ERP (CS604C)

1. Knowledge engineering:
Knowledge Engineering (KE) refers to all technical, scientific and social
aspects involved in building, maintaining and using knowledge-based systems. A
knowledge-based system (KBS) is a computer program that reasons and uses a
knowledge base to solve complex problems. The one common theme that unites
all knowledge based systems is an attempt to represent knowledge explicitly via
tools such as ontologies and rules rather than implicitly via code the way a
conventional computer program does. A knowledge based system has two types
of sub-systems: a knowledge base and an inference engine. The knowledge base
represents facts about the world, often in some form of subsumption ontology.
The inference engine represents logical assertions and conditions about the
world, usually represented via IF-THEN rules. The first knowledge-based systems
were rule based expert systems.
There were essentially two approaches in KE that were attempted:
1. Use conventional software development methodologies had some
issues
2. Develop special methodologies tuned to the requirements of building
expert systems
The second approach to knowledge engineering: development of custom
methodologies specifically designed to build expert systems. One of the first and
most popular of such methodologies custom designed for expert systems was the
Knowledge Acquisition and Documentation Structuring (KADS) methodology,
which had a component as workbench for KE.

2. Business Process Reengineering:

Business process reengineering (BPR) is the analysis and redesign of
workflow within and between enterprises.

Business process re-engineering

engineering is a business management strategy,
focusing on the analysis and design of workflows and business processes within
an organization. BPR aimed to help organizations fundament
fundamentally
ally rethink how they
do their work in order to dramatically improve customer service, cut operational
costs, and become world-class
class competitors.
Business process re-engineering
engineering is also known as business process redesign,
business transformation, or busine
business process change management.
Business Process Reengineering (BPR) is the practice of rethinking and
redesigning the way work is done to better support an organization's mission and
reduce costs. Reengineering starts with a high
high-level
level assessment of the
organization's mission, strategic goals, and customer needs. An organization may
find that it is operating on questionable assumptions, particularly in terms of the
wants and needs of its customers. Only after the organization rethinks what it
should be doing,
ing, does it go on to decide how best to do it.
**Re-engineering
engineering recognizes that an organization's business processes are
usually fragmented into subprocesses and tasks that are carried out by several
specialized functional areas within the organization. O
Often,
ften, no one is responsible
for the overall performance of the entire process. Re
Re-engineering
engineering maintains that
optimizing the performance of subprocesses can result in some benefits, but
cannot yield dramatic improvements if the process itself is fundamentally
fundamental
inefficient and outmoded. For that reason, re
re-engineering
engineering focuses on re-designing
re

the process as a whole in order to achieve the greatest possible benefits to the
organization and their customers. This drive for realizing dramatic improvements
by fundamentally re-thinking how the organization's work should be done
distinguishes the re-engineering from process improvement efforts that focus on
functional or incremental improvement.
BPR & Productivity Paradox: The productivity paradox was analyzed and
popularized in a widely cited article by Erik Brynjolfsson, which noted the
apparent contradiction between the remarkable advances in computer power
and the relatively slow growth of productivity at the level of the whole economy,
individual firms and many specific applications. The paradox has been defined as
the discrepancy between measures of investment in information technology and
measures of output at the national level.
Business Process Redesign is the argument that dramatic improvements in
business effective-ness can be achieved by redesigning business processes, taking
advantage of the capabilities of information technology.
THE APPARENT CONTRADICTION: These two hypotheses appear to be quite
contradictory, one argues that we have over-invested in information technology,
and that little or nothing has improved, and the other argues that great benefits
can result from the judicious use of information technology.
1. The most obvious response is simply that there are many intangible or at
least functionally intangible benefits that are not measured by productivity
calculations.
2. The second response is that there are many benefits that could, at least in
principle, be measured but are not.
3. A third response is simply that many of the capabilities and outputs of
information technology are used simply to gain or maintain competitive
advantage, that competitive advantage is often a sponge soaking up the
benefits of information technology.
4. Another response, perhaps the most compelling, is the argument that our
present calculations of productivity in the service sector are hopelessly
flawed.
At almost precisely the same time that the literature revealed concern about
the productivity paradox, the notion of business process redesign appeared.

