Trends in ERP By Jesse Weaver Benefits of

Trends in ERP By Jesse Weaver

Benefits of ERP Installations • Organizations using ERP systems have expected benefits when deciding to implement an ERP system • By analyzing the expected benefits of ERP systems, vendors can analyze demands from ERP users and alter their strategies accordingly

Study of Expected Benefits • Study in class text rates benefits of ERP systems from 1 – 5, from least to greatest benefit provided. • ERP systems had above a score of 3 for: - providing information faster - increasing interaction within organizations - providing better performance within required cycles

• ERP systems had a score lower than 3 in: - interaction with customers - getting work done more efficiently - reducing operating costs - decreasing information technology costs

Areas Benefiting from ERP Systems • Also analyzed in the study were the operational areas of an organization that received a benefit from an ERP system • Areas with a score above 3 included: - inventory management - financial management - quality of information - availability of information

Slowly Yet Surely ERP Adapts • ERP systems have went through some changes since their origination in the 1970’s, although very slowly and deliberately • The most significant change has been the move from centralized mainframe computing environments to client/server technologies in the late 1980’s and 1990’s

Major Current Trends in ERP • According to ZDNet there are 4 major trends currently influencing ERP systems: 1. Improvements in integration and flexibility 2. Extensions to E-business applications 3. Broader reach to new users 4. Adoption of Internet technologies

Improving Integration and Flexibility • ERP systems have sought to integrate business processes such as accounting and financials, production, and human resources since their inception • This idea of integration has been extended to include integrating 3 rd party applications from other vendors

Integration • There are pros and cons to ERP vendors fully embracing standard frameworks (such as COM and CORBA) to ensure complete open systems • Pros: – Meets customer demands for open systems – Do not have to fully develop each new application

Integration • Cons: – Easier to guarantee reliable software when developed by same vendor – Less modules and units sold if they can be bought from many other competitors

Embracing E-business • ERP vendors have embraced E-business in order to survive. The increasing use of Internet transactions required a linkage to existing ERP systems • Organizations with large ERP systems already in place demanded full integration with E-business transactions, and this also created a selling point to new customers

E-business Categories • Several categories of e-business bolt-on’s have been created to work with ERP systems: • Sales force automation – Automates collecting, qualifying, and organizing sales prospects

• Customer Relationship Management – Collects and organizes customer data from multiple sources (i. e. call centers, direct mailings, email, point-of-sale transactions, etc). – Most popular module an provided my many vendors E-procurement – handles specifying, authorizing, competitive bidding, and acquisition of products and services

• Supply Chain Management – Automates planning, coordination, and tweaking of company’s supply chain – Tracks materials and components through al business processes – Popular component made by many vendors Business Intelligence – Organizes raw and unorganized data so it can be effectively analyzed and used

Reaching New Users • Opening up data to new types of users allows businesses to work more efficiently by improving communication with suppliers and partners • Several types of users need o share data from an ERP: multi-enterprise users, selfservice users, and mobile users

• Multi-enterprise users are users from many businesses and organizations that contribute to a common goal • Self-service users are employees and members of the organization that use a variety of functions such as payoll and human resources services • Mobile users are typically sales reps and field service agents. Examples of this are UPS and Fed. Ex workers tracking shipments doorside

Adapting to the Internet • The Internet is the single largest force or trend that ERP vendors and users must adapt to • ERP vendors must adapt to Internet technologies such as: XML, HTTP, Java and evolving browser standards

• Portals have been on the increase due to their ability to connect users over the eb and centralize information. • Portals can either be general purpose, large scale applications that remain static, or be customized for each type of user. • Businesses can set up portals for other business to complete transactions or manage supply chain activity

Conclusion • ERP systems have been slow to adapt to changing trends, but have done so to kep vital • Evolving technologies and communication systems place a higher importance on open systems and ease of data exchange • ERP vendors must be able to prove that the high cost and risk of implementation of their software is justified

References • Burns, Michael. Accounting and ERP Survey 2004. Sept. 204. • • • http: //www. camagazine. com/index. cfm/ci_id/22551/la_id/1. htm Mello, Adrian. 4 Trends Shaping ERP. Feb. 7, 2002. http: //techupdate. zdnet. com/techupdate/stories/main/0, 14179, 28443381, 00. html. META Group Research. Enterprise Application Strategies 204/2005 META Trends. Jan. 27, 2004. http: //www. metagroup. com/us/display. Article. do? file. Name=trend 2055 Olson, David. Managerial Issues of Enterprise Resource Planning Systems. Mc. Graw-Hill. Pg. 167 - 171. Robinson, Scott. Exploiting Your ERP Infrastructure. Sept. 14, 2004. http: //www. cioupdate. com/trends/article. php/3407941 Zaino, Jennifer. ERP Integration Struggles To Connect. Mar. 31, 2004. http: //informationweek. webservicespipeline. com/trends_archive/sho w. Article. jhtml; jsessionid=1 ZKSGHZ 0 N 51 MQQSNDBCCKH 0 CJUMEKJVN? articl e. Id=18700028&printable. Article=true