Paper: Comparative Analysis of Enterprise Systems
According to Jones & Burger (2011) in SAP business, one software is unique from other SAP products. It is designed depending on the size of the company organizations. The advantage of this software is low cost and short duration it takes for installation in comparison to other soft wares. This software system allows personal customization, with provision for adding extra fields and tables. The SAP B1 contains necessary procedures and a follow up to them gives very easy installation if there is a difference in company structures and that of SAP B1.It takes longer due to changes to strike a common ground regarding structures. The creation of customer relationship management (CRM) module as inbuilt in SAP creates a difference with its working. This requires at time use of external software to procure analysis .e.g. generation of reports with the use of vision. Depending on the size of the company, project related firm has an upper hand regarding generating reports flexible and ability to allocate resources (Iyer, 2012). For the SAP B1 ERP to be sufficient for the various company its integration with other soft wares to enhance its efficiency .e.g. generating reports related to every business operations including sales and bookkeeping. Integrating various soft wares from other SAP applications is easy. The ERP can run on Microsoft operation systems and supports the database of Microsoft SQL Server and IBM DB2.The cost of the SAP B1 ERP is cost efficient especially for small and medium business organizations. The cost of maintenance is higher in the long term than in the short term. This is because of the technicalities required for operation. e.g. cost of training and maintenance of the system e.g. During system upgrade or system maintenance.
The popularity of the client-server technology has led to the launching of the SAP R/3 platfarmed software. R is for real-time calculation data processing and 3 is a three-tier system architecture levels. The use of SAP ERP was well suited with other various multiple platforms and operating systems with the latest version being SAP E,C.C 6.0 of the R/3 platform. The use of form two-tier architecture that based on client and server system was a slow process and limited the number of users. This was a significant border to the big organizations that is global based. This was a result of a vast number of workers from various location trying to access the application (Jones & Burger, 2011). The SAP R/3 is made based on technology that made it usable any number of users without reducing the speed and processing time. Large globe companies could install this ERP, which would work as an independent application for the various units and could also provide a unitary outlook of the whole company at the quickest level in real time. The SAP R/3 has a presentation server works as GUI and as an application called as sapgui.exe. The system is installed on at the client system that takes the input and requests it to the software server which programs the request and gives back the results. The results are then sent back to the application software server that is processed and passed to the presentation server in SAP R/3 architecture format. (Iyer, 2012)
The essential advantage of the new SAP ERP is that performance of software system becomes much speedier, and data transaction is better. The new SAP ERP program is enhanced system than the previous program. It is vital to choose an ERP program that is compatible with the old system to ensure no data loss within the system. So choosing the best upgrade version of SAP ERP is very important. Also along with the version of ERP, you have to keep a watch on what additional hardware or other technicalities needs to be installed to make the up gradation successful. While upgrading the old SAP ERP you should always focus on some vital aspect regarding personnel technicalities, the issue with changing system or an upgrade is an adaption of the workers morale more so if changes various aspect thus it is important to have are training course in the case of such a change. It may take time to train workers on the new version, but once it’s done, then there is no stopping from the gains and your organization will curve a niche in the business world. (Prosser, Bagnato & Müller-Török, 2010)
With so many business growing up every day, everyone wants themselves to be the best in the market, you cannot choose to be the second, so the key is to rely on the best business solution that is, of course, the SAP ERP (Jones & Burger, 2011) and when you find the previous version keeps you little below than others you should think that time has come for the up gradation of your old software ERP. It’s not only about changing the old system but also to upgrade a system in such a manner that its working capability becomes more better and swifter than the previous one. Entrepreneurs wisely choose to upgrade their previous software ERP with the new version of SAP ERP (Iyer, 2012). The performance of SAP ERP is beyond doubts.Although there is a lot of similarities and less of difference between the ERP system .in terms of functionality. ERP system varies only in the creation of various items within the system. SAP has the most complex system in terms creation of items. It requires training and capacity to handle unlike others, which setup is easy as it is just a click on functionality. SAP method of creation is a process where the order is followed unlike other systems windows pop up now and then when creating the functions. As pointed out by Prosser et al., (2010) the ability of SAP to create more than one unit at a time than other systems ensures it remains efficient in planning and resources allocation .in case of details left out or mistake editing data is easy as well unlike another system when one unit has store be completed before starting the other ERP from Microsoft tend to bring information on the first window whereas SAP can navigate to particular details.
