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MISM610-Discussion On The ERP System

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  • Course Code: MISM610
  • University: Ferris State University
  • Country: United States

Question:

Investigate the selected topic using articles, websites, books, journal papers and/or interviews and industry feedback (optional). In the report, you are expected to explain 1) the selected information system, 2) commercially available solutions, 3) state of this system/technology in UAE / GCC market, 4) how the technology/information system is helping the company/ entity to achieve its objectives and 5) key conclusions and contributions of the study.
 
 

Answer:

Introduction to the selected information system:

ERP, or enterprise resource planning, is a modular software system which integrates various functional aspects of an organization that is required for designing a complete integrated system for an organization. An ERP system contains core software elements that is often referred to as modules that manages important aspects of business of any organization such as finance and accounting, HR, production and materials management, customer relationship management (CRM), and supply chain management.  Although ERP provides support for various functional elements, it depends on the organization that what services are required for the business and based on that the organization needs to choose that accordingly. The choice for the ERP packages depends on the requirement on the organizations and services that are important for the organization.

ERP is not the same as the traditional software solutions for the enterprise that has different software for different enterprise services. Although vendors often describe the traditional approach to be more productive, it is not as efficient as the ERP system which integrates all the necessary information at one place. The distinguished feature of the ERP system is that it has a common database that is managed in central server and the same database is shared by all the modules. Hence it is not required for the organization to manage each database differently for each of the software services. The central database as shared by all makes the process less complicated and often improve the accuracy of the system.

Implementation of the ERP system:

ERP is implemented in various way. It is possible to develop ERP with in-house infrastructure or organization might opt for the cloud implementation or even opt for the hybrid implementation which combines both of the approaches. The hybrid implementation such as such as with platform as a service and infrastructure as a service is often preferred by the organizations for its productivity and efficiency. Although previously ERP implementation was complex and expensive due to the advanced hardware and the software requirements, with the application of cloud implementation the process has not only improved, it is now accessible to many small and medium organizations and this is the reason that the ERP system has become so popular in the industry. 

 

ERP technologies:

Databases

There are various database technologies available for the developer to implement ERP system for the enterprise. A DBMS is an essential and integrated part of the ERP system as it holds the data for the system and it then provides interaction between the system and the users. The interaction is essential for data query as requested by the user. The most preferred DBMS is the MSSQL as it is open source, authentic and most consistent among the commercially available solutions.

PostgreSQL:

PostgreSQL, another important DBMS, is powerful option when it comes in ERP trouble shooting and along with that it also offers server management studio and server profile. It is no doubt one of the most powerful and advanced technology that is included in the ERP technologies lists. Along with that PostgreSQL contains various indexing techniques, full-text search, and Elastic search capabilities, which is very significant for the users of the ERP system.

MSSQL:

Microsoft’s SQL which is considered as one of the standard ERP databases. It is basically deployed for the storing and retrieving of the data as required by the applications. Low cost of installation, enhanced performance, and better security features makes this technology very popular among the ERP developers.  

ORACLE SQL:

The Oracle SQL is considered for various tasks like upgrading the data, saving it, and retrieving it, especially when the requirement is super intense speed. SQL provides the automated backup which ensures easy accessibility and also helps in eliminating data with efficiency.

Programming Technologies

NET and ASP.NET:

These two frameworks are favourite choices of the developers as these two frameworks include less code and also offers better code reuse which helps in reducing both the time as well as the cost for developing of the ERP system. It consists of various set of tools which are required for web and desktop development, such as WPF and Winforms which helps in creating excellent interfaces in less time. 

 

Java:

Java, similar to the .NET framework is ideal for the development of the ERP system that is aimed for the web or desktop or both at the same time. The frontend for the desktop version is developed with the swing. When the web version is deployed with the same java backend framework, there are various choice available for the web development framework and also provides consistent experience across various browsers and platforms.

Ruby:

Ruby is another popular choice for the backend development. Ruby offers modules as well as class extensions as it has self-hosting feature and its quick database makes it ideal for the CRM. These two reasons make it popular among the choices for the CRM development. However, Ruby does not have huge community support as it is supported by only one community. Hence, it is hard to maintain. Along with that there are not many Ruby developers available in the market due to lack of jobs and hence there is huge demand for the Ruby developers.

Python:

Python, which is the simplest language available for developing the backend server. It is considered for developing the byte-code for large-scale applications and it also offers high-end abstraction in the development of the ERP model.

