of
industries. Solution providers build on the standard functionality in Microsoft Dynamics ERP and Microsoft
Dynamics CRM applications to deliver industry-specific solutions through a network of channel partners.
Industry solutions for Microsoft Dynamics ERP address needs for the following industries:
Construction
Distribution
Education
Financial services
Government
Healthcare
Manufacturing
Not for profit
Professional services
Retail

The Microsoft Business Solutions group formed in part from Microsofts acquisition of two software
companies: Great Plains Software, acquired in April 2001, and Navision, acquired in July 2002.Microsoft
Dynamics CRM entered the CRM market in 2003. The Microsoft Business Solutions group now includes the
Microsoft Dynamics ERP product group and Microsoft Dynamics CRM product group.

Competitors

SAP Business One is integrated ERP software that targets the business requirements of small and
midsize enterprises; it competes with Microsoft Dynamics globally.
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SAP Business ByDesign is a hosted solution which is based on the SAP R/3 core. It is marketed
towards small to medium enterprises (SME) who require an ERP and CRM solution that can grow
with the business. Prices start from $149 USD per user per month.
Sage Business Solutions provides end-to-end financial accounting software, ERP software, CRM
software, and business intelligence (BI) software solutions to small, midsize, and large businesses.
NetSuite is a vendor of on-demand, integrated business management software suites for mid-
market enterprises and divisions of large companies.
Epicor develops enterprise software targeted at mid-market companies primarily in the
manufacturing, distribution, retail, hospitality, and services industries.
Blackbaud develops a suite of financial management products designed towards higher education
and non-profit organizations.

5. SSA Global
SSA Global Technologies was a company developing Enterprise resource planning (ERP) software. SSA was
founded in December 1981 and has its headquarters in Chicago, USA. On May 15, 2006, SSA Global
announced that it would be acquired by Infor Global Solutions. The acquisition was completed on July 28,
2006.

Infor Global Solutions is a privately held U.S. software company that specializes in enterprise software
ranging from financial systems and resource planning (ERP) to supply chain and customer relationships.
Infor has around $2 billion in revenue, 70,000+ customers, and more than 8,000 employees. Infor supports
customers with 3,500 product specialists in 35 countries, plus 1,400 technology and sales and service
partners, offering support and training in 20 languages. The company was founded in 2002 under the name
Agilisys in Malvern, Pennsylvania. In February 2004, Agilisys headquarters were relocated to Alpharetta, in
the Atlanta metropolitan area, and Agilisys acquired the German company Infor Business Solutions,
headquartered in Friedrichsthal (Saar). After this acquisition, Agilisys changed its name to Infor Global
Solutions.

Infor has approximately 8,000 employees, 120 offices in 36 countries, 2,300 developers, 2,400 consulting
experts, 1,300 support professionals, and 1,100 channel partners. Infor is the third largest provider of
enterprise applications and services, helping 70,000 customers in 164 countries improve operations, drive
growth and quickly adapt to changes in business demands. Infor offers deep industry-specific applications
and suites, engineered for speed, using ground-breaking technology that delivers a rich user experience,
and flexible deployment options that give customers a choice to run their businesses in the cloud, on-
premises or both.

Infor offers a full range of enterprise business software including customer relationship management,
enterprise asset management, enterprise resource planning, financial management, human capital
management, performance management, product lifecycle management, supplier relationship
management, and supply chain management, including business specific inventory management,
transportation logistics and warehouse management software.

Customers of Infor include:


8 of the top 10 aerospace companies
9 of the top 10 high tech companies
9 of the top 10 pharmaceutical companies
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80 of the top 100 automotive suppliers


19 of the top 35 retailers
9 of the top 20 electrical distributors
6 of the top 10 brewers
Over 7,000 machinery manufacturers
Over 1,100 apparel & footwear companies
Over 1,100 state & local government agencies
Over 3,000 financial services companies

6. PeopleSoft
PeopleSoft, Inc. was a company that provided Human Resource Management Systems (HRMS), Financial
Management Solutions (FMS), Supply Chain (SCM) and customer relationship management (CRM)
software, as well as software solutions for manufacturing, enterprise performance management, and
student administration to large corporations, governments, and organizations. It existed as an independent
corporation until its acquisition by Oracle Corporation in 2005. The PeopleSoft name and product line are
now marketed by Oracle.

Founded in 1985 by David Duffield and Ken Morris, PeopleSoft was originally headquartered in Walnut
Creek, California before moving to Pleasanton, California. Duffield envisioned a clientserver version of
Integral Systems' popular mainframe HRMS package. PeopleSoft version 1, released in the late 1980s, was
the first fully integrated, robust clientserver HRMS application suite. PeopleSoft expanded its product
range to include a financials module in 1992, distribution in 1994, and manufacturing in 1996 after the
acquisition of Red Pepper.

In 2003, PeopleSoft performed a friendly merger with smaller rival JD Edwards. The latter's similar product
line, World and OneWorld, targeted mid-sized companies too small to benefit from PeopleSoft's
applications. JD Edwards' software used the Configurable Network Computing architecture, which shielded
applications from both the operating system and the database back-end. PeopleSoft branded the
OneWorld product PeopleSoft EnterpriseOne.

Beginning in 2003, Oracle began to maneuver for control of the PeopleSoft company. In June 2003, Oracle
made a $13 billion bid in a hostile corporate takeover attempt. In February 2004, Oracle decreased their
bid to approximately $9.4 billion; this offer was also rejected 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. 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 in May, it again raised its bid
in November to $9.4 billion, marking a 14% increase.

