Features of Enterprise Resource Planning
Discuss about the Robotics and Computer Integrated Manufacturing.
Enterprise resource planning or ERP can be defined as the significant integrated management of all types of business processes that are mediated either by technology or software (Monk and Wagner 2012). Enterprise resource planning is referred to as the specific category of business management software or a collection of various integrated applications, which any organization eventually utilizes for the purpose of storing, managing, collecting and finally interpreting data or information from all the business activities. This particular system of Enterprise resource planning or ERP is responsible for providing a continuously updated as well as integrated overview of major processes or activities of business by utilizing the common databases that are maintained by the database management system or DBMS (Shaul and Tauber 2013). Several popular organizations are utilizing this ERP in their businesses in today’s world. The information is easily flowed from one department to the other easily and promptly. Cloud computing is the next important and significant technology that is being utilized by various companies. It is the easiest method to transfer data via Internet connection. Cloud computing can be referred to as the significant paradigm of information technology. It majorly relies on the resource sharing for the successful achievement of economies of scale that is similar to the public utility (Zissis and Lekkas 2012). All the third party clouds solely enable the companies in focusing on the major businesses and not on spending any resource on the computer maintenance as well as infrastructure.
The following research report outlines a brief discussion on the amalgamation of enterprise resource planning and cloud computing. There are various options that are required to be considered in ERP. The various options are on premise, which solely refers to the approach that is traditional in nature. In this approach, the organization purchases all the .licenses for any ERP system and again reinstalling it in the company. These types of systems subsequently track all the business resources, such as capacity of production, raw materials and cash. Moreover, the payroll, purchase orders or any other orders are viewed with the help of this enterprise resource planning. This research report will be properly highlighting on the vital details regarding cloud ERP system.
The various objectives of this research report of ERP Systems on Cloud are as follows:
- To understand the concept of enterprise resource planning.
- To know about cloud computing and its advantages.
- To learn about the cloud ERP systems.
- To know about real case studies on cloud ERP systems.
The research questions of this research report are as follows:
- i) What is enterprise resource planning?
- ii) What is cloud computing?
- Which companies have utilized cloud ERP system within their businesses?
Advantages of Enterprise Resource Planning
Enterprise resource planning system or ERP is one of the most significant technologies in today’s technological world. It is being utilized by all popular and significant organizations or companies for the purpose of integrating their business processes or operations (Seethamraju 2015). There are various important features of this technology. The most significant features of this particular system are as follows:
Process Streamlining: The first and the foremost important feature of the enterprise resource planning is process streamlining. Any business comprises of several significant processes. These business processes or operations are extremely important for any organization and thus they should be executed properly (Kwak et al. 2012). However, when these processes are executed separately, it takes up huge time and thus the time consumption is extremely high. The streamlining of processes is much easier with the software of enterprise resource planning. Hence, this process streamlining becomes extremely easier and thus all the organizations utilize this software.
Customer Relationship Management: The second important feature of the software of enterprise resource planning is the customer relationship management or CRM. This particular feature majorly deals with the proper management of customers for the sale of business (Hasibuan and Dantes 2012). The module of this customer relationship management is utilized by all the organizations, who have implemented the solution of enterprise resource planning within their businesses. The module of CRM should ensure the perfect management of the customers, opportunities and support to the customers for proper development of business.
Customization Capability: The next feature of the enterprise resource planning si the capability of customization. The customization capability helps the business in customizing all their processes and activities easily (Leon 2014). Moreover, it decreases the time as well as the cost consumption. The rigid software of enterprise resource planning is not viable, since the process or workflow of business are changed or altered.
Reducing Time Consumption: The fourth important feature of the enterprise resource planning software is to reduce the overall consumption of time. Due to the lower time consumption, ERP software is extremely popular for any specific company (Ptak and Schragenheim 2016).
This particular software has various advantages as well. The main advantages of the enterprise resource planning software are as follows:
- i) Competitive Advantages: The first benefit of the ERP software is that it provides competitive advantages (Seo 2013). These competitive advantages are extremely important for any organization for gaining popularity and importance in the market.
- ii) High Efficiency: The second advantage of the ERP software is that it removes all the repetitive processes and thus reducing the requirement of manual data entry (Matende and Ogao 2013). Moreover, it is responsible for streamlining all the business processes and hence this software makes the business more efficient for collecting data.
Collaboration: The next important benefit of the ERP software is the proper collaboration of all business processes. Proper collaboration between two departments is extremely important and thus the data is entered in the system of ERP for making it centralized as well as consistent.
- iv) Scalability: The next important advantage of the enterprise resource planning software is the high scalability and flexibility (Zeng and Skibniewski 2013). Since, it is extremely scalable and flexible; this software is extremely popular for the users.