PHP:

Although PHP was the first server side language, now there are other alternative such as .NET, Java, and Ruby which has almost replaced the PHP in terms of choice for ERP backend development. Hence it is not preferred to choose PHP for the development purpose.  

Frontend Technologies

JavaScript:  

It is especially best choice if the ERP system is deployed in the cloud.

AngualrJS:  

It is a great framework when the backend for the ERP system is developed with the java or the C# for developing responsive web applications that is supported across various browsers and various devices with enhance experience. AngularJs is considered for developing these kind of applications.

React:  

It is another popular choice for the development of the backend of the ERP system. One of the best feature of this framework is that the code that is developed for the website is also applicable for the mobile app development which reduces the overall cost for the development as well.

Vue.JS:

It is a progressive framework that is one of the best choice for the development for the user interface. It helps in creating single page application which is powerful enough for an alternative to the desktop version of the desktop application. It provides flexibility in designing codes which makes it a perfect choice for the developers. 

 

Commercially available solutions: 

There are various commercial ERP solutions available for the enterprise and each of them is developed for managing different enterprise functionalities. Those solutions are:

  • Accounting and finance
  • Business intelligence and reporting 
  • Sales and customer management
  • Purchasing and supplier management 
  • HR and payroll
  • Inventory management and warehousing

State of this system/technology in UAE / GCC market: 

Considering recent market of the ERP solutions it has been seen that Gulf countries has seen a vast amount of growth in this sector. It has been assessed that gulf countries especially UAE has been projected to exhibit CAGR over 13% during the year of 2017-22. Comparing with other gulf counties UAE has seen huge pace in the ERP market. In UAE such amount of growth has been observed as small and medium sized organizations is increasing in this country and due to the rising initiatives of the government such as UAE Vision 2021 and Smart Dubai. Also the ERP market has been rising in the gulf countries due to the adoption of cloud computing and for boosting the economy of these countries. Furthermore it has been also analysed that the use of the ERP systems will increase more in upcoming years due to growth in the manufacturing sector of these gulf countries and the BFSI sector of this country is also one of the main reason behind the increment of ERP solutions. SAP is global market leader in providing ERP solutions and currently these gulf countries are one of the most important market for them.

In 2018 many gulf countries has introduced the VAT system on the products which is one of the major source of income for these countries. This VAT on the products is collected in almost every stages of the supply chain. It has been assessed that colleting VAT in every stage of the supply chain is difficult and also time consuming. For solving this problem in this case ERP solutions can be a big factor. Implementation of the ERP software can manage the VAT collection in an efficient and flexible way. For collecting the VAT efficiently, implementation of the cloud services is very much important and for that the ERP systems are crucial. These gulf countries are very much interested in the ERP solution for the VAT system as this can be easily accessed through smart devices by using internet. Also, this cloud ERP software needed very less amount of time for deploying.

From a recent research it has been assessed that in the Middle East Gulf countries the market of cloud computing is expected to grow from $887.5 million to $2404.5 million by the end of 2020. Thus for this huge adoption of the cloud computing vast amount of ERP implementation is also needed in this countries. This cloud architecture is mainly adopted for the supply chain lines and finance of the business of the small and medium size organizations. With the implementation of ERP solution faster innovation can be achieved for a truly secure environment for a business. The ERP solution is also very much popular in these gulf countries as this solution can help the business and the organizations to digitize and improve the core processes of the businesses. Most of the gulf countries are in now in developing stage and onsite implementation of the ERP can be costly for the small and medium size organisations. Thus in this case the cloud ERP solutions is very much popular in these countries.

How the technology/information system is helping the company/ entity to achieve its objectives: 

Although the ERP system offers various benefits, majority of its application is the distribution of the information and standardization of the information which is required for developing information integrity. ERP is often considered for the cross-development business process as it is effective in sharing information within the organization compared to the separate information systems implemented for different enterprise applications. Along with that ERP system is more effective and efficient in the data analysis as it has advanced data analytical tools and also the modern ERP systems include newer technologies for the data analysis and this makes the ERP systems a powerful enterprise application widely implemented across the industries.

Application of the ERP software:

  • Boosts in efficiencies with support for automation in the data collection;
  • enables business growth by providing support for managing business processes that are increasingly complex;
  • helps in reducing risk through support for better compliance;
  • promotes collaboration using the process of data sharing and  providing integrated information;
  • provides better business intelligence and customer service capabilities; and
  • Improves the efficiency of the supply chain management.

