Management Information Systems Lab Sessions
ERP
What is ERP?
Enterprise Resource Planning (also known as ERP) is an effective approach that most businesses implement to enhance their productivity and performance. Before implementing this system, it is necessary that business owners and board members have an extensive look at the benefits and risks associated with the use of the ERP system. Known as a systematic approach that most industries use to organize resources as well as improve efficiency and performance, Enterprise Resource Planning (also known as ERP) is usually implemented by corporations to centralize the databases and functions of every department in a single system. The system features various components including software modules, which integrate and manage all the business and private records of firms. With the proper use of this system, firms can decrease their losses and increase their profits.
A Brief History of ERP
The term ERP was coined in 1990 by Gartner, but its roots date to the 1960s. Back then, the concept applied to inventory management and control in the manufacturing sector. Software engineers created programs to monitor inventory, reconcile balances, and report on status. By the 1970s, this had evolved into Material Requirements Planning (MRP) systems for scheduling production processes. In the 1980s, MRP grew to encompass more manufacturing processes, prompting many to call it MRP-II or Manufacturing Resource Planning. By 1990, these systems had expanded beyond inventory control and other operational processes to other back-office functions like accounting and human resources, setting the stage for ERP as we've come to know it. Today, ERP has expanded to encompass business intelligence (BI) while also handling "front-office" functions such as sales force automation (SFA), marketing automation and ecommerce. With these product advancements and the success stories
coming out of these systems, companies in a broad range of industriesfrom wholesale distribution to ecommerceuse ERP solutions.
Moreover, even though the "e" in ERP stands for "enterprise," high-growth and mid-size companies are now rapidly adopting ERP systems. Software-as-a-Service (SaaS) solutionsalso referred to as "cloud computing"have helped fuel this growth. Cloudbased solutions not only make ERP software more affordable, they also make these systems easier to implement and manage. Perhaps even more importantly, cloud ERP enables real-time reporting and BI, making them even valuable to executives and staff seeking visibility into the business. As a result, companies of all sizes and a wide range of industries are transitioning to cloud ERP systems. In fact, Forrester predicts that SaaS-based ERP adoption will rise 21 percent annually through 2015.When you stop to consider the benefits of ERP, it's easy to see why it's become so popular and why its use will continue to grow so rapidly.
ERP Integration
One of the essential factors that affect the efficiency of an ERP system is corporate integration. To ensure that the system works appropriately, business records and data should be integrated successfully. Data migration and consolidation can be done by following these simple steps. First, identify the records that should be transferred to the system. Set the date when the migration will be done. Look for data templates that are very useful in organizing the records. Remember to secure or freeze the tools to be used in the data transfer. Finally, remember to examine and review the archive set-ups of the ERP system.
The Model Enterprise Resource Planning System
A model ERP system features databases that are organized into several software modules, which include financial, human resources and manufacturing. Other modules that are present in this system are projects, data warehouse, customer relationship management as well as supply chain management. These modules are important to consolidate records related to business tasks such as workflow management, supply chain planning and customer support systems.
ERP and Corporate Productivity
Enterprise Resource Planning is one of the keys to enhance corporate productivity. Since all the data or records of a firm were consolidated in a single system, then employees can get updates on processes that are important to the supply and production chain. With the proper use of the software, it will be easy for department heads to communicate with each other whenever there are problems with the performance of the company.
Implementation of an ERP System
To maximize the use of an Enterprise Resource Planning system, there are some services that should be featured in the software. Consulting services are important to the first phase of the implementation of ERP because these will enhance workflows and product training activities. Additionally, support services are also essential to the maintenance of the system. Lastly, customization services are significant to assign codes that can hide and secure private and confidential data.
Advantages and Disadvantages of ERP
Before implementing this approach, it is important that board members assess the advantages and disadvantages associated with the use of the system. Some of the benefits from ERP are enhanced productivity and corporate financial performance, improved business forecasting as well as organized workflows. On the other hand, the disadvantages of using the approach include the need for allotting extra budget for the consolidation of all the databases and the need for the development of an efficient re-engineering business plan.
Microsoft Dynamics NAV
Microsoft Dynamics NAV is an enterprise resource planning (ERP) software product from Microsoft. The product is part of the Microsoft Dynamics family, and intended to assist with finance, manufacturing, customer relationship management, supply chains, analytics and electronic commerce for small and medium-sized enterprises. Value-added resellers (VAR)s can have full access to the business logic source code, and it has a reputation as being easy to customize. For modifications of the system, the proprietary programming language C/AL is used.