Manufacturing process redesign bears the same relationship to the old

technology, the dynamo, as business process redesign does to the new
technology, the computer.
Why BPR before ERP needed: Youre wondering how one can possibly
reengineer business processes without having the software installed, or in
some cases, not even knowing what software is being selected, right? Its a
great question, so here are the five reasons why business process
reengineering should start before your ERP implementation:
1. Maintain your competitive advantage: Business process reengineering
without the constraints of software configuration ensures that you
maintain competitive advantages as you select and implement your new
ERP systems.
2. Mitigate the downside of the flexibility of modern ERP systems: Most of
todays ERP systems are very flexible. In fact, I have read that the average
SAP implementation requires 10,000 configuration decisions in order to
assemble a working, end-to-end process flow. If your business processes
are not well defined and documented prior to implementation, these
thousands of configuration decisions will be made in a vacuum by software
techies.
3. Best practices are a farce, but lean Six Sigma isnt: Best practices sound
good in theory, but the reality is that they are simply best practices for how
any particular ERP vendors software works rather than for your operations.
Lean Six Sigma, on the other hand, is a set of tools that can be used to
define your own set of best practices, efficiencies, and competitive
advantages that you likely dont want to be replicated by industry peers.
4. Faster realization of business process improvements and business
benefits: A new ERP system may help automate and further enable
process changes, many improvements can be rolled out independent of the
chosen ERP software. In addition, from an organizational change
management perspective, spoon feeding changes to employees sooner is
more effective than waiting to implement a massive degree of change all at
once during an ERP implementation.
5. Avoid the paving the cow paths trap: Companies that fail to define
business process improvements prior to their implementations are much

more likely to simply automate their existing broken processes. Once an

implementation starts, the meter is running on expensive technical
consultants, so every minute spent making process decisions or agreeing to
changes costs time and money. This set-up forces most project teams into
the path of easiest resistance (i.e., simply configuring or customizing the
software to fit existing processes). On the other hand, companies that take
the time to define processes up front ultimately end up accelerating their
implementation durations and minimizing extra costs, allowing the
technical resources to focus on how the software can be best configured to
meet those processes.

3. BAAN:
Baan was a vendor of enterprise resource planning (ERP) software that is
now owned by Infor Global Solutions. Baan or Baan ERP was also the name of the
ERP product created by this company.
The Baan Corporation was created to provide financial and administrative
consulting services. The Baan Company focused on the creation of enterprise
resource planning (ERP) software. Baan gained its popularity in the early nineties.
Baan software is famous for its Dynamic Enterprise Modeler (DEM), technical
architecture and its 4GL language. Baan 4GL and Tools nowadays is still
considered to be one of the most efficient and productive database application
development platforms. Baan became a real threat to market leader SAP after
winning a large Boeing deal in 1994. Several large consulting firms throughout the
world partnered to implement Baan IV for multi-national companies. Sales growth
rate was once claimed to reach 91% per year. However the fall of the Baan
Company began in 1998. The management exaggerated company revenue by
booking "sales" of software licenses that were actually transferred to a related
distributor. The discovery of this "creative" revenue manipulation led to a sharp
decline of Baan's stock price at the end of 1998.In June 2000, Baan was sold to
Invensys.
1. Supported Platform and Database (Server):
Server Platform: Windows Server, Linux, IBM AIX, Sun Solaris
Database: Oracle, DB2, Informix, MS SQL Server, MySQL

2. Baan IV modules:
Common (tc), Finance (tf), Project (tp),Manufacturing (ti),Distribution
(td),Process (ps),Transportation (tr),Service (ts),Enterprise Modeler
(tg),Constraint Planning (cp),Tools (tt),Utilities (tu), Baan DEM ( tg)
3. Baan Virtual Machine bshell: Bshell is the core component of Baan
application server. It is a process virtual machine to run Baan 4GL language.
Bshell were ported to different server platforms and make Baan program
scripts platform independent. For example, a Baan session developed on
Windows platform can be copied to Linux platform without re-compiling
the application code. Bshell is similar to nowaday's Java VM or .Net CLR.

