Customization of ERP Software

Customizing is an integral part of ERP solutions. This is a crucial decision which needs to be taken by the organization as it is detrimental in ERP’S success. The rate of customization is directly proportional to ERP success. Customization tends to pose a challenge to time and the funds allocated. The challenge of a successful management lies in balancing them and making both ends meet. It is a difficult task but the success speaks for the process.

Burning Issues
The major issues that require attention in the process of customizing ERP are strong knowledge about the current system and the likelihood of innovations in ERP. These two issues have their own say in the process of ERP customization. The process of customization will not take place properly unless or otherwise there is a strong working knowledge about ERP systems. Even if it does the rate of success won’t be to that of the desired or atleast required extent. The chances of innovation in ERP will have a say on the customization of ERP because whatever modifications are done now would not have any relevance if they are already covered in the new systems. If the management addresses these two issues properly then the chances of ERP’s customization are pretty high which also speaks for ERP’S success. A proper ERP solution can be provided by the Right ERP company.

Features of ERP innovations
The innovations of new ERP applications help users to include all the specific details in ERP system itself. This means they don’t have to input these details into the ERP systems every time they login. This also implies that the operators need not recompile ERP software’s as and when there is a change in the attributes or methodology of data fed. Customization has also helped the users to act independently rather than depending on the vendors whenever a modification is required. The innovations in New ERP systems have made it so user-friendly that the customers go to the extent of modifying the systems to perform functions exclusive to the organization. ERP solutions are now handier to customize than ever. ERP company offers numerous and flexible ERP solution.

Sound knowledge about ERP System
The features be it old or new or modern or traditional will not be of any use unless the users are aware of the ERP Systems features and modalities. This knowledge has to be imparted to the end users apart from IT personnel. They should have a clear knowledge about the entire system in finger tips. If questioned or demanded they must be capable of bringing that particular function into effect. The services of an expert ERP consultant will come in handy for an organization to supply this information to the user. The consultant will make a decision on the basis of the organizational needs and system configuration. He will be a part of the organization for quiet some time. This will also help him in know the organization and people better. He will therefore be able to work easily. Customization is an important part in implementation of ERP.ERP Company can decide the proper ERP solution for the organization.

ERP - A business intelligence application

ERP (Enterprise Resource Planning) is a way to integrate the data and processes of an organization into one single system, using sub-systems that include hardware, software and a unified database in order to achieve integration, to store the data for various functions found throughout the organization.

The term ERP used to refer about how large organizations of the industrial type planned to use organizational wide resources. Today ERP is used in almost any type of organization it doesn't matter whether its large, small or what industry it falls in. How do we know what software system can be considered ERP? First, it must provide an organization with functionality for at least two systems or more.

However, many of today's ERP systems can cover more than just two functions and integrate them into one unified Data Base. Human Resources, Supply Chain Management, Customer Relations Management, Financial, Manufacturing functions and Warehouse Management functions can be found on modern companies under one umbrella - the ERP system.

The Key to ERP is integration. Its main goal is to integrate data and processes from all areas of the organization and unify it, to provide ease of access and an efficient work flow. ERP Systems usually accomplish this through one single database that employs multiple software modules.

The ideal configuration is then to have one ERP system for an entire organization, but organizations that are very large have been known to create an ERP system and then add external interfaces for other stand alone systems considered more powerful or able to fulfill the organization's needs in a better way.

The Ideal ERP System
The ideal ERP system would have a single database for all areas of the company and contain all of the data for various software modules, such as:

• Workflow management, quality control, bills of material, manufacturing process, engineering, etc.
• Accounts (payable & receivable), general ledger and cash management, fixed assets.
• Training, payroll, time and attendance, benefits.
• Purchasing, Inventory, supplier scheduling, claim processing, order entry, supply chain planning.
• Activity management, time and expense, billing, costing.
• Call Center Support, service, commissions, customer contact, sales & marketing.

ERP and Productivity
Before ERP systems appeared, in most organizations each department had their own operating system, data and database. The problem was that many of those systems would not be able to communicate with each other, so for example the financial of a company would have been on a separate computer system than the Human Resources information, thus complicating the processing of certain functions.

When a company sets up an ERP system, all aspects of the organization can work in harmony. As a result the organization enjoys increased productivity and may use less types of software.