In December 2004, Oracle announced that it had signed a definitive merger agreement to acquire
PeopleSoft for approximately $10.3 billion. The following January, Oracle announced plans to cut
approximately 9% of the 55,000 staff of the combined companies, maintaining at least 90% of PeopleSoft's
product development and support staff.

Oracle moved to capitalize on the perceived strong brand loyalty within the JD Edwards user community by
rebranding former JD Edwards products. Thus PeopleSoft EnterpriseOne became JD Edwards
EnterpriseOne and PeopleSoft World became JD Edwards World. Oracle has announced that a new
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product, Fusion Applications, is to be released 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.

7. JD Edwards

J.D. Edwards World Solution Company or JD Edwards, abbreviated JDE, was an Enterprise Resource
Planning (ERP) software company. Products included World for IBM AS/400 minicomputers (the users
using a computer terminal or terminal emulator), OneWorld for CNC architecture (a clientserver fat
client), and JD Edwards EnterpriseOne (a web-based thin client). The company was founded March 1977 in
Denver, Colorado by Jack Thompson, Dan Gregory, and Ed McVaney. It was purchased by PeopleSoft, Inc.
in 2003.PeopleSoft, in turn, was purchased by Oracle Corporation in 2005, and Oracle continues to sell and
support EnterpriseOne and World ERP software line.

JD Edwards OneWorld, an entirely new product with a graphical user interface and a distributed computing
model replacing the old server-centric model. The architecture JD Edwards had developed for this newer
technology, called Configurable Network Computing or CNC, transparently shielded business applications
from the servers that ran those same applications, the databases in which the data was stored, and the
underlying operating system and hardware. By first quarter 1998, JD Edwards had 26 OneWorld customers
and was moving its medium-sized customers to the new clientserver flavor of ERP. By second quarter
1998, JDE had 48 customers, and by 2001, the company had more than 600 customers using OneWorld, a
fourfold increase over 2000.

In June 2003, the JD Edwards board agreed to an offer in which PeopleSoft, a former competitor of JD
Edwards, would acquire JD Edwards. The takeover was completed in July. OneWorld was added to
PeopleSofts software line, along with PeopleSoft's flagship product Enterprise, and was renamed
EnterpriseOne.

Within days of the PeopleSoft announcement, Oracle Corporation mounted a hostile takeover bid of
PeopleSoft. Although the first attempts to purchase the company were rebuffed by the PeopleSoft board
of directors, by December 2004 the board decided to accept Oracle's offer.

8. Baan

Baan was a vendor of enterprise resource planning (ERP) software that is now owned by Infor Global
Solutions. Baan or Baan ERP was also the name of the ERP product created by this company.

The Baan Corporation was created by Jan Baan in 1978 in Barneveld, Netherlands, to provide financial and
administrative consulting services. With the development of his first software package, Jan Baan and his
brother Paul Baan entered what was to become the ERP industry. The Baan Company focused on the
creation of enterprise resource planning (ERP) software.

Jan Baan developed his first computer program on Durango F-85 computers in BASIC language. In the early
'80s, Baan Company began to develop application on Unix computers with C and self-developed Baan-C
language, whose syntax was very similar to BASIC language.

Baan gained its popularity in the early nineties. Baan software is famous for its Dynamic Enterprise
Modeler (DEM), technical architecture and its 4GL language. Baan 4GL and Tools nowadays is still
considered to be one of the most efficient and productive database application development platforms.
Baan became a real threat to market leader SAP after winning a large Boeing deal in 1994. Several large
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consulting firms throughout the world partnered to implement Baan IV for multi-national companies. It
acquired several other software companies to enrich its product portfolio, including Aurum, Berclain, Coda
and Caps Logistics. Sales growth rate was once claimed to reach 91% per year.

However the fall of the Baan Company began in 1998. The management exaggerated company revenue by
booking "sales" of software licenses that were actually transferred to a related distributor. The discovery of
this "creative" revenue manipulation led to a sharp decline of Baan's stock price at the end of 1998. First
Paul Baan left the company as a result of this, shortly after to be followed by brother Jan Baan.

In June 2000, facing worsening financial difficulties, law suits and reporting seven consecutive quarterly
losses and bleak prospects, Baan was sold at a price of US$700 million to Invensys, a UK automation,
controls, and process solutions group to become a unit of its Software and Services Division. Laurens van
der Tang was the president of this unit.

In June 2003, after Allen Yurko stepped down, Invensys sold its Baan unit to SSA Global Technologies for
US$ 135 million. Upon acquiring the Baan software, SSA renamed Baan as SSA ERP Ln. In August 2005, SSA
Global released a new version of Baan, named SSA ERP LN 6.1. In May 2006, SSA was acquired by Infor
Global Solutions of Atlanta, which was a major ERP consolidator in the market.

Baan supports Windows Server, Linux, IBM AIX, Sun Solaris, HP-UX, AS400(Obsolete), OS390 (Obsolete).
And, databases like Oracle, DB2, Informix, MS SQL Server, MySQL (Obsolete since year 2010), Bisam
(Obsolete), Btam (Obsolete).

Major modules of Baan include Enterprise Modeler, Common, Taxation, People, Financials, Project,
Enterprise Planning, Order Management, Electronic Commerce, Central Invoicing, Manufacturing,
Warehouse Management, Freight Management, Service, Quality Management, Object Data Management),
Tools.

