The creative activity of ERP systems has reshaped the concern constructions of administrations by guaranting to work out the challenges posed by a broad scope of disconnected and uncoordinated concern applications ( Kumar et al, 2003 ) . Markus and Tanis ( 2000 ) alongside with Davenport ( 1998 ) agree that concerns and administrations that have successfully adopted ERP systems have hailed them as one of the most important inventions that have lead to the realization of significant betterments in assorted countries of concern procedures. Although Kumar et Al, ( 2003 ) argues that even though ERP systems have been adopted by a big figure of endeavors, the short-run success and long-run endurance of these systems are rather difficult to foretell.
Harmonizing to Wilder and Davies ( 1998 ) , undertaking directors normally discover that ERP execution undertakings are really hard in the short term and this is chiefly due to the organizational alterations, concern procedure constellations and IT systems of the endeavor.
This study critically discusses the deductions of configuring and deploying ERP systems and critically reflects on benefits and challenges engrossed in set abouting such undertakings. In this study, the challenges and issues would be based on the IDES instance survey.
Reengineering the Business Procedure
Before an administration configures and deploys an ERP system, there is the demand for the undermentioned stairss to be followed in order to redesign the concern procedure to increase organizational end product efficiency. The procedure of concern alteration is referred to as Business Process Re-engineering or Business Transformation.
Fig. 1 Business Process Reengineering rhythm adopted from sap.com
Davenport ( 1993 ) states that concern reengineering procedures encompasses the picturing of new work schemes, the existent procedure design activity, and the execution of the alteration in all its complex technological, human, and organisational dimensions. This means that most frequently than non, the constellation of SAP is undertaken with the exclusive purpose of breaking the overall organisational maps.
As shown above, the redesigning procedure of an administration starts with placing all the production, fabrication, fiscal, gross revenues etc procedures involved with the endeavor.
The old procedures are so reviewed separately to find failings and possible betterments that could be customised to heighten the organizational end product. This does non ever intend that new procedures would be created. Mohr ( 1982 ) adds that a little but important per centum of procedures are maintained and unchanged by an administration during the redesigning procedure.
The 3rd measure is to make or pull, as it were, the new and improved ERP processes in the signifier of UML or more appropriate concern procedure patterning notations. This is to pass on the improved procedure to the remainder of the stockholders. This portion is every bit of import as it is complicated, since stockholders might non all agree on one specific procedure to follow.
Finally, after the ERP design ( s ) have been verified and approved, it is configured, implemented and tested as per client ‘s orders. The ERP procedure reengineering undertaking is done at its uttermost best to aline both the ERP systems and the administration processes to hike growing.
To configure and successfully implement production procedure for case, IDES fabrication of bikes, certain procedures such as Production Planning ( PP ) , Gross saless and Distribution ( SD ) and Finance and Control ( FICO ) need to be taken into consideration
ERP Configuration Process
It is imperative that the right ERP bundle or faculties have been chosen for the undertaking before the constellation commences. Wei et Al. ( 2005 ) suggested the undermentioned process for choosing a suited ERP system that clearly present a proposed ERP system choice model, a stepwise process is first described:
Measure 1 Form a undertaking squad and roll up all possible information about ERP sellers and systems.
Measure 2 Identify the ERP system features.
Measure 3 Construct a construction of aims to develop the fundamental-objective hierarchy and means-objective web.
Measure 4 Extract the properties for measuring ERP systems from the construction of aims.
Measure 5 Filter out unqualified sellers by inquiring specific inquiries, which are formulated harmonizing to system demands
Measure 6 Evaluate the ERP systems utilizing the analytic hierarchy procedure ( AHP ) method
Measure 7 Discuss the consequences and do concluding determination.
From the above model, a good seller would be chosen for the constellation of an ERP system. Markus et Al ( 2000 ) suggest that the most appropriate manner to implement an ERP system is to make it on roll-out footing ; this eases the load of holding to close down operations which is slightly expensive and be the endeavor a batch of money.
Challenges Faced when Configuring ERP Systems
There were a few challenges or drawbacks when configuring and implementing ERP systems. Master information tends non to be flexible in footings of redacting and this created a job in the early phases of my Motorcycle constellation. When I was making the Bill of Material for Engine ( B-Engine 01 ) , I made a error with the day of the month which was supposed to be backdated to and I was unable to redact it. I had to make a transcript named B-Engine2-01 to rectify the issue in order to successfully make the Bill of Material for B-Motorcycle-01.
In the cost Centre accounting, when I ran the sequence, it said it had already ran. A cheque box appeared for me to run it in reversal, and I did. I did non gain I had run it in reversal with C-80. The screen showed 3 receiving systems. When I performed the appraisal, I got a warning which is shown below
Fig 2 warning showed that the figure of messages which was 4 was incorrect
I began look intoing my rhythm and section and realised that I made a error on the last page of the section. After altering it, I was able to run my appraisal successfully. Figure shown below
Fig 3 demoing the fixed job.
Benefits of ERP Systems
Spathis, C and Constantinides, S ( 2003 ) cited the most extremely rated sensed benefits achieved via ERP systems involve:
Increased flexibleness in information generation- This is because the faculties are successfully integrated together. It is easy to bring forth information and portion between assorted administrations.