Some ERP systems has even integrated the next-generation capabilities, such as AI, IoT and advanced analytics, to help in the advancement of the digital transformation. Businesses typically need an ERP system when there is a need to outgrow spreadsheets and disparate, and especially when there is a need to support development for growth in the organization through the advanced data analytics the ERP system is required due to its advanced data analytics tool and its ability to manage various enterprise resources efficiently. As it is common with many technology products, the exact definition of the ERP system significantly differs from vendor to vendor. Hence the standard definition of ERP system is often difficult to describe, especially at the enterprise level. 

 

Key conclusions and contributions of the study: 

ERP system has various benefits that is not offered when those integrated systems are implemented differently. Along with that when the enterprise systems are implemented differently or in separate modules, it is often complex and expensive. However implementation of the ERP system is less complex, especially when implemented in the cloud infrastructure. Although in-house implementation is available, it is more complicated and requires advance hardware and software. Hence for the medium and for the small scale industries, the cloud implementation is often preferred.

Due to its advance analytical tools and advance resource planning and the resource management, ERP systems is becoming more popular in the industry and it is also becoming popular in the GCC market too. A lot of companies are adopting this technology and establishing the ERP as the primary information system in the organization.

Along with the powerful data analytic tools the ERP system is also efficient in storing and sharing information across the enterprise with information standardization. This is another important application of the ERP system.

However, it is important to note that although the ERP system offers various benefits, it has several drawbacks too. One of the main drawbacks of the system is that it is difficult to maintain. Along with that employees who are in charge of the system need proper training to properly manage the system and derive various advance feature offered by the system. Hence organizations need to train its employee properly for deriving success through the application of the ERP system. However, the investment is justified compared to the benefits that it offers.

Hence from the analysis it is concluded that the ERP system has both advantages and drawbacks as well. However, if those drawbacks are properly managed, it is possible to ensure success in the resource planning and in the resource management. Hence both of these aspects have to be properly managed for the successful ERP implementation. 

 

References:

Abdinnour, S. and Saeed, K., 2015. User perceptions towards an ERP system: Comparing the post-implementation phase to the pre-implementation phase. Journal of Enterprise Information Management, 28(2), pp.243-259.

Ali, M. and Miller, L., 2017. ERP system implementation in large enterprises–a systematic literature review. Journal of Enterprise Information Management, 30(4), pp.666-692.

Harwood, S., 2017. ERP: The implementation cycle. Routledge.

Lorenc, A. and Szkoda, M., 2015, May. Customer logistic service in the automotive industry with the use of the SAP ERP system. In 2015 4th International conference on advanced logistics and transport (ICALT) (pp. 18-23). IEEE.

Miranda, M.Q., Farias, J.S., de Araújo Schwartz, C. and de Almeida, J.P.L., 2016. Technology adoption in diffusion of innovations perspective: introduction of an ERP system in a non-profit organization. RAI Revista de Administração e Inovação, 13(1), pp.48-57.

Nettsträter, A., Geißen, T., Witthaut, M., Ebel, D. and Schoneboom, J., 2015. Logistics software systems and functions: an overview of ERP, WMS, TMS and SCM systems. In Cloud Computing for Logistics (pp. 1-11). Springer, Cham.

Nwankpa, J.K., 2015. ERP system usage and benefit: A model of antecedents and outcomes. Computers in Human Behavior, 45, pp.335-344.

Omar, K. and Gómez, J.M., 2016, November. A selection model of ERP system in mobile ERP design science research: Case study: Mobile ERP usability. In 2016 IEEE/ACS 13th International Conference of Computer Systems and Applications (AICCSA) (pp. 1-8). IEEE.

Ptak, C.A. and Schragenheim, E., 2016. ERP: tools, techniques, and applications for integrating the supply chain. Crc Press.

Rajan, C.A. and Baral, R., 2015. Adoption of ERP system: An empirical study of factors influencing the usage of ERP and its impact on end user. IIMB Management Review, 27(2), pp.105-117.

Schlichter, J., Klyver, K. and Haug, A., 2018. The Moderating Effect of ERP System Complexity on the Growth–Profitability Relationship in Young SMEs. Journal of Small Business Management.

Shen, Y.C., Chen, P.S. and Wang, C.H., 2016. A study of enterprise resource planning (ERP) system performance measurement using the quantitative balanced scorecard approach. Computers in Industry, 75, pp.127-139.

Zeng, Y.R., Wang, L. and Xu, X.H., 2017. An integrated model to select an ERP system for Chinese small-and medium-sized enterprise under uncertainty. Technological and Economic Development of Economy, 23(1), pp.38-58.

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