Aquevix Solutions (P) Ltd

What is ERP?

Enterprise resource planning (ERP) is an enterprise-wide information system designed to coordinate all the resources, information, and activities needed to complete business processes such as order fulfillment or billing. An ERP system supports most of the business system that maintains in a single database the data needed for a variety of business functions such as Manufacturing, Supply Chain Management, Financials, Projects, Human Resources and Customer Relationship Management.

An ERP system is based on a common database and a modular software design. The common database can allow every department of a business to store and retrieve information in real-time. The information should be reliable, accessible, and easily shared. The modular software design should mean a business can select the modules they need, mix and match modules, and add new modules of their own to improve business performance.

The Need for an ERP

As businesses grow, organizations need structured approach, processes to map business practices and rules and responsibilities to facilitate efficient use of resources. Centralized management, control and reporting become increasingly important. Businesses need constant, organized information flow that is consistent, real time and provide standards based work flow.

Businesses also need well defined workflow so that process flows smoothly. An ERP helps achieve the same with strongly implemented workflow that follows the business processes.

Another reason for ERP implementation is for businesses spread across multiple geographic locations control of various activities. This requires data monitoring and data security along with consistent information flow. It is also important to get information in near real time to be able to manage a complex enterprise.

What to look for in an ERP

Scalability – An ERP should be scalable to meet the rapid increase in the size of the business. With business growth, the ERP should be able to handle the network load as well as load of the new users.

Features – A complete ERP should offer all things integrated. Sometimes it is not possible to have everything integrate, however most of the common modules should be integrated to allow centralized management.

Deployment Cost – Deployment cost is the total cost of adopting to use an ERP system. This includes the one-time cost of the software as well as the cost of training and productivity loss for initial deployment.

Runtime Cost – Runtime cost is the daily cost of using the system. This can depend on if the cost is licensed with runtime deployment costs or simply the cost of infrastructure like servers, electricity, equipment and internet.

Software Cost – Software cost is the cost of software itself and the cost of additional software needed to run the ERP suite. For Microsoft Windows Server based installation such costs may include cost of Anti-virus or Firewall software. Another example is of Microsoft Navision that requires the use of Microsoft Office components to use all features of software or the client access licenses for using Server. Additional software can increase the software costs considerably especially with number of users are large.

Hardware Cost – Hardware costs are costs that are required to run the software. Hardware costs depend on server load as well as the choice of operating system. This may also depend on how the software is installed and whether installation is properly optimized to handle the load.

Hidden Costs – Hidden costs are usually costs that are discovered later when not planned. Usually all the costs should be known or understood beforehand.

Security – Security is most important for any ERP implementation. Usually all ERPs have customizable Role Based Security (RBS) so that uses can be created and assigned various roles based on their responsibilities and tasks.

Deployment Options – Deployment options are options available for an ERP implementation. Usually ERPs are tied to a particular operating system or technology. ERPs that provide support for multiple operating systems are most flexible for users.

When not to use an ERP?

ERP system is not for everyone. You need to analyze your costs and benefits to decide whether an ERP system is for you. Further you need to analyze if the system has all the functionality that you need today or 2 years from now.
Following should be evaluated before considering investing in an ERP:

• If you are a small company with very few employees
• If you have just a few number of products and are not high valued
• If your employees are largely uneducated or cannot handle computers