Product Overview: Piecing together the ERP jigsaw

A large enterprise will find in ERP an essential management tool that can reveal where a business is failing.

A large enterprise will find in ERP an essential management tool that can reveal where a business is failing.

While ERP seems to have fallen from the limelight in recent times, it is still an important element of information systems and can have profound effects on a business's cost base.

Basically it is the software that runs the business. Many industry experts argue that ERP is dead. But it seems less that ERP is dead and more that the acronyms have changed, as seems to happen so often in IT. Supply chain, as it now seems to be called in most circles, is an integral part of e-business. It streamlines the entire delivery process and ensures that the business is adequately prepared for demand.
The integration with the Internet has enforced the name change. As business information systems become integrated across the enterprise, thanks to Internet technology, the traditional information systems models are redefined to include the new technology.

Another area of confusion on the name issue is that supply chain is just part of the evolution of ERP, with virtual marketplaces and e-procurement taking a major part of the new stage.

Supply chain management systems and their associate components are only as strong as their weakest link. Supply chains are, as they imply, business units linked together on a common platform. They are highly dependent on each other.

Technology issues
The Internet is the main issue for ERP at the moment, and the possibilities it offers are redefining the way systems are designed and managed.

The technology change is simple but radical and concerns the overall interconnectedness of operations. In the past, ERP ran the supply chain from one end of the business to mid-way through the other.

When you introduce Internet technology into the equation the problems begin. How do you take your streamlined ERP platform (with its collection of bells and whistles) and integrate it with the rest of the business, particularly when it runs with its own proprietary languages and protocols?

Virtual marketplaces are the big story among the major vendors right now, and are essentially supply 'hubs', were goods can be traded, prices compared and so on. The enterprise is rewarded with traditional e-procurement benefits, while also lowering purchase costs and distribution costs of both supplier and enterprise.

Connecting everyone up is one of the major challenges when supply chain technology is used in conjunction with virtual marketplaces and e-procurement. Most vendors seem to prefer a 'thin' client deployment model involving few or no client installations, so in theory all a client needs to do is plug into the network and have a Web browser ready and waiting.

This slimming of the client role is a major factor in reducing the cost of the technology, as no proprietary applications are needed and infrastructure is limited to hardware changes.

Business issues
The difference between a good, integrated, streamlined supply chain management platform and a bad one makes the difference between a business that is highly competitive and one that is uncompetitive. At base, ERP is all about minimising the cost of running an enterprise. Business is generally organised as silos of information. It is this structure that ERP has mirrored. But with the growth of the Internet, the main suppliers are pushing e-collaboration - technology designed to share information among employees, customers and business partners.

Well-planned and executed supply chain strategies can streamline the business considerably. Business processes can become faster, with a dramatic increase in automation across the chain.

Management issues
With so many different systems involved, there are a number of management challenges to be addressed. With the portal approach (typified by the SAP Enterprise Portal), a company must manage applications and connections with suppliers, partners, customers and staff, but with centralised, browser-based applications the impact of this is minimised.

Any company must weigh up the cost benefits of increased automation through e-procurement and supply chain systems against the management impact involved. While costs may be relatively high on the management side, the new operations will create large swathes of valuable business information.

Supply chain management systems are reliant on the underlying systems that hold the chain together. If one link goes down, the whole chain is disrupted, but the Web-based approach does remove the need for lengthy installation at client locations.

Expert advice
ERP is a complex implementation, often taking several years and involving a major business process re-engineering exercise. Enterprises must identify their business processes and examine how to make them more efficient.
Here is some advice from Giga Group:

  • Build a hierarchical view of processes and component activities and create a functional hierarchy to organise and index the processes to be studied.
  • The most important insight about business rules can be acquired from assessing current business processes.
  • When documenting processes, it is useful to create process flow diagrams using a software tool, such as workflow tools or general-purpose diagramming tools.

Major vendors
  • SAP - This behemoth of the ERP industry has endless implementations in the world's largest companies. The product line is the new 'e-business' range from SAP, integrating a range of products with Internet technology. Several modules form the supply chain management system.
  • JD Edwards - JD Edwards has a range of solutions for each aspect of the supply chain, from procurement through asset management and marketplaces to financials. Each element forms part of an overall JD Edwards solution. It is Web-based to minimise deployment and management costs, and uses software from JD Edwards, IBM and Ariba.
  • PeopleSoft - PeopleSoft now produces Supply Chain Planning, offering 'collaboration' with customers, partners and suppliers. It even offers collaboration for field staff, integrating with other applications to provide real-time resources for all parties.
  • Oracle - 'E-business at Internet speed'. Hopefully Oracle is not talking about the constant wait that modem users endure. The Oracle ERP offering is centred on linking customers, employees and suppliers, to reduce costs and boost efficiency. While the theory isn't inherently different, the fact that it runs under standard Oracle Database systems is a big bonus for some.
  • Baan/Invensys - Collaborative commerce: the buzzword seems to be everywhere these days, and Baan's products are centred around linking suppliers, partners and customers together to automate and streamline business processes as far as is currently possible. Baan has over 15,000 customer implementations worldwide and is very much one of the big boys.

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