- v) Cost Effective: The fifth important benefit of ERP software is that it is extremely cost effective and thus could be easily afforded by all organizations. The operational or administrative expenses are highly reduced with the help of this software.
- vi) High Productivity: Another significant advantage of the ERP software is its higher productivity (Asl et al. 2012). The businesses are extremely productive with this particular software.
Advantages of Cloud-based ERP Software
However, in spite of having all these advantages, there are some of the major disadvantages of this ERP software. They are as follows:
- i) Indirect Costs: The first disadvantage of this software is that it incurs indirect costs. Although, operational or administrative expenses are reduced, the indirect costs are extremely high with this software and hence many organizations often opt not to choose this software (Shaul and Tauber 2013).
- ii) Data Migration Tougher: The migration of data is much difficult with this ERP software and thus is not selected by all.
Dependence on Vendors: The next important disadvantage of ERP software is that it is completely dependent on the vendors. Thus, security often becomes a major issue for the users.
- i) Resource Pooling and Elasticity: Cloud computing is responsible for the purpose of resource pooling as well as elasticity (Dinh et al. 2013). It utilizes the multi tenancy where the various resources are eventually allocated or de allocated as per the demand of the users.
- ii) On Demand Services: This particular technology is completely based on the self services and all on demand service models. The user is allowed for interacting within the cloud for performing all the tasks.
- Quality of Services: The next feature is that it improves the service quality (Arora, Parashar and Transforming 2013).
- i) Easy Implementation: The first advantage is that it could be easily implemented within any business.
- ii) Accessibility: The second advantage is that the data is easily accessed from anywhere (Xu 2012).
iii) Efficient Recovery: The data is easily recovered effectively and efficiently.
- iv) High Flexibility: The technology of cloud computing is extremely scalable and flexible.
The main disadvantages of cloud computing technology are as follows:
- i) No Control: The main disadvantage of this technology is there is no control of data Jadeja and Modi 2012).
- ii) No Redundancy: The next disadvantage of cloud computing is that the cloud server is not at all redundant and neither it is backed up properly.
iii) Bandwidth Issues: The bandwidth of this technology is not much higher and thus they should be properly maintained by the users or cloud providers.
Cloud based computing software is responsible for allowing the users for accessing the software applications, which are running on the shared resources of computing through the Internet (Fernando, Loke and Rahayu 2013). All these resources are properly maintained in the remote data centres that are dedicated for hosting several applications on several platforms. The cloud ERP software is the typical SaaS or software as a Service, allowing or enabling users for the purpose of accessing the enterprise resource planning or ERP software on the Internet connection. This cloud ERP software comprises of lesser expenses since the computing resources are not maintained or controlled on premises (Chen and Zhao 2012). It provides access to the business critical applications from anywhere.
- i) Easy to Use: The first and the foremost characteristic of the cloud based ERP software is that it is extremely easy to use (Wang et al. 2012). This particular software does not incur of any type of complexity within the software and thus could be easily utilized by all users. The application selection is extremely easier with the cloud based enterprise resource planning software.
- ii) Scalability: The second important feature of the cloud based enterprise resource planning software is the scalability. It eventually refers to the proper ability of any cloud based application for growing or contracting as per the demands (Hashem et al. 2015). All the cloud providers have the robust systems, which are handling as the part of the cloud computing. For being perfectly useful as well as cost effective, the cloud based ERP applications must expand or contract with the demands and without the organizations paying huge penalties.
Lower or Easier Customization: Another significant feature of the cloud based enterprise resource planning software is the easy and lower customization (Garg, Versteeg and Buyya 2013). The most important tasks of the users are performed as per demand. One of the major features of this cloud based enterprise resource planning software is that it lowers or makes the process of customization extremely easier or simpler in respect to the other software. If the customization will not be done properly, the software will not work properly and thus the organization would suffer major issues (Lee and Zomaya 2012). Moreover, due to the better customization, huge investment is not required or needed for the technology resources or personnel.
Constant Support: The third important characteristic of the cloud based enterprise resource planning is that it provides constant support to the users. For the 24*7 customer support, this particular software is extremely popular for all the users and thus it often becomes major software for the clients (Rittinghouse and Ransome 2016).
The cloud based enterprise resource planning software also comprises of several important advantages. The main advantages of this particular software are as follows:
- i) Avoids Upfront Expenses: The first and the most important advantage of the cloud based enterprise resource planning software is that it helps to avoid the upfront costs or expenses (Hashizume et al. 2013). The computing hardware or data server expenses are avoided in this software.
- ii) Reducing IT Supports: The second benefit of the cloud ERP software is that it helps in reducing the IT supports. The support services are provided by the data centre.