Implementation of an ERP System
Implementing an ERP system is not an easy task. It takes considerable planning and consulting. The timeline for an ERP implementation may range between 3 months and more than 1 year.

ERP systems are extraordinarily wide in scope and can be extremely complex for many organizations. For instance, Changes on staff and work practices might be required. It is advisable (and more cost effective) to use specially trained ERP implementation consultants and not only the "in-house" IT staff.

Ownership of the project of the most important traits that an organization should have when implementing an ERP system. So many changes take place and it has such an effect on almost every individual in the organization, that it is important to make sure everyone is on board and will help make the new ERP system a success.

Organizations may implement their customized ERP system using ERP vendors or consulting companies. 3 types of professional services are needed when implementing an ERP system: Consulting, Customization and Support.

Consulting: responsible for the initial stages of ERP implementation, training, workflow, etc.

Customization: extend the use of the new ERP system or change its use creating customized interfaces and/or underlying application code. Some things may still need to be built or customized for an organization's specific needs. Support: Technical support and maintenance of ERP systems.

Advantages of ERP Systems

There are many advantages of implementing an EPR system:

• It's totally integrated.
• It has the ability to streamline different processes and workflows.
• It is easy to share data across various departments in an organization.
• It improves efficiency and productivity levels.
• It provides better tracking and forecasting.
• Its costs are lower.
• It provides improved customer service.

Advantages of Web based ERP

Web based ERP software is an ERP system that runs on a web server and the user requires a web-browser to work on it. A web based ERP software has to be hosted on a reliable web server so that the application is secure and always ready for use. A web based ERP system also requires lesser in house IT infrastructure as compared to a client server system. 

A web based ERP software has to be developed based on a three-tier design and the system should have a light weight user interface to minimize the data transfer during each cycle. The presentation layer should include all the web forms and the business layer contains all the business logic of all the modules of the web based ERP software. The data layer includes the sql server database.

Web based ERP system has many benefits compared with a client server system. This is the reason why many companies are now opting for web based ERP system as compared to a client server system. The requirement of server management software and associated licensing is eliminated in a web based ERP software. The most important advantage of a web based ERP system is it can be used from anywhere and anytime. For example, data such as sales orders can be entered from any location. By having a web based ERP system, the need for IT staff to maintain an in house ERP infrastructure is eliminated to a large extent. Training the staff on a web based ERP system is much easier as any computer with an internet connection at any location can be used for conducting training sessions.

Web-based ERP system permits organizations, especially SMEs who have limited infrastructure, to conduct its entire business though this medium. An effective web based ERP system automates all internal functions of an organization to ensure that benefits of e-commerce are delivered to the entire organization.

As all the operations are performed through online, a lot of time can be saved by using a web based ERP system and also all dealings and transactions becomes transparent.

There is no doubt web-based ERP system will surely do a lot of good for SMEs in their business process. It is the easiest and cheapest way they can find in extending their presence in the widely spread global market.

Enterprise Resource Planning and Return on Investment

Though many organizations spend lot of time and money researching, analyzing and justifying an enterprise resource planning (ERP) purchase, they hardly spend any time to scrutinize whether the application performs satisfactorily and gives the required output.

If organizations don't establish specific performance metrics, it will be very hard to gauge how well that product is working to meet their objectives, let alone correct any performance gaps.

Given that ERP system is somewhat expensive, some might wonder why more organizations don't engage in a thorough, after-the-fact audit. Reasons range from a lack of involvement by senior management to anxieties about whether the project will live up to its promise-and whose feet will be held to the fire if it doesn't. And somewhat surprisingly, after-the-fact audits are often skipped because no one agrees on what precisely constitutes a successful ERP program.

When the majority of the people you ask not may not sure about what an ERP is, it makes little difficult for your to search for the people who may know it thoroughly. On a technology level, ERP software integrates a company's departments and functions into a single program running on one database, a valuable step forward for improving efficiencies, because integration speeds up business processes.

For a HR manager ERP system is something different application from a production manager. For him it is a system for the employees to interact with each other. But getting bogged down in definitions is beside the point. The point is whatever methodology you use to measure your ERP, it should be applied consistently across the organization at specific points following the implementation.

How often you measure your ERP system will depend on the size of your organization and the depth of your software change. Typically, an audit should occur halfway through the implementation, again at three-quarters of the way through the implementation, and when it's complete. Then, you should follow up every quarterly.