In September 2004, Jan Baan has launched a new Web Services company Cordys. The Baan organization
was very closely tied to Dutch Reformed Church. For a while corporate policy dictated that no employees
would be compensated for traveling on a Sunday if an employee had a meeting off-site on Monday
morning, he or she was expected to travel on Saturday if Monday travel was not possible. There was no
customer support offered on Sundays, and women were required to dress modestly, wearing long skirts.
Swearing was forbidden. When the company had difficulties, President Jan Baan sent an email to all the
employees saying that God had told him to step down.

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Unit IV
ERP Implementation Life Cycle

ERP implementation means selection of a particular ERP system for the purpose of implementing it into an
enterprise, because there are a number of ERP vendors with a number of ERP projects (ERP systems) trying
to sell the ERP projects to the company management. It is then for the company management to decide
which ERP system is to be purchased and implemented in the organization.

Here a decision that is taken in haste might lead to disastrous damages to the enterprise as a whole.
Therefore it is advisable to use some discipline and scientific procedure for selecting a particular ERP
project. The ERP implementation project is required to go through different phases. These phases of ERP
implementation are collectively called as the ERP implementation life cycle.

The various phases of it are given below:


1. Pre-Evaluation Screening
2. Package Evaluation
3. Project Planning Phase
4. Gap Analysis
5. Reengineering
6. Configuration / Customization
7. Implementation Team Training
8. Testing
9. Going Live
10. End User Training
11. Post Implementation (Evaluation and Maintenance)

Though there is a long list of ERP implementation phases through which an ERP implementation is
supposed to pass, but in expert opinion, no one can definitely guarantee that every ERP implementation
passes through all these phases. It depends on the environment of the company whether a particular ERP
implementation project passes through all the given phases or only through a few.

1. Pre-Evaluation Screening
Once the company has decided to go in for the ERP system; the search for the perfect package starts. But
there are many ERP vendors in the market carrying many ERP packages of all sizes and shapes. All these
vendors claim that their ERP packages are ideal for our company. But since there are many ERP packages in
the market and if we sit for analyzing all these packages then it is very time consuming process. Therefore,
it is always advisable to limit these packages to less than five. It is always better to do a thorough and
detailed evaluation of a small number of packages, than doing a superficial analysis of dozens of packages.
Hence the company should do a pre-evaluation screening to limit the number of packages that are to be
evaluated by an appointed committee. All the packages are not equal; each has got its own strength and
weakness. The pre-evaluation screening process should eliminate those packages that are not at all
suitable for the companys business processes. This can be achieved by looking at the product literature of
the vendors, getting help from external consultants and most importantly by finding out what package is
used by companies which are similar. It is always better to find out how the different packages are
performing in environment similar to ours.

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It is generally accepted that most ERP packages are stronger in certain areas than in others, and each
vendor is trying to add functionalities in those areas where they have been lacking once we select a few
packages. After the screening we can start the detailed evaluation process.

2. Package Evaluation
The evaluation process is one of the most important phases of the ERP implementation, because the
package that we select will decide the success or failure of the project. Since ERP systems involve huge
investments once a package is purchased, it is not an easy task to discard it and switch over to another
package.

The most important factor that should be kept in mind when analyzing the different packages is that none
of them are perfect. The idea that there is no perfect package need to be understood by everyone in the
decision making team. The objective of selection process is not to identify a package that covers each and
every requirement. The objective is to find a package that is flexible enough to meet the companys needs
or in other words software that could be customized to obtain a good fit. To choose the best system, the
company should identify that system which meets the business needs, which matches the business profile
and that which identifies with the business practices of the company. It is impossible to get an ERP 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.

It is always better to form a selection or evaluation committee that will do the evaluation process. This
committee should comprise of people from various departments, top management and consultants (i.e.
package experts). The selection committee should be entrusted with the task of choosing a package for the
company. The package experts or the consultants can act as mediators, or play the role of explaining the
pros and cons of each package.

3. Project Planning Phase


Under this phase implementation plan is developed. This is the phase that designs the implementation
process. It is in this phase that the details of how to go about the implementation are decided.

The project planning is usually carried by a committee. The committee will be headed by the ERP in-charge.
The committee should meet periodically, during the entire implementation cycle, to review the progress
and design future course of actions.

Under this phase, in addition to the plan, roles are identified and responsibilities are assigned. The
organizational resources that will be used for the implementation effort are decided and the people who
are supposed to head the implementation groups are identified. The implementation team members are
selected and jobs of implementation are assigned to them. This phase will decide when to begin the
project, how to do it and when the project is supposed to be completed. This phase also plans and tells
what to do in case of contingencies, how to monitor the progress of implementation, what control
measures should be installed and what corrective actions should be taken when things get out of control.

4. Gap Analysis
This is arguably the most crucial phase in the success of the ERP implementation. Put very simply, this is
the process through which companies create a complete model of where they are now and where they
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want to be headed. The trick is to design a model, which both anticipates and covers any functional gaps. It
has been estimated that even the best ERP package, custom tailored to a companys needs meets only 80%
of the companys functional requirements.