Disadvantages of Cloud-based ERP Software
Eliminates Costs: The next important advantage of the cloud ERP software is that it helps in eliminating all the extra costs and thus monthly fees are not required (Kwak et al. 2012).
- iv) DR Plan: Another important advantage of this particular software is that it comprises of a significant disaster recovery plan and thus data could be easily backed up with this plan.
- v) Avoids Attacks: The next important advantage of the cloud ERP software is that it helps to avoid any type of attack within the organizational server (Seo 2013).
- vi) Lack of Hardware Installation: The sixth important benefit of the cloud ERP software is that it does not require any type of hardware installation.
Easy Accessibility: The final advantage of the cloud based enterprise resource planning software is that the data could be easily accessed without any type of problem within it. This easy accessibility helps the user in accessing the confidential data or information.
Although, the ERP systems on cloud comprise of various advantages, there are some of the major disadvantages that make this software extremely dangerous and vulnerable for the users (Matende and Ogao 2013). The most significant disadvantages of the cloud ERP software are as follows:
- i) Integration Issues: The first challenge of the cloud ERP software is that it consists of several integration issues or problems. These types of integration issues often become major problems for the users since they are not being able to integrate the business processes or activities properly with this software.
- ii) Implementing New Management Processes: The second problem of the cloud ERP software is that there are various problems in implementing the new management processes (Zeng and Skibniewski 2013). This particular issue is extremely dangerous for the organization and thus the cloud enterprise resource planning software makes the process vulnerable.
Difficult Decision Making: Another important issue of the cloud enterprise resource planning software is that the decision making becomes much difficult for the users.
Data Migration: Another important challenge of the cloud enterprise resource planning software is that the data migration is much difficult and thus should be properly executed with the help of supporting software (Asl et al. 2012).
Various important and popular organizations have implemented the cloud enterprise resource planning software within their business for properly executing their business processes or operations. The most popular cloud ERP vendors are Oracle, Microsoft Dynamics, Deltek and many more (Ptak and Schragenheim 2016). The three examples or case studies of successful implementation of cloud ERP software are as follows:
- i) Baldinger Bakery: This particular bakery is serving its customers for the past 128 years. Apart from the baking, they also provide various other food items to the customers. Due to the rapid growth and expansion, Baldinger Bakery is planning to open more locations to fulfil customer expectations. They have implemented cloud ERP software for this purpose and thus have gained extreme success within their business (Matende and Ogao 2013). In just three months since it upgraded to cloud, Baldinger saw a 30 percent improvement in sales order processing, 15 percent faster warehouse picking and shipping, and 99 percent delivery accuracy.
- ii) Living Proof: This organization provides hair care products to the customers. With the proper implementation of cloud ERP software, the revenue of this organization has increased and so is the product portfolio (Leon 2014). 330 percent of the revenue of this organization is increased and thus they have become successful in their business. it has even improvised the brand ability.
Coffice: Another popular organization that is responsible for manufacturing coffee machines, Coffice was suffering from problems in accounting and inventory processes. The accounting as well as the inventory processes is extremely simplified with this particular software. Moreover, the invoice has become faster.
Therefore, from the above discussion, it can be concluded that enterprise resource planning or ERP is the broader set of actions, which help any business by controlling or managing the business. The most significant objective of this enterprise resource planning software is the proper integration of back office business operations and also facilitation of the information flow within a company for the purpose of making the business decisions completely data driven. The suites of ERP software are eventually built for the collection as well as organization of data from the several levels of the company for connecting the business operations in every department. The structured approach to the enterprise resource planning could easily help the organization in standardizing as well as automating the business processes and thus improving the operation efficiencies. The integrated approach for managing each and every business process helps to ensure the fact that time or money is saved. Cloud computing is the significant procedure that is utilized for the proper delivery of any hosted service on the Internet. This technology eventually enables the organizations in consumption of any computing resource liked the virtual machine, application or storage. It even helps in building or maintaining the computing infrastructures. The most significant architecture models of cloud computing are infrastructure as a service or IaaS, platform as a service or PaaS and software as a service or SaaS. The deployment models of this technology are private cloud, public cloud, hybrid cloud and community cloud. The perfect amalgamation of enterprise resource planning and cloud computing is known as cloud ERP systems. It is the kind of enterprise resource planning software, which is eventually hosted on the platform of cloud computing and on the premises within the centre of data of the enterprise. The applications of enterprise resource planning mainly include all the modules for human capital management and finance. Cloud ERP is the type of SaaS or software as a service model. The cloud based enterprise resource planning system is related to the backup, disaster and availability of the software. The above research report has properly outlined all the important features and concepts of cloud computing, enterprise resource planning and cloud ERP software. The research objectives and research questions are also given here.