There may be some further questions that how can the ERP application be measured up? Only a systematic, disciplined approach to measuring ROI can provide the answer. However, if the ERP audit focuses only on productivity gains, such as how many steps it takes to complete a shipping label, you won't get the clear of ROI. To get a clear picture the audit must take into account how well employees interact with the ERP system software. Whether the system empowers them to accomplish key tasks? How quickly do they adjust with its functioning methods? To get the actual result, user surveys should be conducted immediately after the training period and again six months later.

A polite approach to the employees to enquire about the functioning of your ERP system could get you closer to the software and its functioning. It will help you understand any shortcomings in the system as well as the need of further training to the employees which could make them more comfortable with the system. A logical and systematic approach to the ERP system by the employees is a must for a good result that ultimately reflected in the organization's return on investment (ROI).

Importance of Sales and Marketing module in ERP system

It is important to know that the Sales module which also known as Customer Relation Management (CRM) in an ERP system is the most important and essential function for the existence of an organization. Sales module in an ERP system manages the functions of domestic and export sales of a company. This is the module that maintains the customer and product database.

Functions of sales module also includes the interacting inquiries, order placement, order scheduling and then dispatching and invoicing form the broad steps of the sales cycle. Stock transfer between warehouses is also covered by this module. Apart from all these functions Sales module also carry out the task of providing analysis reports to guide decision making and strategy planning.

Organizations always wanted to have a good and fighting sales and marketing force to compete in the market. A comprehensive sales and marketing ERP module will help a company stay competitive and streamline their sales and marketing activities.

Sales and marketing module in an ERP system allows activities such as contacting customers and tracking of each customer orders right from placing an order to dispatch of material for that particular order and customer. This module also helps allows sales executives to contact customers and follow-up each and every sales invoice and receive payments for such invoices.

Another important aspect of sales module is it allows management to monitor sales target achieved by individual marketing personnel as per the target planner for each marketing personnel. This feature in of the sales module in the ERP system enhances the working of the marketing department and ensures personnel are not on the right direction.

A good sales and marketing module also has features to track lost orders and identify the reasons for loosing those orders. Business partners and franchises are a common phenomenon in today's world. Latest ERP software will associate marketing personnel to their business partners and franchises and allow them to track and monitor their performance.

ERP sales module can also track sales trends over different periods and prepare the report, Sales forecast can be made using this module as well as provide all over sales and marketing activities of the company.

The ERP module offers an effective customer complaint management tool which also includes repairs processing and document management.

Failure factors in ERP implementation

Having discussed about the success factors in the previous articles it is time to analyze on failure factors. Here is the first article on this series. We are sure this series of articles will guide our readers make their ERP system work effectively and successfully.

• ERP implementation is, at its core, a people project: The biggest challenge before and after implementation is not the technology; the biggest issues are related to people. At every stage, companies must work harder to manage change, secure buy-in, communicate with and educate their employees. Top human resources issues are related to changing management, training and internal staff adequacy.
• Employee resistance: If the employees are not educated and informed about the benefits of the ERP system and assured about the security of their jobs by the top management, they will start believing in the rumors that float around and will either resist or sabotage the ERP implementation.
• Lack of top management commitment: The top management should pledge and demonstrate that the ERP implementation has its full support. They should assure the employees about their jobs, clear any doubts and explain why the ERP system is a necessity for the organization. The CEO or some senior level manager should sponsor the ERP project in order to demonstrate the management commitment.
• Inadequate training and education: All users of the ERP system should be trained properly in using the system to its fullest. Different groups of people in the company will have different training needs. Managers need more focus on the decision-making and analysis features of the system, while the clerical staff need more focus on how to perform their jobs. But all the users must be trained in the ERP basics, overview of the system and its working, how an action by an employee triggers a host of events through the organization, how automation will help, what processes are changed and so on.
• Educate everyone so that they understand what is going to be achieved with the new system. Additional education should include total quality management and change management strategies. Also the training sessions should be used to gain acceptance for the ERP systems by dispelling the myths about ERP. When the employees do not understand what the new system is and what it is supposed to do and how to operate it, they will not use it or use it incorrectly. This can lead to failure of the system. Train process owners (department managers) in how to use the system. Have them train the users.
• Inadequate requirements definition: If the requirements of the new system or what is expected from a new system are not adequately defined, then the implementation team will find it very difficult to plan the project. Only if the requirements are specified correctly, the ERP package that is best suited can be selected.
•  Inadequate resources: ERP implementation is a complex, costly and lengthy project. The initial budgets are very often exceeded and there are still many hidden costs in an ERP implementation. So, while preparing the budget and allocating resources for the ERP implementation care should be taken to consider all the factors that could affect the costs, manpower requirements, infrastructure needs and then reserve a reasonable amount of buffer of buffer for any contingencies that might occur during implementation.