4. SAP:
SAP ERP is enterprise resource planning software developed by the German
company SAP SE. SAP ERP incorporates the key business functions of an
organization. SAP ERP is part of the applications in the SAP Business Suite (and
SAP Business All-In-One software).
SAP ERP consists of several modules, including utilities for marketing and
sales, field service, product design and development, production and inventory
control, human resources, finance and accounting. SAP ERP collects and combines
data from the separate modules to provide the company or organization with
enterprise resource planning.
When SAP R/3 Enterprise was launched in 2002, all applications were built
on top of the SAP Web Application Server. Extension sets were used to deliver
new features and keep the core as stable as possible. As a result of marketing
changes and changes in the industry, new versions of SAP have been released.
The SAP Web Application Server was wrapped into NetWeaver (the primary
technology computing platform of the software company SAP AG), which was also
introduced in 2003.
Summary of modules in SAP:
A. Technical Modules
1. Programming (ABAP)
2. BASIS

B. Main Functional SAP ERP Modules

**1. FICO (Finance & Controlling)
**2. HR (Human Resource)
**3. PP (Production Planning)
**4. MM (Material Management)
**5. SD (Sales & Distribution)
6. PM (Plant Maintenance)
7. PS (Project System)
**8. QM (Quality Management)
**9. BIW (Business Information Warehousing)
C. Business Suite
**1. CRM (Customer Relationship Management)
**2. SCM (Supply Chain Management)
3. SEM (Strategic Enhanced Management)
4. APO (Advanced Planner Optimizer)
5. EP (Enterprise Portal)
**6. SRM (Supplier Relationship Management)
7. XI (Exchange Infrastructure)
It supports all servers & DBMSs that are listed in BAAN.

5. PeopleSoft:
PeopleSoft, Inc. was a company that provided Human Resource
Management Systems (HRMS), Financial Management Solutions (FMS), Supply
Chain Management (SCM), Customer Relationship Management (CRM), and

Enterprise Performance Management (EPM) software, as well as software for

manufacturing, and student administration to large corporations, governments,
and organizations. It existed as an independent corporation until its acquisition by
Oracle Corporation in 2005. The PeopleSoft name and product line are now
marketed by Oracle. PeopleSoft Financial Management Solutions (FMS) and
Supply Chain Management (SCM) are part of the same package, commonly known
as Financials and Supply Chain Management (FSCM).
In 2003, PeopleSoft performed a friendly merger with smaller rival JD
Edwards.
Application architecture: The original architecture for the PeopleSoft suite
of products was based on a clientserver (two-tier) approach with a dedicated
client.[3] With the release of version 8, the entire suite was refactored as an n-tier
web-centric design called PeopleSoft Internet Architecture (PIA).[3] The new
format allowed all of a company's business functions to be accessed and run from
within a web browser.[4]
The PeopleSoft application suite can function as an ERP, similar to SAP, but can
also be used for single modules - for example, Student Admin. or HCM alone.
Development platform: The architecture is built around PeopleSofts proprietary
PeopleTools technology. PeopleTools includes many different components used
to create web-based applications: a scripting language known as PeopleCode,
design tools to define various types of metadata, standard security structure,
batch processing tools, and the ability to interface with a SQL database. The
metadata describes data for user interfaces, tables, messages, security,
navigation, portals, etc. This set of tools allows the PeopleSoft suite to be
platform independent.
In December 2004, Oracle announced that it had signed a definitive merger
agreement to acquire PeopleSoft.

