Question 1. What Is Erp?
ERP is an acronym that stands for Enterprise Resource Planning. ERP is package deal software program answer that addresses the business enterprise desires of an business enterprise by tightly integrating the various capabilities of an employer the usage of a technique view of the company.
It is a bundle software program and not a custom made software for a specific company. It is familiar with the wishes of any enterprise inside a particular industry segment. Many of the procedures carried out in an ERP software are core methods together with order processing, order success, shipping, invoicing, BOM processing, purchase order processing, practise of Balance Sheet, Profit and Loss declaration and so forth., which can be commonplace to all enterprise segments.
That is the reason why the bundle software answer works so properly. The company unique wishes are met via a system of customization. ERP addresses not simply the desires of a single feature together with finance, advertising, manufacturing or HR. Rather it addresses the entire needs of an organization that cuts throughout these functions to meaningfully execute any of the center techniques. ERP integrates the functional modules tightly. It isn't always simply the import and export of facts across the functional modules.
The integration ensures that the common sense of a method that cuts across the characteristic is captured actually. This in turn implies that information as soon as entered in any of the practical modules (whichever of the module owns the data) is made to be had to each other module that wishes this information. This results in giant improvements via way of stepped forward consistency and integrity of statistics. ERP users the method view of the business enterprise in the region of function view which dominated the employer software program earlier than the arrival of ERP.
The manner view provides a far higher perception into the organizational systems and approaches and additionally breaks the "kingdoms" that paintings at cross-functions in many organizations. To enforce one of these demanding software program one wishes high overall performance computing, excessive availability systems, massive, excessive pace high availability on-line storage and high velocity, excessive reliable internet works, all at low-cost cost. Though many ERP software program providers were round for greater than a long time, ERP software began to make primary inroads into the company global only within the ultimate couple of years. Interestingly Indian company homes are taking the ERP direction quite rapid, even by global requirements in the beyond two years.
The investments on a complete ERP implementation for a Rs. A hundred+ center enterprise might without difficulty run into Rs 10+ crores. ERP is the most effective software program whose deployment selections are made within the company boardrooms and no longer by means of EDP / MIS departments. ERP software these days represents in all likelihood the single most pricey piece of trendy-motive software program.
Question 2. Why Erp?
Corporations move for ERP either to clear up the prevailing troubles or to explore new possibilities. I name these strategies as bad & fantastic method respectively. One thing of the bad method forces a few companies to move for ERP to solve their Y2K problem.
This is in particular true of these organizations that are heavily dependent on legacy structures going for walks on antique important frames. The 2nd element of the bad approach is to get over the issues of islands of heterogeneous and incompatible information systems that have been advanced over the past numerous years in many agencies.
Functional IS modules representing areas together with Finance, Marketing, HR, and Production in these companies could be running on various hardware and software program systems leading to nearly insurmountable problems of reconciling statistics locked up some of the diverse systems. From a fine perspective many organisation look at the exceptional opportunity provided by ERP software program that lead to nearly immediately get admission to of transactional information throughout the organisation.
Such an facts wealthy state of affairs allows organisation to reduce stock across a couple of devices/ departments/ vegetation; lessen cycle times from weeks to hours; and enhance client pride via orders of value. All those translate to increased profitability or increase in marketplace share and in flip a whole lot larger market capitalization. However ERP is only means and now not an cease via itself.
ERP gives an opportunity for a agency to operate as an agile entity to enhance production / operation, customer service and purchaser delight. The innovative ingenuity of an agency to drive towards these corporate desires determines the volume of achievement an ERP implementation can supply.
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Question 3. Does Can Packaged Software Fit Business Needs Well?
Many IS experts understand ERP as a paradox. "How can a software program employer positioned in Germany, Netherlands or U.S.A understand the needs of my corporation operating in Bangalore?" is the query they normally ask.
Many of them feel that custom software have to work far better than packaged software. For lots of them holding this view, the achievement of ERP is a paradox. What they miss out is the point that the center procedures of maximum agencies are through and big, the equal. Thanks to globalization, there was a huge amount of uniformity, standardization and simplification of the middle procedures throughout the industry.
Some of the technology inclusive of EDI have even standardized the contents of important documents, together with delivery and purchase orders. Standard methods and procedures, as an instance, Letter of Credit, have visible a notable level of standardization to suit International Trade. These trends permit groups in Germany and Netherlands to expand the arena-class software program that may be profitably used by a employer in Bangalore also. By pumping in billions of bucks in understanding the commercial enterprise processed used by heaps of groups global, the ERP software program vendors additionally carry in international-magnificence practices to any employer that implements the ERP software program.