The remaining 20% of these requirements present a problematic issue for the companys business process
reengineering (BPR). Some of the possible solutions to fill this 20% gap are as follows:
One of the most affordable, albeit painful, solutions entails altering the business to fit the ERP
package. Here the problem is to change the processes that the company has been following for
the past many years. Maybe that process which has to be changed to accommodate the ERP is
the only process that is providing an edge over the competitors or may be changing that
particular process will have an impact on the important people of the organization which the
company management cant afford to do.
Of course, a company can simply agree to live without a particular function (the cheap but
annoying solution). This solution seems to be cheaper than others, but what is the point in
keeping one part of the organization fully equipped with ERP and the other purely manual or
having some small software. There will be problems related to this sub-standardization as the
information will not be maintained in an integrated manner.
Pinning your hopes on an upgrade (low-cost but risky). Companies try to wait for the next
upgrade from the ERP vendor and hope that the upgrade or a new version will cover the gap
whatever was present. But the chances are few that this thing may happen as with time the
requirements of the company may also change and the vendor may not offer the required
features in the near future.
Identifying a third-party product that might fill the gap (hopefully it also partners with the ERP
packages, keeping interfacing to a minimum). This is the solution that many companies opt for.
Here the problem lies in integration of the third party software with the ERP system as the
vendor should allow for the same and the third party software should be having the
functionality of integrating with the ERP.
Designing a custom program. This is a better solution as the custom software will be designed
specially to fill the gap and fulfill the users requirements. Here again the problem is the level of
integration that the ERP allows and the custom developers can do to ensure information
integration.
Altering the ERP source code, (the most expensive alternative; usually reserved for mission
critical installations). This is the most expensive alternative as altering the code of ERP will
require time, money and resources. Plus it will make upgrading the ERP system in the future
quite difficult as those changes are again to be made in the upgrades as well.

5. Reengineering
It is in this phase that the human factors are taken into account. In ERP implementation settings,
reengineering has two different meanings. The first meaning is the controversial one, involving the use of
ERP to help in downsizing the effort. Sometimes high-level executives initiate the slogan of reengineering
for the purpose of reducing the significant number of employees. This is misuse of the concept of
reengineering. Reengineering if required should be brought into practice, but not under a wrong slogan.
The reengineering concept, in reality involves some change in job responsibilities as processes become
more automated. It is best to treat ERP as an investment as well as a cost cutting measure rather than a
downsizing tool. Downsizing is a business practice that may have its place, but it should not be brought
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under the cover of reengineering slogan, or downsizing should not be justified by the purchase of an ERP
package. The ERP should bring a change in the functional areas of business, but it should not endanger the
jobs of thousands of employees.

The second use of the word reengineering emphasizes the change in human element within an
organization. Here change refers not to downsizing but the change of responsibilities of employees and it is
time consuming also. This second change has also become victim of a large criticism. Bu there is no escape
from it.

6. Configuration / Customization
This is the main functional area of the ERP implementation. Here configuration refers to synchronizing
existing company practices with the ERP package rather than changing the source code and customizing it
to suit the company. In order to do so, business processes have to be understood and linked (mapped) or
transformed into the ERP model in such a way that the transformation match the overall goals of the
company. In this transformation match the overall goals of the company. In this transformation period,
companies cannot just shut down their routine operations. Hence the prototype of the company is
prepared and used for such transformation or mapping. The ERP consultants configure and test the
prototype and while doing so if ERP consultants face any logistical problem then they try to solve such
problems.

Configuring a companys system reveals not only the strengths of a companys business process but also
and perhaps most importantly its weakness. It is in the interest of the company and also for the success of
the ERP implementation that those configuring the system are able to explain as to what will not fit into
the package, and where the gaps in functionality occur.

For (example) a company might have an accounting practice that cannot be configured into the system.
The company needs to know which processes have to change in the process of implementation. To find out
as to what will work and what will not; requires knowledge of business process itself, and an ability to work
with the people throughout the company. Therefore people with such skills should be assigned to these
tasks.

7. Implementation Team Training


Around the same time when the configuration is taking place, the implementation team is being trained,
not so much how to use the system, but how to implement it. This is the phase where the company trains
its employees to implement and later run the system. The ERP vendors and the hired consultants will leave
after the implementation is over. But for the company to be self-sufficient in running the ERP system, it
should have a good in-house team that can handle the various situations. Thus it is very important for the
company to recognize the importance of this phase and select those employees who have the right
attitude, which are willing to change, learn new things and are not afraid of technology and have good
functional knowledge.

8. Testing
This is the phase where we try to break the system. Now we have reached a point where we are testing the
real case situations. To test the system, ask multiple users to log in at the same time with the same query,
let the users enter invalid data, ask the users to access restricted areas and so on. The test cases must be
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designed specifically to find the weak links in the system and these bugs should be fixed before using it for
real time situations.

9. Going Live
On the technical side, the work is almost complete, data conversion is done, and databases are ready.
Similarly on the functional side the prototype is fully configured and tested and is ready to go operational.
The system officially is officially declared operational. Once the system has become live, the system is
removed and the new system is used for doing business.

10. End User Training


This is the phase where the actual users of the system will be given training on how to use the system. This
phase starts much before the system goes live. The employees who are going to use the new system are
identified. Their current skills are noted and based on the current skill levels, they are divided in groups.
Then each group is given training on the new system. This training is very important as the success of the
ERP system is in the hands of end users. So these training sessions should be give the participants an
overall view of the system and how individual actions would affect the entire system.

