the role of erp for global businesses

THE ROLE OF ENTERPRISE RESOURCE PLANNING (ERP) FOR EFFECTIVENESS THE OF

GLOBALIZED BUSINESS BY

ASMAMAW MENGISTIEWashington DC, USA

Email – asmamaw.mum@gmail.comAUGUST, 2010

IntroductionWhat is ERP System?•Definition of ERP:

“The ERP is an application that provides a unified system. The different data processes and sources from the different departments of an organization or institution are integrated in one comprehensive system with the ERP software.” Source: ERP 100 Success Secretes, Glen Godfrey2008, P. 55

•ERP refers to a view of a company and all its parts as connected whole, rather than small silos of activity.

IntroductionWhat is ERP Software? “… is a management system that integrates all the different aspects of the business,…”Source: Oracle Apps DBA, Banerjee Joyjeet, 2008.

It is a company-wide computer software system used to manage and coordinate all the resources, information, and functions of a business from shared data stores.

•ERP relates to the integrated software infrastructure that supports the entire company business process.

Most Common Modules in ERP

Most Common Modules in ERP Manufacturing  • Engineering, • Bills of material, • Work orders, • Scheduling, • Capacity, • Workflow management, • Quality control, • Cost management, • Manufacturing process, • Manufacturing projects, • Manufacturing flow

Most Common Modules in ERP Supply chain management  • Order to Cash• Inventory, • Order entry, • Purchasing, • Product configuration, • Supply chain planning, • Supplier scheduling,• Inspection of goods, • Claim processing, • Commission calculation

Most Common Modules in ERP Financials  • General ledger, • Cash management, • Accounts payable, • Accounts receivable, • Fixed assets

Most Common Modules in ERP Project management  • Costing, • Billing, • Time and expense, • Performance units, • Activity management

Most Common Modules in ERP Human resources  • Human resources, • Payroll, • Training, • Time and attendance, • Benefits

Most Common Modules in ERP Customer relationship management  • Sales and marketing, • Commissions, • Service, • Customer contact, • Call-center support

Most Common Modules in ERP Access control  • System Administrator• Management of user privileges• Developers and other Super Users

    Product Name

 Microsoft Dynamics

GP

  Epicor   NetSuite

  Sage ERP MAS

  Agresso Business World

  Infor ERP

SyteLine

  SAP Business One

  Oracle E-Business Suite

Version 2010 9 2010 7.2 5.5.3 8.01.00   Release 12Price Range $10K-100K $4K -500K $10K-100K $15K-250K 300K+- $25K-100K $25K -

$250K$12K-$350K

 User Range 25-500 1-1000+ 10-250 5-400 25-5000 5-350 25-1000 25-1000+

Multi Site Yes Yes Yes Yes Yes Yes Yes Yes Multi National yes Yes Yes Yes   Yes Yes yes

Database Platform

MS SQL Server, IBM DB2, Other, Oracle, Proprietary`, Web Based (Saas)

MS SQL Server, Progress, Web Based (Saas)

MS SQL Server, Progress, IBM DB2, Other, Oracle, Proprietary`, Web Based (Saas)

MS SQL Server, Other, ODBC Compliant, Proprietary`

MS SQL Server, Oracle, Web Based (Saas)

MS SQL Server, Progress, IBM DB2, Other, Oracle, Proprietary`, Web Based (Saas)

MS SQL Server, Progress, IBM DB2, Other, Oracle, Proprietary`

MS SQL Server, Progress, IBM DB2, Other, Oracle, Proprietary`, Web Based (Saas)

Server OS

Mac OS, Linux, Windows, Unix, Novell Netware

Linux, Windows, Unix

Mac OS, Windows, Unix, Novell Netware

Windows WindowsLinux, Windows, Unix

Mac OS, Linux, Windows, Unix, Novell Netware

Mac OS, Linux, Windows, Unix, Novell Netware

ERP Application Software Comparison

Source:

WHAT IS GLOBALIZATION

What is Globalization?

WHAT IS GLOBALIZATIONGlobalization Defection:“Globalization refers to those processes that have made the world increasingly interconnected through important technological innovations in transport and communications, facilitating a spread of goods, services, information, capital, labor and knowledge across international boundaries worldwide.”Source: Globalization, Regional Development and Local Responses, Leendert de Bell, 2005

Business Drives for Globalization

• Pressure to exploit new markets• Lower manufacturing costs• Flexibility to ship products• improve customer service• Reduce time from order to fulfillment

Source: Aberdeen Group

Enterprise Resource PlanningERP and

Globalization

Problems of Distributed Applications System

Enterprise Resource PlanningERP

Financials

Fixed Asset

Manufacturing Receivabl

es

HRMPurchasin

g

Projects CRM

Marketing

LogisticsServices MGMT

BI

Supply Chain

Procurement

App. 3

App. 2

App. 1

App. 4

App. 5

Integrated ERP System

Enterprise Resource PlanningERP

Fixed Asset

PayablesReceivables

HRMPurchasin

gProjects

CRM

Marketing

Services MGMT

Procurement

Financial Accounting

Project MGMT

HRM

BIAnalytics

& Reporting

Logistics

Marketing

Service/Maintenan

ce

CRM

Quality MGMT

Supply ChainManufacturi

ng

Sales

Benefits of ERP System for Global Businesses

• The right people (authorized employees) get the right information at the right time and at the right place. (Particularly for global businesses there is no time and place restrictions).•

Enterprise Resource PlanningERP

Benefits of ERP System for Global Businesses

• Single source of truth – Data integrity• Easy for system control - Efficiency• Cost reduction which will result in increase in profit• Better and faster inventory management

Enterprise Resource PlanningERP

Benefits of ERP System for Global Businesses

• Real time operations • Integrated information of all parties (vendors, clients, employees, agents, distributors etc)• Integrated business operation locally and internationally• Process improvement with the use of workflows.• Paperless office environment

Enterprise Resource PlanningERP

What Drives ERP System Implementation for Global Businesses

• Globalization and virtualization• The knowledge economy• Rising customer expectation and business growth rate• Competition•

Enterprise Resource PlanningERP

ERP System Shortcomings for Global Businesses

• Higher initial investment• Integration complexity• Long term implementation phase• Mostly, single vendor dependency

Enterprise Resource PlanningERP