In a similar vein, big ERP software providers inclusive of SAP & BaaN are also capable of appoint and maintain lots of software professionals who can continuously enhance their ERP software product. No person cease user corporation can have enough money such big pool of software professionals. This is the secret of achievement of ERP. A possible analogy might also drive domestic the point better. An common Indian has already realized the truth that a ready-made garment made using sophisticated generation can indeed in shape him/her better than a street corner tailor. The pretty state-of-the-art technology of Computer Aided Design to model human anatomy and Computer Aided Manufacturing gear to cut complicated contours resultseasily at excessive pace, provide an explanation for the higher match. Similar is the case of packaged software program.
Question 4. How Are Erp & Bpr Related?
BPR as an acronym stands for Business Process Reengineering. It was once a buzzword till some years ago. Overzealous BPR pundits induced a lot havoc thru job cuts, it's far a debatable challenge today in many nations. An business enterprise can go for standalone BPR or they could choose ERP. Since ERP besides comes bundled with several of the satisfactory practices, a properly carried out ERP exercising results in some quantity of BPR, even though the reengineering effort may not be full-blown. However, reengineering thru ERP, typically termed bundle enabled system reengineering (PEPR) results in less drastic exchange in an agency. Such package deal enabled reengineering through ERP has been received plenty better with the aid of the quit users in preference to stand alone BPR in many agencies round the world.
Question five. Should Bpr & Erp Be Taken In Any Order?
There isn't any smooth algorithm that may provide a simple answer. A BPR exercising previous the ERP implementation can assist the corporation substantially. It may also increase a mixed time of enforcing BPR and ERP appreciably. There is likewise a danger that a specific ERP software decided on later may not be able to implement the reengineered approaches.
A simultaneous BPR and ERP exercising saves time and additionally minimizes the risk of sequential implementation of BPR accompanied by means of ERP. One rarely comes throughout the example wherein BPR is accompanied with the aid of ERP. As such the ordering of ERP & BPR must be based on the needs of a particular enterprise.
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Question 6. What Are The Typical Modules Of Erp?
Typical Modules of ERP encompass income (sales forecasting, customer prospecting, consumer follow-up, aid for telemarketing, database advertising and marketing), order processing (inquiry managing, order taking) delivery, transportation, invoicing, finance (G/L, AR, AP), asset control, value accounting, monetary accounting, manufacturing and materials control. Optionally satisfactory task, warehouse, continuos production and different modules are also present in different ERP software. Industry unique modules to cater to hospitals, retail, banking, coverage, oil, delivery and transportation are also to be had from a few providers.
Question 7. Why Is Top Management Commitment Necessary For The Success Of Erp?
ERP will in the end affect every person in the agency. An ERP implementation represents a primary organizational intervention. The technique view of ERP would cast off the various "kingdoms" in the employer. This could lead to a shift in electricity centers; evidently ERP represents a chief trade. Managing alternate of such high order can't be done with out top management dedication.
ERP workout is likewise a primary exercising and can fee besides from several lakhs to numerous crores of rupees. Such massive resource requirements additionally necessitate commitment from pinnacle management. Last, however not the least, ERP implementation is an extended process, normally jogging into numerous months. Keeping an activity alive for such lengthy period might be nearly impossible without pinnacle management dedication.
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Question 8. What Is Top Management Commitment In Erp Context?
The pinnacle control commitment in ERP is not confined to writing a large cheque, which could be very a whole lot necessary. But it has to move lots beyond that. ERP workout in India represents a paradigm shift within the way many CEO's run their businesses. ERP software program implementation providers frequently make it mandatory for the chief govt and his / her team to spend a complete one week taking note of ERP experts. Such an exercising is exceptional as a minimum inside the Indian company history. The core committee of ERP wishes champions who are well respected, very knowledgeable and often impossible to spare for any organization.
The success of ERP implementation needs the overall-time attention of those champions who need to be drawn from the important thing features and detained for ERP task implementation for an extended duration of six to 9 months. ERP project can't be managed through folks who "can be spared"; it must be controlled by using the "integral" personnel.
Top Management commitment should ensure the release of such key human beings for the ERP center committee. The ERP software regularly brings the fine practices from the enterprise. To gain from such excellent practices, current business practices might also have to be altered. Top management dedication need to encompass the political will to put into effect such changes.
Question 9. Why Is Change Management Necessary For Erp?
ERP being a chief initiative costing significant sum of money, lasting numerous months and in the end affecting every body inside the organization, change management is the important thing for the success of any ERP mission. ERP software brings in conjunction with them some of the nice practices. Implementing such practices might want exchange. To profit from ERP such alternate should be managed. That is the purpose ERP needs top control dedication.