11. Post Implementation (Evaluation and Maintenance)


The post implementation phase is very important and very critical. Once all the implementation phases are
complete, the vendors of ERP and the hired consultants will go. Now it is up to the employees of the
enterprise to reap full benefits of the ERP system. There must be sufficiently large number of employees
who are trained to handle the problems that might crop up during the post-implementation period. There
must be people, within the enterprise, who have technical knowledge to make necessary modifications in
the system as and when required. The system must be upgraded as and when new versions or new
technologies are introduced. People are again required to be trained as soon as up gradation or new
versions of the system are implemented. The training will never end, it is an ongoing process, new people
will always be coming in and new functionalities will always be entering the organization.

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Unit V

Case Studies
CASE STUDY 1 (SAP Implementation)

COMPNAY

Heckler & Koch Great Britain Ltd. is a distributor of weapon systems technologies, and was formed when
part of BAe Systems was sold to the German firm Heckler & Koch in 2002. Heckler & Koch GB, is a
distributor of weapon system technologies including self-loading pistols, sub-machine guns, sniper rifles,
assault rifles, machine guns, etc.

HECKLER & KOCH operates extensive research and design capabilities, enabling us to constantly meet the
developing demands of security, law enforcement and military forces. T

Heckler & Kochs Quality Assurance System has been certified to EN ISO 9001 and meets the requirements
of the NATO Quality Standard AQAP 2110.

PROBLEM

When it was a part of BAe Systems, Heckler & Koch GB used their SAP System. They were used to the
efficiency and simplicity in operations offered by SAP. So they needed a system that would help them
operate at full efficiency once they began to work as a separate and independent company.

THE SOLUTION

Though Heckler & Koch GB is a company of 10 people, still they decided to go for SAP as they had a good
experience of working with SAP of BAe Systems. SAP in BAe Systems was implemented by a company
named CSC. But as CSC was not having local support they decided to go with Absoft, a UK based company
to carry out the implementation process.

Absoft assigned a team of seven to Heckler & Koch GB - a project manager, one full-time lead SAP technical
consultant, three infrastructure specialists and two SAP functional consultants to cover the financials and
logistics areas.

The team built a completely new infrastructure architecture based on Oracle and Windows 2000. They
implemented 4 modules of SAP namely FI, CO, MM and SD. The new system was configured exactly like the
SAP system of BAe Systems, hence the foundation was laid for Heckler & Koch GBs data to be imported.

Absoft took just 11 weeks to complete the project and Heckler & Koch GBs new system went live
successfully, on time and on budget. Heckler & Koch GB holds support contract with Absoft for remote
support which includes weekly and monthly system monitoring checks and comprehensive technical and
functional support.

BENEFITS

1. In 2003 immediately after the implementation Heckler & Koch GB estimated a turnover of 5
million, but it turned out to be 10 million.
2. Now they easily maintain inventory worth 3 million.
3. Productivity increased as a result of more streamlined processes.
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4. Better inventory management.


5. More disciplined staff.

CASE STUDY 2 (SAP Implementation)

INSTITUTION

Shri Sant Gajanan Maharaj Sansthan (Temple Trust), the second largest pilgrimage destination in western
India. The trust handles massive transactions daily pertaining to room reservations and check-outs,
allotment of the cloak room lockers, sales of publications and souvenirs, distribution of sacred food and
medicines and procurement of items required to provide on-campus dining and hospitality services.

PROBLEM

With a daily footfall of 3,000 devotees, a network of nine branches and over 20,000 daily transactions, the
trust needed to radically enhance its operational efficiencies. Over the last few years, the day-to-day
operations of the trust had become complex. Managing the growing volumes of donations received from
different sources and channeling its proceeds into various welfare activities was becoming cumbersome.
Moreover, maintaining manually updated records of transactions with over 1000 suppliers and contractors
was also difficult.

THE SOLUTION

The trust in 2007 partnered with Patni to implement SAP ERP. The implementation started on June 1, 2007
and they went live on December 13, 2007. The Patni team focused on functional objectives of the Sansthan
and not just on the software capabilities and implementation, as moving away from manual silos and
creating effective cross-functional processes that are truly integrated via the SAP ERP system was not an
easy task.

The biggest challenge to change came from the end users of the system. Most of the staff members were
not conversant with English language and happened to be first time computer user. The Sansthans senior
accountants, for instance had never used a keyboard, and found it difficult to adapt to the change. This
raised several questions about the practical relevance of implementing an ERP system. The issue was
addressed by rolling out a change management program. The management committee of the Sansthan
discussed the benefits of the new system with all the members of staff and assured them its
implementation would not affect their employment.

They also imparted end-user training to the entry level staff and assigned the older members with roles in
managing operations. The manual practices were not discontinued for six months ever after go-live state.
The staff continued the practice of recording transactions through manual processes despite the fully
functional ERP, to ensure that its staff achieved a certain level of comfort with the new system.

BENEFITS

1. Improved efficiency and simplified operations, with automated information exchange between
departments and reduction in number of donation counters to one.

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2. Enhanced reporting and improved ability to make decisions, as the system has automated the
generation of reports like supplier outstanding, trail balance, general ledger, balance sheet, budgets
and audit report.
3. Transparency and accountability into the collection and utilization of donations.
4. The trust has undertaken 55 new construction activities like schools, colleges and other
development projects.
5. 80% gain in manpower utilization.

FUTURE PLANS

Inspired by the implementation, Sansthan is now exploring the possibility of adding online donation
functionality to its website. This will enable devotees to submit their donations online by charging their
credit and debit cards. This e-business platform will also help in connecting with devotees to ensure that
they have received the receipts for the same.