While the SAP has a lot of information to be filled for particular employees other systems skip this and add irrelevant information to particular personnel. This can imply that in the case of a vacancy sorting candidates most ERP would only assign would assign holder without due consideration. Although as most ERP systems are used in human resources across the globe they tend to share the similar structure with the only variation on different compensation method and organization structures. Most ERP will contain basic information e.g. health and marital status of workers as a way of ensuring the information is useful to the company, and the goal related concept can be handled with ease like transfer to other areas. It’s always up to a company to customize the ERP system as per its organizations structures. The SAP ECC 6.0 stands out in the market due to the following its capacity to handle information transaction fast and reliability to the multi-task various transaction without slowing down.
Numerous world renowned companies along with many medium-sized firms have opted for SAP or Oracle E-Business Suite ERP systems. The firms as such obtain significant benefits from the outlined effective enterprise frameworks that give support to their firms and enhance their strategies. Although in many cases they struggle to reap a bounty harvest of the productivity gains as expected especially in the area of AP invoice processing (Prosser et al., 2010). Notably is the ITESOFT balance that is the supplier invoicing process as well as an integration framework whose functions complement the SAP or Oracle EBS investment. This helps in automation of the integration and facilitates coding and posting of e-invoices. Furthermore, the ITESOFT Purchase Suite is SAP-certified, or an Oracle legitimized adds on the element that has added functionalities towards the standard Oracle or SAP application. The ITESOFT Balance (White & Crawford, 2011) is attributed to delivering two major benefits, that is, acquiring some level of productivity gains for the company in question and secondly to improve the working environment staff.
Using this software enables a full management of the invoice posting processes where the incoming Purchase Order based documents are compared against Purchase Orders as well as the Goods Received in a process duly referred to as three-way matching. Whenever, differences are realized, workflows are injected to the right individual for verification and hence append an approval or rejection (White & Crawford, 2011). Indeed, the ITESOFT Balance is used to model the compliant invoices right from capture into posting and making payment while disregarding involvement of manual intervention. It is with no doubt that it is another sure means of increasing productivity. To acquire satisfaction as SAP or Oracle Software customer, it is necessary that you opt for the standard and sub-optimal invoicing features for the ERP system. An addition of the certified Oracle software one is bound to continue to leverage the initial investment in the ERP software. It is amazing how the previously cautious employees forget about paperwork, photocopies and reminder emails.
The implementation of the ERP Finance Module is a crucial component for all kinds of organizations whether small or large scale. This module is a foundation for many ERP software systems. Indeed, it is capable of gathering financial information that hails from diverse various functional sections and thus generating significant financial reports including the ledger, balance sheet as well as financial statements. The Production Module is significantly seen in the development of manufacturing requirements planning (MRP) II (White & Crawford, 2011) into ERP and although vendors are developing stronger software for production planning, consulting companies have too gathered massive knowledge for the realization of production planning module. The latter Production module is credited for its optimization of manufacturing capacities to utilize the components and material resources that are sourced from historical productions. Another famously utilized ERP module is the Human Resource package that ensures proper functioning of the management for human resource components as well as human capital.
Also, they promote the maintenance of a routinely complete employees’ database that includes contacts, components of a salary, performance analysis and matters regarding job promotion among the employees. An advanced HR module ought to be incorporated within the knowledge management frameworks in a bid to ensure optimality in the utilization of expertise for employees. (White & Crawford, 2011) Ultimately, the Purchasing module facilitates streamlining of the process of procurement of raw materials. This practice is designed to automate the process of identification of potential suppliers, price negotiation, preparation of purchase order to the suppliers, and a billing procedure. To ensure a proper running of processes, the Purchase module is must be integrated with both the inventory control and production modules. (White & Crawford, 2011)
The inventory valuation is perceived as the detailed or summarized report, during a present moment or at past times. It is essential for the situations whereby the accounting department seeks to establish the inventory amount at the particular time especially at the beginning or end of the month. Equally, the module allows one to do a valuation of inventory on the basis of different Costing Models and to fast compare the outcomes. The main measurable includes an effective system that sets up and tracks company performance against sets of organization outlined factors. The application downloads a whole list of customers that are indicated as being open for outside collections whereby one or more invoices are deemed late if between 45 and 89 days (Narayanan, 2013). On the other hand, the Receiving module uses a simple interface to receive goods into the firm and hence creating history records, makes updates to the Purchase Order, and also updates inventory. The requisitions Module is used by clients to approve products before they can be added to the Purchase Orders. Adoption of strategic planning modules is important in making a robust structure for the development and documentation of a compact Strategic Plan. (Iyer, 2012)
The ERP SAP system is quite challenging to operate and must be regarded as being a program that is command based as opposed to pointing and click. SAP is indeed a good program in that, users easily adapt to using the system, and is very friendly and a much more powerful program. This is well aligned with the expectations because SAP has for many years produced ERP systems. However, the management ought to consider several factors before selecting an ERP system. Although the above-discussed factors don’t compose all the factors, they at least contain the most important ones which the management must put into consideration when implementing an ERP system. When these factors among others are implemented, the management is at liberty to choose any system on the basis of personal preferences since their functions have similarities.