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Question 10. Is Erp Too Expensive For Indian Companies?
It is a loaded query. The fee of ERP software need to now not be regarded as an expense. It is an investment closer to an capability that offers higher profitability, marketplace share or customer support. Of course, the up-front fee of ERP software program could be very high.
Most software pieces utilized by the agencies for commercial programs never had charge tags of crores of rupees which ERP software bring. ERP decisions are a "high-hazard excessive praise" selection. The view that ERP is costly only seems on the risk but now not the rewards.
Question 11. How Do You Cost Justify Erp?
It is tough to calculate return on funding for ERP decisions, although several a hit installations of ERP had dramatic returns on investment. For instance, Microsoft estimates that the investments in ERP might be paid returned through manner of higher overall performance in flat years. It ought to be found out that the ERP is an enabler.
ERP gives agility to agency, which can be exploited to enhance profitability, marketplace percentage or customer service. Without ERP, the employer won't be in a role to handle large commercial enterprise or offer quicker response to customers. The consequences from enlarged enterprise or quicker consumer reaction need to pay back for ERP investment. It is based at the truth that the corporation would leverage the agility in the direction of such company dreams. ERP allows in pursuing such dreams frequently successfully.
But mere ERP implementation does now not always translate to benefits. Better fitness allows a human being to do things, which might have been hard, if no longer not possible, without such sound fitness. But if the person does no longer employ his stepped forward status in the direction of the pursuit of any intention, he or she isn't capitalizing on the progressed fitness. ERP have to also be considered as a manner of providing a better health to an enterprise.
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Question 12. What Is The Erp Life Cycle?
The set of sports thru which ERP is carried out in an organisation constitutes the ERP life cycle. This can be as compared to the well evolved System Development Life Cycle (SDLC) within the conventional Structured System Analysis and Design (SSAD). Typical ERP project consists of the subsequent steps:
Step 1: ERP readiness evaluation
Step 2: Preparing the organization for ERP
Step three: ERP Feasibility Study
Step 4: Process modelling and documenting the "AS IS" approaches & "TO BE" tactics (together with BPR)
Step 5: Detailed plan for ERP implementation (consists of ERP software choice, choice of implementation companions, implementation methodology - "Big Bang" or Modular Implementation - and the very last and specific quantity of implementation)
Step 6: Detailed implementation including improvement, best warranty and manufacturing system
Step 7: Preparing to "go stay" such as statistics migration
Step eight: Going live
Step nine: Performance assessment, documentation, training (continues in early levels additionally) and destiny plans.
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Question thirteen. Is There A Good Time To "move Live"?
Yes. Most implementations of ERP encompass economic module. Every agency has a monetary (financial) yr both for inner use as well as a long way criminal / governmental consolidation. Since the account books ought to be closed and economic reports organized (which include the stability sheet and the income and loss announcement) for the financial 12 months, most ERP implementations attempt to synchronize their "cross stay" date with that of the financial 12 months. (April 1 in India).
If for some cause it cannot be on (April 1), many groups "cross stay" on October 1 at the cease of the half of-12 months. Technically ERP software does not impose any regulations. Any day is good sufficient to "move stay" as lengthy as it isn't " the next day"!
Question 14. Why Do Erp Consultants Charge A High Fee?
ERP experts operate within the "high threat excessive praise" location. Contemporary ERP software are complicated pieces which want years to master. ERP consultants make investments significant quantity of effort and time, which need to be rewarded. ERP Consultancy is likewise given to the best ranges of management regularly at the extent of CEO. CEO stage consulting can not come reasonably-priced. A properly-implemented ERP can translate to crores of rupees of saving for an employer justifying once more the high value of ERP consultants.
ERP experts additionally combine an extraordinary aggregate of verbal exchange ability, area information and software program expertise, all over again justifying the excessive fee. Last, however now not the least, ERP income are developing speedy and the call for for ERP specialists is all time excessive. The gap in deliver-call for additionally explains the surprisingly high price of ERP specialists.
Question 15. What Is The Role Of Process-modeling Tools Erp Implementation?
Process Modelling provides a way to map the company procedures and visualize it in a graphical way. This helps in verbal exchange, rationalization and documentation of the "AS IS" and "TO BE" procedures. Process modelling may be used to reinforce the crucial subject matter of ERP, namely, a shift from function orientation to procedure orientation.
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Question 16. How Do You Decide A Fit Between An Organization And Erp Software?