CASE STUDY 3 (Baan Implementation)

COMPANY

TEI Electronics, a JV of Tyco Electronics and Elentec of Korea manufactures components like electronic
connectors, PCB assemblies and remote controllers for electronics manufacturers. Its customers include
Sony, Samsung, Videocon, Onida, Videocon, Samtel, Salora and HFCL.

PROBLEM

The management had to operate at a lower cost in order to maintain sustainable margins. It had to curb
expenditure and build its asset base, as instructed by its joint venture partners.

The electronics industry is plagued with the issue of obsolescence of material, since product designs
change regularly. Not even five percent scarp value is assigned to the obsolete material. So the need for
inventory and materials management justified the requirement of ERP system.

THE SOLUTION

After a lot of planning and consideration the company decided to deploy an ERP from Baan, and had to
implement it very quickly. The ERP from Baan was implemented in 70 days, with a lot of effort from the
implementation team and support from the top management.

Polaris was chosen as the implementation partner as they had a lot of expertise in implementing Baan. The
implementation team sat together to decide the implementation in September 2002. There was however a
concern. Company sales were to shoot up due to the approaching Diwali festival and the 2003 Cricket
World Cup scheduled for February. This was because, the sale of color television sets were expected to
rise. Keeping this in mind the implementation team prepared an ambitious plan to start the
implementation on October 3, 2002 and go live with Baan on January 1, 2003.

The employees were instructed not to take any leave during implementation. They had to work overtime
to ensure successful implantation. The suggestions of the department heads was welcomed with open
hands. Many of them demanded changes in the software which was agreed and the necessary changes

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made to the system. The company implemented Baan in 70 days with a big bang approach. Probably the
fastest Baan implementation in India.

BENEFITS

1. Transaction processing time reduced substantially.


2. Production planning can now be performed based on forecasts made from customer data.
3. Efficiency has improved.
4. Paperwork reduced.
5. Users can view inventory and its value any time.
6. Better materials planning to help optimize inventory levels.

FUTURE PLANS

The company plans to connect their system to Tyco and Elentec. This will provide them quick information
on the latest development in technology.

CASE STUDY 4 (J D Edwards Implementation)

COMPANY

Founded in 1974, Hindustan Petroleum Corporation Limited (HPCL), a Fortune 500 Company, is one of the
largest integrated petroleum refining and marketing companies in India. The company owns and operates
two oil refineries at Mumbai and Visakhapatnam, two-cross country pipelines and an expensive network of
terminals, depots, bottling plants and aviation servicing facilities.

HPCL refineries upgrade crude petroleum into many value added products and more than 300 grades of
lubricants and greases. The company has around 17% market share of the Indian oil and gas sector and
also exports its products to Bangladesh, Malaysia, Nepal and Sri Lanka.

PROBLEM

To strengthen business management and improve customer service, HPCL wanted to implement a system
that will take care of everything. HPCL wanted to implement innovative ways of enhancing customer
satisfaction by leveraging technology. The information was not available in real-time from across all
geographically spread locations of the corporation which is required to improve efficiencies in the area of
tracking and monitoring customer receivables, credit management, inventory management and providing
enhanced services to customers and other stakeholders.

THE SOLUTION

HPCL implemented an advanced enterprise resource planning (ERP) system based on range of J D Edwards
EnterpriseOne applications from Oracle. The ERP system was implemented at more than 430 locations
across India from 2003 to 2005 and is used by over 2000 employees.

Capgemini Consulting India was engaged to deploy the ERP solution. The J D Edwards platform was
integrated with maintenance systems at refineries, electronic weighbridges and truck loading systems.
These interfaces simplified workflows and reduced the need for manual intervention, minimizing human
error.
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Customized employee compensation, benefits and payroll applications were also developed and integrated
with the J D Edwards EnterpriseOne Financial Management and J D Edwards EnterpriseOne Human Capital
Management Modules.

Powerful IBM enterprise servers that run database and applications are housed at the head office in
Mumbai. A separate DRC (disaster recovery center) is being setup to provide backup in the event of an
emergency. The DRC mirrors the main server and ensures continuous system operation if the primary site
experiences any issues. It will also enable the main server to be shut down for maintenance task.

Extensive training was given to users and also they continuously arrange for refresher courses. HPCL
organizes virtual training sessions from time-to-time to allow staff in remote locations to learn about new
system features. This reduces travel time and cost of participants and enables quick dissemination of new
information to users.

BENEFITS

1. Boosted efficiency by moving to a single, integrated business management platform and


standardizing workflows.
2. Facilitated informed decision-making by providing managers with access to accurate, up-to-date
information in real-time.
3. Enabled quick access to critical documents by installing an archival system to store invoices,
purchase orders, checks and other material.
4. Improved customer service by establishing a portal to provide clients with dispatch details, account
statements and transaction information.
5. Speeded up payments to suppliers by implementing an electronic payment system.

CASE STUDY 5 (PeopleSoft Implementation)

COMPANY

Alcome Marketing Group Incorporated, California, USA. Founded in 1976 is an award winning marketing
and promotions agency. Alcone has 950 employees and offices in four countries.

PROBLEM

Alcone was looking for a new financial system to streamline the billing process and provide greater
information access to its staff.