6. Oracle E-Business Suite:

Oracle's E-Business Suite (also known as Applications/Apps or EB-Suite/EBS)
consists of a collection of enterprise resource planning (ERP), customer
relationship management (CRM), and supply-chain management (SCM) computer
applications either developed or acquired by Oracle. The software utilizes Oracle's
core Oracle relational database management system technology.[4] The EBusiness Suite contains several product lines often known by short

acronyms.Significant technologies incorporated into the applications include the

Oracle database technologies, (engines for RDBMS, PL/SQL, Java, .NET, HTML and
XML), the "technology stack" (Oracle Forms Server, Oracle Reports Server, Apache
Web Server, Oracle Discoverer, Jinitiator and Sun's Java). Oracle Corporation
brands the on-line technical documentation of E-Business Suite as eTRM "EBusiness Suite Technical Reference Manuals".
It makes the following enterprise applications available as part of Oracle
eBusiness Suite:

Asset Lifecycle Management

o Asset Tracking
o Property Management
Customer Relationship Management
Enterprise resource planning
o Financial Management
o Human Capital Management
o Project Portfolio Management
Procurement
o Oracle Advanced Procurement
Oracle Sourcing
Product Life-cycle Management
Supply Chain Management
o Supply Chain Planning
o Logistics & Transportation Management
o Order Management
o Price Management
Manufacturing
o Discrete Manufacturing
o Process Manufacturing

Oracle Financial Applications: The Oracle E-Business Suite provides a set of

financial applications used internationally in businesses.

Oracle Project Portfolio Management Applications

Additional Oracle E-Business Suite products include:

Oracle Bills of Material

Oracle Capacity
Oracle CRM

Oracle Advanced Planning & Scheduling

Oracle Business Intelligence
Oracle Order Entry
Oracle Order Fulfillment (order to cash process)
Oracle Payroll
Oracle Purchasing
Oracle Landed Cost Management
Oracle Receivables
Oracle TMS (Transportation/G-Log)
Oracle Work in Process
Oracle Process manufacturing
Oracle Federal Administration
Oracle Sales
Oracle MRP
Oracle Workflow
Oracle Financials
Oracle SCM
Oracle HRMS

Oracle Accelerate: In 2007 Oracle launched a set of applications for mid-size

businesses called Oracle Accelerate. Accelerate provides access to Oracle's ERP
products through a local partner-network and packages the products to meet
vertical industry requirements.
Oracle User Productivity kit (UPK): The Oracle User Productivity Kit application
provides a content-development, deployment, and maintenance platform.

7. SCM:
A supply chain, as opposed to supply chain management, is a set of
organizations directly linked by one or more upstream and downstream flows of
products, services, finances, or information from a source to a customer. Supply
Chain Management (SCM) is the management of the flow of goods and services. It
includes the movement and storage of raw materials, work-in-process inventory,
and finished goods from point of origin to point of consumption. Interconnected
or interlinked networks, channels and node businesses are involved in the
provision of products and services required by end customers in a supply chain.
SCM draws heavily from the areas of operations management, logistics,

procurement, and information technology, and strives for an integrated

approach.
Supply chain management software includes tools or modules used to execute
supply chain transactions, manage supplier relationships, and control associated
business processes.
FUNCTIONS:

managing the movement of raw materials inside organisation,

the movement of finished goods out of the organization and toward the
end consumer

IDEAL COMPONENTS: SAP SCM (SAP Supply Chain Management) :

1. SCM Process and Business Scenarios
2. SAP Forecasting and Replenishment
3. SAP Advance Planning and Optimization (SAP - APO)
4. SAP Inventory Collaboration Hub (SAP - OCH)
5. SAP Event Management (SAP - EM)
6. SCM Basis
BENEFITS: SCM can help you transform a traditional linear supply chain into an
adaptive network with the following benefits:
With the increased visibility into the supply chain and adaptive supply
chain network, you can be more responsive. You can sense and respond
quickly to changes and quickly capitalize on new opportunities.
By offering a common information framework that supports
communication and collaboration, SCM enables you to better adapt to
and meet customer demands.
You can track and monitor compliance in areas as environment, health
and safety.
Information transparency and real-time business intelligence can lead to
shorter cash-to-cash cycle times. Reduced inventory levels and increased
inventory turns across the network can lower overall costs.
With SCM, you can lower operational expenses with timelier planning for
procurement, manufacturing and transportation. Better order, product
and execution tracking can lead to improvements in performance and
quality - and lower costs. You can also improve margins through better
coordination with business partners.