There is no specific algorithm which could degree the healthy for an organisation to unique ERP software. One generally goes with the aid of reports of comparable groups which have carried out ERP. In fashionable, every ERP software has awesome strengths in a few location. It is better to live with that ERP software which has special strengths for your area. For example, BaaN & Oracle have terrific production modules; People Soft and Marshall have incredible HR modules. If your core enterprise facilities around the sort of modules your choice turns into simpler.
An instructional way to assess the match is to cautiously study all the enterprise procedures that characterize your enterprise and to search for matching enterprise processes which might be supported by using precise ERP software program. Often such an exercising would call for several man-years of attempt. The skill set wished for such an exercise might not be without problems to be had inside the employer. Getting an outdoor consulting institution to do this exercise can be very steeply-priced.
Often maximum corporations determine the ERP software program supplier primarily based on the vast needs of the enterprise in which they function and the aid offered by using unique ERP software for that industry.
Question 17. Why Implement An Erp System?
ERP software program integrates all departments and functions across a company onto a single laptop machine which can serve all the ones extraordinary departments' particular desires. ERP combines finance, HR, production and distribution all collectively right into a unmarried, incorporated software program application that runs off a single database in order that the various departments can more effortlessly proportion facts and communicate with each other. This incorporated method could have a remarkable payback supplied the software program is set up and used efficaciously.
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Question 18. How Much Does It Cost To Go For Erp?
The value of ERP challenge could range substantially from one instance to other. The actual value depends on the nature of the enterprise, the size of the firm, the geographical distribution of the organizational units consisting of offices, plant life, warehouses and distribution factors, the variety of person licenses and the quantity of ERP implementation (the range of practical modules carried out).
A standard mid-length Indian business enterprise with approximately Rs 100- 300 crores of annual commercial enterprise will must make investments approximately 5 to 20 crores of rupees inside the ERP venture. This includes ERP software program licenses, server cost, communication network fee and the fee of consultants who could do the implementation. Large groups with Rs one thousand+ crores of annual business might invest Rs a hundred+ crores in ERP assignment.
A quantity of small companies have controlled to implement ERP in about Rs 1 crore. It may be cited here that during a standard installation the cost of ERP software program money owed for only approximately 20% of the overall price. A fundamental element in ERP venture is the cost of the implementation consultant (each internal and outside).
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Question 19. What Does "going Live" Mean?
After many months of implementation plan every enterprise could decide a selected date after they would shift from their legacy device to the ERP gadget. Up to that point the ERP software program could be under improvement followed by using checking out and first-class warranty.
Once via ERP implementation group feels satisfied that the development is entire and checking out is first-rate, they might decide to "cross stay". In a sense "pass live" date marks the quit of ERP project final touch. Generally most ERP project "cross stay" at the starting of the financial/ economic year, specifically April 1 in India.
Question 20. Who Are The Project Champions?
Project champions (for the crore techniques which can be taken up for implementation) might be those folks who might take the ownership of implementation. They are predicted to provide the management that allows you to preserve the pains and tribulations of ERP implementation.
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Question 21. What Is An Erp Project Team?
ERP venture crew would be charged with the duty of enforcing the ERP for the precise organization. A champion, who is skilled in communique and understands the business enterprise well should head the ERP group.
The chief have to be well familiar via the maximum personnel of the corporation. The chief also have to be someone who can hold the motivation level of the implementation group at fairly excessive levels during the several months of implementation.
The implementation crew might include dozens of human beings. There might be some of teams for each of the useful location with every crew such as key customers and IT employees to provide era help.
Question 22. How To Prepare An Organization For Erp Implementation?
There is no smooth magic through which you will put together an organisation for ERP implementation. Exposing the top management to the benefits of ERP through the real global case studies, sharing of enjoy by other companies which have effectively applied ERP and advent of cognizance is step one. Convincing the pinnacle management to apply a excessive threat, excessive reward scheme inclusive of ERP is a chief assignment.
Almost all the contributors of the company have to get the exhilaration about ERP challenge implementation. Communicating and sharing of the ERP vision is the maximum vital organizational preparation for a successful ERP implementation.
Question 23. Is There A Benchmarking Tool To Fine Tune Erp Performance?
Every ERP seller gives performance suggestions that can be used by gadget administrators to nice song overall performance. Some of them are very complete and address excellent-tuning on the application, database, running system, processor or even the community level. Other ERP vendors offer gear that could leverage the main part database tuning, operating gadget tuning and community performance tuning gear.
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Question 24. Why Do Consultants Recommend Changing Business Practice To Suit The Erp Software Rather Than Customizing The Software To Every User Needs?
A key contribution of ERP software program is the bundled business method know-how that come along side ERP software program. These strategies have developed over the last two decades of ERP implementation in some of the most properly-managed companies around the world.
