ERP System or Enterprise Resource Planning System is a complete solution package including the software and hardware utilities provided for the business organizations and institutions. This system is developed for the enterprise-wide systems which supports all the operational functions of an entire organization.
The introduction of ERP systems into organizations is very successful due to the fact that it is produced for enterprise-wide systems. And because it is enterprise-wide, it is a major undertaking and would need longer time to install and is very costly.
The advantage for having an ERP system is that the new system is obtained at a lower cost and risk compared to having an in-house software development. The cost is lower because major functions of the system are already present on the base system. The risk is lower because the base system is well-developed and tested, and a lot of other organizations are already using it making it have a successful track record.
SAP
SAP is one of the software developing companies that provide ERP systems to many enterprise-wide organizations. Large corporations such as IBM and Microsoft use SAP products to run their businesses.
SAP applications provide the capability to manage financial, asset, and cost accounting, production operations and materials, personnel, plants, and archived documents. The latest technology SAP offers to business organizations is called the R/3 system.
R/3 is a comprehensive set of integrated business applications that uses the client/server model and provides the ability to store, retrieve, analyze, and process in many ways corporate data for financial analysis, production operation, human resource management, and most other business processes.
R/3 is a comprehensive set of integrated business applications that uses the client/server model and provides the ability to store, retrieve, analyze, and process in many ways corporate data for financial analysis, production operation, human resource management, and most other business processes.
Kodak
Kodak is one of the customers of SAP. Kodak uses SAP Business Information Warehouse (SAP BW) to improve its business. Eric Hunt, the ERP global data warehouse project manager at the worldwide leader in imaging, says that “We’re using a single instance of an R/3® global design to run all of our business processes worldwide. Then we use SAP® BW to merge crucial data from R/3 and non-SAP systems to provide us with easy access, through a user-friendly graphical interface, into the critical issues that drive our business.”
Kodak is one of the customers of SAP. Kodak uses SAP Business Information Warehouse (SAP BW) to improve its business. Eric Hunt, the ERP global data warehouse project manager at the worldwide leader in imaging, says that “We’re using a single instance of an R/3® global design to run all of our business processes worldwide. Then we use SAP® BW to merge crucial data from R/3 and non-SAP systems to provide us with easy access, through a user-friendly graphical interface, into the critical issues that drive our business.”
ERP Development Model
According to Ahituv, Neumann, and Zviran (Spring 2002), the following is the ERP life cycle model based on case studies identified during their literature research and system implementation methodologies developed by system vendors.
ERP Life Cycle Model
1. Selection Phase
The objective of this phase is to identify the ERP package most appropriate for the organization and the technological infrastructure needed for it. In this phase, the standard activities and those unique to the organization are reviewed in order to determine the project boundaries.
2. Definition Phase
This phase includes all the preparatory activities for the implementation phase that follows. The system components that will be included in the implementation are defined and the implementation plan is prepared.
3. Implementation Phase
As the main phase of the ERP life cycle, its objective is to link the ERP system to the organizational processes so that when the system moves to the operation phase, its contribution to the organization would be at the maximum. During this phase, the organizational processes are redesigned to work with the ERP system, the system is implemented, user training and acceptance testing is performed. This phase is iterative and the iteration begins at the conclusion of the acceptance tests of the previous iteration.
4. Operation Phase
In this phase, the ERP system is in operation, is maintained, and is upgraded, if needed. This is the longest phase of the ERP life cycle and can last for several years.
Comparison to SDLC
The major phases of SDLC include Definition, Development and Implementation, and Operation. On the other hand, ERP has Selection, Parallel Definition Development and Implementation, and Operation.
The selection phase is not part of the SDLC model because the systems are developed internally. In ERP, selection phase takes place at the start.
In SDLC, the definition phase is performed before the development and implementation phase. Unlike in ERP, the definition phase takes place in parallel to the process of development and implementation since the essence of ERP model is the mutual fit of the system and organization.
The selection phase is not part of the SDLC model because the systems are developed internally. In ERP, selection phase takes place at the start.
In SDLC, the definition phase is performed before the development and implementation phase. Unlike in ERP, the definition phase takes place in parallel to the process of development and implementation since the essence of ERP model is the mutual fit of the system and organization.
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