 Tight connection with trading partners keep your supply chain aligned
with current business strategies and priorities, improving your
organization's overall performance and achievement of goals.

8. CRM:
Customer relationship management (CRM) is an approach to managing a
companys interactions with current and future customers. It often involves using
technology to organize, automate, and synchronize sales, marketing, customer
service, and technical support. CRM is a customer-oriented feature with service
response based on customer input, one-to-one solutions to customers
requirements, direct online communications with customer and customer service
centers that help customers solve their issues.
Impact on Customer Satisfaction: According to Bolton, customer
satisfaction has significant implications for the economic performance of firms
Because customer satisfaction has been found to have a negative impact on
customer complaints and a positive impact on customer loyalty and usage
behavior.
Benefits of implementing CRM include:
Increased customer loyalty may increase usage levels [8]
Secure future revenues [10]
And minimize the likelihood of customer defection
The implementation of CRM is likely to have an effect on customer satisfaction for
at least three reasons:
Firms are able to customize their offerings for each customer. By
accumulating information across customer interactions and processing this
information to discover hidden patterns, CRM applications help firms
customize their offerings to suit the individual tastes of their customers.
Customized offerings enhance the perceived quality of products and
services from a customers viewpoint. Because perceived quality is a
determinant of customer satisfaction, it follows that CRM applications
indirectly affect customer satisfaction through their effect on perceived
quality.
In addition to enhancing the perceived quality of the offering, CRM
applications also enable firms to improve the reliability of consumption
experiences by facilitating the timely, accurate processing of customer

orders and requests and the ongoing management of customer accounts.

For example, Piccoli and Applegate (2003) discuss how Wyndham uses IT
tools to deliver a consistent service experience across its various properties
to a customer. Both an improved ability to customize and a reduced
variability of the consumption experience enhance perceived quality, which
in turn positively affects customer satisfaction.
CRM applications also help firms manage customer relationships more
effectively across the stages of relationship initiation, maintenance, and
termination. In turn, effective management of the customer relationship is
the key to managing customer satisfaction and customer loyalty.
Customer-centric relationship management (CCRM):
CCRM is a style of customer relationship management that focuses on
customer preferences instead of customer leverage. This is a nascent subdiscipline of traditional customer relationship management; to take advantage
of changes in communications technology. Customer centric organizations help
customers make better decisions and it also helps drive profitability. CCRM
adds value by engaging customers in individual, interactive relationships.
Customer-centricity differs from client-centricity in that the latter refers almost
exclusively to business-to-business models rather than customer-facing firms.

9. CRM-SRM:
Supplier relationship management (SRM) and customer relationship
management (CRM) are related, closely related. Just as companies have multiple
interactions over time with their customers, so too do they interact with suppliers
looking at POs, negotiating contracts, managing logistics and delivery, and so
on. The many interactions with suppliers should be viewed as a relationship, one
which can and should be managed in a coordinated fashion across functional and
business units.
CRM and SRM are specifically created to manage relationships. The main
difference between CRM and SRM solutions is the target audience, but here are
some of the things they have in common.

Business relationships are becoming too complex to be managed in the

traditional way (i.e. without the use of a software solution).