By adapting to those approaches that have proved successful in some of the greatest corporations around the sector, an enterprise implementing ERP could get the gain of these "best of the breed" practices. That is the reason behind the consultant hints.
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Question 25. Why Are "financials", The First Module Implemented In Many Indian Erp Implementations?
Financial modules provide the basic pulse of an organization. It additionally impacts all other modules. Successful implementations of financials display up at once reinforcing the faith of an corporation in ERP. Other modules can not be carried out without the economic module in place. All these elements provide an explanation for the fact that economic modules are taken up first.
Question 26. Erp Being Integrated Software Does One Benefit By Implementing Only Specific Modules?
Yes. The complete gain of ERP would accrue if all the ERP modules are implemented. However many groups enforce ERP most effective in the ones functions, which can be, considered to be of strategic significance. Some of the modules, although they seem like restricted to specific functions, in truth integrate with many other capabilities circuitously.
For example finance module more often than not objectives the accounting and finance capabilities. However the money owed payable module address all of the material purchases and in flip impacts the complete materials management capabilities. Many extra examples may be quoted to boost our point of view. The manner orientation of ERP software program truely contributes to a better control of the organisation. Even partial implementation of the ERP therefore leads to widespread benefits.
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Question 27. What Are The Three Dominant Approaches To Erp Implementation?
The 3 dominant methods to ERP implementation are "big bang", location-sensible and module-clever implementation.
In the large bang method the organization comes to a decision to implement all relevant modules, as an instance - Financials, Logistics & HR- all on the identical time. This has the benefit of getting the total gain of the incorporated software across all capabilities of the employer. However there's a hazard of the implementation getting out of control.
In "Location-smart" implementation, the organization chooses a specific area, say, the head office, one of the new plant life and so on. The desire may be primarily based on higher infrastructure, better IT subculture, more co-operative set of users, higher degree of automation and so forth.
In "module-clever" implementation man or woman modules are taken up for implementation in a phased manner depending on the criticality of applications. Once once more a module taken up for implementation may be implemented throughout all places or simply one vicinity. Later they may be rolled out to other places.
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Question 28. What Is The Drawback Of Over Customization?
Customization is the procedure of becoming the chosen ERP software to the wishes of a particular corporation. Whenever the techniques represented inside the ERP software differ significantly from the tactics utilized by the company one has two options. First is to build the organizational procedure into the ERP software program thru customization. The 2nd one is to alternate the exercise accompanied via the firm to suit the method native to the ERP software. Traditional common feel might force people to customise the software program to match the person needs of the corporation.
This ends in problems. The first one arises out of the truth that any customization completed domestically is outdoor the middle ERP software. Accordingly, the following launch of the ERP software program would no longer assist neighborhood customization. They have to be re-performed by the give up consumer for the brand new launch. Second the very motive of ERP is to take gain of the satisfactory practices in industry that come embedded with the ERP software. By over customizing the implementers would deprive the advantage of worldwide - elegance practice to the employer that is enforcing ERP.
Question 29. What Is The Role Of Implementation Partner?
Implementation partners usually come from specialized ERP consulting homes which might be usually outside the employer. Being experts in a specific place (materials, manufacturing, finance or distribution), those experts from out of doors, now not simplest bring software information with appreciate to unique ERP software program, but additionally deliver the extra benefit from their tremendous earlier experiences in other firms wherein they might have carried out that unique ERP.
Over the years, the implementation partners have evolved enough knowledge inside the shape of templates for implementation. These templates notably reduce the cost and time of implementation and mistakes of implementation. Though implementation experts price a excessive charge, they carry enormous amount of fee, way to their prior studies.
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Question 30. How To Get Erp Training?
The ERP providers and their implementation companions supply maximum of the ERP training. There are numerous levels of training. Overview training in ERP principles and ERP advantages could be vital for the pinnacle management and steerage committee contributors. An extensive software program unique education could be necessary for the implementation team. An infrastructure control (hardware, software, networking) and ERP software preservation schooling would be vital for the IT group. Once applied, distinctive consumer-education would be essential for a large variety of customers and ability customers at some stage in the organization. User schooling could be limited to modules precise to individual users.
Question 31. What Is Meant By India Version Of Specific Erp Software?
ERP software program need to deal with all of the agency wishes of an business enterprise in the social context in which the organization operates. This might imply that the neighborhood accounting practices, domestically applicable taxation laws (excise, customs, sales tax and profits tax) are absolutely adhered to in enforcing the various enterprise strategies.
The software program vendor have to contain India precise functions earlier than promoting the software. The specific ERP software program that has been adopted to suit to Indian statutory legal guidelines is called India unique ERP.