Microsoft Dynamics NAV delivers integrated functionality to provide support for: Financial management Supply chain management Manufacturing Distribution Customer relationship management Sales and marketing Service management Human resource management
Advantages 1. It can be integrated to Microsoft SharePoint Server to get information from
other locations. Office business application through SharePoint enables easy transactions to users outside the office. The users who are not in the office can use SharePoint to contact their office through the server. The software enhances employee's efficiency
2. The software is easy to navigate and use 3. High security is provided through various users' provisions. Log files can be
checked to view the various modifications done by different users from their terminals in the main database
4. User interface can be integrated to MS office features such as Word or Excel,
and the user find it easy to work with the familiar interface of Microsoft. The software can linked to MS Visio, which allows easy workflow diagram, which enable you to see transaction flow
5. The software can be integrated to other Microsoft software and the efficiency
of the software is good. You can navigate through the software using a mouse or a keyboard or you can use both. Microsoft Dynamics NAV can be integrated to exchange data, Microsoft Biz Talk server and Windows Live Local Search
6. SQL server database with Microsoft NAV allows proper functioning and
scheduling of work and heavy data
7. Reports can be defined by users and modified as per their requirements, and
reports can be exported to software, which supports SQL cubes
8. Microsoft Dynamics NAV comes with proper support and training. There are
many authorized websites of the company, where you can search for queries and issues
Disadvantages
Although, the software is designed for five hundred users, but if you need a system to work with more than three hundred concurrent users, then it is not advisable to buy Microsoft Dynamics NAV. In such case, you can buy a large scale ERP such as Oracle, SAP or Microsoft Dynamic AX.
Purchasing Agent
Timely purchases made at the best price not only improve the efficiency of the company's inventory management and reduce requisition costs, but also have a direct impact on the company's ability to keep their customers satisfied. Companies must ensure that each purchase transaction is based on the most favourable terms, such as delivery time and price, and that the associated inventory and financial information is registered correctly. Because many aspects of a future purchase agreement with a vendor are negotiated and agreed upon in the pre-purchase stage, it is helpful for purchasing agents to record the relevant agreement details once and reuse this information when making a purchase. The following functionality in Microsoft Dynamics NAV supports purchase transaction handling: Purchase Order Management: This includes documents, such as quotes, blanket orders, and purchase orders that support purchasing agents in efficiently managing purchases. It also provides the facility for:
Partial order receipt Separation between receiving and invoicing Combined invoicing
Alternative Order Addresses: This facilitates managing purchase orders for vendors with several alternate shipping addresses. Alternative Vendors: This supports purchase situations where the same item is supplied by several different vendors. Salespeople/Purchasers: This enables a company to collect purchase statistics at an individual purchasing agent level. Purchase Line Pricing: This helps maintain and manage alternative purchase prices negotiated and agreed upon with individual vendors.
Purchase Invoice and Line Discounting: This helps maintain and manage purchase discounts that are percentage-based, negotiated and agreed upon with individual vendors. Purchasing agents Purchasing agents purchase general and specialized equipment, materials and business services for use or for processing by their establishment. They are employed by medium-sized and large organizations throughout the public and private sectors. They determine what their organization needs to buy to keep functioning. They evaluate the requirements of their establishment and develop specifications for equipment, materials and services to be purchased. They also apply and sometimes help determine general purchasing policies. Purchasing agents then oversee the process of acquiring goods and services, by asking for proposals, consulting with suppliers and reviewing price quotations. Once they've gathered this information, they set contract terms and conditions, and award contracts to specific vendors. They set delivery schedules, track progress and contact clients and suppliers to correct problems. They provide information to other departments and suppliers regarding orders, and they may hire, train or supervise purchasing clerks. In large or specialty organizations, purchasing agents may specialize in purchasing particular materials or business services, such as furniture or office equipment.
Major functionalities of Purchasing agents include: Seeking reliable vendors or suppliers to provide quality goods at reasonable prices Negotiating prices and contracts Reviewing technical specifications for raw materials, components, equipment or buildings Determining quantity and timing of deliveries (more commonly in small companies) Forecasting upcoming demand.