The word 'satisfied' is usually associated with 'customer'but happy

suppliers are also essential for a company's success, especially one involved
in manufacturing and distribution.
Both customers and suppliers should be considered partners by the
company, which involves establishing and maintaining ongoing
relationships with them. It's always better to keep old customers than look
for new ones and the risks of contracting a new vendor can be higher than
the advantages (lower costs)
CRM systems can provide information about what you need to produce,
which is very important when deciding what to purchase; SRM systems
allow access to valuable information about the suppliers that provide the
right components for the products requested by your customers.
CRM and SRM systems can be used for both products and services.

And here are a few other things that differentiate SRM and CRM solutions:
Customers and suppliers have different needs, so your relationships with
them will be differentand therefore need to be managed differently.
Many companies working directly with customers use CRM, whereas
supplier management solutions are quite rare in the manufacturing field.
From the user's point of view, working with suppliers is called collaboration,
because both the user and the supplier have the same goalget the right
product (raw material, component, or finished product) at the right price;
but working with customers is called profit-oriented activity.
CRM is often used as a stand-alone product, but SRM is usually used with
an ERP system.
As a general rule, SRM reduces costs, whereas CRM increases sales. Of
course, low costs can increase sales and CRM can reduce marketing costs if
used properly, but these are only exceptions to the rule.
CRM will rarely be used for relationships between customers, but SRM is
often used for interactions between suppliers.

10. CPD:
Continuing professional development (CPD) or continuing professional
education (CPE) is the means by which people maintain their knowledge and skills
related to their professional lives.

CPD obligations are common to most professions. Many professions define CPD
as a structured approach to learning to help ensure competence to practice,
taking in knowledge, skills and practical experience. CPD can involve any relevant
learning activity, whether formal and structured or informal and self-directed.

11. E LOGISTICS:
Logistics is the management of the flow of goods between the point of
origin and the point of consumption in order to meet requirements of customers
or corporations. The resources managed in logistics can include physical items,
such as food, materials, animals, equipment and liquids, as well as abstract items,
such as time, information, particles, and energy. The logistics of physical items
usually involves the integration of information flow, material handling,
production, packaging, inventory, transportation, warehousing, and often
security. The complexity of logistics can be modeled, analyzed, visualized, and
optimized by dedicated simulation software. The minimization of the use of
resources is a common motivation in logistics for import and export.
E-logistics is defined to be the mechanism of automating logistics
processes and providing an integrated, end-to-end fulfilment and supply chain
management services to the players of logistics processes. Those logistics
processes that are automated by e-logistics provide supply chain visibility and can
be part of existing e-Commerce or Workflow systems in an enterprise.
In a typical E-logistics process, three components come into play: Request
for Quotes (RFQ), Shipping and Tracking. The Logistics intercommunicate with the
business process manager in an e-commerce server. It is the role of the business
service manager to invoke the RFQ (request for Quote) process. After getting the
response, the purchase order is updated, after which the shipping process is
invoked by the business process manager. Once the products are shipped for the
specified destination, the tracking number is then provided to the customer. This
tracking number is mapped to the PO number in an e-commerce system. This
facilitates easy tracking of shipments for the customers. This is the essential
interaction of a business process manager and e-logistics.

12. EDI:
Electronic data interchange (EDI) is an electronic communication method
that provides standards for exchanging data via any electronic means. By
adhering to the same standard, two different companies or organisations, even in

two different countries, can electronically exchange documents (such as purchase

orders, invoices, shipping notices, and many others). National Institute of
Standards and Technology defined electronic data interchange as "the computerto-computer interchange of strictly formatted messages that represent
documents other than monetary instruments. EDI implies a sequence of messages
between two parties, either of whom may serve as originator or recipient. The
formatted data representing the documents may be transmitted from originator
to recipient via telecommunications or physically transported on electronic
storage media." It distinguishes mere electronic communication or data
exchange, specifying that "in EDI, the usual processing of received messages is by
computer only. Human intervention in the processing of a received message is
typically intended only for error conditions, for quality review, and for special
situations. For example, the transmission of binary or textual data is not EDI as
defined here unless the data are treated as one or more data elements of an EDI
message and are not normally intended for human interpretation as part of
online data processing."EDI can be formally defined as the transfer of structured
data, by agreed message standards, from one computer system to another
without human intervention.