THE SOLUTION

The company looked at several financial packages and then decided on PeopleSoft Select. PeopleSoft
Select is a complete hardware and software solution developed for medium sized companies. Unlike other
systems designed for medium sized organization, PeopleSoft Select is offered directly through PeopleSoft,
not a value-added reseller. PeopleSoft satisfied the companys criteria cost-effectiveness, stability,
reliability and fast track turnkey implementation. Another factor in the decision was that Select offered a
total solution incorporating technology from other leading companies like Compaq and Microsoft that
would result in lowering the costs in the long-run. Everything from the Compaq hardware to Microsoft SQL
Server is fully integrated with PeopleSofts applications.
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They implemented PeopleSoft General Ledger, Receivables, Payables, Billing, Projects, PeopleTools
modules. The system was implemented on Microsoft Windows NT as the Operating System and Microsoft
SQL Server as database backend.

BENEFITS

1. Manual (slow) processes became more efficient.


2. Enhanced billing functions and improved billing efficiency.
3. Faster access to shared multi-dimensional information.
4. Fast and improved decision making.
5. Maintaining organization structure became more efficient and easier because of Tree Manager
Feature of PeopleTools.
6. Improved productivity.

CASE STUDY 6 (Oracle Implementation)

COMPANY

Cisco Systems, Inc. is the leading global provider of networking for the Internet. Cisco is a fast-growing,
multi-billion dollar company based in San Jose, California and offers the industrys broadest choice of
standards based networking software and hardware for delivering networked applications.

PROBLEM

Cisco offers nearly infinite number of assemble-to-order software and hardware with unique customer
sales order information behind every piece. Customized specific information must travel with each
product, throughout the warehousing process. Previously Cisco Item Replenishment (CIR) process for their
3 San Jose warehouses was done manually. While pertinent tracking information was keyed in at terminals
by warehouse personnel at each inventory stage, the storage location of the product was not On-hand
balances reflected correct inventory quantities but not location. Another issue was the amount of time
needed to pull an order off the shelf. Ciscos fast growth precipitated the need to reduce the one-and-a-
half hour pull time to 35 minutes for continued efficiency gains. Cisco Systems hired Brouwer Palmer &
Associates to address 4 concerns:

1. Amount of time taken to enter the data


2. Accuracy of the data entered
3. The need for a locator system
4. Ensure that the process is non-intimidating and easy-to-use.

THE SOLUTION

In July 1996 Brouwer Palmer & Associates, Inc. in co-operation with the Cisco Systems Information Services
group installed BP.LINK(r), a software that extends the power of Oracle 7 to the world of bar coding, and
an Intermec RF data collection system. To meet the rapid implementation schedule, BPA proposed a
strategy of using BPAs off-the-shelf BP.LINK / Apps transactions along with BP.LINK(r) application
development training. The collaboration allowed Ciscos IS professionals and BPAs consultants to quickly
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develop the necessary custom transactions the result was a user friendly data collection system that met
Ciscos demanding requirements, with tight integration to both standard Oracle Applications and Ciscos
application customizations.

Cisco implemented Oracle Applications including Oracle Application Object Library, Oracle Bills of Material,
Oracle General Ledger, Oracle Inventory, Oracle Purchasing, Oracle Order Entry and Oracle Work in
Process. The database was implemented using Oralce7 Parallel server.

BENEFITS

1. Inventory volume has doubled while the head count has remained constant.
2. Pull-time has decreased to 35 minutes with use of scanners.
3. Information is scanned without error.
4. User friendly data collection system meets Ciscos demanding requirements.
5. Efficiency has increased.

CASE STUDY 7 (Microsoft Implementation)

COMPANY

Bases in St. Paul, Minnesota, 3 M Medical Sales Division provides wound care management products and
services to medical professionals including doctors, home health nurses and hospitals. 3 M distributes
these products through its worldwide direct sales force of over 800 people.

PROBLEM

3M was seeking a more cost-effective and automated method for its salespeople to place orders and
incorporate intelligent reporting for its management.

3M sales people place phone orders with telemarketing reps for samples of wound care management
products. They provide these samples to doctors and nurses for an evaluation period. A successful
evaluation of 3M products is the key to receiving subsequent orders. 3M products are the key to receiving
subsequent order management cycle and gets business intelligent reporting.

They chose market leader MDI, founded in1964, who provides plastic manufacturing, fulfillment and
packaging, and assembly services. The company targets mid-large customers operating in private and
government sectors and is ISO 9001:2000accredited.Microsoft Dynamics Great Plains is the backbone of
MDIs operations for all its customers. It manages all information from the moment an order is placed to
when the bill is paid extending throughout the entire sales cycle.3M was outgrowing their phone ordering
system to take orders, and needed to migrate to a real time online ecommerce solution that would offer
3M sales force flexibility, accessibility, and more control over the order management cycle.MDI s top
priority in selecting an ecommerce solution was to empower 3Msales people with an online store and
provide bi-directional integration with their existing Microsoft Dynamics Great Plains system, without
disrupting their accounting and business management functions.

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THE SOLUTION

In July 2006, MDI chose Ignify, Microsoft Gold Certified Partner, to create a B2B site that would provide a
self-serve ordering portal for3Ms global sales force. The integrated solution they implemented combined
Microsoft Dynamics Great Plains with Ignify proprietary eCommerce software. The Ignify eCommerce
system integrated with Microsoft Dynamics Great Plains provided 3Msalespeople with real-time access to
quality information and eliminated their reliance on telemarketing team to place and check their orders.
Together the two products automated, simplified, and created a zero touch order processing through a
robust, automated B2B store. With true bidirectional integration with Microsoft Dynamics Great Plains,
management now had access to a variety of key performance indicators and could pull intelligent reports.

