INTRODUCTION The application and introduction of ERP systems have become a central issue for management and operation of enterprises

April 23, 2019 Critical Thinking

INTRODUCTION
The application and introduction of ERP systems have become a central issue for management and operation of enterprises. The competition on market enforces the improvement and optimization of business processes of enterprises to increase their efficiency, effectiveness, and to manage better the resources outside the company. The primary task of ERP systems is to achieve the before-mentioned objectives. The selection of a particular ERP system has a decisive effect on the future operation and profitability of the enterprise. The qualitative correlation between the size of enterprises, market position, etc. and the applied selection criteria for ERP systems should be analyzed as to whether which criteria are used at multinational enterprises or at SMEs.
WHY USE ENTERPRISE SYSTEM ARCHITECTURE
• It allow access of a visual representation of the complex system interfaces among the ERP application and databases, operating systems, legacy applications, and networking.
• Help management and the implementation teams understand in detail the distinctive attribute and components of the enterprise system.
ERP ARCHITECTURE
The process of translating business vision and strategy into effective enterprise change by creating communicating and improving key requirements, principles and models that describe the enterprise’s future state and enable its evolution. ERP system architecture is organized in layers or tiers to manage system complexity in order to provide scalability and flexibility.
The two most commonly employed architectures are:
• Two-Tier Architecture
• Three-Tier Architecture
Two-Tier Implementation
The server handles both application and database duties. The clients are responsible for presenting the data and passing user input back to the server. The distribution of processing responsibilities remains the same even in the presence of multiple servers. This is most simplest form.
Three-Tier Implementation
Three-layer architecture the most reliable, flexible, and scalable architecture and is the most prevalent today and includes:
• Application server\Application Tier
• Web server\Web Tier
• Database server\Database Tier
The database and application functions are separated. This is very typical of large production ERP deployments. Satisfying client requests require two or more network connections. The client establishes communication with the application server which then creates a second connection to the database server.
Application server\Application Tier
This consists of a web browser and reporting tool were business processes and end user interact with the system. It has the capability to shield the user from the inner working network of an ERP but give relevant information to the job and business process.
Web server\Web Tier
This provides the access to allow the user ability to access, analyses and interpret the information through the browser. It provide better integration between internet technologies.
Database server\Database Tier
Concentrate on the organization data volume and its relationship between internal and external system.

Benefit of Three-Tier
• It gives you the ability to update the technology stack of one tier, without impacting other areas of the application.
• It allows for different development teams to each work on their own areas of expertise. Today’s developers are more likely to have deep competency in one area, like coding the front end of an application, instead of working on the full stack.
• You are able to scale the application up and out. A separate back-end tier, for example, allows you to deploy to a variety of databases instead of being locked into one particular technology. It also allows you to scale up by adding multiple web servers.
• It adds reliability and more independence of the underlying servers or services.
• It provides an ease of maintenance of the code base, managing presentation code and business logic separately, so that a change to business logic, for example, does not impact the presentation layer.
Limitation
• Can be very difficult to operate and expensive as well.
FUNCTIONAL
The ERP module assist or support the various business functions of the organization which includes:
• Human Resources
• Finance and Accounting
• Customer Relationship Management (CRM)
• Supply Chain Management (SCM)
• Sales and Marketing
• Inventory
• Purchase
• Engineering/ Production

Human Resources (HR)
The human resources module helps to manage and coordinate employee information tracked employee records like job performance review job description, skill matrix and attendance tracking. Employee training tracking can also be done by ERP.
Finance and Accounting
The finance module can manage the whole inflow and outflow of money or capital. Keeps tracks of all account related transaction like income statement, cash flow statement, financial statement, accounts ledgers, budgeting, bank statement, payment receipts and task management etc. Financial reporting is easy task for this module of ERP.
Customer Relationship Management (CRM)
Customer Relationship Management (CRM) is to help increase the sale performance of the company through better customer services and by establishing a healthy long lasting relationship with the customers. All the stored details of customer are available in CRM module. helps to manage and track detailed information of the customer like communication history ,calls, meetings, details of purchases made by customer, contract duration etc.
Supply Chain Management (SCM)
Supply chain management (SCM) module help to manage and monitor the flow of production from consumer to manufacturer and manufacturer to consumer. Many SMBs face challenges in their process automation. ERP is the great help for such organizations. ERP can efficiently streamline the business operations of organization. Above introduction of modules can help you to choose & customize the ERP modules depending on your organizations requirements
Sales and Marketing
Typical sales process includes processes like Sales queries & enquiry analysis & handling, quotation drafting, accepting sales orders, drafting sales invoices with proper taxation, dispatch/Shipment of material or service, tracking pending sales order . All these sales transactions are managed by sales module of ERP. CRM module can take help of Sales module for future opportunity creation & lead generation.

Inventory
Inventory module can be used to monitor the stock of items. Items can be identified by unique serial numbers. Using that unique numbers inventory system can keep track of item and trace its current location in organization .e.g. you have purchased 100 hard disk , so using inventory system you can track how many hard disks are installed , where they are installed, how many hard disks are remaining etc. Inventory module includes functionalities like inventory control, master units, stock utilization reporting etc. There may be integration of inventory module with purchase module of ERP.
Purchase
As name indicates, purchase modules take care of all the processes that are part of procurement of items or raw materials that are required for organization. Purchase module consist of functionalities like supplier/vendor listing, supplier & item linking, sending quotation request to vendors, receiving & recording quotations, analysis of quotations, preparing purchase orders, tracking the purchase items, preparing GRNs(Good Receipt Notes) & updating stocks & various reports . Purchase module is integrated with Inventory module & Engineering/production module for updating of stocks
Engineering/ Production
Production module is great help for manufacturing industry for delivering product.
This module consist of functionalities like production planning, machine scheduling, raw material usage,(Bill of material)preparation, track daily production progress production forecasting & actual production reporting.

WHAT IS THE COMPELLING BUSINESS NEED FOR ENTERPRISE ARCHITECTURE?
Business: Value To The Business
• Facilitate business transformation throughout the enterprise
• Formalize and capture knowledge about the business that helps identify new opportunities and clarify existing gaps.
• Provide a set of guidelines, standards, and blueprints that can be used to acquire, build and deploy business solution.
Technology: Value To The IT Organization
• Makes new initiatives easier to manage because they are designed and implemented according to architecture guidelines
• Delivers a more manageable agile IT environment
• Align IT initiatives to business imperative so that business benefits justify the costs
• Allow IT to stay ahead of the curve with respect to the underlying technological and infrastructure to support business application

BENEFITS
The following benefits could be gained by implementing the ERP systems:
1. Provide an integrating working environment.
2. Enable automation
3. Availability of information from field level until the management level
4. Integration in applications in any departments
5. Flexibility and facility to standardizing process or to accommodate changes and globalization.
6. Achieve balanced people, process and technology changes across all areas.