Monday, March 05, 2007

Laurent Feltz's Lessons Learning posting (1st day)

As I told when I present myself at the beginning of the class, I am not an IT specialist and to my mind attending an ERP class is something very important to understand the need of companies in terms of information system. I worked on an “old AS400” (as said my placement supervisor) during my last internship. I understood roughly its mechanism with the traceability of the product from the supply (and supply order) to the sale (and the sale order), but my vision was limited to my mission in the company: financial director assistant.

First I would not be honest if I do not say that I know now a lot more what ERP is.

I understood that Enterprise Resource Planning is an ensemble of integrated and modular software that collect and process data from every part of an organization in real-time.

“Integrated” means that ERP relies on a unique system that integrates all data in the same database. This feature brings lots of advantages for organization which used to dealing with a different system for each function and thus different database. It reduces the costs of maintenance. It facilitates management decision making by allowing an immediate transmission of information whatever the department of the organization. It removes data redundancy and multi-processing for each different managers. In conclusion it dynamizes a lot the organization running.

“Modular” means that it comprises different modules: roughly one module for one function in the organization (one for accounting, one for sales, one for supply, one for marketing, and so on). This characteristic allows a better management of demand and supply planning. Which also generates a better order fulfilment and inventories control. The concrete advantages are better customer satisfaction and cost reduction.

Companies use also ERP to compute master production planning and thus monitor more effectively their production process at the operational and business level. This functionality is the improvement of precedent systems: material requirement planning (only deals with operation) and manufacturing resource planning (integrated financial data too).

fter understanding what ERP is, the first question is What ERP to implement?

Indeed there are different providers of ERP system and different level of customization of the finished product.

The major players in this field are companies like Oracle and SAP. They provide more functionality and more support in the use. There are also small players which provide ERP. The main advantage to deal with these companies is that you can more easily influence the design of the finished goods because they are more likely to pamper each of their customers. At last you can find open sources ERP like Compiere or OFBiz. These systems are much cheaper to acquire but the organization can spend a lot of money to adapt it to its specificity. The need for personnel to support -especially in case of upgrades- could be restraint.

A company that implement an ERP has to know that the total customization of the ERP is very complicated, expensive and often impossible. Besides a company can not entirely adapt itself to match the mechanism of the ERP. So a company implementing an ERP must be ready for some change.

In the last part of the class, I learnt some characteristics of SAP. Systems Applications Products is a kind of ERP that has different versions adapted to the sector of the company (bank, service, chemical…). It integrates all core business functions and provides special solutions for organization. It can work with different languages and currencies so it is very interesting for international companies. It has an open-system architecture and can then work whatever the hardware (IBM, HP…) and allows users to add exterior modules like modules specially developed by the company to its own use.

The data integrity is effective in SAP and this is an important advantage.

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