ERP systems provide improved quality of studies and fiscal statements. Payne, W ( 2002 ) stated that ERP systems besides greatly cut down the border of mistake created by information being input by different employees into many different databases. This will guarantee that right monetary values are remitted to the histories section.
Increased integrating of applications- ERP systems allow for a generous sum of faculties and bundles to be integrated. This makes is easy to see the consequence one section has on the other. For case, when a bike is sold, it reflects in the stock at the warehouse as subtraction 1 and shows the payment in the histories section where the client paid for the point.
ERP provides the easy care of databases. This is because all information is centralized. Therefore information is edited one time on the chief database alternatively of the assorted sections holding to redact each record, doing confusion and pandemonium.
Configuration and Implementation of IDES ERP System
This learning result discusses the procedures of production of bikes in IDES. To go on, these procedures would be used for production.
To make a merchandise in SAP, the stuff maestro would hold to be created. This stuff maestro has to be determined by individual configuring the merchandise as to which constituents are finished merchandises and which merchandises are semi-finished merchandises.
In this instance, there was the bike, which is manufactured utilizing two constituents, engine and frame. The engine is besides has two constituents, the camshaft and engine block.
SAP Transaction Code
Fig 4 figure of Master Material
Cost Centre Master Data
The cost Centre is used to supply the cost of non merely the bike, but the wages of employees, the care outgo and assembly outgo among other things. The cost Centre in SAP is a unit within a controlling country in an organisation, to which cost is allocated but returns no direct net income to the organisation. The cost Centres in this practise Sessionss are canteen, care and assembly.
Fig 5 Cost of stuffs for production of bike shown above
This portion shows the production procedure for bikes and engines. The routings assigned to engine production are setup, production and labour clip. The engine is assembled utilizing the one camshaft and one engine block.
This larning result explains the concern procedure involved with Gross saless and Distribution, Production Planning and Procurement. These procedures were displayed utilizing Business Process Modelling Notation ( BPMN )
Gross saless and Distribution in IDES
The figure above shows the sale and distribution procedure. It starts by a client puting an order, through the procedure the client either has a pick to call off or travel in front. Alternatively, if there is no stock, the order would be cancel. If there is stock and client wants the point, it would be sold to them. They would do payment and a reception would be issued.
Production Planning in IDES
The figure above is a shows the production procedure for the engine. The engine is made up of camshaft and engine block constituents. If these constituents are unavailable, the procurance is prompted to buy the natural stuffs needed for the production of the engine.
Procurement Process in IDES
The figure above shows the buying of constituents to fabricate the bike. This is largely a concern to concern dealing.
Testing the Business Procedure
This learning result comprises of everything that has been configured in the Sessionss. This procedure manufactures the bikes, creates client, sell the bikes along with price reduction and produces reception.
This procedure was triggered when a client purchased 100 bikes. The client ( B-CLIENT-01 ) record is created by come ining dealing codification XD01 in the SAP Easy entree bill of fare.
Condition Maestro Record
The client was promised price reduction if the bikes purchased were over a certain bound. For case, when 1 piece of bike purchased, the monetary value is ˆ3,999 but a purchase of 51pieces and above is priced at ˆ3,499 and at 501pc at ˆ3,099. This maestro record is created utilizing SAP dealing codification VK31
These every bit good as the semi-finished merchandises, are purchased externally if there is none in stock. Therefore, buying info record needs to be created for these stuffs. Using SAP dealing codification ME11, a graduated table of ˆ777.16 for 1 piece of frame and ˆ700.00 for 100 pieces was created. For the camshaft, a graduated table of ˆ89.95 for 1 piece and ˆ69.95 for 100 and more was besides created.
Maintain Source List
Maintain beginning list is carried out to enable the system generate purchase requisitions and automatically delegate them to a supply beginning. The SAP dealing codification used is ME01 and it is done for engine block, frame and camshaft.
After all these maestro information has been created, it is now possible to prove the concern procedure by first making a gross revenues order and so transporting out MRP which will take to the creative activity of two production orders ( engine and bike ) . Finally, the needed sum of bike and frames will be created.
Making Gross saless Order
A client wants to order 100 B-MOTORCYCLE-01, utilizing VA01, we create a gross revenues order.
Monetary value: ˆ 3499 ( over 51 pieces, price reduction applied )
Purchase Order for Components
Using dealing SAP dealing codification MDO4, we create two standard orders ( SO ) for Engine Block and camshaft.
Using SAP Transaction codification MIGO, a goods reception ( GR ) is created for the standard orders. This is to demo that the constituents have been received and are expecting production.
Producing the Motorcycles
Once all the Bill of Materials is procured and manufactured in the instance of the engine, the bikes are so produced. Once the bikes have been manufactured, stock handiness degree is made to reflect it. All the needed 100 bikes are available in respects to the client to purchase.
Making a Delivery, Transfer Order and Billing
Using SAP dealing codification VL01N, bringing order was successfully created for the gross revenues order above. Code LT03, is used to make transportation order. After that, a charge papers is created and sent to the client. The client is besides given a price reduction which is released to reason the sale.
Gross saless Process Flow
Upon look intoing this utilizing codification VA03, it will corroborate that all paperss for have been successfully completed. This ends the procedures of IDES.