Microsoft Dynamics Great Plains strength lies in the richness of its functionalityand its integration
capabilities. The two systems exchange information about3M sales orders and its product catalog
seamlessly. Any changes made in Microsoft Dynamics Great Plains are automatically reflected in Ignify
eCommerce, and vice versa.

BENEFITS

1. Reduces overhead costs


2. Increases information accessibility
3. Provides intelligent reporting
4. Improves supply chain
5. Boosts Sales Productivity

CASE STUDY 8 (Sage Implementation)

COMPANY

Agarwal Fasteners Pvt. Ltd. specializes in manufacturing critical stainless steel fasteners as per industry
standards and specific customer requirements for a wide variety of industries. Founded in 1974, Agarwal
Fasteners manufactures and imports best quality tools to produce high quality, reliable fasteners using
modern multi stationed equipment. Having its manufacturing plant in Mumbai, Agarwal Fasteners has a
direct sales team in Maharashtra and supplies its products to the rest of India through its dealer and
reseller network.

PROBLEM

No view of available stocks, uninformed production planning and raw material scoping, inability to identify
best suitable vendor, separate entries to be made in inventory, order entry and invoicing packages leading
to duplication of effort, no data security leading to data tampering.

The company relied on a Fox Pro based local software application with separate packages for accounting
and inventory to maintain stocks and generate invoices. Since the inventory and accounting packages were
not linked to each other the entries had to be made separately into each of them causing duplication of
labor and leaving room for human error. There were also some serious data security issues with this
software as any user could delete entries once the invoice was generated.

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THE SOLUTION

Sage Accpac ERP, a highly scalable and modular application provides high data security and real time
inventory control. It also supports multiple currencies and features a strong reporting tool. Modules are
closely interlinked with each other so that a small change in one module results in a corresponding change
in the related fields of the other modules as well.

They implemented System Manager, General Ledger, Accounts Payable, Accounts Receivable, Order Entry,
Purchase Order, Inventory Control, Transactional Analysis and Optional fields modules from Sage.

BENEFITS

Real time inventory control ensures that production planning is done accurately and the correct quantity of
raw material is ordered at the right price from the right vendor. Tight integration between the various
modules eliminates duplication of efforts and a high level of data security prevents data tampering.
Reports are generated automatically in the required format.

CASE STUDY 9 (SSA Implementation)

COMPANY

MAPFRE ARGENTINA, one of the leading insurance companies in Argentina, provides national coverage
through330 centers, with 2,000 employees and 2,900 consultants. According to Argentina national
rankings, MAPFRE is the number one insurance company, outside of the life insurance market place. The
company is part of Grupo MAPFRE, which was founded in Spain in 1933.Grupo MAPFRE activities are
mainly insurance and reinsurance in39 countries. Total corporate revenue was 13,583 in 2006, a growth
of9 percent over the previous year.

PROBLEM

MAPFRE needed to improve the financial processes that supported its growing network of more than 300
insurance offices in Argentina. In a little more than five years, the company had grown 400 percent,
increasing its number of employees from 400 to 2,000.As part of the expansion, the company had
incorporated new companies into the group, including MAPFRE Health and prepaid medicine. The new
solution would need to be capable of managing all financial processes for each business unit, using a
shared database that users in different parts of the company could access in accordance with their profile
and needs.

THE SOLUTION

MAPFRE chose to implement Infor FMSSunSystems because the solution enabled the company to
integrate and streamline financial resource processes throughout the company. Infor FMS SunSystems
gives MAPFRE are liable, apples-to-apples view of financial performance across the entire enterprise as
well as the flexibility and control necessary for adapting to the demands of even the most challenging
business environment."We are convinced that our choice of Infor FMS was the right one in terms of the
scalability and flexibility we needed to support outgrowth and meet the precise requirements of our
sector," says Aldo Canton, accounting and tax manager for MAPFRE. "The main reasons we chose the Infor
solution were its swift integration to the other applications existing in the company, its ease of use, and
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low cost of ownership. With the assistance of Infor, we have developed interface programs that enable us
to link Infor FMS SunSystems with several of our applications, on the principle of a shared database that
managers have access to in real time, which was one of the critical issues we faced."MAPFRE's latest
expansion of their implementation is Infor PMEIF Studio, a database connector which enables MAPFRE to
extract information from its insurance policy system in order to create custom reports.

BENEFITS

The implementation of Infor FMS SunSystems has provided aide range of tangible business benefits for
MAPFRE. The company is using Infor FMS SunSystems to generate highly analytical information in real
time, making it possible for MAPFRE to prepare higher quality financial reports in less time. "The results of
the Infor implementation have been very positive for MAPFRE," adds Canton. "Now, we can close monthly
accounting operations in just two days and with fewer errors than before, thanks to the alerts and rules
provided by the software. The time to run quarterly reports has been cut in half, and data is more
reliable."The solution also enables MAPFRE to more easily manage local and corporate accounting
processes by giving more users in finance, human resources, and other departments access to the
financial-related data necessary to do their jobs efficiently. The multi-company management capabilities
and simple integration with other MAPFRE third-party applications also contribute to the value of the
solution. For MAPFRE, the bottom line is that Infor FMS SunSystems is enabling the company to manage a
much larger enterprise, more effectively and without resorting to significant additions in headcount.

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