13. SINGLE VENDOR Vs BEST OF BREED:

When function-rich, integrated enterprise resource planning (ERP) software
burst onto the information technology scene over a decade ago, it brought with it
a debate within companies, implementation consultants, and ERP vendors.
Should a company pursue a single integrated ERP solution or implement and
interface multiple best-of-breed packages?
The advent of cloud-computing technology has given rise to a completely new
computing platform, new hosting configuration options, as well as a new
generation of ERP vendors. The debate hasnt changed, though. The debate
begins with the premise that no ERP product will satisfy 100 percent of an
organizations business process needs.
A single ERP solution ensures that business processes are tightly integrated and
that data exists in only one place to be used for transaction execution and
information analysis. Best-of-breed solutions may split processes between
software modules, requiring duplicate transaction entry and the development of
interfaces to keep multiple databases in sync.
A single-vendor solution delivers new software functionality by upgrading to
software releases when they are available. A multi-vendor, best-of-breed ERP

strategy complicates the implementation of new software releases, thus delaying

availability of necessary new functionality and possibly precluding new hosting
configuration options. A multi-vendor solution also adds to the cost for
development and maintenance of interfaces.
The decision to implement an ERP software suite is a long-term strategic decision.
By selecting a particular software product, an organization is not just selecting
software that meets current functional needs but is also selecting a vendor for a
long-term relationship. While the ERP suite selected may not meet all of the
current needs, this strategy provides a path for acquiring and applying software
that is technically current and meets the functional needs of the business.

14. ERP:
DEFINITION: A true Enterprise Resource Planning (ERP) system integrates
both internal and external information flows used by the organization within a
single, comprehensive solution. An ERP solution incorporates the practical
systems used by organizations to manage the basic commercial functions of their
business, such as: planning, inventory/materials management, purchasing,
manufacturing, finance, accounting, human resources, marketing and sales,
services etc. The objective of the ERP solution is to drive the flow of information
between all internal business functions while managing connections, or
"touchpoints," to outside stakeholders.
ERP solutions run on a variety of computer hardware and network configurations,
including "on premises" (i.e. client/server) or hosted (i.e. "cloud-based" or
Software as a Service).
Regardless of the configuration, typically ERP solutions use a common database to
hold information from the various business functions that's accessible in some
form or another by various users. The use of an integrated database to manage
the solution's multi-module application framework within a common information
system is one of the primary ERP benefits of this kind of system over "point
solutions."
Unlike point solutions (historically used by small to midsize businesses) that rely
on multiple (sometimes duplicating) databases which strain IT resources, ERP
solutions standardize the use of one application to run an entire business. This
not only increases efficiencies, but also decreases the overall total cost of
ownership (TCO), thereby reducing operational costs and improving the
company's profitability.

BENEFIT:

Tighter controls for financial compliance declaration (e.g. Sarbanes-Oxley

and Basel II) as well as other forms of compliance reporting.
The single data source for product and services information - such as
information related to suppliers, vendors, customer orders and the products
themselves - drive rapid product development and launch cycles which
increases a company's overall market share.
Increased access to valuable corporate data delivers a clear, global view of
the business that drives continuous improvement strategies and establishes
common performance metrics and measures to gauge the health of the
business.
Effectively managing projects holistically fosters decision making at critical
levels in the development and/or manufacturing process.
Support for streamlined sourcing and procurement processes drive alignment
to customer demands, and also deliver a centralized buying model to reduce
unauthorized and unnecessary expenses.
Providing sales and operations planning with access to critical information
fosters "closed loop" processes that ensures the business does not
overpromise and/or underdeliver to customers.
Automating business processes such as invoicing and sales and purchase
orders within one systems improves forecasting accuracy and reduces
inefficiencies.
Using a single base of information for billing and other customer
interactions improves service levels and increases customer retention.