Tuesday, April 08, 2008

When I arrived in class today , I didn't know anything about ERP system a part from that they were used in companies. I had heard about using it in the consultant or advices companies and as I wanted to work for one of them , I was interrested on the subject.

I learned that an ERP is a system which is set up to help companies in the way they deal with the information (internal communication, relation with clients, with customers...)
An ERP is a system that a company has to adapt to its particular needs. One of the most important thing on ERP is that it has to fit with the need of the company: having an ERP just to have one is totally useless. (and most of the time costly)
ERP were implemented in the first place in mass in the year 1999 when person from the IT department thought that all their system will turn off when it will pass to the year 2000; they decided to change everything in the same time.
At this time, most of the ERP implementations failed. Why? Because top managers of the companies let all the responsability of the change in the hands of the person of the IT department.They had to face alone, without the support of anyone, all the problems and difficulties that the changes created.

We know now that employees have a big resistance to change. That is why , there are two techniques of implementation of an ERP system:
-The big bang one
-The Rool out one
Each technique has its pro's and it's con's.

The big bang technique is the technique of radical change. All the system is change everywhere in the company at one moment.
This technique need to be really well organised.Everything need to be studied and prepared very carefully. The communication to the employee has to be very good to make them know exactly what will happen.
It is a risky technique because if the system fail (if it doesn't really fit the activity , if employees don't like it ) there will be no possibility to go back.
Moreover, it is a huge investment at the same time for companies.
In an other hand, this technique is efficient in the way of it is fast and let no choice.

The rool out technique consists in changing the system module by module . It allows the company to see the reactions of the employees and to adapt itself to those reactions and its needs. If there are issues, they can be solutionated more easily.
A con’s for this technique is that it takes a long time to implement all the ERP and sometimes it don’t go until the end.
A pro’s will be that the investment is spread on a long time view so it is easilier for companies to buy it.

Companies can choice to implement it in an outsourced way or in an in-house way .
The outsourced what has the advantage of the objectivity: consultant implement the system has it has to be implemented and don’t ocus on the internal issues. More over, consultant have the technical skills and the time to do it.

In an other hand, consultant in in house implementation allow the ERP to be more adapted to the real needs of the company . Moreover, they can support the implementing of the ERP in their own team and diminue the resistance to change.
In both case, you need fonctional expert to implement it at the operational level . And you need leaders to support the project.

ERP system are divided in 3 categories:
The major ERP systems such as Oracle, SAP
The little ERP systems
The open sources one

The major ERP systems represents a lower risk for company in the sense that they have been already tested before by severals companies. As they are serious, they have a competent after sales services and consultant will be there to help in case of an issue.
As they are famous, your customers and proveedors might have this system so having it will allows you to fit with them.
The only bad point is that it is very costly.

We insisted on SAP (Systems Aplications Products) a very know system. It is divided and many modules (one from each kind of activity in the company eg: mkt; rh, pp...)
It is composed in a three-tier architecture:

The operating system (the hardware), thaebasis (sap specifics) and the client-server Network ) in the vertical way.
The Application( the sofware itself), the data( acces to the data from the different applications) and the presentation (the bolt-on’s..) in the horizontal way.

The smaller one are cheaper than the first one. They have a good quality and if you find the one which fits with your need you will be satisfied.
As the ERP is small, the communication between the IT department and the consulting company is better.

The open sources system is the more interresting in my opinion because if it it well used, it can fit exaclty to the company needs and really improve the management of the information (which is one of the major aims of the ERP systems).
Moreover it is free.
You can benefit from the community support (anyone in the web can help you if you have a problem (the best thing is to have anyway an in house developping department).
With the open source sotfware, you can customize the system to have your own version. It is flexible and easi to develop. It avoid changing your system in its globality.

ERP is a huge subject, we will need all the minutes we have to cover it entierly!

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