The SAP systems provide numerous capabilities for the HR Department to use in performing their tasks. SAP focuses on aligning the strategic objectives of the firm with the actions of the workforce, and on achieving high levels of process efficiency. First is the management of talents whereby the SAP system provides numerous distinct options for the recruitment and advancement of the workforce of a firm. Considering talent management, the firm is tasked with recruiting a workforce for the company. Also, they monitor the performance of the employee taskforce as well as writing performance reviews in the firm’s system. This information is paramount for the companies to run SAP and utilization of the succession management application that facilitates the organization and fast tracking of high performing employees. Secondly, the HR and Payroll provides the very primary elements of HR functions with modules that include management, timely reports, and payroll. Such a functional component is bound to meet the very basic needs of the HR department.
The Human Resource (HR) aspect is a critical factor chosen for comparison in Oracle Company functioning of each section. The HR department is bestowed with the responsibility of taking care of the employees’ concerns. It is tasked with handling matters of recruitment of the workforce, hiring, expulsion, awarding promotions, and the administration of payrolls. Of essence is that the HR department (Jones & Burger, 2011) has a responsibility for matters of compliance with federal laws including obtaining I-9 documents from immigrants while also establishing mechanisms to deter harassment and discrimination suits. Along with this, the HR department takes care of the administration of benefits on matters of workforce retirement plans, insurance policies among others like tuition reimbursement. However, the obligations of the human resource department have gradually changed over the years. (Jones & Burger, 2011)
According to Narayanan (2013) at first, the HR department was perceived as being a part of the executive policies of a company. In most scenarios, it stood on the way, as a roadblock of a kind managing the movement of a company towards the future. The employees of this department were basically tasked with presenting and filling out all the necessary paperwork affiliated with personnel management and administration of benefits. In the modern days, though, the HR department has turned into a major source of strategic advantage. Indeed, this department is overwhelmingly adaptable, dynamic and to a great extent focuses on the employee relations as well as performance management. Such factors are key to ensuring that the company employees are beneficial. With such a comparative analysis, more attention is attributed particularly towards the creation of company departments and employment positions within the company and more so creating a strong employee base to fill the vacant positions.
It is indeed true that both systems satisfy the basic HR needs of any company, but there are a few factors that the management must consider during their implementation of an ERP system. First, the nature of the business should define its culture and the way of doing business. This is essential in deciding the necessity of implementing the Enterprise Resource Planning (ERP) system. From the different literature the ways upon which companies do business could have serious impacts on the means by which an ERP system should be implemented. In most scenarios the ERP systems operate on the basis of best practice methods (Iyer, 2012). However, when a firm achieves some competitive advantages by means of their business methodologies, then the viable practice approach is likely not to effectively work. It is the duty of firms to do an evaluation for how much customization the ERP systems is needed in a bid to obtain systems that permit the firms to maintain best practices. Failure to consider the nature of the firm is a factor that could lead to conflicts during the process of implementation. (Narayanan, 2013)
Secondly firms ought to consider the ease for ERP system to be modified or be integrated with other systems. Numerous factors for implementations barely engage the full roll out of components within the ERP suite. Hence, the legacy systems in most cases remain in position, and the ERP system must require modification in order to feed information into these systems. Any customization of these systems would cause the cost of implementation to rise while also increasing the maintenance costs. This is so because many software manufacturing companies do not support customizations.
From the discussion, it is certain that the costs in the short term and long term are factors that should be considered alongside the cost of holding the system. Inclusive in the cost are the implementation expenses, license fees, training, and long-term costs of maintenance. Implementation can be time-consuming and hence raises the cost to a great extent for both internal manpower as well as expenses for external consultants. Moreover, there is the inclusion of license fees imposed by the software company including SAP or Oracle. Besides, the company incurs some training cost for the workforce in its use of the system and spends more time in making the appropriate cultural changes needed to realize the applications of a central database or ERP system necessary for storing information. On the other hand, the long-term maintenance costs are projected to run up to 30% of all costs of the software package. It is very expensive to attain sufficient implementation as well as maintenance of an ERP system hence managers are tasked with considering whether or not the ERP adds value.
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Narayanan, V. (2013). SAP FI financial accounting: SAP ERP ECC 6.0, SAP R/3 4.70.
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