Success factors of an ERP implementation

Implementation of an ERP system is a major investment and commitment for any organizations. The size and complexity of ERP projects are the major factors that impact the cost of ERP implementations. Different companies may implement the same ERP software in total different approaches and the same company may integrate different ERP software applications by following the same procedures. 

However, there are factors common to the success or failure of ERP implementation regardless of the ERP systems they implement and the methodologies they use.

Starting with this article we will discuss the various success and failure factors of an ERP implementation. So when you are planning to implement the ERP system in your company, try to follow as many success factors as possible and avoid the failure factors.

 

SUCCESS FACTORS

• Project Planning: ERP implementation starts with project planning - setting project goals, identifying high-level business requirements, establishing project teams and estimating the project costs. Project planning offers the opportunity to re-evaluate the project in great details. If the ERP project is not justified at the planning phase, organization should not hesitate to cancel the project. For every successful ERP project there are projects that are cancelled before implementation.
• Align the organization on the true destination: You should make sure that everyone in the organization has the same vision about the original motivations for implementation ERP-enabled processes: what the targeted capabilities were, as well as the targeted benefits. Only then can an organization really know how close its ERP program is to being complete. This alignment needs special focus on people: communicating, expectations, education, and top management support.
• Architectural Design: While high-level architectural decision is made in the process of ERP vendor selection, it remains a crucial successful factor in integrating ERP with other eBusiness applications, e-commerce applications or legacy systems. Choice of middle-ware interface software or programming languages drastically impact the implementation cost and release date.
• Transition project roles to a way of life: Information technology people, ERP expert, process expert, site leaders, the project manager and the steering committee - going live can involve hundreds of people, in dozens of roles. But at go-live, once the program is operational, the way roles change and the way such change is orchestrated can be an even larger undertaking. Companies successful in the post-implementation phase are simply better at mobilizing and guiding such efforts. They are also better at preparing people for the critical shift, moving from being team members to champions.
• Data Requirements: Unlike in-house eBusiness applications, much of the packaged ERP implementation involves the integration of ERP systems with existing eBusiness software (CRM, SCM and SFA) and legacy information systems. Appropriate level of data requirements is critical for an ERP to interact with other applications. Data requirements usually reflect details of business requirements. It costs ten times to correct a mistake at later phase of ERP implementation than the effort to correctly define requirements at analysis and design phase.
• Apply planning and program management practices throughout the program life cycle: If there is one thing that companies should master by the time they go-live, it is program management and planning. Companies that will succeed are those that accept the fact that if they are to achieve their benefits, the operation and maintenance phase demands at least as much planning as the implementation phase did.
• Achieve balanced people, progress and technology chances across all areas: Companies undertaking the ERP journey must make changes and take action in all areas of the modern enterprise. They need the best-of-breed technology tools, the most effective work processes using world-class practices and people who are trained and motivated. They will also need strategies that fully leverage these new organizational abilities. Far from being a one-dimensional project, the ERP journey must keep change in play and in balance, in all these areas - a fact that successful companies never forget.
• ERP must b e driven by business case: In other words, the work must be directed toward improving specific business metrics: improved cash flow, faster hiring, reduced costs and accelerated shipments. Both line and IT managers must identify the processes that need improvement. Focusing on business process improvement is the only way to know whether you have got your money's worth.
• Active executive direction: Executive direction in this case means more than just oversight or support. People do not adapt to doing work in new ways without some inspiration from the top. ERP systems are huge, influencing thousands of people, processes, practices and policies. There are thousands of decisions to be made - both large and small. Someone at the top of the organization has to make the call.
• Focus on capabilities and benefits, not just going live: The ERP implementation was initiated because of its benefits. So it will not matter much if a schedule is missed by a few days or even weeks. However, if you miss out on an expected feature or benefit, then it is going to hurt. So make sure that all the features that were planned are implemented.