Case studies of Successful Implementation
Arora, R., Parashar, A. and Transforming, C.C.I., 2013. Secure user data in cloud computing using encryption algorithms. International journal of engineering research and applications, 3(4), pp.1922-1926.
Asl, M.B., Khalilzadeh, A., Youshanlouei, H.R. and Mood, M.M., 2012. Identifying and ranking the effective factors on selecting Enterprise Resource Planning (ERP) system using the combined Delphi and Shannon Entropy approach. Procedia-Social and Behavioral Sciences, 41, pp.513-520.
Chen, D. and Zhao, H., 2012, March. Data security and privacy protection issues in cloud computing. In Computer Science and Electronics Engineering (ICCSEE), 2012 International Conference on (Vol. 1, pp. 647-651). IEEE.
Dinh, H.T., Lee, C., Niyato, D. and Wang, P., 2013. A survey of mobile cloud computing: architecture, applications, and approaches. Wireless communications and mobile computing, 13(18), pp.1587-1611.
Fernando, N., Loke, S.W. and Rahayu, W., 2013. Mobile cloud computing: A survey. Future generation computer systems, 29(1), pp.84-106.
Garg, S.K., Versteeg, S. and Buyya, R., 2013. A framework for ranking of cloud computing services. Future Generation Computer Systems, 29(4), pp.1012-1023.
Hashem, I.A.T., Yaqoob, I., Anuar, N.B., Mokhtar, S., Gani, A. and Khan, S.U., 2015. The rise of “big data” on cloud computing: Review and open research issues. Information Systems, 47, pp.98-115.
Hashizume, K., Rosado, D.G., Fernández-Medina, E. and Fernandez, E.B., 2013. An analysis of security issues for cloud computing. Journal of internet services and applications, 4(1), p.5.
Hasibuan, Z.A. and Dantes, G.R., 2012. Priority of key success factors (KSFS) on enterprise resource planning (ERP) system implementation life cycle. Journal of Enterprise Resource Planning Studies, 2012, p.1.
Jadeja, Y. and Modi, K., 2012, March. Cloud computing-concepts, architecture and challenges. In Computing, Electronics and Electrical Technologies (ICCEET), 2012 International Conference on (pp. 877-880). IEEE.
Kwak, Y.H., Park, J., Chung, B.Y. and Ghosh, S., 2012. Understanding end-users’ acceptance of enterprise resource planning (ERP) system in project-based sectors. IEEE Transactions on Engineering Management, 59(2), pp.266-277.
Lee, Y.C. and Zomaya, A.Y., 2012. Energy efficient utilization of resources in cloud computing systems. The Journal of Supercomputing, 60(2), pp.268-280.
Leon, A., 2014. Enterprise resource planning. McGraw-Hill Education.
Matende, S. and Ogao, P., 2013. Enterprise resource planning (ERP) system implementation: a case for user participation. Procedia Technology, 9, pp.518-526.
Monk, E. and Wagner, B., 2012. Concepts in enterprise resource planning. Cengage Learning.
Ptak, C.A. and Schragenheim, E., 2016. ERP: tools, techniques, and applications for integrating the supply chain. Crc Press.
Rittinghouse, J.W. and Ransome, J.F., 2016. Cloud computing: implementation, management, and security. CRC press.
Seethamraju, R., 2015. Adoption of software as a service (SaaS) enterprise resource planning (ERP) systems in small and medium sized enterprises (SMEs). Information systems frontiers, 17(3), pp.475-492.
Seo, G., 2013. Challenges in implementing enterprise resource planning (ERP) system in large organizations: similarities and differences between corporate and university environment (Doctoral dissertation, Massachusetts Institute of Technology).
Shaul, L. and Tauber, D., 2013. Critical success factors in enterprise resource planning systems: Review of the last decade. ACM Computing Surveys (CSUR), 45(4), p.55.
Wang, C., Wang, Q., Ren, K., Cao, N. and Lou, W., 2012. Toward secure and dependable storage services in cloud computing. IEEE transactions on Services Computing, 5(2), pp.220-232.
Xu, X., 2012. From cloud computing to cloud manufacturing. Robotics and computer-integrated manufacturing, 28(1), pp.75-86.
Zeng, Y. and Skibniewski, M.J., 2013. Risk assessment for enterprise resource planning (ERP) system implementations: a fault tree analysis approach. Enterprise Information Systems, 7(3), pp.332-353.
Zissis, D. and Lekkas, D., 2012. Addressing cloud computing security issues. Future Generation computer systems, 28(3), pp.583-592.
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